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EXHIBIT 1.1
1,000,000 SHARES OF COMMON STOCK
1,000,000 COMMON STOCK PURCHASE WARRANTS
XXXXXXXXX TECHNOLOGIES INC.
UNDERWRITING AGREEMENT
, 0000
XXXXXX XXXXXXXXXX XXXXX INC.
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Syndicate Department
Dear Ladies and Gentlemen:
Xxxxxxxxx Technologies Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") 1,000,000 shares of its Common Stock, par value $.01
per share (the "Common Stock") and 1,000,000 Common Stock Purchase Warrants.
Each such Warrant shall represent the right to acquire one-half share of Common
Stock, shall expire three years from the effective date of the public offering,
shall be exercisable at a price equal to 120% of the public offering price per
share of Common Stock for the first twelve months from the date of issuance, at
a price equal to 130% of such public offering price during the ensuing twelve
months and at a price equal to 140% of such price during the last twelve months
of the term of such Warrants, and shall contain such other terms and conditions
as are set forth in the related exhibit to the Registration Statement described
below. The 1,000,000 shares of Common Stock to be purchased by the Underwriters
are hereinafter referred to as the "Firm Shares" and the 1,000,000 Common Stock
Purchase Warrants to be purchased by the Underwriters as the "Firm Warrants".
The Firm Shares and Firm Warrants are hereinafter collectively referred to as
the "Firm Securities". In addition, the Company proposes to grant to the several
Underwriters, solely for the purpose of covering over-allotments, the option
described in Section 5 of this agreement (the "Agreement") to purchase up to
150,000 additional shares of Common Stock of the Company (the "Additional
Shares") and 150,000 additional Common Stock Purchase Warrants (the "Additional
Warrants"). The Additional Shares and the Additional Warrants are hereinafter
collectively referred to as the "Additional Securities". The Additional
Securities may only be purchased on the basis of one Additional Warrant for each
Additional Share purchased.
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The Firm Securities and the Additional Securities, and the shares of
Common Stock issuable on exercise of the Firm Warrants and the Additional
Warrants are hereinafter collectively referred to as the "Offered Securities";
the Offered Securities and the Representative's Securities (itself defined in
Section 6 hereof) collectively as the "Securities"; all the warrants included in
the Securities as the "Warrants" and all of the shares of Common Stock issuable
on exercise of the Warrants as the "Warrant Shares".
You, as representative of the Underwriters (the "Representative"), have
advised the Company that you and the other Underwriters desire to purchase,
severally and not jointly, the Firm Securities and that you have been authorized
by the Underwriters to execute this Agreement on their behalf. The Company
hereby confirms the agreement made by it with respect to the purchase of the
Firm Securities by the several Underwriters on whose behalf you are signing this
agreement, as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) REGISTRATION STATEMENT AND PROSPECTUS. The Company has
filed with the Securities and Exchange Commission ("Commission") a
registration statement on Form SB-2 (No. 333-_________) for the
registration under the Securities Act of 1933, as amended ("Securities
Act"), of the Securities, and may have filed one or more amendments
thereto, copies of which have heretofore been delivered to you. The
registration statement, including the prospectus, financial statements
and exhibits, when it shall become effective, and such additional
information, if any, with respect to the offering permitted to be
omitted from such registration statement when it becomes effective if
subsequently filed with the Commission pursuant to Rule 430A of the
General Rules and Regulations of the Commission under the Securities
Act (the "Rules under the Securities Act"), is hereinafter called the
"Registration Statement" and the final prospectus included as part of
the Registration Statement is herein called the "Prospectus", except
that, if any revised prospectus shall be provided to the Underwriters
by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission
at the time the Registration Statement becomes effective (whether or
not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the Rules under the Securities Act), the
term "Prospectus" shall refer to such revised prospectus from and after
the time it is first provided to the Underwriters for such use. The
term "Preliminary Prospectus" as used in this agreement means a
preliminary prospectus as defined in Rule 430 of the Rules under the
Securities Act. The Securities Act, the Securities Exchange Act of
1934, as amended ("Exchange Act"), and the rules and regulations
promulgated thereunder are sometimes collectively referred to in this
agreement as the "Acts." All contracts and documents required by the
Acts to be filed or submitted in connection with the Registration
Statement have been so filed or submitted.
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(b) COMPLIANCE WITH SECURITIES ACT, ETC. When the Registration
Statement shall become effective and at all times subsequent thereto,
up to and including the Closing Date and the Option Closing Date (as
such terms are herein defined), and during such longer period until any
post-effective amendment to the Registration Statement shall become
effective, the Registration Statement (and any post-effective amendment
to the Registration Statement) will contain all statements which are
required to be stated therein in accordance with the Securities Act and
the Rules under the Securities Act, will fully comply in all material
respects with the applicable provisions of the Securities Act and the
Rules under the Securities Act, and the Registration Statement and any
post-effective amendment to the Registration Statement will not contain
any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and the Prospectus and any
amendment or supplement thereto will at all times up to and including
the Closing Date and the Option Closing Date (as hereinafter defined),
and during such longer period as the Prospectus may be required to be
delivered in connection with sales of Securities by the Underwriters or
any dealer, or in connection with the issuance and sale by the Company
of shares of Common Stock on exercise of any of the Warrants fully
comply in all material respects with the provisions of the Securities
Act and the Rules under the Securities Act and will not contain any
untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement and any
post-effective amendment to the Registration Statement or the
Prospectus or any amendment of, or supplement to, either of them in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the
Representative specifically for use in connection with the preparation
of the Registration Statement or of the Prospectus. It is understood
that for all purposes of this Agreement the statements set forth in the
Prospectus on page 2 with respect to stabilization, under the section
entitled "Underwriting" and the identity of counsel for the
Underwriters under the section entitled "Legal Matters" constitute the
only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Registration Statement and
Prospectus.
(c) NO STOP ORDER, ETC. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus,
and each Preliminary Prospectus, at the time of filing thereof, fully
complied in all material respects with the provisions of the Securities
Act and the Rules under the Securities Act and did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no
representations or warranties as to the information contained in or
omitted from any Preliminary Prospectus in reliance
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upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representative
specifically for use in connection with the preparation of such
Preliminary Prospectus.
(d) ACCOUNTANTS. BDO Xxxxxxx, LLP has audited the audited
financial statements filed as part of the Registration Statement and
those included in the Prospectus, to the extent set forth in their
reports in the Registration Statement and Prospectus, and are
independent public accountants as required by the Securities Act and
the Rules under the Securities Act.
(e) FINANCIAL STATEMENTS. The consolidated financial
statements included in the Registration Statement and Prospectus comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules under the Securities
Act. The consolidated financial statements present fairly the financial
condition and results of operations and combined cash flows of the
Company and its consolidated subsidiaries, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved and the pro forma financial information included
in the Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of Item 310 of Regulation
S-B of the Rules under the Securities Act and the assumptions used in
the preparation thereof are, in the opinion of the Company, reasonable.
The financial information set forth in the Prospectus under the
headings "Summary Consolidated Financial Information" and "Selected
Consolidated Financial Data" present fairly, on the basis stated in the
Prospectus, the information set forth therein and has been derived from
or compiled on a basis consistent with that of the audited consolidated
financial statements included in the Prospectus.
The Companies (as defined below) maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with the management's general
or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any difference.
(f) SUBSIDIARIES; COMMONLY CONTROLLED ENTITIES. The Company
owns all of the outstanding shares of capital stock of Xxxxxxxxx
Instruments, Inc., a _____________ corporation ("BII"), and of
Xxxxxxxxx Research Ltd., a ________________ corporation ("BRL") and 26%
of the capital stock of Xxxxxxxxx Laboratories, Inc., a corporation
("Labco") (collectively the "Subsidiaries"). All the outstanding shares
of Capital Stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and all the
shares of capital stock of BII and
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BRL and 26% of such shares of Labco are owned beneficially by the
Company, free and clear of any liens, encumbrances, security interests
or other restrictions, and no rights exist, or with the passage of time
or otherwise will exist, to acquire any of the capital stock of any of
the Subsidiaries. Neither the Company, nor any of its Subsidiaries owns
any securities of any corporation or has any equity interest in any
firm, partnership, association or other entity. The Company and the
Subsidiaries are hereinafter collectively referred to as the
"Companies".
(g) NO MATERIAL ADVERSE CHANGE. None of the Companies has
sustained any material loss or interference with their respective
businesses, financial condition or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree; and, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
none of the Companies has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, and there has not
been any material change in the capital stock (including any dividend
or distribution of any kind declared, paid, or made on any class of
capital stock of any of the Companies) or long-term debt or obligations
under capital leases of any of the Companies, or any material adverse
change; and there is no present intention by any of the Companies to
terminate any material supplier relationship or knowledge by any of
them of any such supplier's present intention to terminate any supplier
relationship with any of the Companies, nor any development involving a
prospective material adverse change in their respective businesses,
financial conditions or properties, including any proposed legislation
or regulations which, if enacted or adopted, could have a material
adverse change, in the condition (financial or otherwise), or in the
earnings, business affairs or business prospects of the any of the
Companies other than those reflected in the Registration Statement and
the Prospectus.
(h) CAPITALIZATION; DESCRIPTIONS OF SECURITIES. (i) The
authorized, issued and outstanding capital stock of the Company is as
set forth in the Prospectus under "Capitalization"; the issued and
outstanding shares of Common Stock and Preferred Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; the Warrant Shares, when issued and delivered by the
Company pursuant to this agreement, will be validly issued, fully paid
and non-assessable. The shares of Common Stock and Preferred Stock of
the Company conform to the descriptions of them contained in the
Prospectus, and the descriptions of the Common Stock and Preferred
Stock conform to the rights set forth in the Company's Certificate of
Incorporation, as amended, defining the same. No rights exist, or with
the passage of time, or otherwise will exist, to acquire any of the
capital stock of the Company, except as set forth in the Registration
Statement. The issuance of the Firm Shares and the Additional Shares is
not subject to, or in violation of, any preemptive or other similar
rights.
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(ii) The Warrants have been duly authorized and, when
delivered and paid for in accordance with the Agreement will be validly
issued and will constitute valid and binding obligations of the Company
in accordance with, and will be exercisable in accordance with, their
terms; the shares of Common Stock issuable on exercise of the Warrants
have been duly and validly reserved for issuance pursuant to the terms
of the Warrants and, when delivered and paid for pursuant to the terms
of such Warrants, will be duly authorized, validly issued, fully paid
and nonassessable, and the holders will not be subject to personal
liability by reason of being such holders, and such shares will not be
subject to the preemptive rights of any stockholder of the Company.
(iii) The Warrants and the Warrant Shares conform in all
material respects to the descriptions thereof contained in the
Prospectus, and such descriptions conform to the rights set forth in
the instruments defining the same.
(i) ORGANIZATION, QUALIFICATION, ETC. The Company is a duly
organized and validly existing corporation in good standing under the
laws of the State of Delaware with corporate power and authority to own
and lease its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under this
agreement, BII is a duly organized and validly existing corporation in
good standing under the laws of the State of New Jersey, BRL is a duly
organized and validly existing corporation in good standing under the
laws of __________, and Labco is a duly organized and validly existing
corporation in good standing under the laws of the State of __________,
each with corporate power to own and lease its properties and to
conduct its business as described in the Prospectus, and each is duly
qualified to do business and in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
change in its condition, financial or otherwise, or on its earnings,
business affairs or business prospects.
(j) REGULATORY COMPLIANCE. Each of the Companies holds all
material licenses, certificates, permits and other evidence of
regulatory compliance issued by appropriate federal, state or local or
foreign governmental agencies or bodies necessary for the conduct of
its business as described in the Prospectus, and none of the Companies
has received any notice of proceedings relating to the revocation or
modification of any such license, certificate, permit or other evidence
of compliance which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely
affect its condition, financial or otherwise, or the earnings, business
affairs or business prospects.
(k) AUTHORITY. The Company has full power and lawful
authority, and has taken all corporate action necessary, to enter into
this agreement and to authorize, issue and sell the Securities on the
terms and conditions set forth in this agreement, and this agreement
has been duly authorized, executed and delivered by the
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Company and constitutes the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
(l) COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS. None of the
Companies is in violation of its charter or bylaws or in default in the
performance or observation of any obligation, agreement, covenant or
condition contained in any distribution agreement, indenture, mortgage,
deed of trust, note, bank loan or credit agreement, or any other
material agreement or instrument to which any of the Companies is a
party or by which it is bound, or to which any of its properties or
assets are subject, which default or defaults, singly or in the
aggregate, are material to its condition, financial or otherwise, or
its earnings, business affairs or business prospects, and each such
distribution agreement, indenture, mortgage, deed of trust, note, bank
loan or credit agreement, and other material agreement or instrument,
is in full force and effect and is the legal, valid and binding
obligation of, and is enforceable as to, each of the Companies, as the
case may be, in accordance with its terms. The execution, delivery and
performance of this agreement by the Company and the consummation by
the Company of the transactions contemplated herein will not (i)
conflict with, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give rise to the
rights of termination under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Companies pursuant to, any distribution agreement, indenture, mortgage,
deed of trust, note, bank loan or credit agreement or any other
material agreement or instrument to which any of the Companies is a
party or by which any of their respective properties or assets are
bound, nor will such action result in any violation of the provisions
of the charter or bylaws of any of the Companies, or any material law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over any of
the Companies, or their respective properties or operations, or (ii)
require the consent, approval, authorization or order of any court or
governmental agency or body for the consummation by the Company of any
of the transactions contemplated hereby, except such as have been
obtained and such as may be required under the Acts, and under state
securities or "Blue Sky" laws in connection with the issuance and
distribution of the Securities. There are no contracts or documents of
the Companies that are required to be filed as exhibits to the
Registration Statement under the Securities Act or the Rules that have
not been so filed.
(m) LITIGATION. Except as set forth in the Prospectus, there
is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or, to the knowledge
of the Company, threatened, against or affecting any of the Companies,
that is required to be disclosed in the Registration Statement (other
than as disclosed therein), or that might result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of any of the Companies or that
might materially and adversely affect the properties or assets thereof
or that might materially or adversely affect the consummation of this
agreement; all pending legal or governmental proceedings to
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which any of the Companies is a party or of which any of their
respective properties or assets are the subject, that are not described
in the Registration Statement, including ordinary routine litigation
incidental to the business of the Companies, are not material.
(n) PAYMENT OF TAXES. Each of the Companies has filed all
United States federal, state and local tax returns which are required
to be filed and all such filed returns are complete and accurate. All
taxes and all assessments to the extent that they have become due have
been paid in full, and each of them has made adequate accruals for all
taxes which may be owed but have not been paid. There is no audit,
examination, deficiency, or refund litigation pending or threatened,
with respect to any Taxes of the Companies that would individually or
in the aggregate have a material adverse effect on any or all of the
Companies. All Taxes, interest, additions, and penalties due with
respect to completed and settled examinations or concluded litigation
relating to it have been paid in full. None of the Companies has
executed an extension or waiver of any statute of limitations on the
assessment or collection of any Tax that is currently in effect. No
rulings have been issued by or agreements entered into with any Tax
Authority (as defined below) with respect to the Company or any
subsidiary or affiliate. For purposes of this paragraph, "Taxes" shall
mean all taxes, charges, fees, liens, duties or other assessments,
however denominated, including any interest or penalties that may
become payable in respect thereof, imposed by the United States
government, any state, local or foreign government or any agency or
political subdivision of any such government (a "Taxing Authority"),
which taxes shall include, without limiting the generality of the
foregoing, all income taxes, payroll and employee withholding taxes,
unemployment insurance, social security, sales and use taxes, excise
taxes, capital taxes, franchise taxes, gross receipt taxes, occupation
taxes, real or personal property taxes, value added taxes, stamp taxes,
transfer taxes, workers' compensation taxes, and other obligations of
the same or of a similar nature.
(o) The Securities shall have been qualified for listing on
The NASDAQ National Market System.
(p) None of the Companies are an "investment company" or an
"affiliated person" of, or promoter, or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940.
(q) REAL AND PERSONAL PROPERTY. Except as disclosed in the
Prospectus, each of the Companies owns outright, in fee simple, title
to the real and personal property purported to be owned by it, free and
clear of all liens, mortgages, charges or encumbrances of any nature,
except those which do not materially diminish the value of the property
subject to them or interfere with or impair the present and continued
use of that property in the usual and normal conduct of its business.
All of the leases under which each of the Companies holds properties or
assets as lessee are, in all material respects, as described in the
Prospectus and are valid and in full
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force and effect and enforceable as to the Companies in accordance with
their terms, and none of the Companies is in default in any respect
under any of the terms or provisions of any such leases, except for any
default which would not have a material adverse change on its business,
and no claim has been asserted by anyone adverse to the rights of the
Companies as lessee under any of the leases mentioned above, or
affecting or questioning the right of any of the Companies to continued
possession of the leased premises or assets under any such lease.
(r) INTELLECTUAL PROPERTY. Each of the Companies owns or
possesses adequate licenses or other rights to use all patents, trade
secrets, trademarks, trade names and copyrights necessary to enable it
to conduct its business as now operated (the "Intellectual Property")
and such Intellectual Property (other than Intellectual Property rights
acquired as licensee) is owned free and clear of any liens, security
interests, mortgages, charges, encumbrances and adverse rights of every
kind, nature and description; and none of the Companies has any
knowledge of any claim or received any notice of infringement of or
conflict with asserted rights of others or have knowledge of
infringement by others of its rights with respect to any of the
foregoing which, singly or in the aggregate, could result in a material
adverse change in its condition, financial or otherwise, or in its
earnings, business affairs or business prospects. Except for the rights
of customers under license agreements, the Intellectual Property is not
subject to any licenses, sublicenses, royalty arrangements, or
disputes, and except for such rights, each of the Companies has the
exclusive right to make, copy, sell, exploit and provide to others the
use of the Intellectual Property pertinent to it and all derivative
works thereof free and clear of any liens, security interests,
mortgages, charges, encumbrances and adverse rights of every kind,
nature and description. There are no defects in the Intellectual
Property, which defects would in any material and adverse respect
affect the functioning thereof in accordance with the specifications
therefor, or the use or exploitation thereof. No agreement exists which
would preclude any desired change to the Intellectual Property. Each of
the Companies has taken or is taking all actions necessary in its
reasonable judgment to protect the Intellectual Property pertinent to
it. No third party has any interest in, or right to compensation from
any of the Companies by reason of the use, exploitation or sale of the
Intellectual Property, and none of the Companies has received notice or
knowledge of any complaint, assertion, threat or allegation that would
contradict the foregoing.
(s) INSURANCE. Each of the Companies has its property
adequately insured against loss or damage by fire, maintains adequate
insurance against liability for negligence, and maintains such other
insurance in such nature and amounts of coverage as is usually
maintained by companies engaged in the same or similar business.
(t) NO STABILIZATION OR MANIPULATION OF PRICE. Neither the
Company nor any officer or director of the Company has taken, and the
Company and each officer and director of the Company have agreed not to
take, directly or indirectly, any
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action designed to stabilize or manipulate the price of any security of
the Company, or which has constituted or which might in the future
reasonably be expected to constitute stabilization or manipulation of
the price of the Offered Securities in connection with the offering
contemplated by the Registration Statement.
(u) RELATED TRANSACTIONS. There are no business relationships
or related-party transactions of the nature described in Item 404 of
Regulation S-B involving any of the Companies and any other persons
referred to in said Item 404 that are required to be described in the
Prospectus and which have not been so disclosed.
(v) NO REGISTRATION RIGHTS. Except as set forth in the
Prospectus, no person or entity has the right (which has not been
waived) to require registration of Common Stock or other securities of
the Company because of the filing or effectiveness of the Registration
Statement or otherwise.
(w) LOCK-UP AGREEMENTS. The Company has obtained and delivered
to the Underwriters a written agreement, in form satisfactory to
Rosenman & Colin LLP, counsel for the Underwriters, by each officer and
director of the Company as of the Effective Date not to, directly or
indirectly, sell, offer to sell or agree to sell or otherwise dispose
of any Common Stock of the Company for a period of 180 days from the
Effective Date without the prior written consent of the Representative,
other than pursuant to the Registration Statement, and relating also to
the manner of sale of such shares in the two-year period following such
180-day period.
(x) NO BROKER OR FINDER ENGAGED BY THE COMPANY. The Company
has not incurred any liability for any finder's fees or similar
payments in connection with any of the transactions herein
contemplated.
(y) LABOR RELATIONS. None of the Companies is involved in any
labor dispute which might be expected to result in a material adverse
effect on its condition, financial or otherwise, or on its earnings,
business affairs or business prospects, and no such dispute is pending,
or, to the knowledge of the Companies, threatened.
(z) DEALINGS. None of the Companies nor any of their
respective officers, directors, employees, agents or any other person
acting on their behalf has, directly or indirectly, given or agreed to
give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or an agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality of
any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is,
or may be in a position to help or hinder their respective businesses
(or assist in connection with any actual or proposed transaction) which
(a) might subject any of them to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (b) if not given in
the past, might have had a materially adverse effect on the assets,
business or operations of any of them as reflected in any of the
combined financial statements contained in the Xxxxxxxxxx,
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or (c) if not continued in the future, might adversely affect the
assets, business, operations or prospects of any of them. Each of the
Companies' internal accounting controls and procedures are sufficient
to cause it to comply with the Foreign Corrupt Practices Act of 1977,
as amended.
(aa) PRIOR TRANSACTIONS. Except as set forth in the
Registration Statement, the Company has not issued, sold or offered for
sale within the last three years any of its equity securities.
2. PURCHASE AND SALE OF SHARES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby agrees to issue and sell to the Underwriters,
severally and not jointly,the number of Firm Securities to be sold by the
Company set forth opposite the name of each Underwriter on Schedule I, and each
Underwriter, severally and not jointly, hereby agrees to purchase from the
Company the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule I hereto, at a purchase price of $______ per Firm Share
and $_______ per Firm Warrant.
3. DELIVERY AND PAYMENT. The Company shall deliver the Firm Securities
at the office of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
on ________________, 1996 at 10:00 A.M., New York City time, the date and time
of such delivery being hereinafter called the "Closing Date." On the Closing
Date, delivery of the Firm Securities shall be made to you, for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through you of the purchase price for the Firm Securities. The
purchase price for the Firm Securities will be paid to or upon the order of the
Company, in bank checks in New York Clearing House funds. Certificates for the
Firm Securities shall be made available to you for inspection, checking and
packaging at the office of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 00 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx, not less than one full business day prior to the Closing Date. Time
shall be of the essence and delivery at the time and place specified in this
agreement is a further condition to the obligations of each Underwriter.
In the event the Underwriters exercise the option granted in Section
4(a) hereof to purchase all or any portion of the Additional Securities, the
Company shall deliver the Additional Securities at the office of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York
City time on the Option Closing Date (as hereinafter defined). On the Option
Closing Date, delivery of the Additional Securities shall be made to you, for
the respective accounts of the several Underwriters, against payment by the
several Underwriters through you of the purchase price for the Additional
Securities. The purchase price for the Additional Securities will be paid to or
upon the order of the Company, in bank checks in New York Clearing House funds.
Certificates for the Additional Securities shall be made available to you for
inspection, checking and packaging at the office of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, not less than one full business day prior
to the Option Closing Date. Time shall be of the essence and delivery at the
time and place specified in this agreement is a further condition to the
obligations of each Underwriter.
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4. OPTION TO PURCHASE ADDITIONAL SHARES.
(a) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants an option to the Underwriters to purchase
150,000 Additional Shares and 150,000 Additional Warrants from the Company, in
each case at a price identical to the price per Firm Share and Firm Warrant set
forth in Section 2 of this Agreement. The option hereby granted may be exercised
by the Underwriters as to all or any part of the Additional Securities at any
time, but only once prior to the end of the close of business on the thirtieth
day following the Closing Date; provided, however, that Additional Securities
may only be purchased on the basis of one additional Warrant for each Additional
Share purchased. Subject to such adjustments to eliminate fractional Additional
Securities as you, as the Representative of the Underwriters, may determine, the
number of Additional Securities to be purchased by each Underwriter shall bear
the same relation to the total number of Additional Securities to be sold as the
total number of Firm Securities to be purchased by such Underwriter bears to the
total number of Firm Securities purchased by the Underwriters.
(b) The option granted hereby may be exercised by you, as the
Representative of the Underwriters, by giving written notice to the Company
setting forth the number of Additional Securities to be purchased, the date and
time for delivery of payment for the Additional Securities, and stating that the
Additional Securities being purchased are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm
Securities. If the notice is given prior to the Closing Date, the date for
delivery and payment shall not be earlier than the later of two (2) full
business days after the notice is given or the Closing Date. If the notice is
given on or after the Closing Date, the date for delivery and payment shall not
be earlier than five full business days after the day on which the notice is
given. In either event, the date shall not be more than fifteen (15) full
business days after the day on which the notice is given. The date and time for
delivery and payment is called the "Option Closing Date." Upon exercise of the
option, the Company shall become obligated to sell to the Underwriters and,
subject to the terms and conditions set forth in Section 4(c) of this Agreement,
the Underwriters shall become obligated, severally and not jointly to purchase
the number of Additional Shares described in Section 4(a) above. On the Option
Closing Date, delivery of the Additional Securities shall be made against
payment of the purchase price to the Company by bank check or checks payable in
New York Clearing House funds.
(c) The obligation of the Underwriters to purchase and pay for any of
the Additional Securities is subject to the accuracy as of the date of this
Agreement, the Closing Date and the Option Closing Date of, and the compliance
by the Company in all material respects with, its representations and warranties
in this Agreement, to the accuracy of the statements of the officers of the
Company made pursuant to this Agreement, to the performance in all material
respects by the Company of its obligations under this Agreement, to the
satisfaction by the Company as of the Option Closing Date of the conditions set
forth in Section 11 of this Agreement, and to the delivery to you of opinions,
certificates, and letters addressed to you and dated the Option Closing Date
substantially similar in scope to those specified in Section 11 of this
Agreement, but with each reference
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to "Firm Securities" to be to the Additional Securities being sold, and "Closing
Date" to be to the "Option Closing Date."
5. OFFERING BY UNDERWRITERS. After the Registration Statement becomes
effective, the Underwriters propose to offer for sale to the public the Firm
Securities and any Additional Securities which may be sold at the price and upon
the terms set forth in the Prospectus. The Representative represents and
warrants that it has not incurred any liability for finder's fees or similar
payments in connection with the transactions herein contemplated.
6. REPRESENTATIVE'S WARRANTS. At the Closing, the Company shall sell to
the Representative, for a nominal consideration, five-year warrants entitling
the holder to purchase up to 100,000 shares of Common Stock and three-year
warrants entitling the holder to purchase up to 100,000 warrants identical in
form and substance to the Firm Warrants (the warrants to be issued to the
Representative to purchase shares of Common Stock and warrants are referred to
herein as the "Representative's Warrants" and the warrants purchasable on
exercise of the Representative's Warrants are referred to herein as the
"Included Warrants"). The Representative's Warrants to purchase shares of Common
Stock shall be initially exercisable for a period of four years commencing one
year after the effective date of the Prospectus and the Representative's
Warrants to purchase warrants shall be initially exercisable for a period of two
years commencing one year after the effective date of the Prospectus, in each
case at a price or prices conforming to the requirements of the National
Association of Securities Dealers Inc. and shall contain the registration rights
and other terms and conditions set forth in the related Exhibit to the
Registration Statement. As used herein, "Representative's Securities" shall mean
the Representative's Warrants, the Included Warrants and the shares of Common
Stock issuable on exercise of all such Warrants.
7. EXPENSES.
The Company will pay all fees, taxes and expenses incident to the
performance of the obligations of the Company under this Agreement and under any
other agreement in connection with the offer, sale and issuance of the Firm
Securities and Additional Securities, and any fees, taxes and expenses,
including transfer taxes incident to the issuance and delivery of the Firm
Securities and Additional Securities to the Underwriters as may be required by
this agreement, including, without limitation, accounting, legal (other than the
fees and disbursements of the Underwriters' counsel, except as provided below),
printing, any state or local transfer or other taxes advertising and other costs
incurred in connection with the preparation, printing, filing and delivery to
the Representative of the Registration Statement, the Preliminary Prospectus,
the Prospectus, and all amendments or supplements to them, preliminary and final
Blue Sky Memoranda, this Agreement, the Agreement Among Underwriters and
Selected Dealer Agreement, Underwriters' Questionnaires, powers of attorney, the
listing of the Securities on The Nasdaq National Market System and any other
agreements or similar items of expense, including postage, printing, advertising
costs, the costs of "road shows" and other marketing expenses reasonably
incurred by you or reasonably required or desirable in connection with the
offering and sale of the Firm Securities and Additional Securities, and in
connection with furnishing copies of the
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Preliminary Prospectus, the Prospectus and all supplements and amendments to
them to the several Underwriters and all filing fees to the Commission and the
National Association of Securities Dealers, Inc. ("NASD") payable in connection
with this offering. The Company will pay all legal fees (including the
reasonable fees of Rosenman and Colin LLP, Blue Sky counsel to the Company),
disbursements, filing fees and other costs of compliance with or registration
and qualification under applicable state securities or Blue Sky laws and all
reasonable expenses incident thereto. The Company shall also pay the fees and
expenses of the transfer agent and Custodian. At the Closing, the Company shall
pay to the Representative a non-accountable expense allowance of 2% of the gross
proceeds of the offering of the Firm Securities, of which the Representative
acknowledges having received a non-refundable advance of $20,000, and at any
Option Closing shall pay to the Representative a further non-accountable expense
allowance of 2% of the gross proceeds of the offering of Additional Securities.
8. FURTHER COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters contained in this Agreement, the Company
covenants and agrees with each of the several Underwriters as follows:
(a) The Company will not at any time submit or make any
amendment or supplement to the Prospectus or Registration Statement
which shall not have been submitted to you within a reasonable time
prior to the proposed submission thereof, or to which you shall
reasonably object in writing, or which is not in compliance with the
Acts.
(b) The Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to
comply with the requirements of the Securities Act and the Rules under
the Securities Act and to become effective, and will promptly advise
you and confirm in writing (i) when the Registration Statement and any
amendment thereto shall become effective, (ii) when any post-effective
amendment to the Registration Statement becomes effective, (iii) of the
receipt of any comments from the Commission, (iv) when the Commission
shall request any amendment to the Registration Statement or
Prospectus, or request any additional information, (v) of the necessity
of amending or supplementing the Registration Statement or any
post-effective amendment in order to then meet the requirements of the
Securities Act and the Rules under the Securities Act, and (vi) of the
issuance by the Commission, any "Blue Sky" authority or any other
governmental agency with jurisdiction over the Company or its
securities, of any stop order or similar order with regard to the
Registration Statement or the Prospectus, or any order preventing or
suspending the use of any Preliminary Prospectus or the Registration
Statement or Prospectus, or of the suspension of the qualification of
the Securities for offer or sale in any jurisdiction, or of the
institution of any proceedings for any such purpose. The Company will
use its best efforts to prevent the issuance of any stop order or of
any order preventing or suspending such use and if such an order shall
be issued, the Company will use its best efforts to obtain its
withdrawal as soon as possible.
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(c) The Company will prepare and file with the Commission,
upon your reasonable request, any amendments or supplements to the
Registration Statement or Prospectus, in form and substance reasonably
satisfactory to counsel for the Company, as in the opinion of Rosenman
& Colin LLP, counsel for the Underwriters, may be necessary or
advisable in connection with the distribution of the Offered Securities
and the exercise of the Warrants included therein, and will use its
best efforts to cause the same to become effective as promptly as
possible and to remain effective for the term of the Warrants included
in the Offered Securities.
(d) The Company consents to the use of any Preliminary
Prospectus by the several Underwriters and by dealers for the purposes
contemplated by this agreement and in accordance with the Acts. The
Company will deliver to you, at or before the Closing Date, three
executed copies of the Registration Statement and all amendments
thereto, including all financial statements and exhibits filed with it,
and copies of all written communications between the Company, its
representatives and agents and the Commission, and will deliver to you
such number of copies of the Registration Statement, including such
financial statements, but without exhibits, and all amendments thereto
as you may reasonably request. The Company will deliver or mail to you
and, upon your request, to the Underwriters, from time to time, during
the period when delivery of the Prospectus relating to the Offered
Securities shall be required under the Acts, as many copies of the
Prospectus (as amended or supplemented) as you may reasonably request.
(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in
reliance upon Rule 430A of the Rules under the Securities Act, then,
immediately thereafter, the Company will prepare, and file or transmit
for filing with the Commission in accordance with such Rule 430A and
Rule 424(b) of the Rules under the Securities Act copies of the amended
Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended
Prospectus) containing all information so omitted.
(f) The Company will comply with the requirements of the Acts
and any other applicable rules and regulations of any governmental
authority having jurisdiction over this offering so as to permit the
continuance of sales or dealing in the Offered Securities. Subject to
the provisions of Subsection (a) of this Section 8, if, at any time
when a Prospectus is required to be delivered under the Acts, (i) an
event relating to or affecting the Company shall have occurred which,
in the judgment of the Company and its counsel, or in the opinion of
counsel for the Underwriters, would cause the Registration Statement as
then in effect to include an untrue statement of a material fact or to
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or in
order to make the Registration Statement comply with the Acts and the
Rules under the Securities Act, or (ii) it is necessary to amend or
supplement the Registration Statement or Prospectus, the Company will
promptly notify you of the occurrence and will promptly prepare, file
and deliver to you without charge such number of copies of the amended
or supplemented Registration Statement or
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Prospectus as you shall reasonably request, and will use its best
efforts to cause the Commission and appropriate "Blue Sky" authorities
to take all required action with regard to any such amendment as may be
necessary to permit the lawful use of the Registration Statement and
Prospectus in connection with the distribution of the Offered
Securities.
(g) The Company will supply all necessary documents, exhibits
and information and execute all applications, instruments and papers as
may be necessary or desirable in the opinion of Rosenman & Colin LLP,
Blue Sky counsel, and as requested by you, to qualify the Offered
Securities for sale under the Blue Sky or other securities laws in such
jurisdictions as the Underwriters may reasonably request, provided the
Company shall not have to qualify as a foreign corporation and shall
not be required to consent to service of process generally. The Company
will take any reasonable measures requested by you and such action, if
any, which is necessary under such laws in order to qualify the Offered
Securities for sale and to continue such registration or qualification
so long as necessary to permit the continuance of sales or dealings
therein with respect to such Securities.
(h) The Company will make generally available to its security
holders as soon as practicable after the expiration of one year after
the date the Registration Statement becomes effective, and in all
events not later than ___________, 1997, an earnings statement of the
Company (which will be in such detail and form as you may reasonably
request and which need not be audited) covering a period of at least 12
months beginning not later than the first day of the Company's fiscal
quarter next following the date the Registration Statement becomes
effective, which earnings statement shall satisfy the provision of
Section 11(a) of the Securities Act.
(i) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company shall mail to its
stockholders and warrantholders annual reports containing financial
statements of the Company audited by its independent certified public
accountants and quarterly reports for the first three quarters of its
fiscal year containing financial information which may be unaudited.
(j) The Company will, from time to time, after the date the
Registration Statement becomes effective, file with the Commission such
reports as are required by the Acts and with state securities
commissions in states where the Offered Securities have been sold by
the Representative (as the Representative shall have advised the
Company in writing) such reports as are required to be filed by the
securities acts and the regulations of those states.
(k) The Company will apply the net proceeds from the sale of
the Offered Securities for the purposes set forth under "Use of
Proceeds" in the Prospectus.
(l) The Company shall furnish to you as early as practicable
prior to the Closing Date, but no later than three (3) full business
days prior thereto, a copy of the latest available unaudited interim
financial statements of the Company which
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have been read by the Company's independent certified public
accountants, as stated in their letters to be furnished pursuant to
Section 11(i) of this agreement.
(m) During the period of five (5) years from the date the
Registration Statement becomes effective, the Company will furnish to
the Representative copies of all reports and other communications
(financial or other) furnished by the Company to its shareholders and,
as soon as reasonably practicable, copies of any reports or financial
statements furnished or filed by the Company to or with the Commission,
NASDAQ, or any national exchange on which any class of securities of
the Company may be listed.
(n) During a period of 180 days after the date the
Registration Statement becomes effective, the Company will not,
directly or indirectly, without the prior written consent of the
Representative, offer, sell, grant any option to purchase or otherwise
dispose of any Common Stock or any securities convertible into or
exchangeable for Common Stock except pursuant to this Agreement, and
except (i) in connection with a merger or asset acquisition, or (ii)
upon exercise or conversion of securities (including stock options) of
the Company outstanding prior to the effective date of the Registration
Statement or granted under the Company stock option plans under which
___________ shares of Common Stock are reserved for issuance upon
exercise of stock options granted thereunder.
(o) The Company will reasonably enforce, for your benefit, the
written agreements (copies of which have been furnished to you) by all
of the officers, directors and shareholders of the Company pursuant to
Section 1(w) hereof.
(p) At the request of the Representative, the Company, at its
expense, for a period of three years following the Closing Date shall
provide the Representative with copies of the daily transfer sheets for
the Company's Common Stock.
(q) The Company will cause the officers, directors and
principal shareholders of the Company (enumerate) to enter into
an agreement with the Representative to the effect that, for a period
of 180 days from the date hereof, he or she will not, without the
prior consent of the Representative, directly or indirectly, offer,
sell, offer to sell, grant any option to purchase or otherwise sell
or dispose of any shares of the Common Stock of the Company or any
securities convertible into or exercisable or exchangeable therefor
or with respect to which such person has the power of disposition.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, and, subject to
Section 9(c) to indemnify and hold harmless, each Underwriter (including
specifically each person who may be substituted for an Underwriter as provided
in Section 13 of this Agreement)
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and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act, from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or any of them
may become subject under the Act, state securities laws or under any other
statute or at common law or otherwise, and, except as hereinafter provided, will
reimburse each of the Underwriters and each such controlling person, if any, for
any legal or other expenses reasonably incurred by them or any of them in
connection with investigating or defending any claim or action whether or not
resulting in any liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, in any Preliminary Prospectus or in the Prospectus (or the
Registration Statement or Prospectus as from time to time amended or
supplemented by the Company) or in any application or other document
(hereinafter "Application") executed by the Company or based upon written
information furnished by or on behalf of the Company, filed in any jurisdiction
in order to qualify the Securities under the securities laws of that
jurisdiction, or which arise out of or are based upon the omission or alleged
omission to state in any of the foregoing any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnity agreement contained in this Subsection shall not
apply to any loss, claim, damage, expense or liability to the extent arising out
of any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, Preliminary Prospectus or
Prospectus (or the Registration Statement or Prospectus as from time to time
amended or supplemented by the Company) or, Application in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by the Representative or any Underwriter directly or through you
expressly for use therein; provided, further that the indemnity agreement
contained in this Subsection is subject to the condition that, insofar as it
relates to any such untrue statement or alleged untrue statement or omission or
alleged omission in any Preliminary Prospectus but eliminated or remedied in the
Prospectus, such indemnity agreement shall not inure to the benefit of any
Underwriter or any person controlling such Underwriter from whom the person
asserting any such loss, claim, damage, expense, liability or action purchased
the Securities if (i) prior to the time such Prospectus was required under the
Securities Act to be furnished to such person the Company had furnished copies
of the properly corrected or supplemental Prospectus to such Underwriter, (ii) a
copy of such Prospectus, as then corrected or supplemented, was not furnished to
such person at or prior to the time required under the Securities Act, and (iii)
the delivery of such Prospectus would have constituted a complete defense to the
claim asserted by such person. Promptly after receipt by any Underwriter or any
person controlling such Underwriter of notice of the commencement of any action
in respect of which indemnity may be sought against the Company under this
Subsection (a), such Underwriter or controlling person shall notify the Company
in writing of the commencement of the action and, subject to the provisions
hereinafter stated, the Company shall assume the defense of that action
(including the employment of counsel who shall be reasonably satisfactory to the
Representative) and the payment of expenses insofar as such action shall relate
to any alleged liability in respect of which indemnity may be sought against the
Company. Any Underwriter or any such controlling person shall have the right to
employ separate counsel in any such action and participate in the defense, but
the fees and expenses of such counsel shall not be at the expense of the Company
unless the
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employment of such counsel has been specifically authorized by the Company or
unless the indemnified party or parties reasonably conclude there may be
defenses available to it or them which were not available to the Company (in
which case the Company will not have the right to direct the defense of the
action on behalf of the indemnified parties), in which event the reasonable
expenses of one additional counsel for the Underwriters will be borne by the
Company. The Company shall not be liable to indemnify any person for any
settlement of any such action effected without the written consent of the
Company. The obligations of the Company under the indemnity agreement set forth
in this Subsection (a) shall be in addition to any liability the Company may
otherwise have under this Agreement.
(b) Each Underwriter (including specifically each person who may be
substituted for an Underwriter as provided in Section 13 of this Agreement)
severally agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages, expenses, or liabilities, joint or several,
to which they or any of them may become subject under the Acts or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Company and each such director, officer or
controlling person for any legal or other expenses reasonably incurred by them
or any of them in connection with investigating or defending any claim or action
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, in any Preliminary Prospectus or in the Prospectus (or
the Registration Statement or Prospectus as from time to time amended or
supplemented) or in any Application, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but only insofar
as any such statement or omission was made in reliance upon and in conformity
with information furnished in writing to the Company in connection therewith by
the Representative or such Underwriter directly or through the Representative
expressly for use therein. Promptly after receipt of notice of the commencement
of any action in respect of which indemnity may be sought against one or more
Underwriters under this Subsection (b), the indemnified party shall notify all
Underwriters in writing of the commencement of the action and the Underwriter or
Underwriters against whom indemnity may be sought shall, subject to the
provisions hereinafter stated, assume the defense of such action (including the
employment of counsel who shall be reasonably satisfactory to the Company , and
the payment of expenses) insofar as such action shall relate to an alleged
liability in respect of which indemnity may be sought against such Underwriter
or Underwriters. The Company and each such director, officer or controlling
person shall have the right to employ separate counsel in any such action and
participate in the defense, but the fees and expenses of such counsel shall not
be at the expense of any Underwriter unless the employment of such counsel has
been specifically authorized by the Underwriters obligated to defend such
action, unless the indemnified party or parties reasonably conclude there may be
defenses available to it or them which are not available to the Underwriters
against whom indemnification is sought (in which case those Underwriters will
not have the right to direct the defense of the action on behalf of the
indemnified party or parties), in which event the reasonable expenses of one
additional counsel for all the indemnified
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parties will be borne by the indemnifying Underwriters. The Underwriter against
whom indemnity may be sought shall not be liable to indemnify any person for any
settlement of any action effected without such Underwriter's written consent.
The obligations of each Underwriter under the indemnity agreement set forth in
this Subsection (b) shall be in addition to any liability each of them may
otherwise have under this Agreement.
10. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 9 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by said indemnity agreement
incurred by the Company, and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the public offering price appearing
thereon, and the Company shall be responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Firm Securities and Additional Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages of the kind described in Section 9(a) which
such Underwriter has otherwise paid in respect of such losses, claims, damages,
liabilities and expenses. For purposes of this Section , each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Securities
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 Securities Act shall have the same rights to contribution
as the Company.
11. CONDITIONS OF OBLIGATIONS OF UNDERWRITERS. The obligations of the
Underwriters to purchase and pay for the Firm Securities and Additional
Securities are subject (as of the date hereof and the Closing Date) to the
accuracy of the representations and warranties of the Company , the accuracy of
the statements of officers and directors of the Company made pursuant to the
provisions of this Agreement, the performance by the Company of its obligations
under this Agreement and to the following additional conditions:
(a) The Registration Statement shall become effective with the
Commission no later than 10:00 A.M., New York City time, on the day
following the date of this Agreement, or such later time and date as
shall have been consented to by the Underwriters (including you) who
are obligated to purchase a majority of the Firm Securities to be
purchased by all of the Underwriters pursuant to this Agreement; the
Commission shall have taken all required action, if any, with regard to
the Registration Statement, and, prior to the Closing Date, no stop
order or similar order with regard to the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or, to the knowledge of the Underwriters
or the Company, shall be contemplated by the
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Commission or by any securities, Blue Sky or other regulatory authority
of any jurisdiction, and any request on the part of the Commission or
such other securities, Blue Sky or regulatory authorities for
additional information shall have been complied with to the
satisfaction of Rosenman & Colin LLP, counsel for the Underwriters.
(b) Prior to the date of this Agreement, the issuance and sale
of the Securities shall have been approved by all requisite corporate
action of the Company.
(c) The NASD shall have indicated that it had no objection to
the underwriting arrangements pertaining to the sale of the Firm
Securities and the Additional Securities and the participation by the
Underwriters in the sale thereof.
(d) No action shall have been taken by the Commission or the
NASD the effect of which would make it improper, at any time prior to
the Closing Date, for members of the NASD to execute transactions (as
principal or agent) in any of the Securities, and no proceedings for
the taking of such action shall have been instituted or shall be
pending or, to the knowledge of the Underwriters or the Company, shall
be contemplated by the Commission or the NASD. The Company represents
that at the date hereof it has no knowledge that any such action is in
fact contemplated by the Commission or the NASD.
(e) Between the date of this Agreement and the Closing Date,
none of the Companies shall have sustained any material loss outside
the ordinary course of its business or of such character as would
materially adversely affect its business or property, whether or not
that loss is covered by insurance.
(f) Between the date of this Agreement and the Closing Date,
each of the Companies shall have conducted its business in the usual
and ordinary manner, and, except as disclosed in the Prospectus or
except in the ordinary course of its business, shall not have incurred
any material liabilities or obligations, direct or contingent, or
altered in any material respect any material supplier relationship, or
disposed of a material amount of its assets, or entered into any
material transactions, and shall not have suffered or experienced any
substantial adverse change in its condition, financial or otherwise. At
the Closing Date, the capital stock of the Company shall be
substantially as set forth in the Registration Statement, except with
respect to the Firm Securities to be sold by the Company.
(g) At the Closing Date, there shall have been delivered to
you a signed opinion of Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx,
P.A. addressed to the Underwriters, dated as of the Closing Date, in
form and substance satisfactory to Rosenman & Colin LLP, counsel for
the Underwriters, together with a signed or photostatic copy of that
opinion for each of the other Underwriters, substantially to the effect
that:
(i) Each of the Companies has been duly incorporated
and is validly existing and in good standing under the laws of
its jurisdiction of incorpora-
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tion and has full corporate power and authority to own and
lease its properties and to conduct its business as described
in the Registration Statement and Prospectus, and is duly
qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where, to such counsel's
knowledge, it owns or leases properties and where the failure
to so qualify would have a material adverse effect on its
earnings, business affairs or business prospects.
(ii) This Agreement has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company enforceable against the
Company in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy or other laws
relating to or affecting creditors' rights generally or
equitable principles and by limitations on the enforceability
of the indemnification and contribution provisions under
federal or state securities laws or public policy. All
corporate action required to be taken by the Board of
Directors of the Company and all action required to be taken
by the stockholders of the Company in connection with the
authorization, issuance and sale of the Securities to be sold
by the Company as contemplated in the Registration Statement
and the Prospectus have been duly taken. The Company has the
requisite corporate power and authority to enter into and
consummate this Agreement.
(iii) Neither the issuance by the Company of the
Securities to be sold by it under this Agreement, the
execution and delivery of this Agreement, the undertakings
contained in the Registration Statement or the Prospectus, the
consummation of the transactions contemplated in this
Agreement or the compliance with the terms of this Agreement,
will conflict with or result in a breach of any of the terms
or provisions of the Certificate of Incorporation, as amended,
or the By-laws of any of the Companies, or any indenture,
mortgage, deed of trust, note, bank loan or credit agreement
or any other agreement or instrument of which such counsel is
aware to which any of the Companies is a party or by which its
respective properties or assets are bound or any applicable
law (other than Blue Sky laws), rule or regulation, or
(without search of any court dockets) any judgment, order or
decree of any government, governmental agency or
instrumentality or court, domestic or foreign, having
jurisdiction over any of the Companies or their respective
properties or assets, of which such counsel is aware.
(iv) The are no contracts, indentures, mortgages,
notes, leases or other instruments or agreements required to
be described or referred to in the Registration Statement or
to be filed as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto; the
descriptions thereof or references thereto are correct in all
material respects, and no default exists in the due
performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
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mortgage, note, lease or other instrument or agreement so
described, referred to or filed.
(v) To such counsel's knowledge, the Company has no
subsidiaries other than as set forth in Section 1(f) hereof.
All of the outstanding shares of capital stock of each such
subsidiary has been duly authorized and validly issued, are
fully paid and non-assessable and as of the Closing Date are
owned beneficially by the Company, free and clear of any
liens, encumbrances, security interests or other restrictions,
except that the Company owns only a 26% interest in Labco, and
no person, firm or corporation has the right, upon the passage
of time or otherwise, to acquire any of the stock of any such
Subsidiary.
(vi) Except as described in the Prospectus, each of
the Companies holds all material licenses, certificates,
permits and other evidence of regulatory compliance issued by
appropriate federal, state or local governmental agencies or
bodies necessary for the conduct of its business as described
in the Prospectus.
(vii) The Company's authorized capital stock consists
of 7,000,000 shares of Common Stock, par value $.01 per share,
1,000,000 shares of Convertible Preferred Stock, par value
$1.25 per share, and 4,000,000 shares of Preferred Stock, par
value $2.00 per share.
(viii) The outstanding stock options and warrants
relating to the Common Stock have been duly authorized and
validly issued and the descriptions thereof contained in the
Registration Statement and the Prospectus are true and
accurate in all respects.
(ix) The certificates for the Securities are in
proper form and comply with Delaware law.
(x) The Firm Shares and Additional Shares to be sold
by the Company as contemplated by this Agreement have been
duly authorized, and, when issued as provided in this
Agreement will be, and the presently outstanding shares of
Common Stock are, validly issued, fully paid and
non-assessable. The holders of the outstanding shares of
Common Stock are not, and the holders of any of the Firm
Shares and Additional Shares when issued as contemplated
pursuant to this Agreement will not be, subject to personal
liability solely by reason of being such holders, and, to such
counsel's knowledge, there is no preemptive right of any
holder of any securities of the Company applicable to any
outstanding shares of Common Stock. No preemptive right will
be applicable to any of the Firm Shares and Additional Shares
to be sold by the Company under this Agreement when issued and
sold as contemplated in this Agreement and in the Registration
Statement and the Prospectus.
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(xi) The Warrants have been duly authorized and, when
delivered and paid for in accordance with the Agreement will
be validly issued and will constitute valid and binding
obligations of the Company in accordance with, and will be
exercisable in accordance with, their terms; the shares of
Common Stock issuable on exercise of the Warrants have been
duly and validly reserved for issuance pursuant to the terms
of the Warrants and when delivered and paid for pursuant to
the terms of such Warrants will be duly authorized, validly
issued, fully paid and nonassessable, and the holders will not
be subject to personal liability by reason of being such
holders, and such shares will not be subject to the preemptive
rights of any stockholder of the Company.
(xii) Except for registration or qualification under
the Securities Act or under state securities or Blue Sky laws,
no authorization, approval, consent or license of any
regulatory body or authority is required for the valid
authorization, issuance, sale and delivery of any of the
Securities, or, if required, all such authorizations,
approvals, consents and licenses have been obtained and are in
force and effect.
(xiii) The Registration Statement has become
effective, and, to such counsel's knowledge, no stop order or
similar order has been issued with regard to the Registration
Statement or the Prospectus, and no proceedings for that
purpose have been instituted or are pending and such counsel
has not been notified that any such proceedings are
contemplated under the Acts or under any Blue Sky or other
securities laws of any jurisdiction.
(xiv) At the time of effectiveness and as of the
Closing Date and the Option Closing Date, if applicable, the
Registration Statement, the Prospectus and each post-effective
amendment or supplement thereto complies as to form in all
material respects with the requirements of the Acts (except
that no opinion shall be expressed as to the financial
statements, notes related thereto, and other financial
statistical data included therein and information supplied by
you), and, to such counsel's knowledge, all contracts or other
documents of a character required by the Securities Act and
the Rules under the Securities Act to be summarized or
disclosed in the Prospectus or filed as exhibits to the
Registration Statement have been so summarized, disclosed or
filed.
(xv) Such counsel has acted as counsel for the
Company and has participated in the preparation of the
Registration Statement and Prospectus and any post-effective
amendments or supplements thereto to the date of such opinion,
and no facts have come to the attention of such counsel which
would lead such counsel to believe that either the
Registration Statement or the Prospectus or any post-effective
amendment thereto contains any untrue statement of a material
fact or omits 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 (except no
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opinions need be expressed as to the financial statements and
other financial or statistical data included therein and
information supplied by you as set forth in Section 1(b)
hereof).
(xvi) To such counsel's knowledge, all statutes or
regulations or legal or governmental proceedings required to
be described in the Registration Statement or Prospectus are
described therein as required, and all such descriptions in
the Registration Statement or Prospectus are accurate in all
material respects and present fairly the information purported
to be shown.
(xvii) To such counsel's knowledge, none of the
Companies has any outstanding options, warrants or other
rights to purchase or acquire any shares of capital stock of
any of them except as set forth in the Registration Statement
or the Prospectus.
(xviii) The Common Stock conforms as to legal matters
in all material respects with the statements concerning such
shares made in the Registration Statement and the Prospectus
under the section entitled "Description of Capital Stock", and
such statements present fairly the matters respecting such
shares required to be set forth in the Registration Statement
or the Prospectus.
(xix) The Warrants conform as to legal matters in all
material respects with the statements concerning such Warrants
made in the Registration Statement and the Prospectus under
the section entitled "Description of Common Stock Purchase
Warrants", and such statements present fairly the matters
respecting such Warrants required to be set forth in the
Registration Statement or the Prospectus.
(xx) Except as set forth in the Registration
Statement and Prospectus, to such counsel's knowledge, there
is no pending or threatened action, suit or proceeding before
any court or before or by any governmental agency or body to
which any of the Companies is a party, or of which any of
their respective properties or assets are the subject, which
is required to be disclosed in the Registration Statement or
Prospectus or which would have a material adverse effect on
any of the Companies.
(xxi) The contracts filed as Exhibit Nos. 10.1
through ________ to the Registration Statement have been duly
authorized, executed and delivered by the Company, and such
counsel has not been advised of any assertion that such
contracts do not constitute the valid and binding obligation
of the other parties thereto.
(xxii) The Underwriting Agreement has been duly
authorized, executed and delivered by the Company and
constitutes the valid and binding agreement of the Company,
and is enforceable against the Company in accordance with its
terms except insofar as rights to indemnity and/or
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contribution may be limited by the laws of the United States
or the public policy underlying such laws and except as
enforcement (A) may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally, and (B) is subject to general principles of
equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(xxiii) The Company owns all of such shares of
capital stock BII and BRL and 26% of the capital stock of
Labco free and clear of any liens, encumbrances, security
interests or other restrictions, and to the knowledge of such
counsel, no rights exist, or with the passage of time or
otherwise will exist, to acquire any of the capital stock of
them.
(xxiv) Such other legal matters relating to this
Agreement, the Companies and the Securities as you and such
counsel shall reasonably agree upon.
In rendering such opinion, such counsel may rely (a) as to
matters involving the application of laws other than the laws of the
United States and jurisdictions in which they are admitted, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to counsel for Underwriters) of other counsel
reasonably acceptable to counsel for the Underwriters, familiar with
the applicable laws; and (b) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Companies, provided that
copies of any such statements or certificates shall be delivered to
counsel for the Underwriters, and on the representations and warranties
of the Company contained in this Agreement. The opinion of such counsel
for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel, and, in their opinion, you and
they are justified in relying thereon.
(h) At the Closing Date, you shall have received a Certificate
signed by the President and the Vice President-Finance of the Company,
dated as of the Closing Date, to the effect that:
(i) Each officer signing the Certificate has
carefully examined the Registration Statement and the
Prospectus, and, in his opinion, as of the date of the
Prospectus, and as of the date of the Certificate, neither the
Registration Statement nor the Prospectus, nor any amendment
or supplement, includes an untrue statement of a material fact
or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, and, since the date of the Prospectus, no
event has occurred which should have been set forth in an
amendment or a supplement to the Registration Statement or
Prospectus which has not been so set forth, and, since the
respective dates as of which information is given
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in the Registration Statement and the Prospectus, there has
not been any material adverse change in the condition of any
of the Companies, financial or otherwise, or, as compared with
the comparable period in the prior fiscal year, in the
earnings of any of the Companies from that set forth in the
Registration Statement, whether or not arising in the ordinary
course of business.
(ii) No stop order or similar order with regard to
the Registration Statement or Prospectus has been issued and
no proceedings for that purpose have been taken or are, to the
knowledge of such officer, contemplated by the Commission or
any other agency having jurisdiction with respect to the
issuance, sale or distribution of the Offered Securities.
(iii) The Company has complied in all material
respects with its obligations under this Agreement, and the
representations and warranties set forth in Section 1 of this
Agreement are true and correct as of the date of the
Certificate with the same force and effect as though made on
that date.
(i) On the date of this Agreement, you shall have received
letters addressed to the Underwriters, with a signed or photostatic
copy for each of the several Underwriters, dated the date it is
delivered, in form and substance satisfactory to you and Rosenman &
Colin LLP (and substantially in the form of the drafts dated
____________, 1996, previously submitted to Rosenman & Colin LLP), from
BDO Xxxxxxx, LLP concerning their examination and review of financial
statements and various other data contained in the Registration
Statement. At the Closing Date, you shall have received a letter
addressed to you, dated as of the Closing Date, with a signed or
photostatic copy for each of the several Underwriters from BDO Xxxxxxx,
LLP confirming, as of the Closing Date, the statements made in the
letters furnished by them at the date of this Agreement and advising
that as of a date no earlier than three business days prior to the
Closing Date they have no reason to believe that there has been any
change in the matters described in the prior letters.
(j) At the Closing Date there shall have been delivered to
you, with a photostatic copy for each of the several Underwriters, a
signed opinion of Rosenman & Colin LLP, counsel for the Underwriters,
dated as of the Closing Date, with respect to the sufficiency of
corporate proceedings and other legal matters in connection with this
Agreement, the Securities, Registration Statement, Prospectus and
related matters as the Representative may request, and the Company
shall have furnished to such counsel all documents such counsel may
have requested for the purpose of enabling them to pass upon those
matters. In rendering such opinion, Rosenman & Colin LLP may rely, as
to incorporation of the Company and all matters of law governed by the
laws of states other than New York and Delaware, and as to factual
matters, upon the opinion referred to in (g) above.
(k) The Representative shall have received the
Representative's Warrants described in Section 6 hereof and the Company
shall have paid to the Representative
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a non-accountable expense allowance of 2% of the gross proceeds of the
offering of the Firm Securities pursuant to Section 7 hereof, less the
sum of $20,000 heretofore advanced to the Representative pursuant to
such Section 7.
(l) In the event the Underwriters exercise the option granted
in Section 4(a) hereof to purchase all or any portion of the Additional
Securities, the representations and warranties of the Companies
contained in Section 11(a) - (f) herein and the Statements in any
certificates furnished by the Companies shall be true and correct as of
the Option Closing Date and the Representative shall have received:
(i) A certificate, dated the Option Closing date, of
the Chairman or President of the Company and of the chief
financial or chief accounting officer of the Company
confirming that the Certificate delivered on the Closing Date
pursuant to Section 11(h) remains true as of the Option
Closing Date;
(ii) The favorable opinion of Xxxxxxxxxx, Sandler,
Kohl, Xxxxxx & Xxxxxx, P.A., counsel for the Company, dated
the Option Closing Date, relating to the Additional Securities
and otherwise to the same effect as the opinion required by
Section 11(g), to the extent applicable;
(iii) The favorable opinion of Rosenman & Colin LLP,
counsel to the Underwriters, dated the Option Closing Date,
relating to the Additional Securities and otherwise to the
same effect as the opinion required by Section 11(j), to the
extent applicable;
(iv) A letter from BDO Xxxxxxx, LLP, in form and
substance satisfaction to the Underwriters and dated the
Option Closing Date, substantially the same in scope and
substance as the letter furnished to the Representative
pursuant to Section 11(i), dated not more than five days prior
to the Option Closing Date; and
(v) A non-accountable expense allowance of 2% of the
gross proceeds of the Additional Securities pursuant to
Section 7 hereof.
(m) All proceedings in connection with the authorization,
issuance and sale of the Securities on the Closing Date and the Option
Closing Date shall be reasonably satisfactory in form and substance to
you and to your counsel, and your counsel shall have been furnished
with all documents, certificates and opinions, including resolutions of
the Board of Directors of the Company and minutes of any stockholders'
meetings, as may have been reasonably requested in order to evidence
the accuracy and completeness of any of the representations, warranties
or statements of the Company and the performance of any of the
covenants of the Company or the compliance with any of the conditions
contained in this Agreement.
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12. CONDITIONS OF OBLIGATIONS OF COMPANY. The obligations of the
Company to sell and deliver the Firm Securities to the several Underwriters is
subject to the condition that the Registration Statement shall become effective
with the Commission not later than 10:00 A.M., New York City time, on the day
following the date of this Agreement, or such later date as shall have been
consented to by the Underwriters (including you) who are obligated to purchase a
majority of the Firm Securities to be purchased by all of the Underwriters
pursuant to this Agreement, and that prior to the Closing Date (and, with
respect to the Additional Securities, prior the Option Closing Date), no stop
order or similar order with regard to the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be pending, or, to your knowledge or to the knowledge of the Company, shall be
contemplated by the Commission or any other regulatory agency having
jurisdiction with respect to the offer and sales of the Offered Securities.
13. SUBSTITUTION OF UNDERWRITERS.
(a) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Firm Securities which all Underwriters so defaulting shall have
agreed to purchase does not exceed 10% of the Firm Securities, each
nondefaulting Underwriter shall have the right and is obligated, severally, to
purchase and pay for (in addition to the number of Firm Securities set forth
opposite its name in Schedule I) that proportion of the Firm Securities agreed
to be purchased by all the defaulting Underwriters which the percentage of Firm
Securities set forth opposite its name in Schedule I bears to the aggregate of
the percentage of Firm Securities set forth opposite the names of all the
nondefaulting Underwriters. In that event, the Representative, for the accounts
of the several nondefaulting Underwriters, may take up and pay for all or any
part of the Additional Securities to be purchased by each nondefaulting
Underwriter under this Subsection (a), and may postpone the Closing Date to a
time not exceeding three full business days after the Closing Date determined as
provided in Section 3 of this Agreement; or
(b) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Firm Securities which all Underwriters so defaulting shall have
agreed to purchase exceeds 10% of the Firm Securities, or if one or more
Underwriters for any reason permitted under this Agreement cancel its or their
obligations to purchase and pay for Firm Securities under this Agreement, the
noncancelling and nondefaulting Underwriters (hereinafter called the "Remaining
Underwriters") shall have the right to purchase such Firm Securities on the
Closing Date in the proportion as may be agreed among them. If the Remaining
Underwriters do not purchase and pay for all such Firm Securities at the Closing
Date, the Closing Date shall be postponed by two business days and the Remaining
Underwriters shall have the right to purchase the Firm Securities, or to
substitute another person or persons to purchase them, or both, at the postponed
Closing Date. If purchasers are not found for such Firm Securities by the
postponed Closing Date, the Closing Date shall be postponed for a further five
business days and the Company shall have the right to substitute another person
or persons, satisfactory to the Representative, to purchase those Firm
Securities at the second postponed Closing Date. If the Company does not find
the purchasers for those
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Firm Securities by the second postponed Closing Date, then this Agreement shall
automatically terminate and neither the Company nor the Remaining Underwriters
shall be under any obligation under this Agreement (except that the Company
shall remain liable to the extent provided in Sections 7 and 9(a) and the
Underwriters shall remain liable to the extent provided in Section 9(b)). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 13. Nothing in this Section will relieve a
defaulting Underwriter from liability for its default or obligate any
Underwriter to purchase or find purchasers for any Firm Securities in excess of
those agreed to be purchased by the Underwriter in Sections 2 and 13(a) of this
Agreement. If the Representative is the defaulting Underwriter, the right of
first refusal set forth in Section 16 hereof shall terminate.
14. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective
at whichever of the following times shall first occur: (i) at 10:00 A.M., New
York City time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective and the Underwriters shall release
the Firm Securities for sale to the public; provided, however, that the
provisions of Sections 7, 9, 10, 14 and 19 hereof shall at all times be
effective. For purposes of this Section 14, the Firm Securities shall be deemed
to have been so released upon the release by the Underwriters for publication,
at any time after the Registration Statement has become effective, of any
newspaper advertisement relating to the Firm Securities or upon the release by
the Underwriters of telegrams offering the Firm Securities for sale to
securities dealers, whichever may occur first.
15. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Closing
Date by you by giving written notice to the Company upon the occurrence of any
of the following events:
(i) any of the Companies shall have sustained a loss, by
reason of fire, flood, accident or other calamity, which in your
reasonable judgment, materially affects the aggregate value of the
property owned or leased by such one of the Companies or which
materially interferes with the operation of the business of any of the
Companies, regardless of whether or not that loss shall have been
insured;
(ii) any of the Companies has encountered or been threatened
with a strike (including but not limited to strikes of stevedores and
other transporters of goods) or other labor dispute or been subjected
to governmental action or fluctuations in currency or major political
upheaval which materially affects the aggregate value of the property
owned or leased or which materially interferes with the operation of
its business or which in your reasonable judgment makes it
impracticable or inadvisable to offer for sale or to enforce contracts
made by the Underwriters for the resale of the Firm Securities;
(iii) except as set forth in the Prospectus, there shall be
pending or threatened against any of the Companies or notification has
been received by any of
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the Companies of the threat of any material legal or governmental
proceeding or action relating generally to the business or prospects
such one of the Companies which could materially adversely affect such
one of the Companies (including action with respect to credit or
interest rates) or which in your reasonable opinion makes it
impracticable or inadvisable to proceed with the offering;
(iv) any of the certificates, opinions or other documents to
be delivered on the date of this Agreement or at the Closing Date are
not in form reasonably satisfactory to counsel to the Underwriters;
(v) any conditions set forth in Section 11 of this Agreement
shall not have been satisfied;
(vi) the Company is merged or consolidated or all or
substantially all of the capital stock or assets of the Company are
acquired by another company or group, or there exists a binding legal
commitment for the foregoing or any other material change of ownership
or control occurs;
(vii) if there has occurred any outbreak of hostilities or
escalation of any existing hostilities or other calamity or crisis, the
effect of which on the financial markets of the United States is such
as to make it impracticable, in the Representative's reasonable
judgment, to market any of the Firm Securities or the Additional
Securities or to enforce contracts for the sale of any of the Firm
Securities or the Additional Securities;
(viii) a banking moratorium shall have been declared by either
federal or state authorities;
(ix) if trading generally on the American Stock Exchange, the
New York Stock Exchange or NASDAQ has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said Exchanges
or the NASD or by order of the Commission or any other governmental
authority;
(x) there shall have been a change in the general market,
political or economic conditions in the United States, such that in any
such case, in the Representative's reasonable judgment, it would be
inadvisable to proceed with the offering of the Firm Securities; or
(xi) any law shall be enacted or any regulation promulgated
relating to the business of any of the Companies which could materially
adversely affect any of the Companies.
(b) This Agreement may be terminated by the Company by giving written
notice to you (i) at any time before this Agreement becomes effective in
accordance with Section 14 hereof, or (ii) prior to the Closing Date if the
conditions set forth in Section 12 shall not have been satisfied at or prior to
such date.
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(c) If this Agreement shall be terminated by the Company pursuant to
preceding clause (b)(i) because (x) the Company has made, or proposes to make, a
private placement which will provide it with substantial alternative funding
through another investment banking agent, the Representative shall be entitled
to a cash fee equal to 2% of the gross amount of such funding, whether
effectuated by the Company before or after such termination of this Agreement or
(y) because the Company is to be sold, whether by merger, sale of stock, sale of
assets or otherwise, the Representative shall be paid a cash fee of $200,000
should the acquisition or merger close; provided, however, that if in such event
the Company shall choose the Representative as its investment banker in
connection therewith, such $200,000 shall be a credit against any services
rendered by the Representative in such transaction.
(d) If this Agreement shall be terminated pursuant to this Section 15
other than by reason of the fault of the Representative, the Company, in
addition to the advance provided for in Section 7 hereof, shall pay to you your
accountable expenses, including the fees and expenses of your counsel, in an
amount not to exceed $30,000.
16. RIGHT OF FIRST REFUSAL. Until January 1, 1998, the Company shall
notify you in writing at least thirty (30) days before a proposed offering by
the Company of any of its securities (other than bank debt or similar
financing), securities offered solely to Company employees or securities
issuable in transactions enumerated in Rule 145(a) under the Securities Act so
that you, or, at your option, together with a group of investment bankers
associated with you, shall have the right of first refusal to effect the
offering on terms at least as favorable to the Company as those set forth in
such notice (which notice will specify the price to the underwriter or other
method of determining the underwriting discount or fee). You will notify the
Company if you intend to exercise your right of first refusal within thirty (30)
days of receipt by you of such notice from the Company. If you fail to exercise
the right of first refusal within the thirty (30) day period and the terms of
the proposed subsequent financing thereafter are altered in any material respect
less favorable to the Company, the Company shall again offer to you the right of
first refusal to effect a subsequent financing upon such terms and you shall
have ten (10) days from the date of receipt of such notice to notify the Company
of your acceptance.
17. NOTICES. All communications under this Agreement shall be in
writing and, except as otherwise provided shall be delivered at or mailed,
registered or certified, return receipt requested, or telegraphed to the
following addresses:
If to you or any other Underwriter:
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Attention: Xxx Xxxxx
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Copies to:
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representative of the Several Underwriters
Attention: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
and
Xxxxxx X. Xxxxxx, Esq.
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Xxxxxxxxx Technologies Inc.
Attention: Xxxxxxx X. Xxxxxx, President
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxxx, N. J. 07974
Copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx, Sandler, Kohl, Xxxxxx & Xxxxxx, P.A.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Any party may change its address by giving notice in accordance with
this Section .
18. PARTIES IN INTEREST. This Agreement is made solely for the benefit
of the Underwriters, the Company, directors and officers of the Company, and
their respective executors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successor" and "successor and assigns" shall not include any purchaser
from the Company or any of the several Underwriters of the Firm Securities or
the Additional Securities. All of the obligations of the Underwriters under this
Agreement are several and not joint.
19. SURVIVAL CLAUSE. The representations, warranties, indemnities,
agreements and other statements of the Underwriters and the Company and its
officers set forth in this Agreement and made pursuant to this Agreement will
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or controlling person
thereof or by or on behalf of the Company or any of its officers and directors
or (ii) any termination of this Agreement and (iii) delivery of and payment for
the Firm Securities and the Additional Securities.
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20. REPRESENTATION OF UNDERWRITERS. You will act for the several
Underwriters in connection with this financing, and any action under or in
respect of this Agreement taken by you as Representative on behalf of the
Underwriters will be binding upon all of the Underwriters.
21. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
principles of conflicts of law.
22. COUNTERPARTS. This Agreement may be signed in one or more
counterparts and shall be deemed effective when each party hereto has signed a
counterpart.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXX TECHNOLOGIES INC.
By:_____________________________
The foregoing agreement is hereby confirmed and delivered as of the date first
above written.
XXXXXX XXXXXXXXXX XXXXX INC.
By:____________________________
(Authorized Signature)
Acting on their own behalf and as
Representative of the several Underwriters
named in Schedule I attached hereto.
34
35
SCHEDULE I
LIST OF UNDERWRITERS
Number of
Underwriters Firm Securities
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