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Exhibit 1.01
OFFICE CENTRE CORPORATION
4,000,000 SHARES
COMMON STOCK
($.001 PAR VALUE)
FORM OF
UNDERWRITING AGREEMENT
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August __, 1998
Morgan Keegan & Company, Inc.
McDonald & Company Securities, Inc.
Credit Lyonnais Securities (USA), Inc.
As Representatives of the Underwriters
Morgan Keegan & Company, Inc.
50 Front Street
Memphis, TN 38103
Dear Sirs:
Office Centre Corporation, a Delaware corporation (the "Company"), and
Clifford M. Davie and Walter H. Gordenstein (the "Selling Stockholders") propose
to sell to the several underwriters named in Schedule I (collectively, the
"Underwriters") an aggregate of 4,000,000 shares of the Company's common stock,
$.001 par value per share (the "Common Stock"), as set forth in Schedule I
hereto (such 4,000,000 shares are herein referred to as the "Firm Shares"). The
Firm Shares are to be sold to each Underwriter, acting severally and not
jointly, in such amounts as are set forth in Schedule I opposite the name of
such Underwriter.
Solely for the purpose of covering over-allotments in the sale of the
Firm Shares, the Company and Walter H. Gordenstein ("Gordenstein") grant to the
Underwriters the right to purchase up to an additional 600,000 shares of Common
Stock (the "Option Shares"), which option shall be exercisable in the manner and
such Option Shares shall be sold in the denominations set forth in Section 3(b)
below. The Firm Shares and Option Shares are herein sometimes referred to as the
"Shares." The Company operates a wholly owned subsidiary, UDI Corp., a
Massachusetts corporation (the "Subsidiary"); has entered into definitive
agreements to acquire (the "Acquisition Agreements") the companies listed on
Schedule II (collectively the "Acquisition Companies"); and has entered into
exclusivity agreements (the "Exclusivity Agreements") with the companies listed
on Schedule III (collectively the "Target Companies"). The "Office Centre
Companies" refers to Office Centre Corporation, the Subsidiary, the UDI
Subsidiaries (defined below) and the Acquisition Companies unless the context
clearly indicates otherwise.
Section 1. Representations and Warranties of the Company, the
Subsidiary, and the Selling Stockholders. The Company, the Subsidiary, and the
Selling Stockholders represent and warrant to and agree with each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-53411) with
respect to the Shares, including a preliminary form of prospectus subject to
completion, has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "1933 Act"), and the applicable
rules and regulations (the "1933 Act Regulations") of the Securities and
Exchange Commission (the "Commission") and has been filed with the
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Commission; and such amendments to such registration statement as may have been
required, if any, prior to the date hereof have been filed with the Commission,
and such amendments have been similarly prepared. Copies of such registration
statement and amendment or amendments and of each related preliminary
prospectus, and the exhibits, financial statements and schedules, as finally
amended and revised, have been delivered to you. The Company has prepared in the
same manner, and proposes so to file with the Commission, one of the following:
(i) prior to effectiveness of such registration statement, a further amendment
thereto, including the form of final prospectus, (ii) if the Company does not
rely on Rule 434 of the 1933 Act Regulations, a final prospectus in accordance
with Rules 430A and 424(b) of the 1933 Act Regulations, or (iii) if the Company
relies on Rule 434 of the 1933 Act Regulations, a term sheet relating to the
Shares that shall identify the preliminary prospectus that it supplements
containing such information as is required or permitted by Rules 434, 430A and
424(b) of the 1933 Act Regulations. The Company also may file a related
registration statement with the Commission pursuant to Rule 462(b) of the 1933
Act Regulations for the purpose of registering certain additional shares of
Common Stock, which registration statement will be effective upon filing with
the Commission. As filed, such amendment, any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations and any term sheet and form
of final prospectus, or such final prospectus, shall include all Rule 430A
Information (as defined below) and, except to the extent that you shall agree in
writing to a modification, shall be in all respects in the form furnished to you
prior to the date and time that this Agreement was executed and delivered by the
parties hereto, or, to the extent not completed at such date and time, shall
contain only such specific additional information and other changes (beyond that
contained in the latest preliminary prospectus) as the Company shall have
previously advised you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Time (as hereinafter defined), shall also mean
such registration statement as so amended; provided, however, that such term
shall also include all Rule 430A Information contained in any Prospectus and any
Term Sheet (as hereinafter defined) and deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the 1933 Act Regulations. The term "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in the preceding
paragraph and any preliminary prospectus included in the Registration Statement
at the time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean (a) if the Company relies on
Rule 434 of the 1933 Act Regulations, the Term Sheet relating to the Shares that
is first filed pursuant to Rule 424(b)(7) of the 1933 Act Regulations, together
with the Preliminary Prospectus identified therein that such Term Sheet
supplements, or (b) if the Company does not rely on Rule 434 of the 1933 Act
Regulations, the prospectus relating to the Shares in the form in which it is
first filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations or, if no filing pursuant to Rule 424(b) of the 1933 Act Regulations
is required, shall mean the form of final prospectus included in the
Registration Statement at the time such Registration Statement becomes
effective. The term "Rule 430A Information" means information with respect to
the Shares and the offering thereof permitted pursuant to Rule 430A of the 1933
Act Regulations to be omitted from the Registration Statement when it becomes
effective. The term "462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (including the Registration Statement and any Preliminary Prospectus
or Prospectus incorporated therein at the time such registration statement
becomes effective). The term "Term Sheet" means any term sheet that satisfies
the requirements of Rule 434 of the 1933 Act Regulations. Any reference to the
"date" of a Prospectus that includes a Term Sheet shall mean the date of such
Term Sheet.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, the Subsidiary or the
Selling Stockholders, threatened by the Commission or the state securities
authority of any jurisdiction, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the requirements of the
1933 Act and the 1933 Act Regulations and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and
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warranty shall not apply to untrue statements or omissions of material facts to
the extent they are corrected in the Prospectus first filed pursuant to Rule
424(b) under the 1933 Act Regulations, or to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter expressly for use in the Registration Statement or any
462(b) Registration Statement.
(c) When the Registration Statement and any 462(b) Registration
Statement shall become effective, or any Term Sheet that is part of the
Prospectus is filed with the Commission pursuant to Rule 434, when the
Prospectus is first filed pursuant to Rule 424(b) of the 1933 Act Regulations,
when any amendment to the Registration Statement or any 462(b) Registration
Statement becomes effective, and when any supplement to the Prospectus or Term
Sheet is filed with the Commission, and at each Date of Delivery (as defined in
Section 3), (i) the Registration Statement, the 462(b) Registration Statement,
the Prospectus, the Term Sheet and all amendments thereof and supplements
thereto will conform in all material respects with the applicable requirements
of the 1933 Act and the 1933 Act Regulations and (ii) neither the Registration
Statement, the 462(b) Registration Statement, the Prospectus, any Term Sheet nor
any amendment or supplement thereto, will contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter expressly for use in the Registration Statement or any
462(b) Registration Statement.
(d) The Company, the Subsidiary and the Acquisition Companies have been
duly incorporated and each is validly existing as a corporation in good standing
under the laws of its respective state of incorporation, with all requisite
corporate power and authority to own, lease and license its properties, and
conduct its business as described in the Prospectus and to perform its
obligations pursuant to the applicable transactions described under the heading
"Business-The Acquisitions of the Forming Companies" in the Prospectus, namely
the Acquisition Agreements. The Company, the Subsidiary and the Acquisition
Companies each has qualified to do business and is in good standing as a foreign
corporation in every jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business requires such qualification,
except where the failure to do so would have a material adverse effect on the
financial condition, results of operations, cash flows or prospects of the
Office Centre Companies taken as a whole (a "Material Adverse Effect"). The
Company does not own or control, directly or indirectly, any corporation,
association or other entity, other than the Subsidiary, three subsidiaries of
the Subsidiary, namely, The Office Channel Broadcasting Network, Inc., UDI
Office Centre Canada, Ltd. and Art Retailers Together (collectively, the "UDI
Subsidiaries") and the subsidiaries of the Company which are parties to the
Acquisition Agreements.
(e) The Company and the Subsidiary have the full legal right, power and
authority to enter into this Agreement, and to consummate the transactions
contemplated herein. The Company has the full corporate power and authority and
each Selling Stockholder has the legal right and power to issue, sell and
deliver the Shares as provided herein. The Company and each Acquisition Company
has the full corporate power and authority to consummate the transactions
contemplated by the Acquisition Agreements to which it is a party. This
Agreement has been duly authorized, executed and delivered by the Company and
the Subsidiary and constitutes the valid and binding agreement of the Company
and the Subsidiary enforceable against each of them in accordance with its
terms, except to the extent that the indemnification provisions set forth in
Section 9 of this Agreement may be limited by applicable law or equitable
principles, and except as enforceability may be limited by bankruptcy,
reorganization, moratorium or similar laws affecting the enforceability of
creditors' rights generally and rules of law governing specific performance,
injunctive relief and other equitable remedies.
(f) Each material consent, approval, authorization, order, designation
or filing by or with any governmental agency or body necessary for the valid
authorization, issuance, sale and delivery of the Shares, the execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated hereby, and the consummation of the transactions contemplated by
the Acquisition Agreements has been made or obtained by the Company, the
Subsidiary and the Acquisition Companies and are in full force and effect,
except as may be required
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under applicable state securities laws. The issuance, sale and delivery of the
Shares, the execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated by this Agreement, and the
consummation of the transactions contemplated by the Acquisition Agreements (i)
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default by the Company, the Subsidiary or the Acquisition
Companies under their respective Articles of Incorporation or Bylaws and (ii)
will not result in a breach or violation of any of the terms or provisions of,
or constitute a default by the Company, the Subsidiary or the Acquisition
Companies under, any material provision of any indenture, mortgage, deed of
trust, loan agreement, note, lease or other agreement or instrument to which any
of the Company, the Subsidiary, or the Acquisition Companies is a party or to
which it or its properties is subject, or (iii) will not result in a breach or
violation of any material statute, judgment, decree, order, rule or regulation
of any court or governmental agency or body applicable to the Company, the
Subsidiary or the Acquisition Companies or any of their respective properties.
(g) (i) The Company has common stock issued and outstanding as set
forth in the Registration Statement. The Company has no other issued and
outstanding capital stock. The Company has authorized, issued and outstanding
capitalization as set forth in the Prospectus under the caption "Capitalization"
as of the date therein. All the issued and outstanding shares of Common Stock of
the Company, including the Shares to be sold by the Selling Stockholders, have
been duly authorized and validly issued, are fully paid and nonassessable and
conform to the description of the Common Stock contained in the Prospectus and
the rights set forth in the instruments defining the same. All offers and sales
of the Company's capital stock prior to the date hereof were at all relevant
times duly registered under the 1933 Act or were exempt from the registration
requirements of the 1933 Act by reason of Sections 3(b), 4(2) or 4(6) thereof
and were duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue sky laws.
The Shares to be sold by the Company and the Selling Stockholders, when issued
and delivered by the Company and the Selling Stockholders and paid for pursuant
to this Agreement, will be validly issued, fully paid and nonassessable and will
conform in all material respects to the description thereof contained in the
Prospectus. No preemptive rights of stockholders exist with respect to the
Shares or the shares of capital stock of the Acquisition Companies. Except as
disclosed in the Prospectus, no person or entity holds a right to require or
participate in the registration under the 1933 Act of the Shares and no person
holds a right to require registration under the 1933 Act of any shares of Common
Stock of the Company at any other time. No person or entity has a right of
participation or first refusal with respect to the sale of the Shares by the
Company or Selling Stockholders, or the sale of any shares of capital stock by
the Acquisition Companies to the Company. None of the issued shares of capital
stock of the Company or the issued shares of capital stock of the Acquisition
Companies, has been issued in violation of any preemptive or similar rights. All
shares of common stock of the Company subject to outstanding options or warrants
have been duly authorized and reserved for issuance, and, when issued in
accordance with the terms of the applicable option or warrant, will be validly
issued, fully paid and nonassessable and will not be issued in violation of any
preemptive right (contractual or other). There is no outstanding option, warrant
or other right calling for the issuance of and no commitment, plan or
arrangement to issue, any share of capital stock of the Company or the Acquired
Companies or any security convertible into or exchangeable for capital stock of
the Company or the Acquired Companies, except (A) as is disclosed in the
Registration Statement and the Prospectus, or (B) those which will have been
terminated on or before the Closing Time (hereinafter defined);
(ii) All of the shares of issued and outstanding capital stock of the
Subsidiary and the Acquisition Companies have been duly authorized and validly
issued, are fully paid and nonassessable and upon the consummation of the
transactions contemplated by the Acquisition Agreements, the shares of capital
stock of the Acquisition Companies will be owned beneficially by the Company
free and clear of all liens, security interests, pledges, charges, or
encumbrances. Other than the Subsidiary, the UDI Subsidiaries and the
subsidiaries of the Company which are party to the Acquisition Agreements, the
Company does not own directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association.
(iii) The shares of Common Stock to be issued by the Company to the
shareholders of the Acquisition Companies pursuant to the Acquisition Agreements
have been duly authorized and, when issued and delivered pursuant
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to the Acquisition Agreements, will be validly issued, fully paid and
nonassessable and will conform to the description of the Common Stock contained
in the Prospectus.
(h) The financial statements of the Company (including the related
notes and schedules) included in the Registration Statement and the Prospectus
present fairly the financial position of the Company as of the dates indicated
and the results of its operations and its cash flows for the periods specified,
all in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (subject, in the case of
unaudited financial statements, to normal year-end adjustments) and in
conformity with Regulation S-X of the Commission. The supporting schedules
included in the Registration Statement and the amounts in the Prospectus under
the captions "Prospectus Summary -- Summary Combined Historical and Pro Forma
Financial Data," " -- Summary Historical Statement of Operations Data for the
Founding Companies," and "Selected Combined Pro Forma Financial Data," and
"Selected Financial Data of Office Centre Corporation" are accurately computed,
fairly present the information shown therein and have been determined on a basis
consistent with the financial statements included in the Registration Statement
and the Prospectus. No other financial statements or schedules are required by
Form S-1 or otherwise to be included in the Registration Statement, the
Prospectus or any Preliminary Prospectus.
The unaudited pro forma combined financial statements included in the
Prospectus and the selected pro forma financial data set forth under the caption
"Summary Combined Historical and Pro Forma Financial Data" and "Selected
Combined Pro Forma Financial Data" in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the rules and regulations of the Commission thereunder, and the Company
believes (A) the assumptions underlying the pro forma adjustments are
reasonable, (B) that such adjustments have been properly applied to the
historical amounts in the compilation of such statements and (C) that such
statements present fairly, with respect to the Company and its consolidated
subsidiaries the information purported to be shown therein. The financial data
statements and schedules (including the related notes) of each of the Office
Centre Companies included in the Registration Statement, the Prospectus or any
Preliminary Prospectus were prepared in accordance with generally accepted
accounting principals consistently applied throughout the periods involved
(subject, in the case of unaudited financial statements, to normal year-end
adjustments) and fairly present the financial position and result of operations
of each of the Office Centre Companies at the dates and periods presented.
(i) Grant Thornton, LLP, which has examined and is reporting upon the
audited financial statements and schedules included in the Registration
Statement, are, and were during the periods covered by their reports included in
the Registration Statement and Prospectus, independent public accountants with
respect to the Company and the Subsidiary within the meaning of the 1933 Act and
the 1933 Act Regulations.
(j) The Company has obtained for the benefit of the Company and the
Underwriters from each of its directors and officers and from the stockholders
of the Company and the Acquisition Companies, a written agreement that for a
period of 180 days from the date of the Prospectus such director, officer or
stockholder will not, without your prior written consent, offer sell, contract
to sell, pledge, grant any option to purchase, or otherwise dispose of, directly
or indirectly, any shares of Common Stock or other instrument which by its terms
is convertible into, exercisable or exchangeable for, any shares of Common Stock
of which the undersigned is now, or may in the future become, the beneficial
owner (within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended), other than the Option Shares that may be sold by Gordenstein and an
exercise of stock options or sale of Common Stock pursuant to a "cashless
exercise" of stock options which are either (i) outstanding on the date of the
Prospectus, (ii) issued under the Company's stock option plan, or a bona fide
gift of Common Stock, provided that the donee agrees to be bound by the terms
hereof;
(k) Neither the Company, the Subsidiary, nor any of the Acquisition
Companies has sustained, since December 31, 1997, any material loss or
interference with its business from fire, explosion, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or from any labor
dispute or arbitrators' or court or governmental
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action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as otherwise stated in
the Registration Statement and Prospectus, there has not been (i) any material
change in the capital stock, long-term debt, obligations under capital leases or
short-term borrowings of the Company, the Subsidiary or the Acquisition
Companies; (ii) any event or development which could reasonably be seen as
having a Material Adverse Effect; (iii) any liability or obligation, direct or
contingent, incurred or undertaken by the Company, the Subsidiary, or the
Acquisition Companies, except for liabilities or obligations incurred in the
ordinary course of business or which otherwise would not have a Material Adverse
Effect; or (iv) any declaration or payment of any dividend or distribution of
any kind on or with respect to its capital stock.
(l) Neither the Company, the Subsidiary, nor any of the Acquisition
Companies is in violation of its Certificate of Incorporation or Bylaws and, as
of the date hereof, no default exists, and no event has occurred, nor state of
facts exists, which, with notice or after the lapse of time to cure or both,
would constitute a default in the due performance and observance of any
obligation, agreement, covenant, consideration or condition contained in any
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company, the Subsidiary or any Acquisition
Company is a party or by which it or any of its properties is subject, and no
violation exists of any law, order, rule, regulation, writ, injunction or decree
of any government, governmental instrumentality or court, domestic or foreign,
in any such case where the consequences of such violation or default would have
a Material Adverse Effect.
(m) Except as otherwise disclosed in the Prospectus, (i) neither the
Company, the Subsidiary, nor any of the Acquisition Companies has authorized or
conducted or has knowledge of the generation, transportation, storage, presence,
use, treatment, disposal, release or handling of (in an amount or of a type that
has been or must be reported to any governmental agency, violates any
Environmental Law, or has required or could require remediation expenditures)
any hazardous substance, asbestos, radon, polychlorinated biphenyl ("PCBs"),
petroleum product or waste (including crude oil or any fraction thereof),
natural gas, liquefied gas, synthetic gas or other material defined, regulated,
controlled or potentially subject to any remediation requirement under any
Environmental Law (collectively, "Hazardous Materials"), on, in or under any
real property owned, leased or used by the Company, the Subsidiary or the
Acquisition Companies (ii) the Company, the Subsidiary and the Acquisition
Companies are in compliance with all federal, state and local laws, ordinances,
rules, regulations and other governmental requirements relating to pollution,
control of chemicals, management of waste, discharges of materials into the
environment, health, safety, natural resources, and the environment
(collectively, "Environmental Laws"), and (iii) the Company, the Subsidiary and
the Acquisition Companies have, and are in compliance with, all licenses,
permits, registrations and government authorizations necessary to operate under
all applicable Environmental Laws except in the case of clause (i) or (ii),
where such noncompliance would not have a Material Adverse Effect. Except as
otherwise disclosed in the Prospectus, neither the Company, the Subsidiary, nor
any of the Acquisition Companies has received any written or oral notice from
any governmental entity or any other person and there is no pending or, to the
knowledge of the Company, the Subsidiary or the Selling Stockholders, threatened
claim, litigation or any administrative agency proceeding that: alleges a
violation of any material Environmental Laws by the Company, the Subsidiary, or
the Acquisition Companies; alleges the Company, the Subsidiary, or the
Acquisition Companies is a liable party or a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq., or any state superfund law; has resulted in or could
result in the attachment of an environmental lien on any real property owned,
leased or used by the Company, the Subsidiary or the Acquisition Companies; or
alleges the occurrence of contamination of any of such real property, damage to
natural resources, property damage, or personal injury based on activities of
the Company, the Subsidiary or the Acquisition Companies or the activities of
their predecessors or third parties (whether at the real property or elsewhere)
involving Hazardous Materials, whether arising under the Environmental Laws,
common law principles, or other legal standards.
(n) The Company, the Subsidiary, and the Acquisition Companies have
good and marketable title to all real property owned by them, free and clear of
all liens, encumbrances, claims, security interests, restrictions and
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defects, other than liens of mechanics, materialmen and landlords that may arise
in the ordinary course of business for sums not overdue or being diligently
contested in good faith, and except such as are reflected in the Prospectus.
Each parcel of real property owned or leased by the Company, the Subsidiary, and
the Acquisition Companies, and each improvement thereon, complies with all
applicable codes, laws and regulations (including, without limitation, building
and zoning codes, laws and regulations and laws relating to access to facilities
located on such real property) except if and to the extent disclosed in the
Prospectus, and except for such failures to comply that would not have a
Material Adverse Effect. Neither the Company, the Subsidiary nor any Selling
Stockholder has knowledge of any pending or threatened condemnation proceedings,
zoning change, or other proceeding or action that will in any manner affect the
size of, use of, improvements on, construction on or access to such real
property and improvements, except such proceedings or actions that would not
have a Material Adverse Effect.
(o) Any real property and buildings held under lease by the Company,
the Subsidiary, or the Acquisition Companies is held by such entity under a
valid, subsisting and enforceable lease with such exceptions as are not material
and do not interfere in any material respect with the use made and proposed to
be made of such property and building by the Company, the Subsidiary, or the
Acquisition Companies; such leases conform to the description thereof, if any,
set forth in the Registration Statement; and no notice has been given or
material claim asserted by anyone adverse to the rights of the Company, the
Subsidiary, or the Acquisition Companies under any of the leases or affecting
their rights to the continued possession of the leased property.
(p) Except as described in the Prospectus, to the best of the
Company's, the Subsidiary's and the Selling Stockholders' knowledge, there is
not pending nor threatened, any action, suit, proceeding, inquiry or
investigation, against the Company, the Subsidiary, or the Acquisition Companies
or any of their respective officers, directors or significant stockholders or to
which the properties, assets or rights of the Office Centre Companies are
subject, before or brought by any court or governmental agency or body or board
of arbitrators, which would, if adversely determined, have a Material Adverse
Effect, or which could prevent consummation of the transactions contemplated by
this Agreement or the Acquisition Agreements.
(q) There are no contracts or other documents required by the 1933 Act
or the 1933 Act Regulations to be described in or incorporated by reference into
the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which have not been accurately described in all material
respects in the Prospectus or incorporated or filed as required. The agreements
to which the Company, the Subsidiary, and the Acquisition Companies are parties
which are described in the Registration Statement and the Prospectus, are valid
and enforceable in all material respects by the Company, the Subsidiary, or the
Acquisition Companies, as the case may be, and, to the best of the Company's,
the Subsidiary's and the Selling Stockholders' knowledge, no party thereto is in
breach or default under any of such agreements except where such breach or
default would not have a Material Adverse Effect.
(r) The Company, the Subsidiary, and the Acquisition Companies own,
possess or have obtained all permits, licenses, franchises, certificates,
consents, orders, approvals and other authorizations of governmental or
regulatory authorities as are necessary to own or lease, as the case may be, and
to operate their properties and to carry on their businesses as presently
conducted except where a failure to own, possess or obtain such permits,
licenses, franchises, certificates, consents, orders, approvals and other
authorizations would not have a Material Adverse Effect. Neither the Company,
the Subsidiary, nor the Acquisition Companies have received any notice of
proceedings relating to revocation or modification of any such license, permit,
franchise, certificate, consent, order, approval or authorization which
revocation or modification would have a Material Adverse Effect.
(s) The Company, the Subsidiary, and the Acquisition Companies own or
possess adequate licenses or other rights to use all patents, trademarks,
service marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property rights and know-how
(collectively "Intangibles") necessary to entitle them to conduct their
businesses now, and as proposed to be conducted or operated as described in the
Prospectus, and neither the Company, the Subsidiary, nor the Acquisition
Companies have received any notice of
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infringement of or conflict with (and neither the Company, the Subsidiary nor
any Selling Stockholder knows of any such infringement of or conflict with)
asserted rights of others with respect to any Intangibles which would have a
Material Adverse Effect.
(t) The systems of internal accounting controls utilized by the
Company, the Subsidiary, and the Acquisition Companies are sufficient to meet
the objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in amounts
that would be material in relation to the their financial statements and the
financial information disclosed in the Registration Statement and Prospectus;
and, neither the Company, the Subsidiary, nor any of the Acquisition Companies
nor any of their employees, or agents has made any payment or received or
retained any funds from the accounts of any Office Centre Company; and no funds
of the Company, the Subsidiary or the Acquisition Companies have been set aside
to be used for any payment in violation of any law, rule or regulation.
(u) The Company, the Subsidiary, and the Acquisition Companies have
filed on a timely basis all federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and have paid
all taxes shown as due thereon; and no tax deficiency, has been asserted against
the Company, the Subsidiary, or the Acquisition Companies nor does the Company
know of any tax deficiency which is likely to be asserted against any of the
Office Centre Companies, which if determined adversely to any such company,
would have a Material Adverse Effect. All tax liabilities are adequately
provided for on the books of the Company, the Subsidiary, the Acquisition
Companies.
(v) Except as disclosed in the Prospectus, the Company, the Subsidiary,
and the Acquisition Companies maintain insurance (issued by insurers of
recognized financial responsibility) of the types and in the amounts generally
deemed adequate for their businesses and, to the best of the Company's, the
Subsidiary's and the Selling Stockholders' knowledge, generally consistent with
insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Office Centre Companies against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
and casualty and liability insurance covering the Company's, the Subsidiary's
and the Acquisition Companies' operations, all of which insurance is in full
force and effect.
(w) Except as disclosed in the Prospectus, no labor problem exists with
the Company's, the Subsidiary's or the Acquisition Companies' employees or, to
the best of the Company's, the Subsidiary's and the Selling Stockholders'
knowledge, is threatened or imminent, that would have a Material Adverse Effect,
and the Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers, contractors or
customers that would have a Material Adverse Effect.
(x) Neither the Company, its officers, directors, stockholders, its
affiliates nor the Selling Stockholders have taken, and such parties will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in or constitute, the stabilization or
manipulation of the price of the Shares to facilitate the sale or resale of the
Shares.
(y) The Common Stock has been registered pursuant to Section 12(g) of
the 1934 Act and the Shares have been approved for listing on The Nasdaq Stock
Market's National Market (the "NSM"), subject to official notice of issuance.
(z) Neither the Company, the Subsidiary, the Selling Stockholders, nor
the Acquisition Companies have incurred any liability for a fee, commission or
other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than as
contemplated hereby.
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(aa) The Company, is not, will not become as a result of the
transactions contemplated hereby or in the Acquisition Agreements and does not
intend to conduct its business in a manner that would cause it to become an
"investment company" or a company controlled by an "investment company" within
the meaning of the Investment Company Act of 1940.
Section 2. Further Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder further severally represents and warrants
to each Underwriter and agrees that:
(a) Such Selling Stockholder has all legal capacity necessary to
execute and deliver this Agreement, to sell and deliver the Shares to be sold by
him hereunder and to perform all other obligations under this Agreement; this
Agreement has been duly executed and delivered by such Selling Stockholder, and
constitutes the valid and binding agreement of such Selling Stockholder,
enforceable against him in accordance with its terms, except that thee
indemnification provisions set forth in Section 9 of this Agreement may be
limited by applicable law or equitable principles, and except as enforceability
may be limited by bankruptcy, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally and rules of law
governing specific performance, injunctive relief and other equitable remedies;
the execution, delivery and performance of this Agreement by each Selling
Stockholder will not conflict with, result in the creation or imposition of any
lien, charge or encumbrance upon any of the Shares to be sold by such Selling
Stockholder pursuant to the terms of, or constitute a default under, any
agreement or other instrument, or any order, rule or regulation of any court or
governmental agency having jurisdiction over such Selling Stockholder or the
Selling Stockholder's properties; and except as required by the 1933 Act and
applicable state securities laws, no consent, authorization or order of, or
filing or registration with, any court or governmental agency is required (or,
if required, has been obtained) for the execution, delivery and performance of
this Agreement by such Selling Stockholder.
(b) At the Closing Time, such Selling Stockholder will have good title
to the Shares being sold by him hereunder; such Shares are, and at the Closing
Time will be, validly authorized, duly issued and outstanding, fully paid and
nonassessable Common Stock of the Company with no personal liability attaching
to the ownership thereof; and upon the delivery of and payment for such Shares
as contemplated herein, the Underwriters will receive good title to the Shares
purchased by them, respectively, from such Selling Stockholder, free and clear
of any and all liens, encumbrances, security interests and adverse claims.
(c) Without the prior written consent of the Underwriters, such Selling
Stockholder and any affiliate controlled by him (other than the Company) will
not sell or offer or contract to sell, except to the Underwriters pursuant to
this Agreement, any securities of the Company which he beneficially owns within
180 days after the effective date of the Registration Statement. Such Selling
Stockholder has not (i) taken, and agrees that he will not take, directly or
indirectly, any action which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares, or (B) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(d) Except as set forth in the Prospectus, such Selling Stockholder is
disposing of his Shares hereunder for his own account and is not selling such
Shares, directly or indirectly, for the benefit of the Company or the
Underwriters.
(e) When any Preliminary Prospectus was filed with the Commission (i)
it contained all statements required to be stated therein regarding such Selling
Stockholder in accordance with, and complied in all material respects regarding
such Selling Stockholder with the requirements of, the 1933 Act and the rules
and regulations thereunder, and (ii) such statements in the Preliminary
Prospectus as are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder for use therein
did not include any untrue
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statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. When the Registration Statement or any amendment
thereto or any 462(b) Registration Statement or any amendment thereto was or is
declared effective and at the Closing Time or any Date of Delivery, as the case
may be, (i) it contained or will contain all statements required to be stated
therein regarding such Selling Stockholder in accordance with, and complied or
will comply in all material respects regarding such Selling Stockholder with the
requirements of the 1933 Act and the rules and regulations of the Commission
thereunder and (ii) such statements in the Registration Statement, any 462(b)
Registration Statement or any amendment thereto as are made in reliance upon and
in conformity with written information furnished to the Company by such Selling
Stockholder specifically for use therein did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading. When the Prospectus, any Term Sheet,
or any amendment or supplement thereto is filed with the Commission pursuant to
Rule 424(b) (or, if any Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective), and at the Closing Time or any Date of Delivery, as the
case may be, (i) the Prospectus, as amended or supplemented at any such time
(including by means of any Term Sheet), contained or will contain all statements
required to be contained or stated therein regarding such Selling Stockholder in
accordance with, and complied or will comply in all material respects regarding
such Selling Stockholder with the requirements of, the 1933 Act and the rules
and regulations of the Commission thereunder and (ii) such statements in the
Prospectus, as so amended or supplemented at any such time, as are made in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder specifically for use therein did not or will
not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(f) The sale of the Shares by such Selling Stockholder pursuant to this
Agreement is not prompted by any material information concerning the Company
which is not set forth in the Prospectus.
Section 3. Sale and Delivery of Shares to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
and such Selling Stockholder agree to sell to the Underwriters named in Schedule
I hereto, and each such Underwriter agrees, severally and not jointly, to
purchase from the Company and such Selling Stockholder, at a purchase price of
$______ per share, the aggregate number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto.
(b) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
and Gordenstein hereby grant an option to the Underwriters, severally and not
jointly, to purchase up to an additional 600,000 Option Shares on the same terms
and conditions as the Firm Shares. The option hereby granted will expire if not
exercised within the 30 day period after the first date on which the Firm Shares
are released by you for sale to the public, by giving written notice to the
Company. The option granted hereby may be exercised, in whole or in part (but
not more than once), only for the purpose of covering the over-allotments that
may be made in connection with the offering and distribution of the Firm Shares.
The notice of exercise shall set forth the number of Option Shares as to which
the several Underwriters are exercising the option, and the time and date of
payment and delivery thereof. Such time and date of delivery (the "Date of
Delivery") shall be determined by you but shall not be earlier than the second
business day after the date on which the notice of the exercise of the option
shall have been given nor later than seven full business days after the exercise
of such option, nor in any event prior to the Closing Time. If the option is
exercised in whole or in part, then the first 204,640 Option Shares shall be
sold to the Underwriters by Gordenstein, and the balance of the Option Shares
with respect to which the option shall have been exercised shall be sold to the
Underwriters by the Company. If the option is exercised as to all or any portion
of the Option Shares, the Option Shares as to which the option is exercised
shall be purchased by the Underwriters, severally and not jointly, in their
respective underwriting obligation proportions.
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(c) Payment of the purchase price for and delivery of the Firm Shares
shall be made at the offices of Morgan Keegan & Company, Inc., 50 Front Street,
Memphis, Tennessee 38103 or at such other place as shall be agreed upon by the
Company, the Selling Stockholders and you, at 10:00 A.M., either (i) on the
third full business day after the effective date of the Registration Statement,
or (ii) at such other time not more than ten full business days thereafter as
you, the Selling Stockholders and the Company shall determine (unless, in either
case, postponed pursuant to Section 12) (such date and time of payment and
delivery being herein called the "Closing Time"). In addition, in the event that
any or all of the Option Shares are purchased by the Underwriters, payment of
the purchase price for and delivery of the Option Shares shall be made at the
offices of Morgan Keegan & Company, Inc. in the manner set forth above, or at
such other place as the Company, the Selling Stockholders and you shall
determine, on the Date of Delivery as specified in the notice from you to the
Company and the Selling Stockholders. Payment for the Firm Shares and the Option
Shares shall be made to the Company by certified or official bank check or
checks in New York Clearing House next day funds payable to the order of the
Company and the Selling Stockholders, respectively, against delivery to you for
the respective accounts of the Underwriters of the Shares to be purchased by
them.
(d) The Shares to be purchased by the Underwriters shall be in such
denominations and registered in such names as you may request in writing at
least two full business days before the Closing Time or the Date of Delivery, as
the case may be. The Shares will be made available at the offices of Morgan
Keegan & Company, Inc. or at such other place as Morgan Keegan & Company, Inc.
may designate for examination and packaging not later than 10:00 A.M. at least
two full business days prior to the Closing Time or the Date of Delivery, as the
case may be.
(e) After the Registration Statement becomes effective, you intend to
offer the Shares to the public as set forth in the Prospectus, but after the
initial public offering of such Shares, you may from time to time increase or
decrease the public offering price, in your sole discretion, by reason of
changes in general market condition or otherwise.
Section 4. Certain Covenants of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (if not yet effective at the date and time that
this Agreement is executed and delivered by the parties hereto). If the Company
elects to rely upon Rule 430A of the 1933 Act Regulations or the filing of the
Prospectus is otherwise required under Rule 424(b) of the 1933 Act Regulations,
and subject to the provisions of Section 4(b) of this Agreement, the Company
will comply with the requirements of Rule 430A and will file the Prospectus,
properly completed, pursuant to the applicable provisions of Rule 424(b), or a
Term Sheet pursuant to and in accordance with Rule 434, within the time period
prescribed. If the Company elects to rely upon Rule 462(b), the Company shall
file a 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 p.m., Washington, D.C. time on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee. The Company will notify you immediately and confirm
the notice in writing, (i) when the Registration Statement, 462(b) Registration
Statement or any post-effective amendment to the Registration Statement, shall
have become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission to amend the Registration
Statement or 462(b) Registration Statement or amend or supplement the 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 any
462(b) 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 institution or threat
of any proceedings for any of such purposes. The Company will use every
reasonable effort to prevent the issuance of any such stop order or of any order
preventing or suspending such use and, if any such order is issued, use its
reasonable efforts to obtain the withdrawal thereof at the earliest possible
moment.
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(b) The Company will not at any time file or make any amendment to the
Registration Statement or any amendment or supplement (i) to the Prospectus, if
the Company has not elected to rely upon Rule 430A, or (ii) if the Company has
elected to rely upon Rule 430A, to either the Prospectus included in the
Registration Statement at the time it becomes effective or to the Prospectus
filed in accordance with Rule 424(b) or any Term Sheet filed in accordance with
Rule 434, or (iii) if the Company has elected to rely upon Rule 462(b), to any
462(b) Registration Statement, in either case if you shall not have previously
been advised and furnished a copy thereof a reasonable time prior to the
proposed filing, or if you or counsel for the Underwriters shall reasonably
object to such amendment or supplement.
(c) The Company has furnished or will furnish to you, at its expense,
as soon as available, as many signed copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or after
the Registration Statement becomes effective, copies of all exhibits and
documents filed therewith and signed copies of all consents and certificates of
experts, as you may reasonably request, and has furnished or will furnish to
each Underwriter, one conformed copy of the Registration Statement as originally
filed and of each amendment thereto (but without exhibits).
(d) The Company will deliver to each Underwriter, at its expense, from
time to time, as many copies of each Preliminary Prospectus as such Underwriter
may reasonably request, and the Company hereby consents to the use of such
copies for purposes permitted by the 1933 Act. The Company will deliver to each
Underwriter, at its expense, as soon as the Registration Statement shall have
become effective, and thereafter from time to time as requested during the
period when the Prospectus is required to be delivered under the 1933 Act, such
number of copies of the Prospectus (as supplemented or amended) as each
Underwriter may reasonably request. The Company will use its best efforts to
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Shares as contemplated in this Agreement
and in the Prospectus. In case you are required to deliver a prospectus within
nine months after the time of issue of the Prospectus or any Term Sheet in
connection with the offering or sale of the Shares and if at such time any event
shall have occurred as a result of which the Prospectus or any Term Sheet as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made
when such Prospectus or any Term Sheet is delivered, not misleading, or, if for
any reason it shall be necessary during such period to amend or supplement the
Prospectus or any Term Sheet in order to comply with the 1933 Act or the 1933
Act Regulations, the Company will notify you and upon your request prepare
promptly and furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably request of an
amended Prospectus or any Term Sheet or a supplement to the Prospectus or any
Term Sheet which will correct such statement or omission or effect such
compliance. In case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Shares at any time nine months or more after
the time of issue of the Prospectus or any Term Sheet, upon your request but at
the expense of such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus or any Term Sheet complying with the requirements of Section 10(a)(3)
of the 1933 Act.
(e) The Company will use its best efforts, in cooperation with you, to
qualify the Shares for offering and sale under the applicable securities laws of
such states and other jurisdictions as you may designate and to maintain such
qualifications in effect for as long as may be necessary to complete the
distribution of the Shares; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation in any jurisdiction in which it is not otherwise so subject.
The Company will file such statements and reports as may be required by the laws
of each jurisdiction in which the Shares have been qualified as above provided.
(f) The Company will use the net proceeds received by it from the sale
of the Shares substantially in the manner specified in the Prospectus under the
caption "Use of Proceeds."
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(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the 1933 Act
Regulations), an earnings statement (in reasonable detail but which need not be
audited) complying with the provisions of Section 11(a) of the 1933 Act and Rule
158 thereunder and covering a period of at least 12 months beginning after the
effective date of the Registration Statement.
(h) During a period of five years from the date hereof, the Company
will furnish to its stockholders, as soon as practicable after the end of each
fiscal year, annual reports (including financial statements audited by
independent public accountants) and will furnish to you: (i) as soon as they are
available, copies of all reports (financial or otherwise) mailed to stockholders
of the Company; (ii) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or the NASD; (iii) every material press release in respect of the
Company or its affairs which is released by the Company; and (iv) any additional
information of a public nature concerning the Company that you may reasonably
request. During such five-year period, the foregoing financial statements shall
be on a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so consolidated.
(i) For a period of 180 days from the date hereof, the Company will
not, without your prior written consent, directly or indirectly, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of, any Common
Stock or securities convertible into Common Stock, other than to the
Underwriters pursuant to this Agreement except for: (i) contributions to
employee benefit plans in existence on the date of the execution of this
Agreement; (ii) the issuance of Common Stock pursuant to the terms of the
Acquisition Agreements; (iii) the issuance of Common Stock to stockholders of a
company whose primary business is sales of office products, supplies, furniture
or equipment and such stock is issued in connection with the acquisition of such
company by the Company, provided that each such stockholder of the acquired
company agrees not to offer, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, such shares of common
stock for a period of 180 days from the date of the Prospectus without prior
written consent of the Underwriters; (iv) the grant of options pursuant to the
Company's Stock Option Plan in effect at the time of execution of this
Agreement; or (v) pursuant to an exercise of stock options or sale of Common
Stock pursuant to a "cashless exercise" of stock options which are outstanding
on the date of the Prospectus.
(j) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.
(k) For as long as the Common Stock of the Company is publicly traded,
the Company will use it best efforts to maintain the listing of its shares of
Common Stock on NSM; provided that nothing herein shall prevent the Company from
listing its Common Stock on the New York Stock Exchange.
(l) The Company is familiar with the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder, and has in the past conducted
its affairs, and will in the future conduct its affairs, in such a manner so as
to ensure that the Company was not and will not be an "investment company"
within the meaning of the Investment Company Act of 1940 and the rules and
regulations thereunder.
(m) The Company will not, and will use its best efforts to cause its
officers, directors and affiliates not to, (i) take, directly or indirectly
prior to the termination of the underwriting syndicate contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares or (iii) pay or agree to pay
to any person any compensation for soliciting any order to purchase any other
securities of the Company.
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(n) If at any time during the 30-day period after the Registration
Statement becomes effective, any publication or event relating to or affecting
the Company shall occur as a result of which in your reasonable opinion the
market price of the Common Stock has been or is likely to be materially affected
(regardless of whether such publication or event necessitates a supplement or
amendment of the Prospectus) and after written notice from you advising the
Company to the effect set forth above, the Company agrees to forthwith prepare,
consult with you concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to you, responding to or
commenting on such publication or event.
(o) The Company will file timely and accurate information with the
Commission in accordance with Rule 463 of the 1933 Act Regulations or any
successor provision.
(p) The Company will supply the Underwriters with copies of all
correspondence to and from and all documents issued to and by the Commission or
the Commission staff in connection with the registration of the Shares under the
1933 Act.
Section 5. Covenants of the Selling Stockholders. The Selling
Stockholders covenant:
(a) To pay all taxes, if any, on the transfer and sale of the Shares to
be sold by them hereunder;
(b) To comply with all reasonable requests of the Company to cause the
Registration Statement to become effective, to do and perform all things to be
done and performed by the Selling Stockholders hereunder prior to the Closing
Time and to satisfy all conditions precedent to the delivery of the Shares to be
sold by the Selling Stockholders; and
(c) To not (i) take, directly or directly, prior to the termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company.
Section 6. Payment of Expenses. (a) The Company will pay or cause to be
paid and bear all costs, fees and expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Preliminary Prospectuses and
the Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters; (ii) the preparation, printing
and distribution of this Agreement, the Selected Dealer Agreement, and any
instruments relating to any of the foregoing; (iii) the issuance and delivery of
the Shares to the Underwriters, including any transfer taxes payable upon the
sale of the Shares to the Underwriters (other than transfer taxes on resales by
the Underwriters); (iv) the fees and disbursements of the Company's counsel and
accountants; (v) the qualification of the Shares under the applicable securities
laws in accordance with Section 4(f) hereof and any filing for review of the
offering with the NASD, including filing fees and fees and disbursements of
counsel for the Underwriters in connection therewith; (vi) the transfer agent's
and registrar's fees and all miscellaneous expenses referred to in Item 14 of
the Registration Statement; (vii) costs related to travel and lodging incurred
by the Company and its representatives relating to meetings with and
presentations to prospective purchasers of the Shares; and (viii) all other
costs and expenses incident to the performance of the Company's obligations
hereunder (including costs incurred in closing the purchase of the Option
Shares, if any) that are not otherwise specifically provided for in this
section. The Company, upon your request, will provide funds in advance for
filing fees in connection with "blue sky" qualifications and the NASD.
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(b) The Selling Stockholders shall pay their proportionate share of all
Underwriters' commissions relating to Shares of the Company sold by such Selling
Stockholders.
(c) If the sale of Shares provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 7 hereof has not been satisfied or because of any refusal, inability or
failure on the part of the Company or the Selling Stockholders to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company and the Selling Stockholders
will reimburse the Underwriters severally on demand for all reasonable
out-of-pocket expenses, including fees and disbursements of Underwriters'
counsel, reasonably incurred by the Underwriters in reviewing the Registration
Statement and the Prospectus, and in investigating and making preparations for
the marketing of the Shares.
Section 7. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Shares that they have severally
agreed to purchase pursuant to this Agreement (including any Option Shares as to
which the option granted in Section 3 has been exercised and the Date of
Delivery determined by you is the same as the Closing Time) are subject to the
accuracy of the representations and warranties of the Company and the Selling
Stockholders contained herein or in certificates of any officer of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., eastern time, on the date of this Agreement or, with your
consent, at a later time and date not later, however, than 5:30 P.M., eastern
time, on the first business day following the date hereof, or at such later time
or on such later date as you may agree to in writing; and at the Closing Time no
stop order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose shall have
been instituted or shall be pending or, to your knowledge or the knowledge of
the Company shall be contemplated by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters. If the Company has
elected to rely upon Rule 430A, a prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with Rule
424(b) (or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A).
(b) At the Closing Time you shall have received the opinions of (i)
Richards & O'Neil, LLP, counsel for the Company and the Selling Stockholders,
with respect to the Company, the Subsidiary, the Selling Stockholders and King
Office Supply, Inc. (ii) Atlas Pearlman Trop & Brokson, P.A., counsel for the
Company, with respect to the Acquisition Companies (other than King Office
Supply, Inc.) and (iii) Cooley, Shrair P.C., counsel for the Subsidiary, with
respect to the Subsidiary and the UDI Subsidiaries, together with signed or
reproduced copies of such opinions for each of the other Underwriters, in form
and substance satisfactory to Baker, Donelson, Bearman & Caldwell, counsel for
the Underwriters and to be attached as Exhibit 7.b.
(c) At the Closing Time, you shall have received a favorable opinion
from Baker, Donelson, Bearman & Caldwell, counsel for the Underwriters, dated as
of the Closing Time, with respect to the Registration Statement, the Prospectus
and other related matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(d) At the Closing Time,
(i) the Registration Statement, any 462(b) Registration
Statement, and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required to be
stated therein under the 1933 Act and the 1933 Act Regulations and in
all material respects shall conform to the requirements of the
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1933 Act and the 1933 Act Regulations, the Company shall have complied
in all material respects with Rule 430A (if it shall have elected to
rely thereon) and neither the Registration Statement, any 462(b)
Registration Statement nor the Prospectus, as they may then be amended
or supplemented, shall contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(ii) there shall not have been, since the respective dates as
of which information is given in the Registration Statement, any change
in the business, prospects, properties, assets, results of operation or
condition (financial or otherwise) of the Company, whether or not
arising in the ordinary course of business which would have a Material
Adverse Effect;
(iii) no action, suit or proceeding at law or in equity before
or by any federal, state or other commission, board or administrative
agency shall be pending or, to the best of the Company's knowledge,
threatened against the Company that would be required to be set forth
in the Prospectus other than as set forth therein wherein an
unfavorable decision, ruling or finding would have a Material Adverse
Effect.
(iv) the Company and the Selling Stockholders shall have
complied with all agreements and satisfied all conditions contained
herein in all material respects on their respective parts to be
performed or satisfied at or prior to the Closing Time; and
(v) the representations and warranties of the Company and the
Selling Stockholders set forth in Section 1 and the representations and
warranties of the Selling Stockholders set forth in Section 2 shall be
accurate in all material respects as though expressly made at and as of
the Closing Time. At the Closing Time, you shall have received
certificates executed by the Selling Stockholders, the President and
the Chief Financial Officer of the Company, dated as of the Closing
Time, to such effect and with respect to the following additional
matters:
(A) the Registration Statement has become effective
under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of the Prospectus has been issued, and no
proceedings for that purpose have been instituted or are
pending or, to the best of their knowledge, threatened under
the 1933 Act; and
(B) they have carefully reviewed the Registration
Statement, any 462(b) Registration Statement and the
Prospectus and when the Registration Statement and any 462(b)
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement, any 462(b) Registration Statement and
the Prospectus and any amendments or supplements thereto
contained all statements and information required to be
included therein or necessary to make the statements therein
in light of the circumstances in which they were made, not
misleading and neither the Registration Statement, any 462(b)
Registration Statement nor Prospectus and any amendment or
supplement thereto included any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amended or supplemented Prospectus that
has not been so set forth, and
(C) all representations, warranties, covenants and
statements made herein by the Company and the Selling
Stockholders, respectively, are true and correct in all
material respects at such Closing Time, with the same effect
as if made on and as of such Closing Time, and all agreements
herein to be performed by the Company and the Selling
Stockholders, respectively, on or prior to such Closing Time
have been duly performed.
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(e) On the business day immediately preceding the date of this
Agreement and at the Closing Time you shall have received from Grant Thornton,
LLP, a letter or letters, dated the date hereof and as of the Closing Time in
form and substance satisfactory to you, together with signed or reproduced
copies of such letter for each of the other Underwriters, confirming that they
are independent public accountants with respect to the Company within the
meaning of the 1933 Act and 1933 Act Regulations, stating in effect that:
(i) in their opinion, the financial statements and any
supplementary financial information and schedules included in the
Registration Statement and covered by their opinion therein comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations;
(ii) on the basis of limited procedures (set forth in detail
in such letter and made in accordance with such procedures as may be
reasonably specified by you) not constituting an audit in accordance
with generally accepted auditing standards, consisting of (but not
limited to) a reading of the latest available internal unaudited
financial statements of the Office Centre Companies , a reading of
minute books of the Office Centre Companies , inquiries of officials of
the Company responsible for financial and accounting matters, and such
other inquiries and procedures, as may be specified in such letter,
nothing has come to their attention which caused them to believe that:
(A) the unaudited financial statements and supporting
schedules and other unaudited financial data of the Company
included in the Registration Statement do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act or the 1933 Regulations or are
not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included in the
Registration Statement;
(B) the amounts of revenues, income before income
taxes, net income and net income per share for the three
fiscal years ended December 31, 1997 included in the
Prospectus under the caption "Prospectus Summary -- Summary
Combined Historical and Pro Forma Financial Data" do not agree
with the corresponding amounts in the audited statements of
earnings;
(C) at a specified date not more than five business
days prior to the date of delivery of such letter, there was
any change in the capital stock or long-term debt or
obligations under capital leases of the Company other than
scheduled repayments or any decreases in total assets,
Stockholders' equity or other items specified by the
Underwriters from that set forth in the Consolidated Balance
Sheet at December 31, 1997, included in the Prospectus, except
as described in such letter;
(D) for the period from December 31, 1997, to a
specified date not more than five days prior to the date of
delivery of such letter, there were any decreases in revenues,
gross profit, or the total or per share amounts of income
before extraordinary items or net income, of the Company, in
each case as compared with the corresponding period of the
preceding year, except in each case for decreases or increases
which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iii) in addition to the procedures referred to in clause (ii)
above and the examination referred to in their opinions included in the
Registration Statement, they have carried out certain specific
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by you which are
derived from the general accounting records of the Company, which
appear in the Registration Statement or the exhibits or schedules
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thereto and are specified by you, and have compared such amounts,
percentages and financial information with the accounting records of
the Company and with material derived from such records and have found
them to be in agreement.
(f) At the Closing Time, you shall have received from Grant Thornton,
LLP a letter, in form and substance satisfactory to you and dated as of
the Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (e) above, except that
the specified date referred to shall be a date not more than five
business days prior to the Closing Time.
(g) In the event that either of the letters to be delivered pursuant to
subsections (e) and (f) above sets forth any such changes, decreases or
increases, it shall be a further condition to your obligations that you shall
have determined, after discussions with officers of the Company responsible for
financial and accounting matters and with Grant Thornton, LLP, that such
changes, decreases or increases as are set forth in such letters do not reflect
a material adverse change in the capital stock, long-term debt, obligations
under capital leases, total assets, or Stockholders' equity of the Company as
compared with the amounts shown in the latest condensed consolidated balance
sheet of the Company, or a material adverse change in revenues or the total or
per share amounts of income before extraordinary items or net income, of the
Company, in each case as compared with the corresponding period of the prior
year.
(h) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
reasonably request for the purpose of enabling them to pass upon the issuance
and sale of the Shares as contemplated in this Agreement and the matters
referred to in Section 7(d) and in order to evidence the accuracy and
completeness of any of the representations and warranties or statements of the
Company, the performance of any of the covenants of the Company, or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as contemplated in this Agreement
shall be reasonably satisfactory in form and substance to you and to counsel for
the Underwriters. The Company will furnish you with such number of conformed
copies of such opinion, certificates, letters and documents as you shall
request.
(i) The NASD, upon review of the terms of the public offering of the
Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(j) The Firm Shares and the Option Shares, if any, shall have been
approved for listing on NSM upon official notice of the issuance, sale and
evidence of satisfactory distribution thereof pursuant to this underwritten
public offering.
(k) Each executive officer, director and stockholder of the Company
specified in Section 1(j) hereof shall have agreed in writing as to the matters
set forth in such section.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in any material respect when and as required by this Agreement to
be fulfilled, this Agreement may be terminated by you on notice to the Company
and the Selling Stockholders at any time at or prior to the Closing Time, and
such termination shall be without liability of any party to any other party.
Notwithstanding any such termination, the provisions of Section 9 shall remain
in effect and shall survive the term of this Agreement.
Section 8. Conditions to Purchase of Option Shares. In the event that
the Underwriters exercise the option granted in Section 3 hereof to purchase all
or any part of the Option Shares and the Date of Delivery determined by you
pursuant to Section 3 hereof is later than the Closing Time, the obligations of
the several Underwriters to purchase and pay for the Option Shares that they
shall have severally agreed to purchase pursuant to this Agreement are subject
to the accuracy of the representations and warranties of the Company and Selling
Stockholders herein contained, to
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the performance by the Company and the Selling Stockholders of their obligations
hereunder and to the following further conditions:
(a) The Registration Statement shall remain effective at the Date of
Delivery, and, at the Date of Delivery, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or shall
be pending or, to your knowledge or the knowledge of the Company or the Selling
Stockholders, shall be contemplated by the Commission, and any request on the
part of the Commission for additional information shall have been complied with
to the satisfaction of counsel for the Underwriters.
(b) At the Date of Delivery, the provisions of Sections 7(d)(i) through
7(d)(v) shall have been complied with at and as of the Date of Delivery and, at
the Date of Delivery, you shall have received certificates executed by the
Selling Stockholders, the President and the Chief Financial Officer of the
Company, dated as of the Date of Delivery, to such effect and to the effect set
forth in clauses (A), (B) and (C) of Section 7(d).
(c) At the Date of Delivery, you shall have received favorable opinions
of (i) Richards & O'Neil, LLP, counsel for the Company and the Selling
Stockholders, with respect to the Company, the Selling Stockholders and King
Office Supply, Inc., (ii) Atlas Pearlman Trop & Brokson, P.A., counsel for the
Company, with respect to the Acquisition Companies (other than King Office
Supply, Inc.), and (iii) Cooley, Shrair P.C., counsel for the Subsidiary, with
respect to the Subsidiary, together with signed or reproduced copies of such
opinions for each of the other Underwriters, in form and substance satisfactory
to counsel for the Underwriters, dated as of the Date of Delivery, relating to
the Option Shares and otherwise to the same effect as the opinions required by
Section 7(b).
(d) At the Date of Delivery, you shall have received a favorable
opinion of Baker, Donelson, Bearman & Caldwell, counsel for the Underwriters,
dated as of the Date of Delivery relating to the Option Shares and otherwise to
the same effect as the opinion required by Section 7(c).
(e) At the Date of Delivery, you shall have received a letter from
Grant Thornton, LLP, in form and substance satisfactory to you and dated as of
the Date of Delivery, to the effect that they reaffirm the statements made in
the letter furnished pursuant to Section 7(e), except that the specified date
referred to shall be a date nor more than five business days prior to the Date
of Delivery.
(f) At the Date of Delivery, counsel for the Underwriters shall have
been furnished with all such documents, certificates and opinions as they may
reasonably request for the purpose of enabling them to pass upon the issuance
and sale of the Option Shares as contemplated in this Agreement and the matters
referred to in Section 8(a) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements of the
Company and the Selling Stockholders, the performance of any of the covenants of
the Company and the Selling Stockholders, or the fulfillment of any of the
conditions herein contained; and all proceedings taken by the Company and the
Selling Stockholders, at or prior to the Date of Delivery in connection with the
authorization, issuance and sale of the Option Shares as contemplated in this
Agreement shall be reasonably satisfactory in form and substance to you and to
counsel for the Underwriters.
Section 9. Indemnification and Contribution. (a) The Company and the
Subsidiary, jointly and severally, and each Selling Stockholder, severally, with
his potential liability limited to the amount of gross proceeds from the sale of
his Shares, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject under the 1933 Act, specifically including but
not limited to losses, claims, damages or liabilities related to negligence on
the part of any Underwriter, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
breach of any warranty or covenant of the Company herein contained or any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment
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or supplement thereto, or in any "blue sky" application or other document
executed by the Company or based upon any information furnished in writing by
the Company, filed in any jurisdiction in order to qualify any or all of the
Shares under the securities laws thereof ("Blue Sky 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 to make the statements
therein, in light of the circumstances in which they were made, not misleading;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company and the Selling Stockholders shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you expressly for use therein;
provided, further, that the Company and the Selling Stockholders will not be
liable for any such losses, claims, damages, or liabilities arising from the
sale of the Shares to any person if a copy of the Prospectus (as first filed
pursuant to Rule 424(b)) or the Prospectus as amended or supplemented by all
amendments or supplements thereto which has been furnished to the Underwriters
shall not have been sent, mailed or given to such person, at or prior to the
written confirmation of the sale of such Shares to such person, but only if and
to the extent that such Prospectus, if so sent or delivered, would have cured
the defect giving rise to such losses, claims, damages or liabilities. In
addition to their other obligations under this Section 9(a), the Company and the
Selling Stockholders agree that, as an interim measure during the pendency of
any such claim, action, investigation, inquiry or other proceeding arising out
of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 9(a), they will reimburse the Underwriters
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
and the Selling Stockholders' obligation to reimburse the Underwriters for such
expense and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim reimbursement
payments that are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the prime rate (or reference rate or other
commercial lending rate for borrowers of the highest credit standing) announced
from time to time by First Tennessee Bank National Association (the "Prime
Rate") from the date of such request. This indemnity agreement shall be in
addition to any liabilities that the Company may otherwise have. For purposes of
this Section 9, the information set forth in the last paragraph on the front
cover page (insofar as such information related to the Underwriters) and under
"Underwriting" in any Preliminary Prospectus and in the Prospectus constitutes
the only information furnished by the Underwriters to the Company for inclusion
in any Preliminary Prospectus, the Prospectus or the Registration Statement.
(b) Each Underwriter, severally but not jointly, will indemnify and
hold harmless the Company and the Selling Stockholders against any losses,
claims, damages or liabilities to which the Company or the Selling Stockholders
may become subject, under the 1933 Act specifically including but not limited to
losses, claims, damages or liabilities related to negligence on the part of the
Company and the Selling Stockholders, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
breach of any warranty or covenant by you herein contained or any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or any Blue Sky Application or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, such Preliminary Prospectus or the Prospectus, or such
amendment or supplement, or any Blue Sky Application, in reliance upon and in
conformity with information furnished to the Company by such Underwriter
expressly for use therein; and will reimburse the Company and the Selling
Stockholders for any legal or other expenses reasonably incurred by the Company
or the Selling Stockholders in connection with investigating or defending any
such loss, claim, damage, liability or action. In addition to their other
obligations under this Section 9(b), the Underwriters agree that, as an
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interim measure during the pendency of any such claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 9(b),
they will reimburse the Company and the Selling Stockholders on a monthly basis
for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of their obligation to reimburse the Company or
the Selling Stockholders for such expense and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction.
Any such interim reimbursement payments that are not made to the Company or the
Selling Stockholders within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which the Underwriters may
otherwise have.
The indemnity agreement in this Section 9(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer and
director of the Company and each person, if any, who controls the Company within
the meaning of the 1933 Act to the same extent as such agreement applies to the
Company.
(c) The Selling Stockholders shall indemnify and hold harmless the
Company and the Underwriters against any losses, claims, damages or liabilities
to which the Company or the Underwriters may become subject, under the 1933 Act
specifically including but not limited to losses, claims, damages or liabilities
related to negligence on the part of the Company or the Underwriters, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any breach of any warranty or covenant by the
Selling Stockholders herein contained or any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
or any Blue Sky Application or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, such Preliminary Prospectus or the Prospectus, or such amendment or
supplement, or any Blue Sky Application, in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholders
expressly for use therein; and will reimburse the Company and the Underwriters
for any legal or other expenses reasonably incurred by the Company or the
Underwriters in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition to his other obligations under this
Section 9(c), the Selling Stockholders agree that, as an interim measure during
the pendency of any such claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 9(c), he will reimburse
the Company and the Underwriters on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
his obligation to reimburse the Company or the Underwriters for such expense and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. Any such interim reimbursement payments that
are not made to the Company or the Underwriters within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Selling Stockholders may otherwise have.
The indemnity agreement in this Section 9(c) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer and
director of the Company and each person, if any, who controls the Company within
the meaning of the 1933 Act to the same extent as such agreement applies to the
Company.
(d) Within ten days after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; no indemnification provided in this Section
9(a), 9(b) or 9(c) shall be available to any party who shall fail to give notice
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as provided in this Section 9(d) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
that it may have to any indemnified party otherwise than under this Section 9.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it shall wish, jointly with any other indemnifying party, similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized by the indemnifying party, (ii) the indemnified party
shall have been advised by such counsel that there may be a conflict of interest
between the indemnifying party and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party)
or (iii) the indemnifying party shall not in fact have employed counsel to
assume the defense of such action, in any of which events such fees and expenses
shall be borne by the indemnifying party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Section 9(a), 9(b) and 9(c)
hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for arbitration or
a written notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration does not make such
designation of an arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Any such arbitration
will be limited to the operation of the interim reimbursement provisions
contained in Sections 9(a), 9(b) and 9(c) hereof and will not resolve the
ultimate propriety or enforceability of the obligation to indemnify for expenses
that is created by the provisions of Sections 9(a), 9(b) and 9(c).
(f) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 9 is for
any reason judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company, the
Selling Stockholders and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity incurred by the Company, the Selling Stockholders and one or more
of the Underwriters, as incurred, in such proportions that (i) the Underwriters
are responsible pro rata for that portion represented by the underwriting
discount appearing on the cover page of the Prospectus bears to the public
offering price (before deducting expenses) appearing thereon, and (ii) the
Company and the Selling Stockholders are responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation; provided,
further, that if the allocation provided above is not permitted by applicable
law, the Company, the Selling Stockholders and the Underwriters shall contribute
to the aggregate losses in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company, the Selling Stockholders and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or
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the omission or alleged omission to state a material fact relates to information
supplied by the Company, by the Selling Stockholders or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages or liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (f), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 9(f), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
(g) The parties to this Agreement acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including without
limitation, the provisions of this Section 9, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement and Prospectus as required by the 1933 Act. The
parties are advised that federal or state public policy, as interpreted by the
courts in certain jurisdictions, may be contrary to certain of the provisions of
this Section 9, and the parties hereto hereby expressly waive and relinquish any
right or ability to assert such public policy as a defense to a claim under this
Section 9 and further agree not to attempt to assert any such defense.
Section 10. Representations and Agreements to Survive Delivery. The
representations, warranties, indemnities, agreements and other statements of the
Selling Stockholders, the Company or its officers set forth in or made pursuant
to this Agreement will remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Company, the Selling
Stockholders or any Underwriter or controlling person, with respect to an
Underwriter or the Company and will survive delivery of and payment for the
Shares or termination of this Agreement.
Section 11. Effective Date of Agreement and Termination. (a) This
Agreement shall become effective immediately as to Sections 6 and 9 and, as to
all other provisions, (i) if at the time of execution of this Agreement the
Registration Statement has not become effective, at 10:00 A.M. eastern time on
the first full business day following the effectiveness of the Registration
Statement, or (ii) if at the time of execution of this Agreement, the
Registration Statement has been declared effective, at 10:00 A.M. eastern time
on the first full business day following the date of execution of this
Agreement; but this Agreement shall nevertheless become effective at such
earlier time after the Registration Statement becomes effective as you may
determine on and by notice to the Company or by release of any of the Shares for
sale to the public. For the purposes of this Section 11, the Shares shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Shares or upon the release by you of
telegrams or facsimile messages (i) advising the Underwriters that the Shares
are released for public offering, or (ii) offering the Shares for sale to
securities dealers, whichever may occur first. By giving notice before the time
this Agreement becomes effective, you, as the Representative of the several
Underwriters, or the Company, may prevent this Agreement from becoming
effective, without liability of any party to any other party, except that the
Company shall remain obligated to pay costs and expenses to the extent provided
in Section 6 hereof.
(b) You may terminate this Agreement by notice to the Company and the
Selling Stockholders at any time at or prior to the Closing Time in accordance
with the last paragraph of Section 7 of this Agreement:
(i) if there has been, since the respective dates as of which
information is given in the Registration Statement, any development
which would have a Material Adverse Effect.
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(ii) if there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or
change in economic or political conditions the effect of which on the
financial markets of the United States is such as to make it, in your
judgment, impracticable to market the Shares or enforce contracts for
the sale of the Shares;
(iii) if trading in any securities of the Company has been
suspended by the Commission or by the NASD or NSM, or if trading
generally on the New York Stock Exchange or in the over-the-counter
market has been suspended, or limitations on prices for trading (other
than limitations on hours or numbers of days of trading) have been
fixed, or maximum ranges for prices for securities have been required,
by such exchange or the NASD or by order of the Commission or any other
governmental authority;
(iv) if a banking moratorium has been declared by federal or
New York or Tennessee authorities;
(v) any federal or state statute, regulation, rule or order of
any court or other governmental authority has been enacted, published,
decreed or otherwise promulgated which in your reasonable opinion would
have a Material Adverse Effect; or
(vi) any action has been taken by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which
in your reasonable opinion has a material adverse effect on the
securities markets in the United States.
(c) If this Agreement is terminated pursuant to this Section 11, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 6. Notwithstanding any such termination, the
provisions of Section 9 shall remain in effect.
Section 12. Default by One or More of the Underwriters. (a) If any
Underwriter shall default in its obligation to purchase the Firm Shares which it
has agreed to purchase hereunder, you may in your discretion arrange for you or
another party or other parties to purchase such Firm Shares on the terms
contained herein. If within 36 hours after such default by any Underwriter you
do not arrange for the purchase of such Firm Shares, then the Company or the
Selling Stockholders shall be entitled to a further period of 36 hours within
which to procure another party or other parties satisfactory to you to purchase
such Firm Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Selling Stockholders that you
have so arranged for the purchase of such Firm Shares, or the Company or the
Selling Stockholders notifies you that it has so arranged for the purchase of
such Firm Shares, you or the Company or the Selling Stockholders shall have the
right to postpone the Closing Time for a period of not more than seven 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 to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any persons substituted under this Section 12 with like effect as if such person
had originally been a party to this Agreement with respect to such Firm Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares of a defaulting Underwriter or Underwriters made by you or the
Company or the Selling Stockholders as provided in subsection (a) above, the
aggregate number of Firm Shares which remains unpurchased does not exceed
100,000, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the Firm Shares which such Underwriter agreed to
purchase hereunder and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Firm Shares which such
Underwriter agreed to purchase hereunder) of the Firm Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
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(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares of a defaulting Underwriter or Underwriters made by you or the
Company or the Selling Stockholders as provided in subsection (a) above, the
number of Firm Shares which remains unpurchased exceeds 100,000, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholders except for the expenses to be borne by the Company,
the Selling Stockholders and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 9 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
Section 13. Default by the Company or the Selling Stockholders. If the
Company or the Selling Stockholders shall fail at the Closing Time to sell and
deliver the respective aggregate number of Firm Shares that they are obligated
to sell, then this Agreement shall terminate without any liability on the part
of any non-defaulting party, except to the extent provided in Section 6 and
except that the provisions of Section 9 shall remain in effect. No action taken
pursuant to this Section shall relieve the Company or the Selling Stockholders
from liability, if any, in respect of its default.
Section 14. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
mailed, delivered or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Morgan Keegan & Company, Inc.,
50 Front Street, Memphis, Tennessee 38103, attention of Mr. John H. Grayson,
Jr., Senior Vice President (with a copy sent in the same manner to Baker,
Donelson, Bearman & Caldwell, 2000 First Tennessee Building, 165 Madison Avenue,
Memphis, Tennessee 38103, attention of John A. Good, Esq.); and notices to the
Company and the Selling Stockholders shall be directed to Office Centre
Corporation, 38 E. 32nd Street, 4th Floor, New York, NY 10016, Attention Robert
J. Gillon, Jr., Chief Executive Officer (with a copy sent in the same manner to
Richards & O'Neil, LLP, 885 Third Avenue, New York, NY 10022, Attention Floyd I.
Wittlin, Esq.). Each notice hereunder shall be effective upon receipt by the
party to which it is addressed.
Section 15. Parties. This Agreement is made solely for the benefit of
the Underwriters, the Selling Stockholders, the Acquisition Companies and the
Company and, to the extent so provided, any person controlling the Company or
any of the Underwriters, and the directors of the Company, its officers who have
signed the Registration Statement, and their respective executors,
administrators, successors and assigns and, subject to the provisions of Section
12, no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser, as
such purchaser, from any of the several Underwriters of the Shares.
Section 16. Governing Law and Time. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Tennessee.
Specified time of the day refers to United States Central Time.
Section 17. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
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26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
OFFICE CENTRE CORPORATION
By:
---------------------------------
Robert J. Gillon, Jr.
SELLING STOCKHOLDERS:
------------------------------------
Clifford M. Davie
Walter H. Gordenstein
UDI CORP., a Massachusetts corporation:
------------------------------------
Confirmed and accepted in Memphis,
Tennessee, as of the date
first above written, as
Representatives of the
Underwriters named
in Schedule I hereto.
MORGAN KEEGAN & COMPANY, INC.
By:
--------------------------------------------
John H. Grayson, Jr., Senior Vice President
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27
SCHEDULE I
Number
of
Name Shares
---- ------
Morgan Keegan & Company, Inc. ............................................
McDonald & Company Securities, Inc........................................
Credit Lyonnais Securities USA, Inc.......................................
Total ...........................................................
Schedule I
28
Schedule II
-----------
1. King Office Supply, Inc.
2. The Supply Room Companies, Inc.
3. New England Office Supply, Inc.
4. Sierra Office Systems and Products, Inc.
5. Office Solutions Business Products and Services, Inc.
6. Greenwood Outfitters, Inc.
7. SOS Office Supply Company
8. Georgia Impression, Inc.
9. Office Express, Inc.
10. Southern Office Center, Inc.
11. Metro Data Supply, Inc.
12. BCB Products Company and BCB Specialities, Inc.
Schedule II
29
Schedule III
------------
1. Harris Stations, Inc.
2. Office Interiors, Inc.
3. K&G Office Centre
4. American Office Products
5. Business World Products
6. Circle Brands
7. Shubert's
8. The Paperwork Company
9. Value Business Products
10. Dwyco Office Centre
11. TAG Office Products
12. O'Leary's Office Products
13. Universal Business Equipment Corp.
14. P.D. Morrison Enterprises Inc.
15. Hurricane Office Centre, Inc.
16. Parchment'n Quill, Inc.
17. Rhyme Supply Co., Inc.
18. Sablatura's Office Centre
19. Indainhead Specialty Co.
20. Mississippi Office Environments, Inc.
21. St. John's Printing and Office Centre
22. Work Center, Inc.
23. Sherman Office Supply, Inc.
24. Branan Office Products, Inc.
25. Challenge Office Products, Inc.
26. Reliant Business Products, Inc.
27. Jackpine Press, Inc.
28. Wright Business Products
29. Universal Stationers, Inc.
30. Stire Office Furniture & Supplies, Inc.
31. Veltri Interests
32. Southern Office Centre
33. Reliant Business Products
34. Sherman Office Supply, Inc.
35. Universal Business Equipment Corp.
36. Mississippi Office Environments Inc.
37. Alted Industries, Inc.
38. Meadows Office Supply & Equipment (but not its Stockholders)
39. Business World Products of Hastings, Inc.
40. Agenda Group, Ltd. dba TAG Office Products
41. Circle Brands Office Express
42. Shubert's, Inc. (but not its Stockholders)
43. The Paperwork Co.
44. Value Business Products, Inc.
45. City Office Supplies
Schedule III-1