AMERICAN MARINE RECREATION, INC.
2,180,000 Shares of Common Stock
($.01 par value per share)
UNDERWRITING AGREEMENT
----------------------
New York, New York
________ __, 1998
BlueStone Capital Partners, L.P.
Royce Investment Group, Inc.
as Representatives of the
Several Underwriters named
in Schedule A hereto
c/o BlueStone Capital Partners, L.P.
575 Fifth Avenue
New York, New York 10017
Dear Sirs:
American Marine Recreation, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters (the "Underwriters")
named in Schedule A to this Underwriting Agreement (the "Agreement"), for whom
BlueStone Capital Partners, L.P. ("BlueStone") and Royce Investment Group, Inc.
are acting as representatives (hereinafter sometimes referred to together as the
"Representatives"), two million one hundred eighty thousand (2,180,000) shares
of common stock, $.01 par value per share (the "Offered Shares"), which Offered
Shares are presently authorized but unissued shares of the common stock, $.01
par value per share (individually a "Common Share" and collectively the "Common
Shares"), of the Company. In addition, the Representatives, in order to cover
over-allotments in the sale of the Offered Shares, may purchase from the
Company, for their own accounts, up to an aggregate of three hundred
twenty-seven thousand (327,000) Common Shares (the "Optional Shares"; the
Offered Shares and the Optional Shares are hereinafter sometimes collectively
referred to as the "Shares"). The Shares are described in the Registration
Statement, as defined below. The Company also proposes to issue and sell to the
Representatives for their own accounts and/or the accounts of their designees,
warrants to purchase an aggregate of two hundred eighteen thousand (218,000)
Common Shares (the "Warrant Shares") at an exercise price of $___ [120% of the
IPO price] per Warrant Share
(the "Representatives' Warrants"), which sale will be consummated in accordance
with the terms and conditions of the form of Representatives' Warrant Agreement
filed as an exhibit to the Registration Statement.
The Representatives hereby warrant to the Company that they
have been authorized by each of the Underwriters to enter into this Underwriting
Agreement on their behalf and to act for them in the manner herein provided. The
Company hereby confirms its respective agreements with the Representatives and
each of the Underwriters, on whose behalf the Representatives are signing this
Agreement, as follows:
1. Purchase and Sale of Offered Shares. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell the Offered
Shares to the Underwriters, severally, and each Underwriter agrees severally and
not jointly, to purchase from the Company, at a purchase price of $____ [7%
underwriter's discount] per share, the number of Offered Shares set forth
opposite the name of such Underwriter in Schedule A attached hereto, plus any
additional Offered Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof. The Underwriters plan
to offer the Offered Shares to the public at a public offering price of $___ per
share.
2. Payment and Delivery.
(a) Payment for the Offered Shares will be made to
the Company by wire transfer against delivery of the Offered Shares to the
Representatives. Such payment and delivery will be made at 10:00 A.M. New York
City time, on the third business day following the Effective Date (the fourth
business day following the Effective Date in the event that trading of the
Offered Shares commences on the day following the Effective Date), the date and
time of such payment and delivery being herein called the "Closing Date." The
certificates representing the Offered Shares to be delivered will be in such
denominations and registered in such names as the Representatives may request
not less than two full business days prior to the Closing Date, and will be made
available to the Representatives for inspection, checking and packaging at the
offices of Continental Stock Transfer & Trust Company, the Company's transfer
agent, at 2 Broadway, New York, New York 10004, not less than one full business
day prior to the Closing Date.
(b) On the Closing Date, the Company will sell the
Representatives' Warrants to the Representatives or to their designees (limited
to officers and partners of the Representatives and Underwriters). The
Representatives' Warrants will be in the form of, and in accordance with, the
provisions of the
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Representatives' Warrant Agreement attached as an exhibit to the Registration
Statement. The aggregate purchase price for the Representatives' Warrants is
$214.50. The Representatives' Warrants will be restricted from sale, transfer,
assignment or hypothecation for a period of one year from the Effective Date,
except to officers or partners of the Representatives and Underwriters and
members of the selling group and/or their officers or partners. Payment for the
Representatives' Warrants will be made to the Company by check or checks payable
to its order on the Closing Date against delivery of the certificates
representing the Representatives' Warrants. The certificates representing the
Representatives' Warrants will be in such denominations and such names as the
Representatives may request prior to the Closing Date.
3. Option to Purchase Optional Shares.
(a) For the purposes of covering any overallotments
in connection with the distribution and sale of the Offered Shares as
contemplated by the Prospectus as defined below, the Representatives are hereby
granted an option to purchase for their own accounts, and not as representatives
of the Underwriters, all or any part of the Optional Shares from the Company.
The purchase price to be paid for the Optional Shares will be the same price per
Optional Share as the price per Offered Share set forth in Section 1 hereof. The
option granted hereby may be exercised by the Representatives as to all or any
part of the Optional Shares at any time within 45 days after the Effective Date.
The Representatives will not be under any obligation to purchase any Optional
Shares prior to the exercise of such option.
(b) The option granted hereby may be exercised by
the Representatives by giving oral notice to the Company, which must be
confirmed by a letter, telex or telegraph setting forth the number of Optional
Shares to be purchased, the date and time for delivery of and payment for the
Optional Shares to be purchased and stating that the Optional Shares referred to
therein are to be used for the purpose of covering over-allotments in connection
with the distribution and sale of the Offered Shares. If such notice is given
prior to the Closing Date, the date set forth therein for such delivery and
payment will not be earlier than either two full business days thereafter or the
Closing Date, whichever occurs later. If such notice is given on or after the
Closing Date, the date set forth therein for such delivery and payment will not
be earlier than two (2) full business days thereafter. In either event, the date
so set forth will not be more than 15 full business days after the date of such
notice. The date and time set forth in such notice is herein called the "Option
Closing Date." Upon exercise of such option, the Company will become obligated
to convey to the Representatives, and, subject to the terms and conditions set
forth in Section 3(d) hereof, the Representatives
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will become obligated to purchase, the number of Optional Shares specified in
such notice.
(c) Payment for any Optional Shares purchased will be
made to the Company by wire transfer against delivery of the Optional Shares
purchased to the Representatives. The certificates representing the Optional
Shares to be delivered will be in such denominations and registered in such
names as the Representatives request not less than two full business days prior
to the Option Closing Date, and will be made available to the Representatives
for inspection, checking and packaging at the aforesaid office of the Company's
transfer agent or correspondent not less than one full business day prior to the
Option Closing Date.
(d) The obligation of the Representatives to purchase
and pay for any of the Optional Shares is subject to the accuracy and
completeness (as of the date hereof and as of the Option Closing Date) of and
compliance in all material respects with the representations and warranties of
the Company herein, to the accuracy and completeness of the statements of the
Company or its officers made in any certificate or other document to be
delivered by the Company pursuant to this Agreement, to the performance in all
material respects by the Company of its obligations hereunder, to the
satisfaction by the Company of the conditions, as of the date hereof and as of
the Option Closing Date, set forth in Section 3(b) hereof, and to the delivery
to the Representatives of opinions, certificates and letters dated the Option
Closing Date substantially similar in scope to those specified in Sections 5 and
6(b), (c), (d) and (e) hereof, but with each reference to "Offered Shares" and
"Closing Date" to be, respectively, to the Optional Shares and the Option
Closing Date.
4. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full power and authority, corporate and other, and all Permits (defined
hereafter) to own or lease, as the case may be, and operate, its properties,
whether tangible or intangible, and to conduct its business as described in the
Registration Statement and to execute, deliver and perform this Agreement and
the Representatives' Warrant Agreement and to consummate the transactions
contemplated hereby and thereby. The Company has no subsidiaries as of the date
hereof and, as of the Closing Date, will have no subsidiaries other than Boat
Tree, Inc., a corporation duly organized and validly existing under the laws of
the State of Florida ("Boat Tree") and Marine America, Inc., a corporation duly
organized and validly existing under the laws of
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the State of Florida ("Marine") (together, the "Subsidiaries"). Unless the
context otherwise requires, all references to the "Company" in this Agreement
shall include the Subsidiaries.
(b) Each of the Subsidiaries has full power and
authority, corporate and other, and all Permits necessary to own or lease, as
the case may be, and operate, its properties, and to conduct its business as
described in the Registration Statement. Each of the Subsidiaries is also duly
qualified to do business as a foreign corporation, and is in good standing, in
all jurisdictions wherein such qualification is necessary and failure so to
qualify could have a material adverse effect on the financial condition, results
of operations, business or properties of the Company or any Subsidiary. On the
Closing Date, the Company will own all of the issued and outstanding shares of
capital stock of each of the Subsidiaries, free and clear of any security
interests, liens, encumbrances, claims and charges, and all of such shares have
been duly authorized and validly issued and are, and on the Closing Date will
be, fully paid and nonassessable. There are no options or warrants for the
purchase of, or other rights to purchase, or outstanding securities convertible
into or exchangeable for, any capital stock or other securities of any
Subsidiary other than those described in the Prospectus.
(c) This Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, and the Representatives' Warrant Agreement, when executed and delivered
by the Company on the Closing Date, will be the valid and binding obligation of
the Company, enforceable against the Company in accordance with their respective
terms. The execution, delivery and performance of this Agreement and the
Representatives' Warrant Agreement by the Company, the consummation by the
Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms of this Agreement and the Representatives' Warrant
Agreement have been duly authorized by all necessary corporate action and do not
and will not, with or without the giving of notice or the lapse of time, or
both, (i) result in any violation of the Company's or of any Subsidiary's
Certificate of Incorporation, Articles of Incorporation or By-laws, each as
amended; (ii) result in a breach of or conflict with any of the terms or
provisions of, or constitute a default under, or result in the modification or
termination of, or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any Subsidiary pursuant to, any indenture, mortgage, note, contract,
commitment or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company, any Subsidiary or any of their
respective properties or assets are or may be bound or affected; (iii) violate
any existing applicable law, rule, regulation,
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judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company, any Subsidiary or any of their
respective properties or business; or (iv) have any effect on any permit,
certification, registration, approval, consent, order, license, franchise or
other authorization (collectively, the "Permits") necessary for the Company or
any Subsidiary to own or lease and operate their respective properties or
conduct their respective businesses or the ability of the Company to make use
thereof.
(d) No Permits of any court or governmental agency or
body, other than under the Securities Act of 1933, as amended (the "Act"), the
Regulations (as hereinafter defined) and applicable state securities or Blue Sky
laws, are required for (i) the valid authorization, issuance, sale and delivery
of the Shares to the Underwriters or the Representatives' Warrants to the
Representatives, and (ii) the consummation by the Company of the transactions
contemplated by this Agreement and the Representatives' Warrant Agreement or, if
so required, all such Permits have been duly obtained and are in full force and
effect.
(e) The conditions for use of a registration
statement on Form SB-2 set forth in the General Instructions to Form SB-2 have
been satisfied with respect to the Company, the transactions contemplated herein
and in the Registration Statement. The Company has prepared in conformity with
the requirements of the Act and the rules and regulations (the "Regulations") of
the Securities and Exchange Commission (the "Commission") and filed with the
Commission a registration statement (File No. 333-_______) on Form SB-2 and has
filed one or more amendments thereto, covering the registration of the Shares
under the Act, including the related preliminary prospectus or preliminary
prospectuses (each thereof being herein called a "Preliminary Prospectus") and a
proposed final prospectus. Each Preliminary Prospectus was endorsed with the
legend required by Item 501(a)(5) of Regulation S-B of the Regulations and, if
applicable, Rule 430A of the Regulations. Such registration statement including
any documents incorporated by reference therein and all financial schedules and
exhibits thereto, as amended at the time it becomes effective, and the final
prospectus included therein are herein, respectively, called the "Registration
Statement" and the "Prospectus," except that, (i) if the prospectus filed by the
Company pursuant to Rule 424(b) of the Regulations differs from the Prospectus,
the term "Prospectus" shall mean the prospectus filed pursuant to Rule 424(b),
and (ii) if the Registration Statement is amended or such Prospectus is
supplemented after the date the Registration Statement is declared effective by
the Commission (the "Effective Date") and prior to the Option Closing Date, the
terms "Registration Statement" and "Prospectus" shall include the Registration
Statement as amended or supplemented.
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(f) Neither the Commission nor, to the best of the
Company's knowledge, any state regulatory authority has issued any order
preventing or suspending the use of any Preliminary Prospectus or has instituted
or, to the best of the Company's knowledge, threatened to institute any
proceedings with respect to such an order.
(g) The Registration Statement when it becomes
effective, the Prospectus (and any amendment or supplement thereto) when it is
filed with the Commission pursuant to Rule 424(b), and both documents as of the
Closing Date and the Option Closing Date referred to below, will contain all
statements which are required to be stated therein in accordance with the Act
and the Regulations and will in all material respects conform to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, on such
dates, will contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company in connection with the Registration
Statement or Prospectus or any amendment or supplement thereto by the
Representatives, or by any Underwriter through the Representatives, expressly
for use therein.
(h) Based on the assumptions stated in the
Registration Statement and the Prospectus, the Company had at the date or dates
indicated in the Prospectus a duly authorized and outstanding capitalization as
set forth in the Registration Statement and the Prospectus and, on the Closing
Date, the Company will have the adjusted stock capitalization set forth therein.
Except as set forth in the Registration Statement or the Prospectus, on the
Effective Date and on the Closing Date, there will be no options to purchase,
warrants or other rights to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell shares of the
Company's capital stock or any such warrants, convertible securities or
obligations. Except as set forth in the Prospectus, no holder of any of the
Company's securities has any rights, "demand," "piggyback" or otherwise, to have
such securities registered under the Act.
(i) The descriptions in the Registration Statement
and the Prospectus of contracts and other documents are accurate and present
fairly the information required to be disclosed, and there are no contracts or
other documents required to be described in the Registration Statement or
Prospectus or to be filed as
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exhibits to the Registration Statement under the Act or the Regulations which
have not been so described or filed as required.
(j) BDO Seidman, LLP, the accountants who have
certified certain of the financial statements filed and to be filed with the
Commission as part of the Registration Statement and the Prospectus, are
independent public accountants within the meaning of the Act and Regulations.
The financial statements and schedules and the notes thereto filed as part of
the Registration Statement and included in the Prospectus are complete, correct
and present fairly the financial position of Boat Tree, as of the dates thereof,
and the results of operations and changes in financial position of Boat Tree for
the periods indicated therein, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as otherwise stated in the Registration Statement and the
Prospectus. The selected financial data set forth in the Registration Statement
and the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited and unaudited financial
statements included in the Registration Statement and the Prospectus.
(k) The Company and each Subsidiary has filed with
the appropriate federal, state and local governmental agencies, and all
appropriate foreign countries and political subdivisions thereof, all tax
returns, including franchise tax returns, which are required to be filed or has
duly obtained extensions of time for the filing thereof and has paid all taxes
shown on such returns and all assessments received by it to the extent that the
same have become due; and the provisions for income taxes payable, if any, shown
on the financial statements filed with or as part of the Registration Statement
are sufficient for all accrued and unpaid foreign and domestic taxes, whether or
not disputed, and for all periods to and including the dates of such financial
statements. Except as disclosed in writing to the Representatives, neither the
Company nor any Subsidiary has executed or filed with any taxing authority,
foreign or domestic, any agreement extending the period for assessment or
collection of any income taxes and is not a party to any pending action or
proceeding by any foreign or domestic governmental agency for assessment or
collection of taxes; and no claims for assessment or collection of taxes have
been asserted against the Company or any Subsidiary.
(l) The outstanding Common Shares and outstanding
options and warrants to purchase Common Shares have been duly authorized and
validly issued. The outstanding Common Shares are fully paid and nonassessable.
The outstanding options and warrants to purchase Common Shares constitute the
valid and binding obligations of the Company, enforceable in accordance with
their terms. None of the outstanding Common Shares or options or
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warrants to purchase Common Shares has been issued in violation of the
preemptive rights of any shareholder of the Company. None of the holders of the
outstanding Common Shares is subject to personal liability solely by reason of
being such a holder. The offers and sales of the outstanding Common Shares and
outstanding options and warrants to purchase Common Shares were at all relevant
times either registered under the Act and the applicable state securities or
Blue Sky laws or exempt from such registration requirements. The authorized
Common Shares and outstanding options and warrants to purchase Common Shares
conform to the descriptions thereof contained in the Registration Statement and
Prospectus. Except as set forth in the Registration Statement and the
Prospectus, on the Effective Date and the Closing Date, there will be no
outstanding options or warrants for the purchase of, or other outstanding rights
to purchase, Common Shares or securities convertible into Common Shares.
(m) The Company has complied with the Regulations of
the Commission with respect to the disclosure in the Registration Statement of
sales of securities within the three years prior to the date hereof.
(n) The issuance and sale of the Shares and the
Warrant Shares have been duly authorized and, when the Shares and the Warrant
Shares have been issued and duly delivered against payment therefor as
contemplated by this Agreement and the Representatives' Warrant Agreement,
respectively, the Shares and the Warrant Shares will be validly issued, fully
paid and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. Neither the Shares nor the
Warrant Shares will be subject to preemptive rights of any shareholder of the
Company.
(o) The issuance and sale of the Representatives'
Warrants have been duly authorized and, when issued, paid for and delivered as
contemplated by the Representatives' Warrant Agreement, the Representatives'
Warrants will constitute valid and binding obligations of the Company,
enforceable as to the Company in accordance with their terms. The Warrant Shares
have been duly reserved for issuance upon exercise of the Representatives'
Warrants in accordance with the provisions of the Representatives' Warrant
Agreement. The Representatives' Warrants conform to the description thereof
contained in the Registration Statement and the Prospectus.
(p) Neither the Company nor any Subsidiary is in
violation of, or in default under, (i) any term or provision of its Certificate
of Incorporation, Articles of Incorporation or By-Laws, each as amended; (ii)
any material term or provision or any financial covenants of any indenture,
mortgage, contract,
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commitment or other agreement or instrument to which it is a party or by which
it or any of its property or business is or may be bound or affected; or (iii)
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of their respective properties or business. The
Company and each Subsidiary owns, possesses or has obtained all governmental and
other (including those obtainable from third parties) Permits necessary to own
or lease, as the case may be, and to operate its properties, whether tangible or
intangible, and to conduct its respective business and operations as presently
conducted, and all such Permits are outstanding and in good standing, and there
are no proceedings pending or to the best of the Company's knowledge, threatened
(nor, to the best of the Company's knowledge, is there any basis therefor),
which seek to cancel, terminate or limit such Permits.
(q) Except as set forth in the Prospectus, there are
no claims, actions, suits, proceedings, arbitrations, investigations or
inquiries before any governmental agency, court or tribunal, domestic or
foreign, or before any private arbitration tribunal, pending, or, to the best of
the Company's knowledge, threatened against the Company or any Subsidiary or
involving the Company's or any Subsidiary's properties or business which, if
determined adversely to the Company or any Subsidiary would, individually or in
the aggregate, result in any material adverse change in the financial position,
shareholders' equity, results of operations, properties, business, management or
affairs or business prospects of the Company or any Subsidiary or which question
the validity of the capital stock of the Company or this Agreement or of any
action taken or to be taken by the Company pursuant to, or in connection with,
this Agreement; nor, to the best of the Company's knowledge, is there any basis
for any such claim, action, suit, proceeding, arbitration, investigation or
inquiry. There are no outstanding orders, judgments or decrees of any court,
governmental agency or other tribunal naming the Company or any Subsidiary and
enjoining the Company or any Subsidiary from taking, or requiring the Company or
any Subsidiary to take, any action, or to which the Company or any Subsidiary or
the Company's or any Subsidiary's properties or business is bound or subject.
(r) Neither the Company nor any of its affiliates has
incurred any liability for any finder's fees or similar payments in connection
with the transactions herein contemplated.
(s) The Company and each Subsidiary owns or possesses
adequate and enforceable rights to use all patents, patent applications,
trademarks, service marks, copyrights, rights, trade secrets, confidential
information, processes and formulations used or proposed to be used in the
conduct of its business as
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described in the Prospectus (collectively the "Intangibles"); to the best of the
Company's knowledge, neither the Company nor any Subsidiary has infringed or is
infringing upon the rights of others with respect to the Intangibles; and,
except as set forth in the Prospectus, neither the Company nor any Subsidiary
has received any notice of conflict with the asserted rights of others with
respect to the Intangibles which could, singly or in the aggregate, materially
adversely affect its business as presently conducted or the prospects, financial
condition or results of operations of the Company or any Subsidiary and the
Company knows of no basis therefor; and, except as set forth in the Prospectus,
to the best of the Company's knowledge, no others have infringed upon the
Intangibles of the Company or any Subsidiary.
(t) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, neither
the Company nor any Subsidiary has incurred any material liability or
obligation, direct or contingent, or entered into any material transaction,
whether or not incurred in the ordinary course of business, or sustained any
material loss or interference with its business from fire, storm, explosion,
flood or other casualty, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree; and since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there have not been, and prior to the Closing Date referred
to below there will not be, any changes in the capital stock or any material
increases in the long-term debt of the Company or any Subsidiary or any material
adverse change in or affecting the general affairs, management, financial
condition, shareholders' equity, results of operations or prospects of the
Company or any Subsidiary, other than as set forth or contemplated in the
Prospectus.
(u) The Company and each Subsidiary has good and
marketable title in fee simple to all real property and good title to all
personal property (tangible and intangible) owned by it, free and clear of all
security interests, charges, mortgages, liens, encumbrances and defects, except
such as are described in the Registration Statement and Prospectus or such as do
not materially affect the value or transferability of such property and do not
interfere with the use of such property made, or proposed to be made, by the
Company or any Subsidiary. The leases, licenses or other contracts or
instruments under which the Company and the Subsidiaries lease, hold or are
entitled to use any property, real or personal, are valid, subsisting and
enforceable only with such exceptions as are not material and do not interfere
with the use of such property made, or proposed to be made, by the Company or
any Subsidiary, and all rentals, royalties or other payments, if any, accruing
thereunder which became due prior to the date of this Agreement have been duly
paid, and neither the Company nor any
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Subsidiary, nor, to the best of the Company's knowledge, any other party is in
default thereunder and, to the best of the Company's knowledge, no event has
occurred which, with the passage of time or the giving of notice, or both, would
constitute a default thereunder. Neither the Company nor any Subsidiary has
received notice of any violation of any applicable law, ordinance, regulation,
order or requirement relating to its owned or leased properties. The Company and
each Subsidiary has adequately insured its properties against loss or damage by
fire or other casualty and maintains, in adequate amounts, such other insurance
as is usually maintained by companies engaged in the same or similar businesses
located in its geographic area.
(v) Each contract or other instrument (however
characterized or described) to which the Company or a Subsidiary is a party or
by which its respective properties or businesses are or may be bound or affected
and to which reference is made in the Prospectus has been duly and validly
executed, is in full force and effect in all material respects and is
enforceable against the parties thereto in accordance with its terms, and none
of such contracts or instruments has been assigned by the Company or any
Subsidiary, and neither the Company nor any Subsidiary, nor, to the best of the
Company's knowledge, any other party is in default thereunder and, to the best
of the Company's knowledge, no event has occurred which, with the lapse of time
or the giving of notice, or both, would constitute a default thereunder.
None of the material provisions of such contracts or
instruments violates any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court having jurisdiction over the
Company or any Subsidiary or any of their respective assets or businesses.
(w) The employment, consulting, confidentiality and
non-competition agreements between the Company and its officers, employees and
consultants and between the Subsidiaries and their respective officers,
employees and consultants, described in the Registration Statement, are binding
and enforceable obligations upon the respective parties thereto in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other similar laws or
arrangements affecting creditors' rights generally and subject to principles of
equity.
(x) Except as set forth in the Prospectus, the
Company has no employee benefit plans (including, without limitation, profit
sharing and welfare benefit plans) or deferred compensation arrangements that
are subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended.
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(y) To the best of the Company's knowledge, no labor
problem exists with any of the Company's employees or any of the Subsidiaries'
employees or is imminent which could adversely affect the Company or any
Subsidiary.
(z) Neither the Company nor any Subsidiary has,
directly or indirectly, at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such contribution in
violation of law or (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than, in each case, payments or contributions
required or allowed by applicable law. The Company's internal accounting
controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.
(aa) The Shares have been approved for listing on the
Nasdaq National Market System ("Nasdaq NMS").
(ab) The Company has provided to Tenzer Greenblatt
LLP, counsel to the several underwriters ("Underwriters' Counsel"), all material
agreements, certificates, correspondence and other items, documents and
information requested by such counsel's Corporate Review Memorandum dated
____________________, 1998.
Any certificate signed by an officer of the Company
or by an officer of a Subsidiary and delivered to the Representatives or to
Underwriters' Counsel shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the matters covered thereby.
5. Certain Covenants of the Company. The Company covenants
with the several Underwriters as follows:
(a) The Company will not at any time, whether before
the Effective Date or thereafter during such period as the Prospectus is
required by law to be delivered in connection with the sales of the Shares by
the Representatives or a dealer, file or publish any amendment or supplement to
the Registration Statement or Prospectus of which the Representatives have not
been previously advised and furnished a copy, or to which the Representatives
shall object in writing.
(b) The Company will use its best efforts to cause
the Registration Statement to become effective and will advise the
Representatives promptly, and, if requested by the Representatives, confirm such
advice in writing, (i) when the Registration Statement, or any post-effective
amendment to the Registration Statement or any supplemented Prospectus is filed
with the Commission; (ii)
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of the receipt of any comments from the Commission; (iii) of any request of the
Commission for amendment or supplementation of the Registration Statement or
Prospectus or for additional information; and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any Preliminary
Prospectus, or of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the initiation of any proceedings for any of
such purposes. The Company will use its best efforts to prevent the issuance of
any such stop order or of any order preventing or suspending such use and to
obtain as soon as possible the lifting thereof, if any such order is issued.
(c) The Company will deliver to each Underwriter,
without charge, from time to time until the Effective Date, as many copies of
each Preliminary Prospectus as each Underwriter may reasonably request, and the
Company hereby consents to the use of such copies for purposes permitted by the
Act. The Company will deliver to each Underwriter, without charge, as soon as
the Registration Statement becomes effective, and thereafter from time to time
as requested, such number of copies of the Prospectus (as supplemented, if the
Company makes any supplements to the Prospectus) as each Underwriter may
reasonably request. The Company has furnished or will furnish to each of the
Representatives a signed copy of the Registration Statement as originally filed
and of all amendments thereto, whether filed before or after the Registration
Statement becomes effective, a copy of all exhibits filed therewith and a signed
copy of all consents and certificates of experts.
(d) The Company will comply with the Act, the
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder so as to permit the continuance
of sales of and dealings in the Offered Shares and in any Optional Shares which
may be issued and sold. If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act, any event occurs as a result of which
the Registration Statement and Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it shall be necessary to amend or
supplement the Registration Statement and Prospectus to comply with the Act or
the regulations thereunder, the Company will promptly file with the Commission,
subject to Section 5(a) hereof, an amendment or supplement which will correct
such statement or omission or which will effect such compliance.
(e) The Company will furnish such proper informa-
tion as may be required and otherwise cooperate in qualifying the
-14-
Shares for offering and sale under the securities or Blue Sky laws relating to
the offering in such jurisdictions as the Representatives may reasonably
designate, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Company would be subject to
service of general process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction.
(f) The Company will make generally available to its
security holders, in the manner specified in Rule 158(b) under the Act, and
deliver to the Representatives and Underwriters' Counsel as soon as practicable
and in any event not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement meeting the requirements of Rule 158(a)
under the Act covering a period of at least 12 consecutive months beginning
after the effective date of the Registration Statement.
(g) For a period of three years from the Effective
Date, the Company will deliver to the Representatives, on a timely basis (i) a
copy of each report or document, including, without limitation, reports on Forms
8-K, 10-K (or 10-KSB) and 10-Q (or 10-QSB) and exhibits thereto, filed or
furnished to the Commission, any securities exchange or the National Association
of Securities Dealers, Inc. (the "NASD") on the date each such report or
document is so filed or furnished; (ii) as soon as practicable, copies of any
reports or communications (financial or other) of the Company mailed to its
security holders; (iii) as soon as practicable, a copy of any Schedule 13D, 13G,
14D-1 or 13E-3 received or prepared by the Company from time to time; (iv)
quarterly statements setting forth such information regarding the Company's
results of operations and financial position (including balance sheet, profit
and loss statements and data regarding backlog) as is regularly prepared by
management of the Company; and (v) such additional information concerning the
business and financial condition of the Company as the Representatives may from
time to time reasonably request and which can be prepared or obtained by the
Company without unreasonable effort or expense. The Company will furnish to its
shareholders annual reports containing audited financial statements and such
other periodic reports as it may determine to be appropriate or as may be
required by law.
(h) Neither the Company nor any person that con-
trols, is controlled by or is under common control with the Company will take
any action designed to or which might be reasonably expected to cause or result
in the stabilization or manipulation of the price of the Common Shares.
-15-
(i) If the transactions contemplated by this
Agreement are consummated, BlueStone shall retain the $50,000 previously paid to
it, and the Company will pay or cause to be paid the following: all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to, the fees and expenses of
accountants and counsel for the Company; the preparation, printing, mailing and
filing of the Registration Statement (including financial statements and
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto; the printing and mailing of the Selected Dealer Agreement;
the issuance and delivery of the Shares to the Representatives; all taxes, if
any, on the issuance of the Shares; the fees, expenses and other costs of
listing the Shares on Nasdaq NMS and of qualifying the Shares for sale under the
"Blue Sky" or securities laws of those states in which the Shares are to be
offered or sold, including the fees and disbursements of Underwriters' Counsel
incurred in connection therewith, and the cost of printing and mailing the "Blue
Sky Survey"; the filing fees incident to securing any required review by the
NASD; the cost of furnishing to the several Underwriters copies of the
Registration Statement, Preliminary Prospectuses and the Prospectus as herein
provided; the costs of placing "tombstone advertisements" in any publications
which may be selected by the Representatives; and all other costs and expenses
incident to the performance of the Company's obligations hereunder which are not
otherwise specifically provided for in this Section 5(i).
In addition, at the Closing Date and the Option
Closing Date, the Representatives will deduct from the payment for the Shares an
amount equal to the Representatives' accountable out-of-pocket costs, fees and
expenses (up to an aggregate maximum of $325,000) incurred during the
registration process (less the sum of $50,000 previously paid to BlueStone),
including all accountable out-of-pocket expenses and relating to the
transactions contemplated hereby, which amount will include, among others, fees
and expenses of Underwriters' Counsel (other than those payable by the Company
in connection with "Blue Sky" qualifications referred to in the preceding
paragraph) and costs associated with the marketing and selling of the Shares.
(j) If the transactions contemplated by this
Agreement or related hereto are not consummated because the Company decides not
to proceed with the offering for any reason or if the Representatives decide not
to proceed with the offering because of a breach by the Company of its
representations, warranties or covenants in this Agreement or as a result of
adverse changes in the affairs of the Company, the Company will reimburse the
Representatives for all of their accountable out-of-pocket expenses incurred in
connection with the offering. If the Representatives decide not to proceed with
the offering for any other reason, the
-16-
Company will reimburse the Representatives for their accountable expenses up to
the $50,000 previously paid to BlueStone. In no event, however, will the
Representatives, in the event the offering is terminated, be entitled to retain
or receive more than an amount equal to their actual accountable out-of-pocket
expenses.
(k) The Company intends to apply the net proceeds
from the sale of the Shares for the purposes set forth in the Prospectus.
(l) During the period of twelve (12) months following
the date hereof, neither the Company nor any of its officers, directors or
securityholders beneficially owning one percent (1%) or more of the outstanding
Common Shares will offer for sale, sell, transfer, pledge or otherwise dispose
of, directly or indirectly, any securities of the Company, in any manner
whatsoever, whether pursuant to Rule 144 of the Regulations or otherwise (other
than by bona fide gift, will or the laws of descent and distribution to the
securityholder's spouse, children or grandchildren, a trust for the benefit of
such securityholder's spouse, children or grandchildren, a partnership the
general partner of which is the securityholder (or a corporation, a majority of
whose outstanding stock is owned of record or beneficially by the securityholder
or any of the foregoing) or partners of the securityholder in connection with
the securityholder partnership's distribution of its Common Shares to its
partners; provided in each case that the transferee first executes and delivers
to the Underwriter an undertaking to be bound by the provisions of this Section
5(l)), and no holder of registration rights relating to securities of the
Company will execute any such registration rights, in either case, without the
prior written consent of BlueStone. The Company will deliver to the
Representatives the undertakings as of the date hereof of its officers,
directors, registration rights holders and securityholders, including the
securityholders and registration rights holders of Boat Tree and Marine, to this
effect.
(m) The Company will not file any registration
statement relating to the offer or sale of any of the Company's securities,
including any registration statement on Form S-8 (except for a Form S-8 filed
with respect to the Company's 1998 Stock Option Plan), during the twelve (12)
months following the date hereof without BlueStone's prior written consent.
(n) The Company maintains and will continue to
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in
accordance with generally
-17-
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(o) The Company will use its best efforts to maintain
the listing of the Shares on the Nasdaq NMS for so long as the Shares are
qualified for such listing.
(p) The Company will, concurrently with the Effective
Date, register the class of equity securities of which the Shares are a part
under Section 12(g) of the Exchange Act and the Company will maintain such
registration for a minimum of five (5) years after the Effective Date.
(q) The Company shall retain a transfer agent for the
Common Shares, reasonably acceptable to BlueStone, for a period of three (3)
years following the Effective Date. In addition, for a period of three (3) years
following the Effective Date, the Company, at its own expense, shall cause its
transfer agent to provide BlueStone, if so requested in writing, with copies of
the Company's daily transfer sheets and when requested by BlueStone, a current
list of the Company's security holders, including a list of the beneficial
owners of securities held by a depository trust company and other nominees.
(r) The Company hereby agrees, at its sole cost and
expense, to supply and deliver to Underwriters' Counsel, within a reasonable
period from the date hereof, four bound volumes, including the Registration
Statement, as amended or supplemented, all exhibits to the Registration
Statement, the Prospectus and all other underwriting documents.
(s) The Company shall, within 10 days of the date
hereof, have applied for listing in Standard & Poor's Corporation Records
Service (including annual report information) or Moody's Industrial Manual
(Moody's OTC Industrial Manual not being sufficient for these purposes) and
shall use its best efforts to have the Company listed in such manual and shall
maintain such listing for a period of three (3) years following the Effective
Date.
(t) For a period of two (2) years from the Effective
Date, the Company shall provide BlueStone, on a not less than annual basis, with
internal forecasts setting forth projected results of operations for each
quarterly and annual period in the two (2) fiscal years following the respective
dates of such forecasts; provided, however, that BlueStone shall keep
-18-
confidential and shall not disclose to any third party any material non-public
information. Such forecasts shall be provided to BlueStone more frequently than
annually if prepared more frequently by management, and revised forecasts shall
be prepared and provided to BlueStone when required to reflect more current
information, revised assumptions or actual results that differ materially from
those set forth in the forecasts.
(u) For a period of three (3) years following the
Effective Date, the Company shall continue to retain BDO Seidman, LLP (or such
other nationally recognized accounting firm as is acceptable to BlueStone) as
the Company's independent public accountants.
(v) For a period of three (3) years following the
Effective Date, the Company, at its expense, shall cause its independent
certified public accountants, as described in Section 5(u) above, to review (but
not audit) the Company's financial statements for each of the first three fiscal
quarters prior to the announcement of quarterly financial information, the
filing of the Company's 10-Q (or 10-QSB) quarterly report and the mailing of
quarterly financial information to shareholders.
(w) For a period of eighteen (18) months following
the Effective Date, the Company will not offer or sell any of its securities (i)
pursuant to Regulation S of the Act or (ii) at a discount from the then current
market price or in a discounted transaction, without the prior written consent
of BlueStone.
(x) For a period of twenty-five (25) days following
the Effective Date, the Company will not issue press releases or engage in any
other publicity without BlueStone's prior written consent, other than normal and
customary releases issued in the ordinary course of the Company's business or
those releases required by law.
(y) For a period of three (3) years following the
Effective Date, the Company will cause its Board of Directors to meet, either in
person or telephonically, a minimum of four (4) times per year and will hold a
shareholder's meeting at least once per annum.
6. Conditions of the Underwriters' Obligation to Purchase
Shares from the Company. The obligation of the several Underwriters to purchase
and pay for the Offered Shares which they have agreed to purchase from the
Company is subject (as of the date hereof and the Closing Date) to the accuracy
of, and the Company's compliance in all material respects with, the
representations and warranties of the Company herein, to the accuracy of the
statements of the Company and its officers made pursuant hereto, to the
-19-
performance in all material respects by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement will have become
effective not later than 9:30 A.M., New York City time, on the day following the
date of this Agreement, or at such later time or on such later date as the
Representatives may agree to in writing; prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement will have been
issued and no proceedings for that purpose will have been initiated or will be
pending or, to the best of the Representatives' or the Company's knowledge, will
be contemplated by the Commission; and any request on the part of the Commission
for additional information will have been complied with to the satisfaction of
Underwriters' Counsel.
(b) At the time that this Agreement is executed and
at the Closing Date, there will have been delivered to the Representatives a
signed opinion of McLaughlin & Stern, LLP, counsel for the Company ("Company
Counsel"), dated as of the date hereof or the Closing Date, as the case may be
(and any other opinions of counsel referred to in such opinion of Company
Counsel or relied upon by Company Counsel in rendering its opinion), reasonably
satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with full power and authority, corporate and other, and with all
Permits necessary to own or lease, as the case may be, and operate its
properties, whether tangible or intangible, and to conduct its business as
described in the Registration Statement. The Company has no subsidiaries and, as
of the Closing Date, will have no subsidiaries other than the Subsidiaries. Each
of the Subsidiaries is a corporation duly organized and validly existing under
the laws of its state of incorporation. Unless the context otherwise requires,
all references to the "Company" in this opinion shall include the Subsidiaries.
The Company and each of the Subsidiaries is duly qualified to do business as a
foreign corporation, and is in good standing, in all jurisdictions wherein such
qualification is necessary and the failure to so qualify could have a material
adverse effect on the financial condition, results of operations, business or
properties of the Company or any Subsidiary. Each of the Subsidiaries has full
power and authority, corporate and other, with all Permits necessary to own or
lease, as the case may be, and operate its properties and to conduct its
business as described in the Prospectus.
On the Closing Date, the Company will own all of the
issued and outstanding shares of capital stock of each of the Subsidiaries, free
and clear of any security interests, liens,
-20-
encumbrances, claims and charges, and all of such shares have been duly
authorized and validly issued and are, and on the Closing Date will be, fully
paid and nonassessable.
(ii) The Company has full power and authority,
corporate and other, to execute, deliver and perform this Agreement and the
Representatives' Warrant Agreement and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Representatives' Warrant Agreement by the Company, the
consummation by the Company of the transactions herein and therein contemplated
and the compliance by the Company with the terms of this Agreement and the
Representatives' Warrant Agreement have been duly authorized by all necessary
corporate action, and this Agreement has been duly executed and delivered by the
Company. This Agreement is (assuming for the purposes of this opinion that it is
valid and binding upon the other party thereto), and the Representatives'
Warrant Agreement, when executed and delivered by the Company on the Closing
Date, will be, valid and binding obligations of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and the discretion of courts in
granting equitable remedies and except that enforceability of the
indemnification provisions set forth in Section 7 hereof may be limited by the
federal securities laws or public policy underlying such laws.
(iii) The execution, delivery and performance of
this Agreement and the Representatives' Warrant Agreement by the Company, the
consummation by the Company of the transactions herein and therein contemplated
and the compliance by the Company with the terms of this Agreement and the
Representatives' Warrant Agreement do not, and will not, with or without the
giving of notice or the lapse of time, or both, (A) result in a violation of the
Certificate of Incorporation, Articles of Incorporation or ByLaws, each as
amended, of the Company or any Subsidiary, (B) result in a breach of or conflict
with any of the terms or provisions of, or constitute a default under, or result
in the modification or termination of, or result in the creation or imposition
of any lien, security interest, charge or encumbrance upon any of the properties
or assets of the Company or any Subsidiary pursuant to, any indenture, mortgage,
note, contract, commitment or other material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company, any Subsidiary
or any of their respective properties or assets are or may be bound or affected;
(C) violate any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company, any Subsidiary or any of their respective
properties or business;
-21-
or (D) have any effect on any Permit necessary for the Company or any Subsidiary
to own or lease and operate its properties or conduct its business or the
ability of the Company to make use thereof.
(iv) No Permits of any court or governmental agency
or body (other than under the Act, the Regulations and applicable state
securities or Blue Sky laws) are required for the valid authorization, issuance,
sale and delivery of the Shares or the Representatives' Warrants, or the
consummation by the Company of the transactions contemplated by this Agreement
and the Representatives' Warrant Agreement or, if so required, all such Permits
have been duly obtained and are in full force and effect.
(v) The Registration Statement has become effective
under the Act; no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending, threatened or contemplated under the Act or
applicable state securities laws.
(vi) The Registration Statement and the Prospectus,
as of the Effective Date, and each amendment or supplement thereto as of its
effective or issue date (except for the financial statements and other financial
data included therein or omitted therefrom, as to which Company Counsel need not
express an opinion) comply as to form in all material respects with the
requirements of the Act and Regulations.
(vii) The descriptions in the Registration Statement
and the Prospectus of statutes, regulations, government classifications,
contracts and other documents (including opinions of such counsel), and the
response to Item 13 of Form SB-2, have been reviewed by Company Counsel, and,
based upon such review, are accurate in all material respects and present fairly
the information required to be disclosed, and there are no material statutes,
regulations or government classifications, material contracts or documents, of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement, which are
not so described or filed as required.
None of the material provisions of the contracts or
instruments described above violates any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or court having
jurisdiction over the Company or any Subsidiary or any of their respective
assets or businesses.
(viii) The outstanding Common Shares and outstanding
options and warrants to purchase Common Shares have
-22-
been duly authorized and validly issued. The outstanding Common Shares are fully
paid and nonassessable. The outstanding options and warrants to purchase Common
Shares constitute the valid and binding obligations of the Company, enforceable
in accordance with their terms. None of the outstanding Common Shares or options
or warrants to purchase Common Shares has been issued in violation of the
preemptive rights of any shareholder of the Company. None of the holders of the
outstanding Common Shares is subject to personal liability solely by reason of
being such a holder. The offers and sales of the outstanding Common Shares and
outstanding options and warrants to purchase Common Shares were at all relevant
times either registered under the Act and the applicable state securities or
Blue Sky laws or exempt from such registration requirements. The authorized
Common Shares and outstanding options and warrants to purchase Common Shares
conform to the descriptions thereof contained in the Registration Statement and
Prospectus. Except as set forth in the Prospectus, no holders of any of the
Company's securities has any rights, "demand", "piggyback" or otherwise, to have
such securities registered under the Act.
(ix) The issuance and sale of the Shares and the
Warrant Shares have been duly authorized and, when the Shares and the Warrant
Shares have been issued and duly delivered against payment therefor as
contemplated by this Agreement and the Representatives' Warrant Agreement,
respectively, the Shares and the Warrant Shares will be validly issued, fully
paid and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. None of the Shares nor the
Warrant Shares are subject to preemptive rights of any shareholder of the
Company. The certificates representing the Shares are in proper legal form.
(x) The issuance and sale of the Representatives'
Warrants have been duly authorized and, when paid for, issued and delivered
pursuant to the terms of the Representatives' Warrant Agreement, they will
constitute the valid and binding obligations of the Company, enforceable as to
the Company in accordance with their terms. The Warrant Shares have been duly
reserved for issuance upon exercise of the Representatives' Warrants in
accordance with the provisions of the Representatives' Warrant Agreement. The
Representatives' Warrants conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(xi) Upon delivery of the Offered Shares to the
Underwriters against payment therefor as provided in this Agreement, the
Underwriters (assuming they are bona fide purchasers within the meaning of the
Uniform Commercial Code) will acquire good title to the Offered Shares, free and
clear of all liens, encumbrances, equities, security interests and claims.
-23-
(xii) Assuming that the Representatives exercise the
over-allotment option to purchase any of the Optional Shares and make payment
therefor in accordance with the terms of this Agreement, upon delivery of the
Optional Shares so purchased to the Representatives hereunder, the
Representatives (assuming they are bona fide purchasers within the meaning of
the Uniform Commercial Code) will acquire good title to such Optional Shares,
free and clear of any liens, encumbrances, equities, security interests and
claims.
(xiii) To the best of Company Counsel's knowledge,
there are no claims, actions, suits, proceedings, arbitrations, investigations
or inquiries before any governmental agency, court or tribunal, foreign or
domestic, or before any private arbitration tribunal, pending or threatened
against the Company or any Subsidiary, or involving the Company's or any
Subsidiary's properties or business, other than as described in the Prospectus,
such description being accurate, and other than litigation incident to the kind
of business conducted by the Company which, individually and in the aggregate,
is not material.
(xiv) The Company and each Subsidiary owns or
possesses adequate and enforceable rights to use all patents, patent
applications, trademarks, service marks, copyrights, rights, trade secrets,
confidential information, processes and formulations used or proposed to be used
in the conduct of its business as described in the Prospectus (collectively the
"Intangibles"); to the best of Company Counsel's knowledge, neither the Company
nor any Subsidiary has infringed nor is infringing upon the rights of others
with respect to the Intangibles; and to the best of Company Counsel's knowledge,
neither the Company nor any Subsidiary has received any notice that it has or
may have infringed, is infringing upon or is conflicting with the asserted
rights of others with respect to the Intangibles which might, singly or in the
aggregate, materially adversely affect its business, results of operations or
financial condition and such counsel is not aware of any licenses with respect
to the Intangibles which are required to be obtained by the Company or any
Subsidiary.
(xv) Company Counsel has participated in reviews and
discussions in connection with the preparation of the Registration Statement and
the Prospectus, and in the course of such reviews and discussions and such other
investigation as Company Counsel deemed necessary, no facts came to its
attention which lead it to believe that (A) the Registration Statement (except
as to the financial statements and other financial data contained therein, as to
which Company Counsel need not express an opinion), on the Effective Date,
contained any untrue statement of a material fact required to be stated therein
or omitted to state any material fact required to be stated therein or necessary
to
-24-
make the statements therein, in light of the circumstances under which they were
made, not misleading, or that (B) the Prospectus (except as to the financial
statements and other financial data contained therein, as to which Company
Counsel need not express an opinion), contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering its opinion pursuant to this Section
6(b), Company Counsel may rely upon the certificates of government officials and
officers of the Company as to matters of fact, provided that Company Counsel
shall state that they have no reason to believe, and do not believe, that they
are not justified in relying upon such opinions or such certificates of
government officials and officers of the Company as to matters of fact, as the
case may be.
The opinion letters delivered pursuant to this
Section 6(b) shall state that any opinion given therein qualified by the phrase
"to the best of our knowledge" is being given by Company Counsel after due
investigation of the matters therein discussed.
(c) At the Closing Date, there will have been
delivered to the Representatives a signed opinion of Underwriters' Counsel,
dated as of the Closing Date, to the effect that the opinions delivered pursuant
to Section 6(b) hereof appear on their face to be appropriately responsive to
the requirements of this Agreement, except to the extent waived by the
Representatives, specifying the same, and with respect to such other related
matters as the Representatives may require.
(d) At the Closing Date (i) the Registration State-
ment and the Prospectus and any amendments or supplements thereto will contain
all material statements which are required to be stated therein in accordance
with the Act and the Regulations and will conform in all material respects to
the requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading; (ii)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there will not have been any material adverse
change in the financial condition, results of operations or general affairs of
the Company from that set forth or contemplated in the Registration Statement
and the Prospectus, except changes which the Registration Statement and the
Prospectus indicate might occur
-25-
after the Effective Date; (iii) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no material transaction, contract or agreement entered into by
the Company, other than in the ordinary course of business, which would be
required to be set forth in the Registration Statement and the Prospectus, other
than as set forth therein; and (iv) no action, suit or proceeding at law or in
equity will be pending or, to the best of the Company's knowledge, threatened
against the Company which is required to be set forth in the Registration
Statement and the Prospectus, other than as set forth therein, and no
proceedings will be pending or, to the best of the Company's knowledge,
threatened against the Company before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable decision,
ruling or finding would materially adversely affect the business, property,
financial condition or results of operations of the Company, other than as set
forth in the Registration Statement and the Prospectus. At the Closing Date,
there will be delivered to the Representatives a certificate signed by the
Chairman of the Board or the President or a Vice President of the Company, dated
the Closing Date, evidencing compliance with the provisions of this Section 6(d)
and stating that the representations and warranties of the Company set forth in
Section 4 hereof were accurate and complete in all material respects when made
on the date hereof and are accurate and complete in all material respects on the
Closing Date as if then made; that the Company has performed all covenants and
complied with all conditions required by this Agreement to be performed or
complied with by the Company prior to or as of the Closing Date; and that, as of
the Closing Date, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to the best of his knowledge, are contemplated or threatened. In
addition, the Representatives will have received such other and further
certificates of officers of the Company as the Representatives or Underwriters'
Counsel may reasonably request.
(e) At the time that this Agreement is executed and
at the Closing Date, the Representatives will have received a signed letter from
BDO Seidman, LLP, dated the date such letter is to be received by the
Representatives and addressed to them, confirming that it is a firm of
independent public accountants within the meaning of the Act and Regulations and
stating that: (i) insofar as reported on by it, in its opinion, the financial
statements of the Company included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable Regulations; (ii) on the basis of procedures and inquiries (not
constituting an examination in accordance with generally accepted auditing
standards) consisting of a reading of the unaudited interim financial statements
of the Company, if any, appearing in the Registration
-26-
Statement and the Prospectus and the latest available unaudited interim
financial statements of the Company, if more recent than that appearing in the
Registration Statement and Prospectus, inquiries of officers of the Company
responsible for financial and accounting matters as to the transactions and
events subsequent to the date of the latest audited financial statements of the
Company, and a reading of the minutes of meetings of the shareholders, the Board
of Directors of the Company and any committees of the Board of Directors, as set
forth in the minute books of the Company, nothing has come to its attention
which, in its judgment, would indicate that (A) during the period from the date
of the latest financial statements of the Company appearing in the Registration
Statement and Prospectus to a specified date not more than three business days
prior to the date of such letter, there have been any decreases in net current
assets or net assets as compared with amounts shown in such financial statements
or decreases in net sales or decreases in total or per share net income compared
with the corresponding period in the preceding year or any change in the
capitalization or long-term debt of the Company, except in all cases as set
forth in or contemplated by the Registration Statement and the Prospectus, and
(B) the unaudited interim financial statements of the Company, if any, appearing
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
the Regulations or are not fairly presented in conformity with generally
accepted accounting principles and practices on a basis substantially consistent
with the audited financial statements included in the Registration Statement or
the Prospectus; and (iii) it has compared specific dollar amounts, numbers of
shares, numerical data, percentages of revenues and earnings, and other
financial information pertaining to the Company set forth in the Prospectus
(with respect to all dollar amounts, numbers of shares, percentages and other
financial information contained in the Prospectus, to the extent that such
amounts, numbers, percentages and information may be derived from the general
accounting records of 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 (which
procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found them to be in
agreement.
(f) There shall have been duly tendered to the
Representatives certificates representing the Offered Shares to be sold on the
Closing Date.
(g) The NASD shall have indicated that it has no
objection to the underwriting arrangements pertaining to the sale
-27-
of the Offered Shares by the Underwriters or the sale of the Shares
by the Representatives.
(h) No action shall have been taken by the Commission
or the NASD the effect of which would make it improper, at any time prior to the
Closing Date or the Option Closing Date, as the case may be, for any member firm
of the NASD to execute transactions (as principal or as agent) in the Shares,
and no proceedings for the purpose of taking such action shall have been
instituted or shall be pending, or, to the best of the Representatives' or the
Company's knowledge, shall be contemplated by the Commission or the NASD. The
Company represents at the date hereof, and shall represent as of the Closing
Date or Option Closing Date, as the case may be, that it has no knowledge that
any such action is in fact contemplated by the Commission or the NASD.
(i) The Common Shares have been approved for listing
on Nasdaq NMS.
(j) All proceedings taken at or prior to the Closing
Date or the Option Closing Date, as the case may be, in connection with the
authorization, issuance and sale of the Shares shall be reasonably satisfactory
in form and substance to the Representatives and to Underwriters' Counsel, and
such counsel shall have been furnished with all such documents, certificates and
opinions as they may request for the purpose of enabling them to pass upon the
matters referred to in Section 6(c) hereof and in order to evidence the accuracy
and completeness of any of the representations, warranties or statements of the
Company, the performance of any covenants of the Company, or the compliance by
the Company with any of the conditions herein contained.
(k) As of the date hereof, the Company will have
delivered to the Underwriters the written undertakings of its officers,
directors and security holders and/or registration rights holders, as the case
may be, to the effect of the matters set forth in Section 5(l).
If any of the conditions specified in this Section
6 have not been fulfilled, this Agreement may be terminated by the
Representatives on notice to the Company.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, including specifically each person that may be substituted for
an Underwriter as provided in Section 10 hereof, each officer, director,
partner, employee and agent of any Underwriter, and each person, if any, who
controls any of the Underwriters within the meaning of Section 15 of the Act or
Section
-28-
20(a) of the Exchange Act, from and against any and all losses, claims, damages,
expenses or liabilities, joint or several (and actions in respect thereof), to
which they or any of them may become subject under the Act or under any other
statute or at common law or otherwise, and, except as hereinafter provided, will
reimburse each of the Underwriters and each such person, if any, for any legal
or other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions, whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained (i) in the Registration Statement, in any
Preliminary Prospectus or in the Prospectus (or the Registration Statement or
Prospectus as from time to time amended or supplemented) or (ii) in any
application or other document executed by the Company, or based upon written
information furnished by or on behalf of the Company, filed in any jurisdiction
in order to qualify the Shares under the securities laws thereof (hereinafter
"application"), 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 in order to make the statements therein not misleading, in light of
the circumstances under which they were made, unless such untrue statement or
omission was made in such Registration Statement, Preliminary Prospectus,
Prospectus or application in reliance upon and in conformity with information
furnished in writing to the Company in connection therewith by the Underwriter
or any such person through the Underwriter expressly for use therein; provided,
however, that the indemnity agreement contained in this Section 7(a) with
respect to any Preliminary Prospectus will not inure to the benefit of the
Underwriter (or to the benefit of any other person that may be indemnified
pursuant to this Section 7(a)) if (A) the person asserting any such losses,
claims, damages, expenses or liabilities purchased the Shares which are the
subject thereof from such Underwriter or other indemnified person; (B) such
Underwriter or other indemnified person failed to send or give a copy of the
Prospectus to such person at or prior to the written confirmation of the sale of
such Shares to such person; and (C) the Prospectus did not contain any untrue
statement or alleged untrue statement or omission or alleged omission giving
rise to such cause, claim, damage, expense or liability.
(b) Each Underwriter (including specifically each
person that may be substituted for an Underwriter as provided in Section 10
hereof) agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement 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, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several (and actions
in respect thereof), to which they or any of them may
-29-
become subject under the Act or under any other statute or at common law or
otherwise, and, except as hereinafter provided, will reimburse the Company and
each such director, officer or controlling person for any legal or other
expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions, whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained (i) in the Registration Statement, in any
Preliminary Prospectus or in the Prospectus (or the Registration Statement or
Prospectus as from time to time amended or supplemented) or (ii) in any
application (including any application for registration of the Shares under
state securities or Blue Sky laws), 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 in order to make the statements therein not
misleading, in light of the circumstances under which they were made, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by such Underwriter, or by the Representatives on behalf of such
Underwriter, expressly for use therein.
(c) Promptly after receipt of notice of the
commencement of any action in respect of which indemnity may be sought against
any indemnifying party under this Section 7, the indemnified party will notify
the indemnifying party in writing of the commencement thereof, and the
indemnifying party will, subject to the provisions hereinafter stated, assume
the defense of such action (including the employment of counsel satisfactory to
the indemnified party and the payment of expenses) insofar as such action
relates to an alleged liability in respect of which indemnity may be sought
against the indemnifying party. After notice from the indemnifying party of its
election to assume the defense of such claim or action, the indemnifying party
shall no longer be liable to the indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the reasonable judgment of the
indemnified party or parties, it is advisable for the indemnified party or
parties to be represented by separate counsel, the indemnified party or parties
shall have the right to employ a single counsel to represent the indemnified
parties who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the indemnified parties thereof against the
indemnifying party, in which event the fees and expenses of such separate
counsel shall be borne by the indemnifying party. Any party against whom
indemnification may be sought under this Section 7 shall not be liable to
indemnify any person that might otherwise be indemnified pursuant hereto for any
-30-
settlement of any action effected without such indemnifying party's
consent.
8. Contribution. To provide for just and equitable
contribution, if (i) an indemnified party makes a claim for indemnification
pursuant to Section 7 hereof (subject to the limitations thereof) and it is
finally determined, by a judgment, order or decree not subject to further
appeal, that such claim for indemnification may not be enforced, even though
this Agreement expressly provides for indemnification in such case; or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the Exchange
Act, or otherwise, then the Company (including, for this purpose, any
contribution made by or on behalf of any director of the Company, any officer of
the Company who signed the Registration Statement and any controlling person of
the Company) as one entity and the Underwriters (including, for this purpose,
any contribution by or on behalf of 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 and each officer, director, partner, employee and agent of any of
the Underwriters) as a second entity, shall contribute to the losses,
liabilities, claims, damages and expenses whatsoever to which any of them may be
subject, so that the Underwriters are responsible for the proportion thereof
equal to the percentage which the underwriting discount per Share set forth on
the cover page of the Prospectus represents of the initial public offering price
per Share set forth on the cover page of the Prospectus and the Company is
responsible for the remaining portion; provided, however, that if applicable law
does not permit such allocation, then, if applicable law permits, other relevant
equitable considerations such as the relative fault of the Company and the
Underwriters in connection with the facts which resulted in such losses,
liabilities, claims, damages and expenses shall also be considered. The relative
fault, in the case of an untrue statement, alleged untrue statement, omission or
alleged omission, shall be determined by, among other things, whether such
statement, alleged statement, omission or alleged omission relates to
information supplied by the Company or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, alleged statement, omission or alleged omission. The
Company, on one hand, and the Underwriters, on the other hand, agree that it
would be unjust and inequitable if the respective obligations of the Company and
the Underwriters for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages and expenses or
by any other method of allocation that does not reflect the equitable
considerations referred to in this Section 8. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of
-31-
this Section 8, each person, if any, who controls any of the Underwriters within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and
each officer, director, partner, employee and agent of any of the Underwriters
will have the same rights to contribution as the Underwriters, 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 has signed
the Registration Statement and each director of the Company will have the same
rights to contribution as the Company, subject in each case to the provisions of
this Section 8. Anything in this Section 8 to the contrary notwithstanding, no
party will be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 8 is intended
to supersede, to the extent permitted by law, any right to contribution under
the Act or the Exchange Act or otherwise available.
9. Survival of Indemnities, Contribution, Warranties and
Representations. The respective indemnity and contribution agreements of the
Company and the Underwriters contained in Sections 7 and 8 hereof, and the
representations and warranties of the Company contained in this Agreement shall
remain operative and in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of the
Underwriters, the Company or any of its directors and officers or any
controlling person referred to in said Sections, and shall survive the delivery
of, and payment for, the Shares.
10. Substitution of Underwriters.
(a) If one or more Underwriters should default in its
or their obligation to purchase and pay for any Offered Shares hereunder and if
the aggregate number of such Offered Shares which all Underwriters so defaulting
have agreed to purchase does not exceed 10% of the total number of the Offered
Shares, the non-defaulting Underwriters will be obligated severally to purchase
and pay for (in addition to the number of Offered Shares set forth opposite
their names in Schedule A attached hereto) the full number of Offered Shares
agreed to be purchased by all defaulting Underwriters, and not so purchased, in
proportion to their respective commitments hereunder. In such event the
Representatives, for the accounts of the several nondefaulting Underwriters, may
take up and pay for all or any part of such additional Offered Shares to be
purchased by each such Underwriter under this Section 10(a), and may postpone
the Closing Date to a time not exceeding three full business days after the
Closing Date determined as provided in Section 2 hereof.
(b) If one or more Underwriters should default in its
or their obligation to purchase and pay for any Offered Shares
-32-
hereunder and if the aggregate number of such Offered Shares which all
Underwriters so defaulting have agreed to purchase exceeds 10% of the total
number of Offered Shares, or if one or more Underwriters for any reason
permitted hereunder should cancel its or their obligation to purchase and pay
for Offered Shares hereunder, the non-cancelling and non-defaulting Underwriters
(hereinafter called the "remaining Underwriters") will have the right to
purchase such Offered Shares in such proportion as may be agreed among them at
the Closing Date determined as provided in Section 2 hereof. If the remaining
Underwriters do not purchase and pay for such Offered Shares at such Closing
Date, the Closing Date will be postponed for 24 hours and the remaining
Underwriters will have the right to purchase such Offered Shares, or to
substitute another person or persons to purchase the same, or both, at such
postponed Closing Date. If purchasers have not been found for such Offered
Shares by such postponed Closing Date, the Closing Date will be postponed for a
further 24 hours, and the Company will have the right to substitute another
person or persons, reasonably satisfactory to the Representatives to purchase
such Offered Shares at such second postponed Closing Date. If it shall be
arranged for the remaining Underwriters or substituted underwriters to take up
the Firm Shares of the defaulting Underwriter or Underwriters as provided in
this Section, (A) the Company shall have the right to postpone the time of
delivery for a period of not more than three (3) full Business Days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents or arrangements, and the
Company agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary. If the
Company has not found such purchasers for such Offered Shares by such second
postponed Closing Date, then this Agreement will automatically terminate, and
neither the Company nor the remaining Underwriters will be under any obligation
under this Agreement (except that the Company and the Underwriters will remain
liable to the extent provided in Sections 7 and 8 hereof and the Company will
also remain liable to the extent provided in Section 5(j) hereof). As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10(b). Nothing in Section 11 hereof will relieve
a defaulting Underwriter from the liability for its default and nothing in this
Section 10(b) will obligate any Underwriter to purchase or find purchasers for
any Offered Shares in excess of those agreed to be purchased by such Underwriter
under the terms of Section 2 hereof.
11. Termination of Agreement.
(a) The Company, by written or telegraphic notice to
the Representatives, or the Representatives, by written or telegraphic notice to
the Company, may terminate this Agreement prior to the earlier of (i) 11:00
A.M., New York City time, on the first full business day after the Effective
Date; or (ii) the time when the Underwriters, after the Registration Statement
becomes
-33-
effective, release the Offered Shares for public offering. The time when the
Underwriters "release the Offered Shares for public offering" for the purposes
of this Section 11 means the time when the Underwriters release for publication
the first newspaper advertisement, which is subsequently published, relating to
the Offered Shares, or the time when the Underwriters release for delivery to
members of a selling group copies of the Prospectus and an offering letter or an
offering telegram relating to the Offered Shares, whichever will first occur.
(b) This Agreement, including without limitation, the
obligation to purchase the Shares and the obligation to purchase the Optional
Shares after exercise of the option referred to in Section 3 hereof, is subject
to termination in the absolute discretion of the Underwriters, by notice given
to the Company prior to delivery of and payment for all the Offered Shares or
the Optional Shares, as the case may be, if, prior to such time, any of the
following shall have occurred: (i) the Company withdraws the Registration
Statement from the Commission or the Company does not or cannot expeditiously
proceed with the public offering; (ii) the representations and warranties in
Section 4 hereof are not materially correct or cannot be complied with; (iii)
trading in securities generally on the New York Stock Exchange, American Stock
Exchange or the Nasdaq Stock Market will have been suspended; (iv) limited or
minimum prices will have been established on either such Exchange; (v) a banking
moratorium will have been declared either by federal or New York State
authorities; (vi) any other restrictions on transactions in securities
materially affecting the free market for securities or the payment for such
securities, including the Offered Shares or the Optional Shares, will be
established by either of such Exchanges, by the Commission, by any other federal
or state agency, by action of the Congress or by Executive Order; (vii) trading
in any securities of the Company shall have been suspended or halted by any
national securities exchange, the NASD or the Commission; (viii) there has been
a materially adverse change in the condition (financial or otherwise), prospects
or obligations of the Company; (ix) the Company will have sustained a material
loss, whether or not insured, by reason of fire, flood, accident or other
calamity; (x) any action has been taken by the government of the United States
or any department or agency thereof which, in the judgment of the
Representatives, has had a material adverse effect upon the market or potential
market for securities in general; or (xi) the market for securities in general
or political, financial or economic conditions will have so materially adversely
changed that, in the judgment of the Representatives, it will be impracticable
to offer for sale, or to enforce contracts made by the Underwriters for the
resale of, the Offered Shares or the Optional Shares, as the case may be.
(c) If this Agreement is terminated pursuant to
Section 6 hereof or this Section 11 or if the purchases provided for herein are
not consummated because any condition of the
-34-
Underwriters' obligations hereunder is not satisfied or because of any refusal,
inability or failure on the part of the Company to comply with any of the terms
or to fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to or does not perform all of its obligations under this
Agreement, the Company will not be liable to any of the Underwriters for damages
on account of loss of anticipated profits arising out of the transactions
covered by this Agreement, but the Company will remain liable to the extent
provided in Sections 5(j), 7, 8 and 9 of this Agreement.
12. Information Furnished by the Underwriters to the Company.
It is hereby acknowledged and agreed by the parties hereto that for the purposes
of this Agreement, including, without limitation, Sections 4(f), 7(a), 7(b) and
8 hereof, the only information given by the Underwriters to the Company for use
in the Prospectus are the statements set forth in the last sentence of the last
paragraph on the cover page, the statement appearing in the last paragraph on
page 2 with respect to stabilizing the market price of Shares, the information
in the third paragraph of the "Underwriting" Section commencing on page [__]
with respect to concessions and reallowances, the table on page [__] regarding
the offering syndicate, and the information in the [________], [_____], [__],
and [__] full paragraphs of the "Underwriting" Section commencing on page [___]
with respect to discretionary accounts, the determination of the public offering
price, stabilizing the market price of the Shares and BlueStone, respectively,
as such information appears in any Preliminary Prospectus and in the Prospectus.
13. Notices and Governing Law. All communications hereunder
will be in writing and, except as otherwise provided, will be delivered at, or
mailed by certified mail, return receipt requested, or telecopied to, the
following addresses: if to BlueStone, the Representatives, or the Underwriters,
to BlueStone Capital Partners, L.P., 575 Fifth Avenue, New York, New York 10017,
Facsimile No. (212) 297-5695, with a copy to Tenzer Greenblatt LLP, Attention:
Robert J. Mittman, Esq., 405 Lexington Avenue, New York, New York 10174,
Facsimile No. (212) 885-5001; if to the Company at 1924 33rd Street, Orlando,
Florida, Attention: President, Facsimile No. (407) 316-0396, with a copy to
McLaughlin & Stern, LLP, Attention: Martin Licht, Esq., 260 Madison Avenue, New
York, New York 10016, Facsimile No. (212) 448-6260.
This Agreement shall be deemed to have been made and delivered
in New York City and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New York. The Company (1) agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement shall be instituted exclusively in
New York State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York, (2) waives any objection
which the Company may have now or hereafter to
-35-
the venue of any such suit, action or proceeding, and (3) irrevocably consents
to the jurisdiction of the New York State Supreme Court, County of New York, and
the United States District Court for the Southern District of New York in any
such suit, action or proceeding. The Company further agrees to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the New York State Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York and
agrees that service of process upon the Company mailed by certified mail to the
Company's address shall be deemed in every respect effective service of process
upon the Company in any such suit, action or proceeding.
14. Parties in Interest. This Agreement is made solely for the
benefit of the several Underwriters, the Company and, to the extent expressed,
any person controlling the Company or the Underwriters, each officer, director,
partner, employee and agent of the Underwriters, the directors of the Company,
its officers who have signed the Registration Statement, and their respective
executors, administrators, successors and assigns, and, no other person will
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" will not include any purchaser of the Shares from any
of the Underwriters, as such purchaser.
-36-
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
AMERICAN MARINE RECREATION, INC.
By:_____________________________
Confirmed and accepted in New York, N.Y., as of the date first above written:
BLUESTONE CAPITAL PARTNERS, L.P.
By: Bluestone Capital Management, Inc.,
General Partner
By:
---------------------------------
Kerry J. Dukes,
President
ROYCE INVESTMENT GROUP, INC.
By:
------------------------------
Anthony J. Sarkis,
Vice-President
Acting on behalf of themselves as the Representatives of the several
Underwriters named in Schedule A hereto.
-37-
SCHEDULE A
TO THE UNDERWRITING AGREEMENT
Underwriter Number of Shares
- ----------- ----------------
BlueStone Capital Partners, L.P.
Royce Investment Group, Inc.
Total 2,180,000
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