Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment #1 to Form S-1 71 447K
2: EX-1.1 Form of Underwriting Agreement 38 155K
3: EX-3.1 Certificate of Incorporation of the Company 15 45K
4: EX-3.2 Bylaws of the Company 22 94K
5: EX-5.1 Opinion of O'Melveny & Myers LLP 2 10K
6: EX-10.1 Form of Directors' & Officers' Indemnity Agreement 9 41K
7: EX-10.13 Employee Stock Ownership Plan 60 116K
8: EX-10.18 Standard Industrial/Commercial Single-Tenant Lease 35 168K
9: EX-10.24 Celtic Master Lease 22 110K
10: EX-10.25 Stock Purchase Agreement 11 28K
11: EX-10.26 Stock Purchase Agreement 11 28K
12: EX-10.27 Stock Purchase Agreement 11 27K
13: EX-10.28 Stock Purchase Agreement 11 27K
14: EX-10.29 Meade Instruments Corp. 1997 Stock Incentive Plan 31 114K
15: EX-10.30 Form of Agreement of Merger 5 22K
16: EX-10.31 Preferred Stock Redemption Agreement 6 26K
EXHIBIT 1.1
_______________________, 1997
3,875,500 SHARES OF COMMON STOCK
MEADE INSTRUMENTS CORP.
UNDERWRITING AGREEMENT
MORGAN KEEGAN & COMPANY, INC.
CROWELL, WEEDON & CO.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Morgan Keegan & Company, Inc.
50 North Front Street, 20th Floor
Memphis, Tennessee 38103
Dear Sirs:
Meade Instruments Corp., a corporation organized and existing under the
laws of Delaware (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") 2,500,000 shares of common stock, par value $.01 per
share, of the Company (the "Common Stock") and the selling stockholder of the
Company named in Schedule II hereto (the "Selling Stockholder") proposes to sell
to the Underwriters an additional 870,000 shares of Common Stock, which
aggregate of 3,370,000 shares of Common Stock are referred to herein as the
"Firm Shares." In addition, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, the Selling Stockholder proposes to
sell to the Underwriters, at the option of the Underwriters, up to an additional
130,000 shares of Common Stock and the Company proposes to sell to the
Underwriters, at the option of the Underwriters, up to an additional 375,500
shares (which aggregate of 505,500 shares are referred to herein as the
"Additional Shares") of Common Stock. The Firm Shares and any Additional Shares
purchased by the Underwriters are referred to herein as the "Shares." The Shares
are more fully described in the Registration Statement referred to below. All
references herein to the Company and representations and warranties relating
thereto give effect to the merger of Meade Instruments Corp., a California
corporation (the "Predecessor"), with and into the Company, as a result of which
the Company shall be the surviving corporation, which merger shall be
consummated prior to the Closing Date (as defined below). Accordingly, all
references to the Company herein shall be deemed to include the Company and its
Predecessor.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDER.
A. The Company represents and warrants to, and agrees with, the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-211123)
with respect to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
Company has prepared and has filed or proposes to file prior to the
effective date of such registration statement an amendment or
amendments to such registration statement, which amendment or
amendments have been or will be similarly prepared.
The Company will next file with the Commission one of the
following: (i) prior to effectiveness of such registration statement, a
further amendment thereto, including the form of final prospectus, (ii)
a final prospectus in accordance with Rules 430A and 424(b) of the
Rules and Regulations, or (iii) a term sheet as described in and in
accordance with Rules 434 and 424(b) of the Rules and Regulations (a
"Term Sheet"). As filed, such amendment and form of final prospectus,
or such final prospectus, or such Term Sheet, shall include all Rule
430A Information (as defined below) and, except to the extent that you
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the date and time that
this Underwriting Agreement (this "Agreement") was executed and
delivered by the parties hereto, or, to the extent not completed at
such date and time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company shall have previously advised
you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall
mean such registration statement at the time such registration
statement becomes or became effective including all financial schedules
and exhibits thereto and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended;
provided, however, that such term shall also include all Rule 430A
Information deemed to be included in such registration statement at the
time such registration statement becomes or became effective as
provided by Rule 430A of the Rules and Regulations. The term
"Preliminary Prospectus" shall mean any preliminary prospectus referred
to in the preceding paragraph and any preliminary prospectus included
in the Registration Statement at the time it becomes or became
effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the
2
prospectus relating to the Shares in the form in which it is first
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, (ii) if the Company relies on Rule 434 of the Rules and
Regulations, the Term Sheet relating to the Shares that is first filed
pursuant to Rule 424(b)(7) of the Rules and Regulations, together with
the Preliminary Prospectus identified therein that such Term Sheet
supplements, or, (iii) if a Term Sheet is not used and no filing
pursuant to Rule 424(b) of the Rules and Regulations is required, shall
mean the form of final prospectus included in the Registration
Statement at the time such registration statement becomes or became
effective. The term "Rule 430A Information" means information with
respect to the Shares and the offering thereof permitted to be omitted
from the Registration Statement when it becomes or became effective
pursuant to Rule 430A of the Rules and Regulations. Any reference to
the "date" of a Prospectus that includes a Term Sheet shall mean the
date of the Term Sheet.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements
of the Act and the Rules and Regulations and, as of its date, has not
included any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at
the time the Registration Statement becomes or became effective, and at
all times subsequent thereto up to and including each Closing Date
hereinafter mentioned, the Registration Statement and the Prospectus,
and any amendments or supplements thereto, will contain or contained
all material statements and information required to be included therein
by the Act and the Rules and Regulations and will in all material
respects conform, or did in such respects conform, to the requirements
of the Act and the Rules and Regulations, 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 a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED,
HOWEVER, no representation or warranty contained in this subsection
1.A(b) shall be applicable to information contained in or omitted from
any Preliminary Prospectus, the Registration Statement, the Prospectus
or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
any Underwriter, directly or through the Representatives, reciting in
writing that it is specifically for use in the preparation thereof.
(c) The Company does not own or control, directly or indirectly,
any corporation, association or other entity. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Delaware, with full power and authority (corporate
and other) to own and lease its properties and conduct its business as
described in the Prospectus;
3
the Company is in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders
material to the conduct of its business, all of which are valid and in
full force and effect; the Company is duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which
the ownership or leasing of properties or the conduct of its business
requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect upon the
Company; and no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification.
(d) The Company has authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; the
issued and outstanding shares of Common Stock have been duly authorized
and the outstanding shares of Common Stock have been validly issued,
are fully paid and nonassessable, have been duly approved for quotation
on the Nasdaq National Market; the issued and outstanding shares of
Common Stock and the outstanding options described in the Prospectus
have been issued in compliance with all federal and state securities
laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and
conform in all material respects to any description thereof contained
in the Prospectus. Except as disclosed in or contemplated by the
Prospectus and the financial statements of the Company, and the related
notes thereto, included in the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible
securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the
options or other rights granted and exercised thereunder, set forth in
the Prospectus, accurately and fairly presents the information required
to be shown with respect to such plans, arrangements, options and
rights.
(e) The Shares to be sold by the Company have been duly authorized
and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in
the Prospectus. The Shares to be sold by the Selling Stockholder have
been duly authorized, validly issued, fully paid and nonassessable and
conform to the description thereof contained in the Prospectus. No
preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of the Shares pursuant to this
Agreement. No holder of any securities of the Company has any right
that has not been waived to require the Company to register the sale of
any shares of Common Stock or other securities of the Company owned by
such holder under the Act in the public offering
4
contemplated by this Agreement. No further approval or authority of the
stockholders, the Board of Directors of the Company or any other party
will be required for the transfer and sale of the Firm Shares or the
Additional Shares to be sold as contemplated herein except for
compliance with the Act, the Blue Sky laws applicable to the public
offering of the Shares by the several Underwriters and the clearance of
such offering with the National Association of Securities Dealers, Inc.
(the "NASD").
(f) The Company has full legal right, power and authority to enter
into this Agreement and perform the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable against it in accordance with its terms, except (i) as such
enforceability may be limited by the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to rights
and remedies of creditors, and (ii) to the extent that rights to
indemnity or contribution hereunder may be limited by federal or state
securities laws or the public policy underlying such laws. The making
and performance of this Agreement by the Company and the consummation
of the transactions herein contemplated will not violate any provisions
of the certificate of incorporation or bylaws, as amended or restated,
or other organizational documents, of the Company, and will not
conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a
default under, result in the acceleration of any indebtedness under or
performance required by, result in any right of termination of,
increase any amounts payable under, decrease any amounts receivable
under, or, to the Company's best knowledge, adversely change any other
rights pursuant to, any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the
Company is a party or by which the Company or any of its properties may
be bound or affected, or any statute or any authorization, judgment,
decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body, or arbitrator
(domestic or foreign) applicable to the Company or any of its
properties. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of this Agreement or
the consummation of the transactions contemplated by this Agreement
except for compliance with the Act, the Blue Sky laws applicable to the
public offering of the Shares by the several Underwriters and the
clearance of such offering with the NASD.
(g) Price Waterhouse LLP, who has expressed its opinion with
respect to the financial statements and schedules of the Company, filed
with the Commission as a part of the Registration Statement and
included in the Prospectus and in the Registration Statement, are
independent accountants as required by the Act and the Rules and
Regulations.
5
(h) The financial statements and schedules, if any, of the
Company, and the related notes thereto, included in the Registration
Statement and the Prospectus present fairly the financial positions of
the Company as of the respective dates of such financial statements and
schedules, and the results of operations and cash flows of the Company,
respectively, for the respective periods covered thereby. Such
statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis as certified by the independent accountants named in
subsection 1.A(g). No other financial statements, schedules or
information are required by the Act or the Rules and Regulations to be
included in the Registration Statement. The financial data set forth in
the Prospectus under the captions "Capitalization" and "Selected
Financial Data" fairly present the information set forth therein on the
basis stated in the Registration Statement. The pro forma financial
statements and other pro forma financial information included in the
Registration Statement, Prospectus or Preliminary Prospectus comply in
all material respects with the applicable requirements of Rule 11-02 of
Regulation S-X of the Commission and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of
such statements and the assumptions used in the preparation thereof
are, in the opinion of the Company, reasonable.
(i) Except as disclosed in the Prospectus, and except as to
violations, breaches, defaults and events of default that individually
or in the aggregate would not have a material adverse effect on the
Company, (i) the Company is not in violation or default of any
provision of its certificate of incorporation or bylaws, as amended or
restated, or other organizational documents, or is in breach of or
default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument to which the Company is a party
or by which the Company or any of its properties are bound; and (ii)
there does not exist any state of facts that constitutes an event of
default on the part of the Company as defined in such documents or
which, with notice or lapse of time or both, would constitute such an
event of default.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to
the Registration Statement by the Act or by the Rules and Regulations
that have not been described or filed as required. The descriptions of
the contracts in the Prospectus are accurate in all material respects
and fairly present the information required by the Act and/or the Rules
and Regulations to be presented in Form S-1; except as disclosed in the
Prospectus, the contracts so described in the Prospectus are in full
force and effect on the date hereof, and the Company or, to the best of
the Company's knowledge, any other party is not in breach of or default
under any of such contracts other than any such breach or default as
would not, individually or in the aggregate, prevent or
6
adversely affect the transactions contemplated by this Agreement or
result in a material adverse change in the condition (financial or
other), properties, business, results of operations or prospects of the
Company.
(k) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened to which the Company is or may be a
party or of which property owned or leased by the Company is or may be
the subject or related to environmental or discrimination matters, that
might, individually or in the aggregate, prevent or adversely affect
the transactions contemplated by this Agreement or result in a material
adverse change in the condition (financial or other), properties,
business, results of operations or prospects of the Company; and no
labor disturbance by the employees of the Company exists or is imminent
that might be expected to affect adversely such condition, properties,
business, results of operations or prospects. The Company is not a
party or subject to the provisions of any injunction, judgment, decree
or order of any court, regulatory body, administrative agency or other
governmental body that could be expected to result in a material
adverse change in the condition (financial or other), properties,
business, results of operations or prospects of the Company.
(l) The Company has good and marketable title to all the
properties and assets reflected as owned by it in the financial
statements hereinabove described (or elsewhere in the Prospectus),
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except (i) those, if any, reflected in such financial statements (or
elsewhere in the Prospectus), or (ii) those which are not material in
amount and do not adversely affect the use made and proposed to be made
of such property by the Company. The Company holds its leased
properties under valid and binding leases, with such exceptions as are
not materially significant in relation to the business of the Company.
Except as disclosed in the Prospectus, the Company owns or leases all
such properties as are necessary to its operations as now conducted or
as proposed to be conducted.
(m) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as described in
or specifically contemplated by the Prospectus: (i) the Company has not
incurred any material liabilities or obligations, indirect, direct or
contingent, or entered into any material verbal or written agreement or
other transaction that is not in the ordinary course of business or
that could result in a material reduction in the future earnings of the
Company; (ii) the Company has not sustained any loss or interference
with its business or properties from fire, flood, windstorm, accident
or other calamity, whether or not covered by insurance, that materially
and adversely affects the condition (financial or other), business,
results of operations or prospects of the Company; (iii) the Company
has not paid or
7
declared any dividends or other distributions with respect to its
capital stock and the Company is not in default in the payment of
principal of or interest on any outstanding debt obligations; (iv)
there has not been any change in the capital stock (other than upon the
sale of the Shares hereunder and upon the exercise of options and other
rights described in the Registration Statement) or increase in
indebtedness material to the Company (other than in the ordinary course
of business); and (v) there has not been any material adverse change in
the condition (financial or other), business, properties, results of
operations or prospects of the Company.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, the Company has sufficient trademarks, trade names, patent
rights, mask works, copyrights, licenses, approvals and governmental
authorizations to conduct its business as now conducted; the expiration
of any trademarks, trade names, patent rights, mask works, copyrights,
licenses, approvals or governmental authorizations would not have a
material adverse effect on the condition (financial or other),
business, results of operations or prospects of the Company; except as
disclosed in or specifically contemplated by the Prospectus, the
Company has no knowledge of any material infringement by it or its
customers, with respect to their use of the Company's trademarks, trade
name rights, patent rights, mask works, copyrights, licenses, trade
secrets or other similar rights of others, and there is no claim being
made against the Company or its customers with respect to their use of
the Company's products, which claims are regarding trademarks, trade
names, patents, mask works, copyrights, licenses, trade secrets or
other infringements which could have a material adverse effect on the
condition (financial or other), business, results of operations or
prospects of the Company.
(o) The Company has not been advised, and has no reason to
believe, that it is not conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it
is conducting business, including, without limitation, all applicable
local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not materially adversely
affect the condition (financial or other), business, results of
operations or prospects of the Company.
(p) The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due
thereon; and the Company has no knowledge of any tax deficiency which
has been or might be asserted or threatened against the Company which
could materially and adversely affect the condition (financial or
other), business, results of operations or prospects of the Company.
(q) The Company is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
8
(r) The Company has not distributed and will not distribute prior
to the Closing Date any offering material in connection with the
offering and sale of the Shares other than the Prospectus, the
Registration Statement and the other materials permitted by the Act.
(s) The Company maintains insurance of the types, with insurers,
and in the amounts as are reasonable and customary in the business in
which it is engaged, including, but not limited to, insurance covering
real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force
and effect.
(t) The Company has not at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign or domestic
office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any foreign or federal or state
governmental officer or official or other person charged with similar
public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(v) Other than the Underwriters acting in their capacity as such,
no person is or will be owed any finders fee or commission or similar
payment in connection with the transactions contemplated by this
Agreement.
B. The Selling Stockholder represents and warrants to, and agrees
with, the Underwriters that:
(a) The Selling Stockholder has, and on the Closing Date and the
Additional Closing Date hereinafter mentioned will have, good and valid
title to the Firm Shares and/or the Additional Shares, as applicable,
proposed to be sold by the Selling Stockholder hereunder on such
Closing Date and the Additional Closing Date and full right, power and
authority to enter into this Agreement and to sell, assign, transfer
and deliver such Shares hereunder, free and clear of all voting trust
arrangements, liens, encumbrances, equities, security interests,
restrictions and claims whatsoever; and upon delivery of and payment
for such Shares hereunder, the Underwriters will acquire good and
marketable title thereto, free and clear of all liens, encumbrances,
equities, claims, restrictions, security interests, voting trusts or
other defects of title whatsoever.
(b) The Selling Stockholder has executed and delivered a Custody
Agreement and Power of Attorney (hereinafter referred to as the
"Stockholder
9
Agreement") and in connection herewith has deposited in custody, under
the Stockholder Agreement, with the agent named therein (the "Agent")
as custodian, certificates in negotiable form for the Shares to be sold
hereunder by the Selling Stockholder, for the purpose of further
delivery pursuant to this Agreement. The Selling Stockholder agrees
that the Shares to be sold by the Selling Stockholder on deposit with
the Agent are subject to the interests of the Company and the
Underwriters, that the arrangements made for such custody are to that
extent irrevocable, and that the obligations of the Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement
or in the Stockholder Agreement, by any act of the Selling Stockholder,
by operation of law, by the death or incapacity of the Selling
Stockholder or by the occurrence of any other event. If the Selling
Stockholder should die or become incapacitated, or if any other event
should occur, before the delivery of the Shares hereunder, the
documents evidencing Shares then on deposit with the Agent shall be
delivered by the Agent in accordance with the terms and conditions of
this Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Agent shall have received
notice thereof. This Agreement and the Stockholder Agreement have been
duly executed and delivered by or on behalf of the Selling Stockholder
and the form of the Stockholder Agreement has been delivered to you.
(c) The Selling Stockholder has full legal right, power and
authority to enter into this Agreement and perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed
and delivered by the Selling Stockholder and constitutes a valid and
binding obligation of the Selling Stockholder, enforceable against it
in accordance with its terms, except (i) as such enforceability may be
limited by the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to rights and remedies of
creditors, and (ii) to the extent that rights to indemnity or
contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws. The making and
performance of this Agreement and the Stockholder Agreement and the
consummation of the transactions herein contemplated and by the
Stockholder Agreement will not result in a breach of any provisions of
the certificate of incorporation or bylaws, as amended or restated, or
other organizational documents, of the Selling Stockholder, and will
not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a
default under, result in the acceleration of any indebtedness under or
performance required by, result in any right of termination of,
increase any amounts payable under, decrease any amounts receivable
under, or, to the Selling Stockholder's best knowledge, adversely
change any other rights pursuant to, any agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument
to which the Selling Stockholder is a party or by which the Selling
Stockholder or any of its properties may be bound or affected, or any
statute or any authorization, judgment, decree, order, rule or
10
regulation of any court or any regulatory body, administrative agency
or other governmental body, or arbitrator (domestic or foreign)
applicable to the Selling Stockholder or any of its properties.
(d) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(e) Each Preliminary Prospectus and the Prospectus, insofar as it
has related to the Selling Stockholder, has conformed in all material
respects to the requirements of the Act and the Rules and Regulations
and has not included any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made;
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as it relates to the Selling
Stockholder, 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 not misleading.
(f) The Selling Stockholder is not aware that any of the
representations and warranties set forth in Section 1.A above is untrue
or inaccurate in any material respect.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to the several Underwriters and the
Underwriters, severally and not jointly, agree to purchase from the Company, at
a price per share of $_________, the number of Firm Shares set forth opposite
the respective names of the Underwriters on Schedule I hereto and (ii) the
Selling Stockholder agrees to sell to the several Underwriters and the
Underwriters, severally and not jointly, agree to purchase from the Selling
Stockholder, at the same price per share as specified in clause (i) hereof, the
number of Firm Shares set forth opposite the respective names of the
Underwriters in Schedule I hereto.
(b) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the office of Morgan Keegan &
Company, Inc., 50 North Front Street, 20th Floor, Memphis, Tennessee 38103 or
such other location as may be mutually acceptable. Such delivery and payment
shall be made at 10:00 A.M. on the third business day (unless such time and date
postponed in accordance with the provisions of Section 9 hereof) following the
date of the effectiveness of the Registration Statement (or, if the Company has
elected to rely upon Rule 430A of the Regulations, the third business day after
the determination of the initial public offering
11
price of the Shares), or such other time not later than ten business days after
such date as shall be agreed upon by you, the Selling Stockholder and the
Company (such time and date of payment and delivery being herein called the
"Closing Date"). Delivery of the certificates for the Firm Shares shall be made
to you for the respective accounts of the several Underwriters against payment
by the several Underwriters through the Representatives of the purchase price
for the Firm Shares to the order of the Company and to the Selling Stockholder
by certified or official bank checks payable in New York Clearing House Funds,
or by such other means as to which the parties may agree.
The Company shall cause certificates for the Firm Shares to be
prepared in registered form, in such name or names and in such authorized
denominations as you may request in writing at least two full business days
prior to the Closing Date. The Company and the Selling Stockholder will permit
you to examine and package such certificates for delivery at least one full
business day prior to the Closing Date.
(c) In addition, (i) the Selling Stockholder hereby grants to the
several Underwriters the option to purchase up to an aggregate of 130,000
Additional Shares (as set forth opposite the respective names of the
Underwriters on Schedule I hereto), at the same purchase price per share to be
paid by the several Underwriters to the Company and the Selling Stockholder for
the Firm Shares as set forth in this Section 2 and (ii) the Company hereby
grants to the several Underwriters the option to purchase up to an aggregate of
375,500 Additional Shares (as set forth opposite the respective names of the
Underwriters on Schedule I hereto), at the same purchase price per share to be
paid by the several Underwriters to the Company and the Selling Stockholder for
the Firm Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the several Underwriters. The
Underwriters shall not exercise the option granted by the Company unless and
until the Underwriters have first exercised in full the option granted by the
Selling Stockholder. Subject to the preceding sentence, the options may be
exercised at any time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company
and the Selling Stockholder. Such notice shall set forth the aggregate number of
Additional Shares as to which the option(s) is(are) being exercised and the date
and time, as reasonably determined by you, when the Additional Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); PROVIDED, HOWEVER, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option(s) shall have been exercised nor
later than the third full business day after the date on which the option(s)
shall have been exercised (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). The Company shall cause certificates
for the Additional Shares to be prepared in registered form in such name or
names and in such authorized denominations as you may request in writing at
least two full business days prior to the Additional Closing Date. The Company
and the Selling Stockholder will permit you to examine and package such
certificates for delivery at least one full business day prior to the Additional
Closing Date.
12
Payment for the Additional Shares shall be made by certified or
official bank check or checks, in New York Clearing House or similar next day
funds, or by such other means as to which the parties may agree, payable to the
order of the Company and the Selling Stockholder at the offices of Morgan Keegan
& Company, Inc., 50 North Front Street, 20th Floor, Memphis, Tennessee 38103, or
such other location as may be mutually acceptable, upon delivery of the
certificates for the Additional Shares to you for the respective accounts of the
Underwriters.
(d) Each of the Company and the Selling Stockholder acknowledge
that the wire transfer by or on behalf of the Underwriters of the purchase price
for any Shares does not constitute closing of a purchase and sale of the Shares.
Only execution and delivery of a receipt for the Shares by the Underwriters
indicates completion of the closing of a purchase of the Shares from the Company
and/or the Selling Stockholder. Furthermore, in the event that the Underwriters
wire funds to the Company and/or the Selling Stockholder prior to the completion
of the closing of a purchase of Shares, each of the Company and/or the Selling
Stockholder hereby acknowledges that until the Underwriters execute and deliver
a receipt for the Shares, by telecopy or otherwise, the Company and/or the
Selling Stockholder will not be entitled to the wired funds and shall return the
wired funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Shares is not completed and the wire funds are not returned by the Company
and/or the Selling Stockholder to the Underwriters on the same day wired funds
were received by the Company and/or the Selling Stockholder, each of the Company
and/or the Selling Stockholder agrees to pay to the Underwriters in respect of
each day the wired funds are not returned by it, in same-day funds, interest on
the amount of such wired funds in an amount representing the Underwriters' cost
of financing, as reasonably determined by the Underwriters.
3. OFFERING. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms set forth in the Prospectus.
4. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDER.
A. The Company covenants and agrees with the several Underwriters
that:
(a) If the Registration Statement has not yet been declared
effective at the time of execution of this Agreement, the Company will use its
best efforts to cause the Registration Statement and any amendments thereto to
become effective as promptly as possible, and if Rule 430A is used or the filing
of the Prospectus or any Term Sheet that constitutes a part thereof is otherwise
required under Rules 424(b) and/or 434, the Company will file the Prospectus
(properly completed if Rule 430A has been used) pursuant to Rules 424(b) and/or
434 within the prescribed time period and will provide evidence satisfactory to
you of such timely filing.
13
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b) or the term sheet required to be
filed pursuant to Rule 434) that differs from the prospectus or term sheet on
file at the time of the effectiveness of the Registration Statement before or
after the effective date of the Registration Statement to which you shall
reasonably object in writing after being timely furnished in advance a copy
thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act any event shall have occurred as a result
of which the Prospectus as then amended or supplemented includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, the Company will notify you
promptly and prepare and file with the Commission an appropriate amendment or
supplement (in form and substance satisfactory to you) which will correct such
statement or omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will, without charge, promptly deliver to you a
signed copy of the Registration Statement, including exhibits and all amendments
thereto, or a conformed copy of the registration statement originally filed with
respect to the Shares, including exhibits and all amendments thereto, certified
by the Secretary of the Company to be true and complete copies thereof as filed
with the Commission by electronic transmission. The Company will promptly
deliver to each of the several Underwriters such number of copies of any
Preliminary Prospectus, the Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, as you may reasonably
request.
14
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time the Registration Statement becomes effective, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not otherwise required to be so qualified, or to execute a general
consent for service of process in any jurisdiction in which it is not otherwise
required to execute such a consent.
(e) The Company will make generally available (within the meaning
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations) to its
security holders and to you as soon as practicable, but not later than 90 days
after the end of its fiscal quarter in which the first anniversary date of the
effective date of the Registration Statement occurs, an earnings statement (in
form complying with the provisions of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(f) During the period of 270 days from the date of the
Prospectus, the Company will not, without the prior written consent of Morgan
Keegan & Company, Inc., on behalf of the Representatives, issue, sell, offer or
agree to sell, encumber, pledge, grant any option for the sale of, or otherwise
dispose (or announce any offer, sale, grant of an option to purchase or other
disposition) of, directly or indirectly, any Common Stock (or any securities
convertible into, exercisable for or exchangeable for Common Stock), and the
Company will obtain the undertaking of each of its officers and directors, and
such of its other stockholders as have been heretofore designated by you not to
engage in any of the aforementioned transactions on their own behalf, other than
(i) the sale by the Company and the Selling Stockholder of Shares hereunder and
(ii) the Company's issuance of Common Stock upon the exercise of presently
outstanding stock options.
(g) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to the Representatives copies
of (i) all reports to its stockholders; and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to remain qualified,
and to cause the Shares to be included, for quotation on the Nasdaq National
Market.
(j) The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 of the Rules and Regulations.
15
B. The Selling Stockholder covenants and agrees with the several
Underwriters that, during the period of 180 days from the date of the
Prospectus, it will not, without the prior written consent of Morgan Keegan &
Company, Inc., on behalf of the Representatives, sell, offer or agree to sell,
encumber, pledge, grant any option for the sale of, or otherwise dispose of,
directly or indirectly, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock).
5. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
and subject to the obligations of the Selling Stockholder set forth below, the
Company hereby agrees to pay all costs and expenses incident to the performance
of the obligations of the Company and the Selling Stockholder hereunder,
including those in connection with (i) preparing, printing, duplicating, filing
and distributing the Registration Statement, as originally filed, and all
amendments thereof (including all exhibits thereto), any Preliminary Prospectus,
the Prospectus and any amendments thereof or supplements thereto (including,
without limitation, fees and expenses of the Company's accountants and counsel),
the underwriting documents (including this Agreement, the Agreement Among
Underwriters and the Selling Agreement) (excluding the legal fees incurred by
the Underwriters in connection with drafting and negotiating the underwriting
documents) and all other documents related to the public offering of the Shares
(including those supplied to the Underwriters in quantities as hereinabove
stated), (ii) the issuance, transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
qualification of the Shares under state or foreign securities or Blue Sky laws,
including the costs of printing and mailing a preliminary and final "Blue Sky
Memorandum" and the fees of counsel for the Underwriters and such counsel's
disbursements in relation thereto, (iv) quotation of the Shares on the Nasdaq
National Market, (v) filing fees of the Commission and the NASD, (vi) the cost
of printing certificates representing the Shares and (vii) the cost and charges
of any transfer agent or registrar. Pursuant to that certain letter agreement
dated as of January 31, 1997 between the Company and the Selling Stockholder,
the Selling Stockholder agreed to reimburse the Company upon the completion of
the offering for the Company's expenses related to the offering as follows: (x)
if the Selling Stockholder receives proceeds from the sale of 500,000 of its
Shares sold in the offering at a price per share of not less than $8.00 and an
underwriting discount of not more than seven percent (7%), the Selling
Stockholder shall pay the Company on the Closing Date up to $200,000 of the
expenses incurred by the Company to conduct the offering (including by not
limited to printing expenses, fees and disbursements of counsel for the Company,
blue sky fees and expenses, accounting expenses, Commission registration fees
and Nasdaq National Market listing fees) (the "Expenses"); (y) if the Selling
Stockholder receives proceeds from the sale of 1,000,000 of its Shares sold in
the offering at a price per share of not less than $8.00 and an underwriting
discount of not more than seven percent (7%), the Selling Stockholder shall pay
the Company on the Closing Date up to $400,000 of the Expenses; and (z) if the
Selling Stockholder receives proceeds from the sale of more
16
than 500,000 of its Shares but less than 1,000,000 of its Shares sold in the
offering at a price per share of not less than $8.00 and an underwriting
discount of not more than seven percent (7%), the Selling Stockholder shall pay
the Company on the Closing Date an amount of the Expenses equal to the product
of (i) $400,000 multiplied by (ii) the number of Shares sold in the offering by
the Selling Stockholder divided by 1,000,000. To the extent, if at all, that the
Selling Stockholder engages legal counsel or any other advisors or persons to
represent, counsel or advise it in connection with this offering, the fees and
expenses of such counsel shall be borne by the Selling Stockholder.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Shares and the
Additional Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholder herein
contained, as of the date hereof and as of the Closing Date (for purposes of
this Section 6, "Closing Date" shall refer to the Closing Date for the Firm
Shares and any Additional Closing Date, if different, for the Additional
Shares), to the absence from any certificates, opinions, written statements or
letters furnished to you or to Gibson, Dunn & Crutcher LLP ("Underwriters'
Counsel") pursuant to this Section 6 of any material misstatement or omission,
to the performance by the Company and the Selling Stockholder of their
respective obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, or at such
later time and date as shall have been consented to in writing by you; if the
Company shall have elected to rely upon Rule 430A of the Regulations, the
Prospectus or any Term Sheet that constitutes a part thereof shall have been
filed with the Commission in a timely fashion in accordance with Section 4.A(a)
hereof; and, at or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the opinion of
O'Melveny & Myers LLP, counsel for the Company, dated the Closing Date,
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(1) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business as a foreign corporation
and is in good standing in all other jurisdictions where the ownership
or leasing of properties or the conduct of its business requires such
qualification, except for jurisdictions in which the failure to so
qualify would not have a material adverse effect on the Company, and
has full corporate power and authority to own its
17
properties and conduct its business as described in the Registration
Statement, and has no subsidiaries;
(2) The authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; all outstanding shares of Common Stock (including the Firm
Shares to be sold by the Selling Stockholder and the Additional Shares)
have been duly authorized and validly issued, are fully paid and
nonassessable, were not issued in violation of or subject to any
preemptive rights and conform to the description thereof contained in
the Prospectus; without limiting the foregoing, there are no preemptive
or other rights to subscribe for or purchase any of the Shares to be
sold by the Company hereunder;
(3) The certificates evidencing the Shares to be delivered
hereunder are in due and proper form under Delaware law, and when duly
countersigned by the Company's transfer agent and registrar, and
delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of this
Agreement, the Shares represented thereby will be duly authorized and
validly issued, fully paid and nonassessable, will not have been issued
in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities and will conform in all material
respects to the description thereof contained in the Prospectus;
(4) Except as disclosed in or specifically contemplated by
the Prospectus, there are no outstanding options, warrants or other
rights calling for the issuance of, or plans or arrangements to issue,
any shares of capital stock of the Company or any security convertible
into or exchangeable for capital stock of the Company;
(5) The statements under the captions "Risk
Factors--Dependence on Key Manufacturer and --Anti-Takeover Effects of
Certain Certificate of Incorporation and Bylaw Provisions and Delaware
Law; Possible Issuance of Preferred Stock," "Management's Discussion
and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," "Business--Properties and
--Litigation," "Management--Benefit Plans" and --Employment
Agreements," "Certain Transactions," "Description of Capital Stock" and
"Shares Eligible for Future Sale," at the time the Registration
Statement became effective, fairly summarize, in all material respects,
the matters described therein insofar as such statements constitute a
summary of documents referred to therein or matters of law;
(6)(a) The Registration Statement has become effective under
the Act, and no stop order suspending the effectiveness of the
Registration Statement or preventing the use of the Prospectus has been
issued and no proceedings for that purpose have been instituted or are
pending or, to such
18
counsel's knowledge, contemplated by the Commission; any required
filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b);
(6)(b) The Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial statements
and schedules and other statistical information included therein as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations;
(6)(c) There are no franchises, leases, contracts, agreements
or documents of a character required to be disclosed in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not disclosed or filed, as required;
and
(6)(d) There are no legal or governmental actions, suits or
proceedings pending or, to such counsel's knowledge, threatened against
the Company which are required to be described in the Prospectus which
are not described as required;
(7) The Company has full corporate power and authority to
enter into this Agreement and to sell and deliver the Firm Shares to be
sold by it to the several Underwriters; this Agreement has been duly
and validly authorized by all necessary corporate action by the
Company, has been duly and validly executed and delivered by and on
behalf of the Company; and no approval, authorization, order, consent,
registration, filing, qualification, license or permit of or with any
court, regulatory, administrative or other governmental body is
required for the execution and delivery of this Agreement by the
Company or the consummation of the transactions contemplated by this
Agreement except such as have been obtained and are in full force and
effect under the Act and such as may be required under applicable Blue
Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters and the clearance of such offering with the NASD;
(8) The execution and performance of this Agreement and
the consummation of the transactions herein contemplated will not
conflict with, result in the acceleration of any indebtedness under or
performance required by, result in any right of termination of,
increase any amounts payable under, decrease any amounts receivable
under, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under,
result in the acceleration of any indebtedness under or performance
required by, result in any right of termination of, increase any
amounts payable under, decrease any amounts receivable under, or, to
the Company's best knowledge, adversely change any other rights
pursuant to, any
19
agreement, mortgage, deed of trust, lease, franchise, license,
indenture, permit or other instrument known to such counsel to which
the Company is a party or by which the Company or any of its properties
may be bound or affected, or any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body, or
arbitrator (domestic or foreign) applicable to the Company or any of
its properties or violate any of the provisions of the certificate of
incorporation or bylaws, or other organizational documents, of the
Company or violate any statute, judgment, decree, order, rule or
regulation of any court or governmental body having jurisdiction over
the Company or any of its property;
(9) The Company is not in violation of its certificate of
incorporation or bylaws, as amended or restated, or other
organizational documents, or in breach of or default with respect to
any provision of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument known to such
counsel to which the Company is a party or by which it or any of its
properties may be bound or affected, except where such default would
not materially and adversely affect the Company; and, to the knowledge
of such counsel, the Company is in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes of any court or
jurisdiction to which they are subject, except where noncompliance
would not materially and adversely affect the Company;
(10) No holders of securities of the Company have rights that
have not been waived or satisfied to the registration of shares of
Common Stock or other securities because of the filing of the
Registration Statement by the Company or the offering contemplated
hereby;
(11) Except as set forth in the Registration Statement and
the Prospectus, such counsel has no knowledge that any patent,
trademark or copyright held by others is infringed by the activities of
the Company described in the Registration Statement or the Prospectus
or by the manufacture, use or sale of any product, device, system or
instrument made by the Company; and
(12) Except as set forth in the Registration Statement and
the Prospectus, such counsel has no knowledge of any actual or
threatened material action, suit, claim or proceeding relating to
patents, patent rights or licenses, trademarks or trademark rights,
copyrights, collaborative research, licenses or royalty arrangements or
agreements or trade secrets, know-how or proprietary techniques or
technology, including, processes and substances, owned by or affecting
the business operations of the Company that are pending or threatened
against the Company or any of its officers or directors.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company,
20
representatives of the independent public accountants for the Company and the
Underwriters at which the contents of the Prospectus and related matters were
discussed and, no facts have come to the attention of such counsel which would
lead such counsel to believe that either the Registration Statement at the time
it became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b), if
applicable), or any amendment thereof made prior to the Closing Date as of the
date of such amendment, contained an 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 not misleading or that the Prospectus as of its date
(or any amendment thereof or supplement thereto made prior to the Closing Date
as of the date of such amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief or opinion with respect to the financial statements and schedules and
other statistical information and financial data included or incorporated by
reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Company and its subsidiaries, provided that copies of any
such statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(c) At the Closing Date, you shall have received the opinion of
______________________, counsel for the Selling Stockholder, dated the Closing
Date, addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(1) This Agreement and the Stockholder Agreement have been
duly authorized, executed and delivered by or on behalf of the Selling
Stockholder; the Agent has been duly and validly authorized to act as
the custodian of the Shares to be sold by such Selling Stockholder; the
performance of this Agreement and the Stockholder Agreement, and the
consummation of the transactions herein and therein contemplated by the
Selling Stockholder will not conflict with, result in the breach or
violation of, or constitute, either by itself
21
or upon notice or the passage of time or both, a default under, result
in the acceleration of any indebtedness under or performance required
by, result in any right of termination of, increase any amounts payable
under, decrease any amounts receivable under, or, to the Selling
Stockholder's best knowledge, adversely change any other rights
pursuant to, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder or any of
its properties may be bound or affected, or any statute or any
authorization, judgment, decree, order, rule or regulation of any court
or any regulatory body, administrative agency or other governmental
body, or arbitrator (domestic or foreign) applicable to the Selling
Stockholder or any of its properties; and to such counsel's knowledge
no approval, authorization, order or consent of any court, regulatory
body, administrative agency or other governmental body is required for
the execution and delivery of this Agreement and the Stockholder
Agreements or the consummation by the Selling Stockholder of the
transactions contemplated herein or therein except such as have been
obtained and are in full force and effect under the Act and such as may
be required under the rules of the NASD and applicable Blue Sky laws,
as to which no opinion is expressed;
(2) The Selling Stockholder has full right, power and
authority to enter into this Agreement and the Stockholder Agreement
and to sell, transfer and deliver the Shares to be sold on such Closing
Date by the Selling Stockholder hereunder and good and marketable title
to such Shares so sold, free and clear of all liens, encumbrances,
equities, claims, restrictions, security interests, voting trusts, or
other defects of title whatsoever, has been transferred to the
Underwriters (whom counsel may assume to be bona fide purchasers) who
have purchased such Shares hereunder;
(3) The Stockholder Agreement executed and delivered by the
Selling Stockholder is legally valid and binding;
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that no facts have come to the attention of
such counsel which would lead such counsel to believe that (i) the sections
under the caption "Principal and Selling Stockholders" in the Registration
Statement, in so far as it relates to the Selling Stockholder, at the time it
became effective under the Act (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable), or any amendment thereof made prior to the Closing Date
as of the date of such amendment, contained an 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 not misleading or that the Prospectus
as of its date (or any amendment thereof or supplement thereto made prior to the
Closing Date as of the date of such amendment or supplement) and as of the
Closing Date contained or contains an untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
22
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief or opinion with respect to the
financial statements and schedules and other statistical information and
financial data included or incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Selling Stockholder,
provided that copies of any such statements or certificates shall be delivered
to Underwriters' Counsel. The opinion of such counsel for the Selling
Stockholder shall state that the opinion of any such other counsel is in form
satisfactory to such counsel and, in their opinion, you and they are justified
in relying thereon.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to you and to Underwriters' Counsel, and the Underwriters
shall have received from said Underwriters' Counsel a favorable opinion, dated
as of the Closing Date, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company and the Selling Stockholder shall have
furnished to Underwriters' Counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(e) At the Closing Date, you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date to the effect that (i) the condition set forth in subsection
(a) of this Section 6 has been satisfied, (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
sustained any material loss or interference with its business or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding,
and there has not been any material adverse change, or any development involving
a material adverse change, in the business, prospects, properties, operations,
condition (financial or otherwise), or results of operations of the Company,
except in each case as described in or contemplated by the Prospectus.
(f) At the Closing Date, you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Selling
Stockholder, dated
23
the Closing Date to the effect that (i) as of the date hereof and as of the
Closing Date, the representations and warranties of the Selling Stockholder set
forth in Section 1 hereof are accurate and (ii) as of the Closing Date, the
obligations of the Selling Stockholder to be performed hereunder on or prior
thereto have been duly performed.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter, from Price Waterhouse LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, to the effect that: (i) they are independent
certified public accountants with respect to the Company within the meaning of
the Act and the Rules and Regulations and stating that the answer to Item 10 of
the Registration Statement is correct insofar as it relates to them; (ii) in
their opinion, the financial statements and schedules and the pro forma
financial statements and schedules of the Company included in the Registration
Statement and the Prospectus and covered by their opinion therein comply as to
form in all material respects with the applicable accounting requirements of the
Act and the Rules and Regulations, including, but not limited to, the applicable
accounting requirements of Rule 11-02 of Regulation S-X; (iii) on the basis of
procedures consisting of a reading of the latest available unaudited interim
financial statements of the Company, a reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company and the
committees of such boards subsequent to February 29, 1996, inquiries of officers
and other employees of the Company and its subsidiaries who have responsibility
for financial and accounting matters of the Company and its subsidiaries with
respect to transactions and events subsequent to February 29, 1996 and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would cause
them to believe that: (A) the unaudited financial statements and schedules of
the Company presented in the Registration Statement and the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and, if applicable, the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the applicable published rules and
regulations of the Commission thereunder or that such unaudited financial
statements are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements included in the Registration Statement and the
Prospectus; (B) with respect to the period subsequent to November 30, 1996 there
were, as of the date of the most recent available monthly financial statements
of the Company and its subsidiaries, if any, and as of a specified date not more
than five days prior to the date of such letter, any changes in the capital
stock or long-term indebtedness of the Company or any decrease in the net
current assets or stockholders' equity of the Company, in each case as compared
with the amounts shown in the most recent balance sheet presented in the
Registration Statement and the Prospectus, except for changes or decreases which
the Registration Statement and the Prospectus disclose have occurred or may
occur or which are set forth in such letter or (C) that during the period from
November 30, 1996 to the date of the most recent available monthly financial
statements of the
24
Company and its subsidiaries, if any, and to a specified date not more than five
days prior to the date of such letter, there was any decrease, as compared with
the corresponding period in the prior fiscal year, in total revenues, or total
or per share net income, except for decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur or which are set forth in
such letter; and (iv) they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings, and other financial information
pertaining to the Company set forth in the Registration Statement and the
Prospectus, which have been specified by you prior to the date of this
Agreement, to the extent that such amounts, numbers, percentages, and
information may be derived from the general accounting and financial records of
the Company and its subsidiaries or from schedules furnished by the Company, and
excluding any questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries, and
other appropriate procedures specified by you set forth in such letter, and
found them to be in agreement.
(h) Prior to the Closing Date, the Company and the Selling
Stockholder shall have furnished to you such further information, certificates
and documents as you may reasonably request including, without limitation, the
Stockholder Agreement.
(i) You shall have received from each person who is a director or
officer of the Company, the Selling Stockholder and such additional stockholders
as have been heretofore designated by you, an agreement to the effect that such
person will not, directly or indirectly, without the prior written consent of
Morgan Keegan & Company, Inc., on behalf of the Representatives, offer, sell,
offer or agree to sell, encumber, pledge, grant any option to purchase or
otherwise dispose (or announce any offer, sale, grant of an option to purchase
or other disposition) of any shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable or exercisable for shares of
Common Stock) for a period of 270 days after the date of the Prospectus, except
for the Selling Stockholder, in which case the period shall be 180 days after
the date of the Prospectus.
(j) At the Closing Date, the Shares shall have been approved for
quotation on the Nasdaq National Market.
(k) There shall not have occurred any change, or any development
involving a prospective change, in the condition (financial or other),
properties, business, results of operations or prospects of the Company from
that set forth in the Registration Statement, that, in your reasonable judgment,
is material and adverse and that make it, in your reasonable judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this
25
Section 6 shall not be in all material respects reasonably satisfactory in form
and substance to you and to Underwriters' Counsel, all obligations of the
Underwriters hereunder may be canceled by you at, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the Additional
Shares may be canceled by you at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company and the
Selling Stockholder in writing, or by telephone, telex or telegraph, confirmed
in writing.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and disbursements and any
and all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon:
(1) any untrue statement or alleged untrue statement made by the
Company in Section 2(A) of this Agreement)
(2) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto executed by the
Company or based upon written information furnished by or on behalf of
the Company or the Principal Stockholders filed in any jurisdiction in
order to qualify the Shares under the securities or blue sky laws
thereof or filed with the Commission or any securities association or
securities exchange (each, an "Application");
(3) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein no misleading; or
(4) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings;
26
PROVIDED, HOWEVER, that the Company will not be liable in any such
case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through you expressly for use
therein; and PROVIDED, FURTHER, that this indemnity agreement with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, liabilities, claims, damages or
expenses purchased Shares, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall have
furnished any such amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if such is required by law, at
or prior to the written confirmation of the sale of such Shares to such person
and if the Prospectus (as so amended or supplemented) would have corrected the
defect giving rise to such loss, liability, claim, damage or expense. This
indemnity will be in addition to any liability which the Company may otherwise
have, including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, the Selling Stockholder, each of the
directors of the Company, each of the officers of the Company who shall have
signed the Registration Statement, and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and disbursements and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), jointly or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Shares, as originally filed or any amendment thereof, or any related
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; PROVIDED,
HOWEVER, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. This indemnity will be in addition to any
liability which any Underwriter may otherwise have, including under this
Agreement. The Company and the Selling
27
Stockholder acknowledge that the statements set forth in the last paragraph of
the cover page and in the paragraphs under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing by or on behalf
of any Underwriter expressly for use in the registration statement relating to
the Shares as originally filed or in any amendment thereof, any related
Preliminary Prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(c) The Selling Stockholder agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
against any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to attorneys' fees and disbursements and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein relating to the Selling Stockholder in reliance upon and in
conformity with written information relating to the Selling Stockholder
furnished to the Company by the Selling Stockholder expressly for use therein;
PROVIDED, HOWEVER, that the liability of the Selling Stockholder hereunder shall
in no event exceed the net proceeds received by the Selling Stockholder from the
sale of Common Stock pursuant to this Agreement. This indemnity will be in
addition to any liability which the Selling Stockholder may otherwise have,
including under this Agreement.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7, except to the extent
prejudiced thereby). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to
28
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
take charge of the defense of such action within a reasonable time after notice
of commencement of the action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, (y) an indemnifying party shall not be liable for any
settlement of any claim or action effected without its written consent;
PROVIDED, HOWEVER, that such consent was not unreasonably withheld, and (z) no
indemnifying party, in the defense of any such claim or action, shall consent to
the entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release for all liability with respect to such claim or
action, without the written consent of such indemnified party.
8. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Sections 7(a), (b) or
(c) hereof is for any reason held to be unavailable from the Company, any
Underwriter or the Selling Stockholder who would otherwise be liable as an
indemnifying party under Section 7 of this Agreement, as the case may be, or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholder and such Underwriter shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provisions (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company, the Selling Stockholder or such Underwriter, any contribution received
by the Company, the Selling Stockholder or such Underwriter from persons other
than (i) the Underwriters or the Selling Stockholder in the case of the Company,
(ii) the Company or the Selling Stockholder in the case of the Underwriters and
(iii) the Company or any Underwriter, in the case of the Selling Stockholder,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to that the Company, the Selling
Stockholder and such Underwriter may be subject, in such proportions as is
appropriate to reflect the relative benefits received by the Company, the
Selling Stockholder and such Underwriter from the offering of the Shares or, if
such allocation is not permitted by applicable law or indemnification is not
29
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company, the Selling Stockholder and such Underwriter in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Selling Stockholder and such
Underwriter shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company, (y) the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Selling Stockholder and (z) the underwriting discounts
and commissions received by such Underwriter, respectively, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company, the Selling Stockholder and such Underwriter 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, the Selling Stockholder or such
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholder and such Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 8 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. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters entered into by and among the several
Underwriters) be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) in no case shall the Selling Stockholder be liable or
responsible for any amount in excess of the net proceeds received by the Selling
Stockholder from the sale of Common Stock pursuant to this Agreement, and (iii)
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions of
this Section 8, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter,
each person, if any, who controls the Selling Stockholder within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as the Selling Stockholder, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration
30
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (iii) of
this Section 8. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 8, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 8 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, such Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names on Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Selling Stockholder and the Company to sell the Additional Shares shall
thereupon terminate, without liability on the part of the Company, the Selling
Stockholder or the several Underwriters with respect thereto (except in each
case as provided in Sections 5, 7(a), (b), (c) and 8 hereof), but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other several Underwriters, the Company and the
Selling Stockholder for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the
31
right to postpone the Closing Date or Additional Closing Date, as the case may
be, for a period, not exceeding five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees to
file promptly any amendment or supplement to the Registration Statement or the
Prospectus that, in the opinion of the Underwriters and Underwriters' Counsel,
may thereby be made necessary or advisable. The term "Underwriter" as used in
this Agreement shall include any party substituted under this Section 9 with
like effect as if it had originally been a party to this Agreement with respect
to such Firm Shares and Additional Shares.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements of the Underwriters, the Company and
the Selling Stockholder contained in this Agreement, including the
representations and warranties contained in Section 1, the agreements contained
in Section 5, the indemnity agreements contained in Section 7 and the
contribution agreements contained in Section 8, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company, any of its officers and directors or the Selling Stockholder or any
controlling person thereof, and shall survive delivery of and payment for the
Shares to and by the several Underwriters. The representations contained in
Section 1 and the agreements contained in Sections 5, 7 and 8 hereof shall
survive the termination of this Agreement, including termination pursuant to
Sections 9 or 11 hereof.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of (i)
when you and the Company shall have received notification of the effectiveness
of the Registration Statement or (ii) the execution of this Agreement. If either
the initial public offering price or the purchase price per Share has not been
agreed upon prior to 5:00 P.M., New York time, on the fifth full business day
after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company or the Underwriters
except as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company by notifying you and the Selling
Stockholder or by you notifying the Company and the Selling Stockholder.
Notwithstanding the foregoing, the provisions of this Section 11 and of Sections
1, 5, 7 and 8 hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in your reasonable opinion will in the
immediate future materially disrupt, the market for the Company's securities or
the securities markets in general; or (ii) if
32
trading on the New York or American Stock Exchanges shall have been suspended or
materially limited, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York or American Stock Exchanges by the New York or American Stock
Exchanges or by order of the Commission or any other governmental authority
having jurisdiction; or (iii) if a banking moratorium has been declared by a
state or federal authority, or if a moratorium in foreign exchange trading by
major international banks or persons has been declared, or if any new
restriction materially adversely affecting the distribution of the Firm Shares
or the Additional Shares, as the case may be, shall have become effective; or
(iv) if there shall have occurred any outbreak or escalation of major
hostilities or any change in the financial markets or any calamity or crises
that, in your sole judgment, is material and adverse; or (v) if there shall have
been such a change in the market for securities in general or in political,
financial or economic conditions, in the case of each of clauses (i) through (v)
if, in your sole judgment, any such event, individually or in the aggregate with
any other such event, makes it inadvisable to proceed with the offering, sale
and delivery of the Firm Shares or the Additional Shares, as the case may be, on
the terms contemplated by the Prospectus.
(c) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) hereof), or if the sale of
the Shares provided for herein is not consummated because any condition to the
obligations of the several Underwriters set forth herein is not satisfied or
because of any refusal, inability or failure on the part of the Company or the
Selling Stockholder to perform any agreement herein or comply with any provision
hereof, the Company will, subject to demand by you, reimburse the Underwriters
for all out-of-pocket expenses (including the fees and expenses of their
counsel), incurred by the several Underwriters in connection herewith.
12. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telecopied or telexed or telegraphed
and confirmed in writing, to such Underwriter c/o Morgan Keegan & Company, Inc.,
50 North Front Street, 20th Floor, Memphis, Tennessee, Attention: _____________;
if sent to the Company or the Selling Stockholder, shall be mailed, delivered,
or telegraphed and confirmed in writing to the Company, 16542 Millikan Avenue,
Irvine, California 92714, Attention: Mr. John C. Diebel. All such notices and
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; three business days after being deposited in the mail,
postage prepaid, if mailed; one business day after being sent by next-day
courier; when answered back, if telexed; and when receipt acknowledged, if
telecopied.
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Selling Stockholder and the
Company and the controlling persons, directors, officers, employees and agents
referred to in
33
Sections 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Shares from any of the Underwriters.
14. WAIVER OF TRIAL BY JURY. EACH OF THE COMPANY, THE UNDERWRITERS AND
THE SELLING STOCKHOLDER HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATED TO THIS AGREEMENT
(INCLUDING THE STOCKHOLDER AGREEMENT) OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
JUDGE AND NOT BEFORE A JURY.
15. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE, BUT WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE COMPANY, THE UNDERWRITERS
AND THE SELLING STOCKHOLDER HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF TENNESSEE, IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY, AGREES THAT ALL CLAIMS IN
RESPECT OF THE ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND AGREES NOT TO BRING ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN ANY OTHER COURT OR TO CONTEST THE JURISDICTION (IN
REM OR IN PERSONAM) OR POWER OR DECISION OF SUCH COURT OVER OR PERTAINING TO THE
PARTY OR WITH RESPECT TO THE SUBJECT MATTER IN ANY OTHER COURT WITHIN OR WITHOUT
THE UNITED STATES OTHER THAN APPROPRIATE APPELLATE COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE
OF ANY ACTION OR PROCEEDING SO BROUGHT AND WAIVES ANY BOND, SURETY, OR OTHER
SECURITY THAT MIGHT BE REQUIRED OF THE OTHER PARTIES HERETO WITH RESPECT
THERETO. EACH OF THE PARTIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY DO
SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT.
34
If the foregoing correctly sets forth the understanding among you, the
Company and the Selling Stockholder, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
MEADE INSTRUMENTS CORP.
By: ______________________________
John C. Diebel
Chairman of the Board and Chief
Executive Officer
CHURCHILL ESOP CAPITAL
PARTNERS, A MINNESOTA LIMITED
PARTNERSHIP
By: ______________________________
Name:
Title:
35
Accepted as of the date first above written
MORGAN KEEGAN & COMPANY, INC.
CROWELL, WEEDON & CO.
BY: MORGAN KEEGAN & COMPANY, INC.
By: ___________________________________
__________________________,
__________________________
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
36
SCHEDULE I
Number of Shares to Be Purchased
[Enlarge/Download Table]
MAXIMUM NO. OF MAXIMUM NO. OF
ADDITIONAL ADDITIONAL SHARES
FROM THE SHARES TO BE TO BE PURCHASED
FROM THE SELLING PURCHASED FROM FROM THE SELLING
NAME OF UNDERWRITER COMPANY STOCKHOLDER THE COMPANY STOCKHOLDER
------------------- ------- ----------- ----------- -----------
MORGAN KEEGAN & COMPANY, INC.
CROWELL, WEEDON & CO.
TOTAL 2,500,000 870,000 375,500 130,000
========= ======= ======= =======
A-1
SCHEDULE II
Selling Stockholder
[Download Table]
MAXIMUM NO. OF
ADDITIONAL
NUMBER OF FIRM SHARES TO BE
NAME OF SELLING STOCKHOLDER SHARES TO BE SOLD PURCHASED
CHURCHILL ESOP CAPITAL PARTNERS, A
MINNESOTA LIMITED PARTNERSHIP 870,000 130,000
TOTAL 870,000 130,000
======= =======
A-2
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000892569-97-000560 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Fri., Apr. 19, 12:54:11.1pm ET 
