Exhibit 1.1
[Form of Underwriting Agreement]
_________ Shares of Common Stock
ZYGO CORPORATION
UNDERWRITING AGREEMENT
February __, 2001
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
on behalf of,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ BROTHERS INC.
ING BARINGS LLC
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Zygo Corporation, a corporation organized and existing under the
laws of Delaware (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of _______________ shares (the "Company
Firm Shares") of its common stock, par value $0.10 per share (the "Common
Stock"), and the stockholders listed on Schedule II hereto (the "Selling
Stockholders"), propose, subject to the terms and conditions stated herein, to
sell to the Underwriters _______ shares of Common Stock (the "Selling
Stockholders Firm Shares" and, collectively, with the Company Firm Shares, the
"Firm Shares"). The Company proposes to sell, for the sole purpose of covering
over-allotments in connection with the sale of the Firm Shares, at the option of
the Underwriters, up to an additional_______________ shares (the "Additional
Shares") of Common Stock. The Firm Shares and any Additional Shares purchased by
the Underwriters are referred to herein as the "Shares." The Shares are more
fully described in the Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-53214), and amendments thereto, and related Preliminary Prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of Shares, which registration statement, as so amended, has been declared
effective by the Commission and copies of which have heretofore been delivered
to the Underwriters. The registration statement, as amended at the time it
became effective, including the exhibits and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A or 434(d) under the Securities Act, is hereinafter referred to as the
"Registration Statement." If the Company has filed or is required pursuant to
the terms hereof to file a registration statement pursuant to Rule 462(b) under
the Act registering additional shares of Common Stock (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which
became effective upon filing, no other document with respect to the Registration
Statement has heretofore been filed with the Commission. No stop order
suspending the effectiveness of either the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge, threatened by
the Commission. The Company, if required by the rules and regulations of the
Commission (the "Rules and Regulations"), proposes to file the Prospectus with
the Commission pursuant to Rule 424(b) of the Rules and Regulations. The
Prospectus, in the form in which it is to be filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations, or, if the Prospectus is not to be
filed with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement at the time the Registration
Statement became effective, is hereinafter referred to as the "Prospectus,"
except that if any revised prospectus or prospectus supplement shall be provided
to the Underwriters by the Company for use in connection with the offering and
sale of the Shares (the "Offering") which differs from the Prospectus (whether
or not such revised prospectus or prospectus supplement is required to be filed
by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to the
Underwriters for such use. Any Preliminary Prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the Securities Act is hereafter called a "Preliminary
Prospectus." Any reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on or before the effective date of the Registration Statement,
the date of such Preliminary Prospectus or the date of the Prospectus, as the
case may be, and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration
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Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such Preliminary
Prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus and the Prospectus, or any
amendments or supplements to any of the foregoing, shall be deemed to include
any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("▇▇▇▇▇").
(b) At the time of the effectiveness of the Registration Statement
or the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
Rule 424(b) or Rule 434 of the Rules and Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, when any document
filed under the Exchange Act is filed and at the Closing Date and the Additional
Closing Date, if any (as hereinafter respectively defined), the Registration
Statement and the Prospectus and any amendments thereof and supplements thereto
complied or will comply with the applicable provisions of the Act and the Rules
and Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not and will not contain an untrue statement of a material
fact and did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
Prospectus or any related Preliminary Prospectus in light of the circumstances
under which they were made, not misleading. When any related Preliminary
Prospectus was first filed with the Commission (whether filed as part of the
registration statement for the registration of the Shares or any amendment
thereto or pursuant to Rule 424(a) of the Rules and Regulations) and when any
amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the Act and
the Regulations and the Exchange Act and the respective rules and regulations
thereunder and did not contain an untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein in light of the circumstances under
which they were made not misleading. No representation and warranty is made in
this subsection (b), however, with respect to any information contained in or
omitted from the Registration Statement or the Prospectus or any related
Preliminary Prospectus or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through you specifically for use
therein ("Underwriters' Information"). The parties acknowledge and agree that
the Underwriters Information consists solely of the material included in
paragraphs ___, ___ and ___ under the caption "Underwriting" in the Prospectus.
(c) KPMG LLP, who have certified the financial statements and
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supporting schedules of the Company included in the Registration Statement, is
an independent public accountant as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development involving a prospective material adverse
change in the business, prospects, properties, operations, condition (financial
or other) or results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole, whether or not arising from transactions
in the ordinary course of business, and since the date of the latest balance
sheet presented in the Registration Statement and the Prospectus, neither the
Company nor any of the Subsidiaries has incurred or undertaken any liabilities
or obligations, direct or contingent, which are material to the Company and the
Subsidiaries, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus.
(e) No stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of the Company, threatened by the
Commission or by the state securities or Blue Sky authority of any jurisdiction.
No order preventing or suspending the use of the Prospectus has been issued and
no proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission or by the state securities or Blue Sky
authority of any jurisdiction.
(f) The Company has timely filed all reports, contracts or documents
required to be filed with the Commission under the Exchange Act and the rules
and regulations thereunder.
(g) This Agreement and the transactions contemplated herein have
been duly and validly authorized by the Company, and this Agreement has been
duly and validly executed and delivered by the Company.
(h) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to any material agreement, indenture, mortgage,
deed of trust, loan agreement, instrument, franchise, license or permit to which
the Company or any of the Subsidiaries is a party or by which any of such
entities or their respective properties or assets may be bound or (ii) violate
or conflict with any provision of the certificate or articles of incorporation,
by-laws or other organizational documents of the Company or any of the
Subsidiaries or, to the knowledge of the Company, any judgment, decree, order,
statute, rule or regulation of any court or
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any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their respective properties or
assets. No consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of the Subsidiaries or any of their respective properties or assets is
required for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, by the Registration
Statement and by the Prospectus, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company hereunder, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses and
permits as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters.
(i) The Company has the authorized capitalization set forth in the
Registration Statement and the Prospectus and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and were not issued in violation of or subject
to any preemptive or similar rights that entitle or will entitle any person to
acquire any shares of Common Stock from the Company upon issuance thereof by the
Company, except for such rights as may have been fully satisfied or waived prior
to the effectiveness of the Registration Statement; the Shares to be delivered
on the Closing Date and the Additional Closing Date, if any, (as hereinafter
respectively defined) have been duly and validly authorized and, when delivered
by the Company against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable and will not have been
issued in violation of or subject to any preemptive or similar rights that
entitle or will entitle any person to acquire any Shares from the Company upon
issuance thereof by the Company; and all of the issued shares of capital stock
of each Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims; the
Common Stock and the Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(j) The only subsidiaries (as defined in Rule 405 of the
Regulations) of the Company are those listed on Exhibit 21 of the Company's Form
10-K405 for the Company's fiscal year ended June 30, 2000 (the "Subsidiaries").
The Company and each of the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which in the aggregate
could not reasonably be expected to have a material adverse effect on (i) the
condition (financial or otherwise), results of operations, stockholders' equity,
business, properties or
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prospects of the Company and the Subsidiaries taken as a whole or (ii) the
Offering, or give rise to any liability or obligation on the part of the
Underwriters or (iii) the transactions contemplated by this Agreement or the
Company's performance of its obligations hereunder (a "Material Adverse
Effect"). Each of the Company and the Subsidiaries has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits (collectively, the
"Consents") of and from all public, regulatory or governmental agencies and
bodies, to own, lease and operate its properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus except for any Consents the nonobtainment of which individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect. No Consent contains any material restriction not adequately disclosed in
the Registration Statement and the Prospectus.
(k) Except as described in the Prospectus, there is no legal or
governmental proceeding to which the Company or any of the Subsidiaries is a
party to which any property of the Company or any of the Subsidiaries is subject
or which is pending or, to the knowledge of the Company, contemplated against
the Company or any of the Subsidiaries.
(l) Neither the Company nor any officer, director or, to the
Company's knowledge, affiliate of the Company has taken or will take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(m) The financial statements, including the notes thereto, and
supporting schedules, if any, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial position
of the Company on a consolidated basis as of the dates indicated and condition
and results of operations for the periods specified; except as otherwise stated
in the Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The financial
information and data included in the Registration Statement and the Prospectus
present fairly the information included therein and have been prepared on a
basis consistent with that of the financial statements included or incorporated
by reference in the Registration Statement and the Prospectus and the books and
records of the respective entities presented therein. Pro forma financial
information included in the Prospectus has been prepared in accordance with the
applicable requirements of the Act and the Regulations and includes all
adjustments necessary to present fairly the pro forma financial position of the
respective entity or entities presented therein at the respective dates
indicated and the results of their operations for the respective periods
specified.
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(n) Except for the Subsidiaries or as otherwise set forth in the
Prospectus, the Company owns no capital stock or other beneficial interest,
directly or indirectly, in any corporation, partnership, joint venture or other
business entity.
(o) Except as disclosed in the Prospectus, no holder of securities
of the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in connection
with the sale of the Shares contemplated hereby, and any such rights so
disclosed have been either fully complied with by the Company or effectively
waived by the holders thereof.
(p) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940.
(q) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(r) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
under the Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(s) There are no contracts or other documents that are required to
be filed as exhibits to the Registration Statement or to the Company's Form
10-K405 for the Company's fiscal year ended June 30, 2000 that have not been so
filed.
(t) The Company and each of the Subsidiaries has complied with all
laws, regulations and orders applicable to each of them or their respective
businesses or assets except where the failure to do so would not have a Material
Adverse Effect. Neither the Company nor any of the Subsidiaries is in default
under any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness,
lease, contract or other agreement or instrument to which any of them is a party
or by which any of them or their respective properties are bound except where
such default would not have a Material Adverse Effect.
(u) The Company and each of the Subsidiaries have accurately
prepared and timely filed all federal, state and other tax returns that are
required to be filed by it and has paid or made provision for the payment of all
taxes, assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes
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which the Company and each of the Subsidiaries is obligated to withhold from
amounts owing to employees, creditors and third parties, with respect to the
periods covered by such tax returns (whether or not such amounts are shown as
due on any tax return). No deficiency assessment with respect to a proposed
adjustment of the Company's or any of the Subsidiaries' Federal, state, or other
taxes is pending or, to the best of the Company's knowledge, threatened. There
is no tax lien, whether imposed by any federal, state, or other taxing
authority, outstanding against the assets, properties or business of the Company
or any of the Subsidiaries.
(v) The Company and the Subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration statement and the
Prospectus or such as do not materially affect the value of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries.
(w) The Shares are registered pursuant to Section 12(g) of the
Exchange Act and are listed for quotation on The Nasdaq Stock Market's National
Market (the "Nasdaq National Market"), and the Company has taken no action
designed to, or reasonably likely to have the effect of, terminating the
registration of the Shares under the Exchange Act or de-listing the Shares from
the Nasdaq National Market, nor has the Company received any notification that
the SEC or the Nasdaq National Market is contemplating terminating such
registration or listing.
(x) The Company owns, holds, licenses to or otherwise has rights to
use, on reasonable terms, all patents, patent applications, trade and service
marks, trade and service ▇▇▇▇ registrations, trade names, copyrights, mask
works, inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "Intellectual Property") reasonably necessary for
the conduct of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus under the
caption "Business--Intellectual Property," (i) there are no rights of third
parties to any such Intellectual Property; (ii) to the Company's knowledge,
there is no infringement by third parties of any such Intellectual Property;
(iii) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (iv) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (v) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others that the Company infringes or
otherwise
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violates any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such claim; and (vi) there is no prior art of which
the Company is aware that may render any U.S. patent held by the Company invalid
or any U.S. patent application held by the Company unpatentable which has not
been disclosed to the U.S. Patent and Trademark Office.
(y) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan which could
have a Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law; including ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from any "pension
plan;" and each "pension plan" (as defined in ERISA) for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which could cause the loss of such
qualification.
(z) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or is reasonably likely to be liable) upon any other
property now or previously owned or leased by the Company or any of the
Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability except
where such violation in all such circumstances would not have and is not likely
to have a Material Adverse Effect; there has been no disposal discharge,
emission or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company or any of the Subsidiaries has
knowledge.
(aa) The statistical and market-related data included in the
Prospectus and the Registration Statement are based on or derived from sources
which the Company believes to be reliable and accurate.
(bb) Except as contemplated by this Agreement, neither the Company
nor any of the Subsidiaries has incurred any liability for a fee, commission or
other
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compensation on account of the engagement of a broker or finder in connection
with the transactions contemplated herein.
(cc) Except for normal disputes with employees in the ordinary
course of business, no labor dispute with the employees of the Company or any of
the Subsidiaries exists or, to the Company's knowledge, is eminent, and the
Company is not aware that any executive, key employee or group of employees of
the Company or any of the Subsidiaries plans to terminate (except for ▇▇▇▇▇▇▇ ▇.
▇▇▇▇) employment with the Company or any of the Subsidiaries.
(dd) Each Operative Document (as hereinafter defined) has been duly
authorized, executed and delivered by the Company and the Subsidiaries and, to
the Company's knowledge, the other parties thereto, as applicable, and
constitutes the valid and binding agreement of the Company and the Subsidiaries
and, to the Company's knowledge, the other parties thereto enforceable against
the Company and the Subsidiaries and, to the Company's knowledge, the other
parties thereto in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws affecting the enforcement of creditors' rights generally and to equitable
principles. The execution, delivery and performance of the Operative Documents
and the consummation of the transactions contemplated thereby, in all cases by
the Company or its Subsidiaries, as applicable, have not and will not result in
a breach or violation of any term or provision of, or constitute a default
under, (i) any law, rule or regulation applicable to the Company or the
Subsidiaries, (ii) any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them is bound or to which any property of the Company or any of the
Subsidiaries is or, upon consummation of the transactions contemplated by the
Operative Documents, will be subject or (iii) any order or decree of any court
or governmental agency or body having jurisdiction over the Company or any of
the Subsidiaries or any of their respective properties except in the cases of
(i) through (iii) above, where such breach or violation would not have a
Material Adverse Effect. No material consent, approval, authorization or order
of, or filing with, any court or governmental agency or body or any other third
party is required to be obtained or made by the Company or any of the
Subsidiaries for the consummation of the transactions contemplated by the
Operative Documents except for such consents, approvals, authorizations, orders
or filings as had been obtained or made, except where the failure to do so would
not have a Material Adverse Effect. "Operative Documents" shall mean the
contracts or documents filed as exhibits to the Company's Form 10-K405 for the
Company's fiscal year ended June 30, 2000, pursuant to Item 601 of Regulation
S-K promulgated under the Act, as such Operative Documents may be amended or
modified at or as of the effective time of the Registration Statement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder severally represents and warrants to, and agrees
with, the Underwriters, with respect to such Selling Stockholder only, that:
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(a) Such Selling Stockholder on the Closing Date and the Additional
Closing Date, if any, will have good and marketable title to the Selling
Stockholders Firm Shares and, if applicable, any Additional Shares to be sold by
such Selling Stockholder hereunder and full right, power and authority to enter
into this Agreement and Custody Agreement and Power of Attorney (each, a
"Custody Agreement and Power of Attorney"), relating to the deposit of the
Shares to be sold by such Selling Stockholder and appointing certain individuals
as such Selling Stockholder's attorneys-in-fact (an "Attorney-in-Fact") and to
sell, assign, transfer and deliver the Selling Stockholder Firm Shares and any
such Additional Shares to be sold by such Selling Stockholder as set forth on
Schedule II hereto, free and clear of all voting trust arrangements, pledges,
liens, encumbrances, equities, security interests and claims; and upon the
delivery and payment for such Shares hereunder, the several Underwriters will
acquire good and marketable title to such Shares, free and clear of all voting
trust arrangements, pledges, liens, encumbrances, equities, security interests
and claims.
(b) This Agreement and the Custody Agreement and Power of Attorney
executed by such Selling Stockholder and the transactions contemplated herein
and therein have been duly and validly authorized by each Selling Stockholder,
and this Agreement and each Custody Agreement and Power of Attorney has been
duly and validly executed and delivered by each Selling Stockholder.
(c) The execution, delivery and performance of this Agreement and
the Custody Agreement and Power of Attorney and the consummation of the
transactions contemplated hereby and thereby will not (A) conflict with or
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of such Selling
Stockholder pursuant to any agreement, instrument, franchise, license or permit
to which such Selling Stockholder is a party or by which any of his properties
or assets may be bound or (B) violate or conflict with any provisions of any
partnership agreement, trust agreement or other organizational documents, as the
case may be, of such Selling Stockholder or any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over such Selling Stockholder or
any of his properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
such Selling Stockholder or any of his properties or assets is required for the
execution, delivery and performance of this Agreement or the Custody Agreement
and Power of Attorney by such Selling Stockholder or the consummation of the
transactions contemplated hereby or thereby, except the registration under the
Act of the Shares to be sold by such Selling Stockholder, filings under the
Exchange Act resulting from the sale of the Selling Stockholder Firm Shares and
the Additional Shares, if any, to be sold by such Selling Stockholder and such
consents, approvals, authorizations, orders, registrations, filings,
11
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
to be sold by such Selling Stockholder by the Underwriters.
(d) The Custody Agreement and Power of Attorney executed by such
Selling Stockholder has been duly authorized, executed and delivered by or on
behalf of such Selling Stockholder and is a valid and binding agreement of such
Selling Stockholder, enforceable in accordance with its terms, and pursuant to
such Custody Agreement and Power of Attorney (subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws affecting the enforcement of creditors' rights generally and to equitable
principles) such Selling Stockholder has, among other things, authorized the
designated Attorneys-in-Fact to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document that an
Attorney-in-Fact may deem necessary or desirable in connection with the
transactions contemplated hereby and thereby and to deliver the Shares to be
sold by such Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken nor will take, directly
or indirectly, any action designed to cause, result in, or which constitute or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares.
(f) At the time of the effectiveness of the Registration Statement
or the effectiveness of the post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant to
the Rule 424(b) of the Regulations, when any supplement to or amendment of the
Prospectus is filed with the Commission, when any document is filed under the
Exchange Act and at the Closing Date and the Additional Closing Date, if any,
the Registration Statement and the Prospectus and any amendments thereof and
supplements thereto, insofar as they relate to such Selling Stockholder (in his
capacity as Selling Stockholder), comply or will comply in all material respects
with the applicable provisions of the Act and the Regulations and the Exchange
Act and the respective rules and regulations thereunder and do not or will not
contain an untrue statement of a material fact and do not or will not omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the Prospectus, in light of the circumstances
in which they were made, not misleading. When any related Preliminary Prospectus
was first filed with the Commission (whether filed as part of the Registration
Statement or pursuant to Rule 424(a) of the Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, insofar as
such Preliminary Prospectus relates to such Selling Stockholder (in his capacity
as a Selling Stockholder), such Preliminary Prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and did not contain an untrue
statement of a
12
material fact and did not omit to state any material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading. No representation and
warranty is made in this subsection (f), however, with respect to any
information contained in or omitted from the Registration Statement or the
Prospectus or any related Preliminary Prospectus or any amendment thereof or
supplement thereto in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through you as
herein stated expressly for use in connection with the preparation thereof.
(g) At any time during the period commencing on the first business
day after the date of this Agreement and from time to time thereafter for such
period as in the reasonable opinion of Underwriters' Counsel (as defined below)
a prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, if there is any change in the information referred to in
Section 2(f) above, such Selling Stockholder will promptly notify you and the
Company of such change.
(h) Such Selling Stockholder agrees with the Company and the
Underwriters, except as provided in this Agreement, not to sell, offer or agree
to sell, grant any option for the sale of, pledge or otherwise dispose of,
directly or indirectly, any Common Stock for a period of 180 days after this
Agreement becomes effective without your prior written consent.
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Internal Revenue Code of 1986, as
amended, with respect to the transactions herein contemplated, such Selling
Stockholder agrees to deliver to you prior to or on the Closing Date and
Additional Closing Date, if applicable, a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company and each Selling Stockholder, severally and not jointly,
agree to sell to the Underwriters and the Underwriters, severally and not
jointly, agree to purchase from the Company and the Selling Stockholders, at a
purchase price per share of $_______, the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed
upon by you and
13
the Company, at 10:00 A.M., New York City time on the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) (unless postponed in
accordance with the provisions of Section 10 hereof) following the date of the
effectiveness of the Registration Statement (or, if the Company has elected to
rely upon Rule 430A of the Regulations, the third or fourth business day (as
permitted under Rule 15c6-1 under the Exchange Act) after the determination of
the public offering price of the Shares), or such other time not later than ten
business days after such date as shall be agreed upon by you and the Company
(such time and date of payment and delivery being herein called the "Closing
Date"). Payment shall be made to the Company and the Selling Stockholders c/o
the Company by wire transfer in same day funds, against delivery to you or
through the facilities of the Depository Trust Company for the respective
accounts of the Underwriters of certificates for the Shares to be purchased by
them. Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two full
business days prior to the Closing Date. You will be permitted to examine and
package such certificates for delivery at least one full business day prior to
the Closing Date.
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase up to ______ Additional Shares at the same purchase price per
share to be paid by the Underwriters to the Company and the Selling Stockholders
for the Firm Shares as set forth in this Section 3, for the sole purpose of
covering over-allotments in the sale of Firm Shares by the Underwriters. This
option may be exercised from time to time and at any time, in whole or in part,
on or before the thirtieth day following the date of the Prospectus, by written
notice by you to the Company and the Selling Stockholder. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time being herein sometimes
referred to as the "Additional Closing Date"); PROVIDED, HOWEVER, that the
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 10 hereof). Certificates
for the Additional Shares shall be registered in such name or names and in such
authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall
be the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to ___________ [the total number of Firm Shares
being purchased from the Company and each Selling Stockholder], subject,
however, to such adjustments to
14
eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be made to the Company by
wire transfer in same day funds at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, or such other location as may be
mutually acceptable to you and the Company, upon delivery of the certificates
for the Additional Shares to you for the respective accounts of the
Underwriters.
4. OFFERING. Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public
upon the terms and conditions set forth in the Prospectus.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriters that:
(a) If the Registration Statement has not yet been declared
effective the Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective as promptly as
possible, and if Rule 430A is used or the filing of the Prospectus is otherwise
required under Rule 424(b), the Company will file the Prospectus (properly
completed if Rule 430A has been used) pursuant to Rule 424(b) within the
prescribed time period and will provide evidence satisfactory to you of such
timely filing.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b)) that differs from the prospectus
on file at the time of the effectiveness of the Registration Statement before or
after the effective date of the Registration Statement or, so long as the
prospectus delivery requirements are applicable, file any document under the
Exchange Act if such document would be deemed to be incorporated by reference
into the Prospectus to which you shall
15
reasonably object in writing after being reasonably timely furnished in advance
a copy thereof.
(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act or the Exchange Act in connection with
sales of Shares, any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would, in the judgment of the
Underwriters or the Company, include an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the Act or
the Regulations, or to file under the Exchange Act so as to comply therewith any
document incorporated by reference in the Registration Statement or the
Prospectus or in any amendment thereof or supplement thereto, the Company will
notify you promptly and prepare and file with the Commission an appropriate
amendment or supplement (in form and substance reasonably satisfactory to you)
which will correct such statement or omission or which will effect such
compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the Underwriters
and Underwriter's Counsel a signed copy of the Registration Statement, including
exhibits and all documents incorporated by reference therein and all amendments
thereto, and the Company will promptly deliver to each of the Underwriters such
number of copies of any Preliminary Prospectus, the Prospectus, the Registration
Statement, all amendments of and supplements to such documents, if any, all
documents incorporated by reference in the Registration Statement and Prospectus
or any amendment thereof or supplement thereto, without exhibits, as you may
reasonably request. Prior to 10:00 A.M., New York time, on the business day next
succeeding the date of this Agreement and from time to time thereafter the
Company will furnish each Underwriter without charge with copies of the
Prospectus in New York City in such quantities as you may reasonably request.
(d) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares in such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for the
distribution thereof; except that in no event shall the Company be obligated in
connection therewith to qualify as a foreign corporation or take any action that
would subject it to general service of process in any jurisdiction where it is
not presently qualified or where it would be subject to taxation as a foreign
corporation.
(e) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, but not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act), an earnings
statement of the Company and the
16
Subsidiaries (which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder.
(f) During the period of 180 days from the date of the Prospectus,
the Company will not, directly or indirectly, without your prior written
consent, issue, sell, offer or agree to sell, grant any option for the sale of,
pledge, make any short sale or maintain any short position, establish or
maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h) under
the Securities Exchange Act of 1934, as amended), enter into any swap,
derivative transaction or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common Stock
(whether any such transaction is to be settled by delivery of Common Stock,
other securities, cash or other consideration) or otherwise dispose of, any
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock) or interest therein of the Company or of any of
the Subsidiaries, and the Company will obtain the undertaking of each of its
executive officers and directors and such of its shareholders as have been
heretofore designated by you and listed on Schedule II attached hereto not to
engage in any of the aforementioned transactions on their own behalf, other than
the Company's or a Selling Stockholder's, as applicable, sale of Shares
hereunder and the Company's issuance of Common Stock upon (i) the conversion or
exchange of outstanding convertible or exchangeable securities; (ii) the
exercise of presently outstanding options; (iii) the exercise of currently
outstanding warrants; and (iv) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans or employee
stock purchase plans in effect on the date hereof.
(g) During the period of three years from the effective date of
Registration Statement, the Company will furnish to you copies of all reports or
other communications (financial or other) furnished to security holders, and to
deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company listed, in
all such instances, to the extent not publicly available through the Internet or
similar methods; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and the Subsidiaries are consolidated in reports
furnished to its security holders generally or to the Commission).
(h) The Company will apply the proceeds from the sale of the Shares
as set forth under the caption "Use of Proceeds" in the Prospectus.
(i) The Company will use its best efforts to list for quotation the
Shares on The Nasdaq National Market.
(j) The Company, during the period when the Prospectus is required
to be
17
delivered under the Act or the Exchange Act, will file all documents required to
be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Exchange Act and the rules and
regulations thereunder.
6. PAYMENT OF EXPENSES. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of producing any
Agreement Among Underwriters, this Agreement, the Blue Sky Memoranda closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(d) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on The Nasdaq National Market;
(v) all travel expenses of the Company's officers and employees and any other
expense of the Company incurred in connection with attending or hosting meetings
with prospective purchasers of the Shares; and (vi) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares. The Company also will pay
or cause to be paid: (i) the cost of preparing stock certificates; (ii) the cost
and charges of any transfer agent or registrar; and (iii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section 5. It is understood,
however, that except as provided in this Section, and Sections 8 and 12 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, stock transfer taxes on resale of any of the Shares by
them, and any advertising expenses connected with any offers they may make.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to you or to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("Underwriters' Counsel") pursuant to
this Section 7 of any misstatement or omission, to the performance by the
Company of its obligations hereunder, and to the following additional
conditions:
18
(a) The Registration Statement (including any 462(b) Registration
Statement) shall have become effective not later than, if pricing pursuant to
Rule 430A: 5:30 P.M., New York time, on the date of this Agreement or at such
later time and date as shall have been consented to in writing by you; if the
Company shall have elected to rely upon Rule 430A of the Regulations, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 5(a) hereof; and, at or prior to the Closing Date no
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof shall have been issued and no proceedings
therefor shall have been initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the favorable
written opinion of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., counsel for the Company, dated
the Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) Each of the Company and the Subsidiaries has been duly
incorporated (or organized, as applicable) and is validly existing as an
entity in good standing under the laws of its jurisdiction of
incorporation (or organization as applicable). Each of the Company and the
Subsidiaries is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary. All of the issued and
outstanding capital stock of each Subsidiary of the Company has been duly
and validly issued and is fully paid and non-assessable and was not issued
in violation of preemptive rights and, to the best of such counsel's
knowledge, is owned, directly or indirectly, by the Company, free and
clear of any lien, encumbrance, claim, security interest, restriction on
transfer, stockholders' agreement, voting trust or other defect of title
whatsoever.
(ii) The Company has the authorized capitalization set forth
in the Registration Statement and the Prospectus under the caption heading
"Capitalization" and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and were not issued in violation of or subject to any
preemptive or, to the best of such counsel's knowledge, rights that
entitle or will entitle any person to acquire any shares of common stock
from the Company upon issuance thereof by the Company, except for such
rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement; the Shares to be delivered on
the Closing Date and the Additional Closing Date, if any, (as hereinafter
respectively defined) have been duly and validly authorized and, when paid
for and delivered by the Company in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable and will not
have been issued in violation of or subject to any preemptive or, to the
best of such counsel's
19
knowledge rights, that entitle or will entitle any person to acquire any
Shares from the Company upon issuance thereof by the Company; and all of
the issued shares of capital stock of each Subsidiary have been duly and
validly authorized and issued and are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims; the Common Stock and the Shares
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(iii) The Common Stock currently outstanding is listed, and
the Shares to be sold under this Agreement to the Underwriters are duly
authorized for quotation on the Nasdaq National Market.
(iv) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) To the best of such counsel's knowledge, there is no legal
or governmental or other action, suit, proceeding or investigation before
any court or before or by any public, regulatory or governmental agency or
body pending or to the best of such counsel's knowledge, threatened
against, or involving the properties or business of, the Company or any of
the Subsidiaries, which is of a character required to be disclosed in the
Registration Statement and the Prospectus which has not been disclosed
therein.
(vi) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby by
the Company do not and will not (A) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any agreement, instrument, franchise, license or
permit specified in an exhibit to such opinion or (B) violate or conflict
with any provision of (x) the certificate or articles of incorporation or
by-laws of the Company or any of the Subsidiaries, or, to the best of such
counsel's knowledge, any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over the Company or any of the Subsidiaries or
any of their respective properties or assets or (y) the terms and
provisions of any of the Operative Documents. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any public, governmental or regulatory
agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (1) such
as may be required under state securities or Blue Sky laws in connection
with the purchase and
20
distribution of the Shares by the Underwriters (as to which such counsel
need express no opinion) and (2) such as have been made or obtained under
the Act and (3) such as are required by the National Association of
Securities Dealers, Inc.
(vii) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or incorporated
by reference therein, as to which no opinion need be rendered) comply as
to form in all material respects with the requirements of the Act and the
Rules and Regulations. The documents filed under the Exchange Act and
incorporated by reference in the Registration Statement and the Prospectus
or any amendment thereof or supplement thereto (other than the financial
statements and schedules and other financial data included or incorporated
by reference therein, as to which no opinion need be rendered) when they
became effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when such documents became effective or were so filed, as they
case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact, or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case
of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents
were so filed, not misleading.
(viii) The statements under the captions "Prospectus Summary",
"Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations", "Business", "Management",
"Transactions with Related Parties", "Description of Capital Stock" and
"Underwriting" in the Prospectus and Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings, except for purposes of this opinion matters
relating to intellectual property.
(ix) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(x) The Company has full right, power and authority to execute
21
and deliver this Agreement, to deliver the Shares and to perform its
obligations hereunder, and all corporate action required to be taken for
the due and proper authorization, execution and delivery of this
Agreement, the deliver of the Shares and the consummation of the
transactions contemplated by this Agreement and as described in the
Prospectus have been duly and validly taken.
(xi) To the best knowledge of the Company, no contract or
agreement is required to be filed as an exhibit to the Registration
Statement that is not so filed.
(xii) To the best of such counsel's knowledge after due
inquiry, neither the Company nor any of the Subsidiaries is in violation
of its respective charter or by-laws and neither the Company nor any of
the Subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that filed as
an exhibit to any of the Company's filings with the Commission, taken as a
whole, to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or their respective property
is bound.
(xiii) The Registration Statement is effective under the Act,
and, to the best of such counsel's knowledge after due inquiry, no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereof has been issued and no proceedings
therefor have been initiated or threatened by the Commission and all
filings required by Rule 424(b) of the Regulations have been made.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents and the Prospectus and related
matters were discussed and, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the Registration Statement,
at the time it became effective (including the information deemed to be part of
the Registration Statement at the time of effectiveness pursuant to Rule 430A(b)
or Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it
22
being understood that such counsel need express no belief or opinion with
respect to the financial statements and schedules and other financial data
included or incorporated by reference therein).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters involving incorporations in
other jurisdictions, on a reading of the applicable statutes without any review
of judicial or administrative interpretations thereof and (C) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the Subsidiaries,
provided that copies of any such statements or certificates shall be delivered
to Underwriters' Counsel. In addition, as to matters relating to existence, good
standing (or the equivalent thereof) or authority of any of the Subsidiaries,
such counsel's review shall be limited to the following: (w) the minute books of
each such Subsidiary; (x) the stock transfer ledgers of each such Subsidiary;
(y) good standing (or the equivalent thereof) certificates of each such
Subsidiary; and (z) the actual knowledge of such counsel. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
(c) At the Closing Date, you shall have received the favorable
written opinion of Fish & ▇▇▇▇▇▇▇▇▇▇ P.C., intellectual property counsel for the
Company, dated the Closing Date addressed to the Underwriters and in form and
substance satisfactory to Underwriters' Counsel, to the effect that:
The Company owns, holds, licenses to or otherwise has rights
to use, all of the Intellectual Property reasonably necessary for the
conduct of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus under
the caption "Business--Intellectual Property": (A) there are no rights of
third parties to any such Intellectual Property; (B) to the knowledge of
such counsel, there is no infringement by third parties of any such
Intellectual Property; (C) there is no pending or, to such counsel's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual Property,
and counsel is unaware of any facts which would form a reasonable basis
for any such claim; (D) there is no pending or, to the knowledge of such
counsel, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
counsel is unaware of any
23
facts which would form a reasonable basis for any such claim; (E) there is
no pending or, to such counsel's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and such counsel is unaware of any other
fact which would form a reasonable basis for any such claim; and (F) there
is no prior art of which such counsel is aware that may render any U.S.
patent held by the Company invalid or any U.S. patent application held by
the Company unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters involving incorporations in
other jurisdictions, on a reading of the applicable statutes without any review
of judicial or administrative interpretations thereof; and (C) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and the Subsidiaries,
provided that copies of any such statements or certificates shall be delivered
to Underwriters' Counsel. The opinion of such counsel for the Company shall
state that the opinion of any such other counsel is in form satisfactory to such
counsel and, in their opinion, you and they are justified in relying thereon.
(d) At the Closing Date, you shall have received the opinion of
counsel to the Selling Stockholders addressed to the Underwriters and in form
and substance satisfactory to the Underwriters' Counsel, to the effect:
(i) The Underwriting Agreement has been duly executed and
delivered by or on behalf of each Selling Stockholder.
(ii) Each Selling Stockholder has, to the knowledge of such
counsel after due inquiry, good and valid title to all of the Shares which
may be sold by such Selling Stockholder under the Underwriting Agreement
and has, to the knowledge of such counsel after due inquiry, the legal
right and power, and, to the knowledge of such counsel after due inquiry,
all authorizations and approvals required to enter into the Underwriting
Agreement and its Custody Agreement and Power of Attorney, to sell,
transfer and deliver all of the Shares which may be sold by such Selling
Stockholder under the Underwriting Agreement and to comply with its other
obligations under the Underwriting Agreement, its Custody Agreement and
Power of Attorney.
24
(iii) The Custody Agreement and Power of Attorney of each
Selling Stockholder has been duly executed and delivered by such Selling
Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws affecting the enforcement of creditors'
rights generally and to equitable principles.
(iv) Assuming that the Underwriters purchase the Shares which
are sold by each Selling Stockholder pursuant to the Underwriting
Agreement for value, in good faith and without notice of any adverse
claims, the delivery of such Shares pursuant to the Underwriting Agreement
will pass good and valid title to such Shares, free and clear of any
security interest, mortgage, pledge, lieu encumbrance or other claim.
(v) To the best of such counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing with,
any court or governmental authority or agency, is required for the
consummation by any Selling Stockholder of the transactions contemplated
in the Underwriting Agreement, except as required under the Securities
Act, applicable state securities or blue sky laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of the Selling Stockholders or responsible officers
of the Selling Stockholders 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 Selling Stockholders,
provided that copies of any such statements or certificates shall be delivered
to Underwriters' Counsel. The opinion of such counsel 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.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be satisfactory in
form and substance to you and to Underwriters' Counsel, and the Underwriters
shall have received from said Underwriters' Counsel a favorable opinion, dated
as of the Closing Date with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company shall have furnished to Underwriters'
Counsel such documents as they
25
reasonably request for the purpose of enabling them to pass upon such matters.
(f) At the Closing Date, you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 7 has been satisfied, (ii) as of the date hereof and as of
the Closing Date the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and the
Subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a material adverse change, in the
business, properties, operations, condition (financial or other) or results of
operations of the Company and the Subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus.
(g) At the time this Agreement is executed and at the Closing Date,
you shall have received a letter, from KPMG LLP, independent public accountants
for the Company, dated, respectively, as of the date of this Agreement and as of
the Closing Date addressed to the Underwriters and in form and substance
satisfactory to you, to the effect that: (i) they are independent certified
public accountants with respect to the Company within the meaning of the Act and
the Regulations and stating that the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them; (ii) stating that, in their
opinion, the financial statements and schedules of the Company incorporated by
reference in the Registration Statement and the Prospectus and covered by their
opinion therein comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the applicable
published rules and regulations of the Commission thereunder; (iii) on the basis
of procedures referred to in such letter, including, without limitation, a
reading of the Company's unaudited consolidated balance sheet at December 31,
2000, the Company's unaudited statement of income for the six months ended
December 31, 2000 and the Company's consolidated statement of cash flows for the
six months ended December 31, 2000 and a reading of the minutes of meetings and
consents of the stockholders and boards of directors of the Company and the
Subsidiaries and the committees of such boards subsequent to June 30, 2000,
inquiries of officers and other employees of the Company and the Subsidiaries
who have responsibility for financial and accounting matters of the Company and
the Subsidiaries with respect to transactions and events subsequent to June 30,
2000, and other specified procedures and inquiries to a date not more than five
days prior to the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) with respect to the period subsequent to
June 30, 2000 there were, as of the date of the most recent available monthly
consolidated financial statements of the Company and the Subsidiaries and as of
a specified date not more than five days prior to the date of
26
such letter, any changes in the capital stock or long-term indebtedness of the
Company or any decrease in the net current assets or stockholders' equity of the
Company, in each case as compared with the amounts shown in the most recent
balance sheet presented in the Registration Statement and the Prospectus, except
for changes or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur or which are set forth in such letter; (B)
with respect to the period subsequent to December 31, 2000 there were, as of the
date of the most recent available monthly consolidated financial statements of
the Company and the Subsidiaries and as of a specified date not more than five
days prior to the date of such letter, any changes in the capital stock or
long-term indebtedness of the Company or any decrease in the net current assets
or stockholders' equity of the Company, in each case as compared with the
amounts shown in the most recent balance sheet presented in the Registration
Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; or (C) that during the period from December
31, 2000 to the date of the most recent available monthly consolidated financial
statements of the Company and the Subsidiaries, if any, and to a specified date
not more than five days prior to the date of such letter, there was any
decrease, as compared with the corresponding period in the prior fiscal year, in
total revenues, or total or per share net income, except for decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter; (iv) stating that nothing caused them to
believe that the unaudited proforma financial information of the Company
included in the Registration Statement does not comply as to form in all
material respects with the applicable accounting requirements of Rule 11-02 of
Regulation S-X promulgated under the Act or that the proforma adjustments have
not been properly applied to the historical amounts in the compilation of such
statements; and (v) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, and other financial
information pertaining to the Company and the Subsidiaries set forth in the
Registration Statement and the Prospectus, which have been specified by you
prior to the date of this Agreement, to the extent that such amounts, numbers,
percentages, and information may be derived from the general accounting and
financial records of the Company and the Subsidiaries or from schedules
furnished by the Company, and excluding any questions requiring an
interpretation by legal counsel, with the results obtained from the application
of specified readings, inquiries, and other appropriate procedures specified by
you set forth in such letter, and found them to be in agreement.
(h) Prior to the Closing Date the Company shall have furnished to
you such further information, certificates and documents as you may reasonably
request.
(i) You shall have received from (i) each person who is a director
or executive officer of the Company or such stockholders as have been heretofore
designated by you and listed on Schedule II hereto an agreement to the effect
that for a period
27
of 180 days from the date of the Prospectus and (ii) each Selling Stockholder
and each related party listed on Schedule III hereto an agreement to the effect
that for a period of 180 days from the date of the Prospectus such persons will
not, directly or indirectly, without your prior written consent, offer, sell,
offer or agree to sell, grant any option to purchase or otherwise dispose (or
announce any offer, sale, grant of an option to purchase or other disposition)
of any shares of Common Stock (or any securities convertible into, exercisable
for or exchangeable or exercisable for shares of Common Stock).
(j) At the Closing Date, the Shares shall have been approved for
quotation on the Nasdaq National Market upon notice of issuance.
(k) On or prior to the Closing Date, you shall have received a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof) from each Selling Stockholder.
(l) You shall have also received from KPMG LLP, a letter stating
that the Company's system of internal accounting controls taken as a whole is
sufficient to meet the broad objectives of internal accounting control insofar
as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the financial
statements of the Company and the Subsidiaries.
(m) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in the capital
stock or long-term debt of the Company or any of the Subsidiaries or any change,
or any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business, properties or
prospects of the Company and the Subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Prospectus (exclusive of any supplement).
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you at, or at any time prior to, the Additional Closing Date.
Notice of such cancellation shall be given to the Company in writing, or by
telephone, electronic mail or facsimile, confirmed in writing.
8. INDEMNIFICATION.
28
(a) The Company shall indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to reasonable attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related Preliminary Prospectus or the Prospectus, or
in any supplement thereto or amendment thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to any
Underwriter or any controlling person of any Underwriter to the extent but only
to the extent that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein. The foregoing indemnity
agreement with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter who failed to deliver a Prospectus (as then amended
or supplemented, provided by the Company to the several Underwriters in the
requisite quantity and on a timely basis to permit proper delivery on or prior
to the Closing Date) to the person asserting any losses, claims, damages and
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured, as determined by a court of competent jurisdiction in a
decision not subject to further appeal, in such Prospectus and such Prospectus
was required by law to be delivered at or prior to the written confirmation of
sale to such person. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(b) Each Selling Stockholder agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses as
incurred (including but not limited to reasonable attorneys' fees and any and
all expenses incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim, and any and all amounts paid
in settlement of any claim or litigation), severally, to which they or any of
29
them may become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact relating to such Selling Stockholder contained in
the Registration Statement for the registration of the Shares relating to such
Selling Stockholder, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact relating to such Selling Stockholder
required to be stated therein or necessary to make the statements therein not
misleading, in each such case to the extent but only to the extent that, with
respect to any Selling Stockholder, any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Selling Stockholder expressly for use therein. The foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus (as then
amended or supplemented, provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages
and liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured, as determined by a court of competent jurisdiction in a
decision not subject to further appeal, in such Prospectus and such Prospectus
was required by law to be delivered at or prior to the written confirmation of
sale to such person. This indemnity agreement will be in addition to any
liability which such Selling Stockholder may otherwise have including under this
Agreement.
(c) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any losses,
liabilities, claims, damages and expenses as incurred (including but not limited
to reasonable attorneys' fees and any and all expenses incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim, and any and all amounts paid in settlement of any
claim or litigation), jointly or severally, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement for the registration
of the Shares, as originally filed or any amendment thereof, or any related
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission
30
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through you expressly for use
therein; PROVIDED, HOWEVER, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder. This indemnity will be in
addition to any liability which any Underwriter may otherwise have including
under this Agreement. The Company acknowledges that the statements set forth in
the [two paragraphs immediately following the table on the cover page] and in
the first table and the first and third paragraphs following such table under
the caption "Underwriting" in the Prospectus constitute the only information
furnished in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Shares as originally filed or in any
amendment thereof, any related Preliminary Prospectus or the Prospectus or in
any amendment thereof or supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of any claims or the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing of the claim or the commencement
thereof (but the failure to so notify an indemnifying party shall not relieve it
from any liability which it may have under this Section 8 unless such failure
adversely affects the ability to defend). An indemnifying party may participate
at its own expense in the defense of any such action and to the extent it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action (iii) the indemnified party does not diligently
defend after assumption of the defense or (iv) such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to one or all of
the indemnifying parties (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by the indemnifying parties. In no event shall the indemnifying party be liable
for more than one counsel for each
31
indemnified party. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or reasonably could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or reasonably could have been the subject matter of
such action and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of the indemnified
party.
9. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 8 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company, the
Selling Stockholders and the Underwriters shall contribute to the aggregate
losses, claims, damages, liabilities and expenses of the nature contemplated by
such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company and each Selling Stockholder any contribution received by the Company
and/or the Selling Stockholder from persons, other than the Underwriters, who
may also be liable for contribution, including persons who control the Company
and/or the Selling Stockholder within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, officers of the Company who signed the
Registration Statement and directors of the Company) as incurred to which the
Company, each Selling Stockholder and one or more of the Underwriters may be
subject, in such proportions as are appropriate to reflect the relative benefits
received by the Company and each Selling Stockholder on the one hand and the
Underwriters on the other hand from the offering of the Shares or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 8 hereof, in such proportions as are appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company and each Selling Stockholder on the one hand and the Underwriters on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as (a) the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by the Company and the Selling Stockholder bear to (b) the underwriting
discounts and commissions received by the Underwriters, respectively, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of each of the Company, any Selling Stockholder and the Underwriters shall
be determined by reference to, among other things, whether
32
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 9, (i) in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 9 and the preceding sentence, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this
Section 9, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as such Underwriter, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company and any Selling Stockholder, as
applicable, subject in each case to clauses (i) and (ii) of this Section 9. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 9 or otherwise unless the failure to so notify has an
adverse impact on the party to be so notified. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided however that such consent was not unreasonably withheld. The
obligations of the Underwriters to contribute pursuant to this Section 8 are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint.
10. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving
33
effect to arrangements, if any, made by you pursuant to subsection (b) below)
exceed in the aggregate 10% of the number of Firm Shares or Additional Shares,
the Firm Shares or Additional Shares to which the default relates shall be
purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within five calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company and the Selling Stockholder to sell the Additional Shares shall
thereupon terminate, without liability on the part of the Company or the Selling
Stockholder with respect thereto (except in each case as provided in Sections 6,
8(a) and 9 hereof with respect to the Company and in Sections 8(b) and 9 hereof
with respect to the Selling Stockholder) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company and the
Selling Stockholders for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be for a period, not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' Counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 10 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Additional Shares.
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements of the Underwriters, the Company and
the Selling Stockholders contained in this Agreement, including the agreements
contained in Section 6, the indemnity agreements contained in Section 8 and the
contribution agreements contained in Section 9, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof or by or on behalf of the
Company or the Selling Stockholders, any of their
34
respective officers and directors or any controlling persons thereof, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
6, 8, 9 and 12(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 10 or 12 hereof.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
(a) This Agreement shall become effective, upon the later of when
(i) you and the Company shall have received notification of the effectiveness of
the Registration Statement or (ii) the execution of this Agreement. If either
the public offering price or the purchase price per Share has not been agreed
upon prior to 5:00 P.M., New York City time, on the fifth full business day
after the Registration Statement shall have become effective, this Agreement
shall thereupon terminate without liability to the Company, the Selling
Stockholders or the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the Company by
notifying you or by you notifying the Company. Notwithstanding the foregoing,
the provisions of this Section 12 and of Sections 1, 6, 8, 9 and 11 hereof shall
at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to purchase the
Additional Shares at any time prior to the Additional Closing Date, as the case
may be, if (i) any domestic or international event or act or occurrence has
materially disrupted, or in your opinion will in the immediate future materially
disrupt, the market for the Company's securities or securities in general; (ii)
if trading on the New York Stock Exchange or the Nasdaq National Market shall
have been suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the New York Stock Exchange or the Nasdaq National Market or by order of the
Commission or any other governmental authority having jurisdiction; (iii) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Additional Shares, as the case may be, shall have become
effective; (iv) (A) if the United States becomes engaged in hostilities or there
is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (B) if there
shall have been such change in political, financial or economic conditions if
the effect of any such event in (A) or (B) as in your judgment makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall
be in writing.
35
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 12(a) hereof or (ii) Section 10(b) or 12(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
reasonable out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
13. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and , if sent to
any Underwriter, shall be mailed, delivered, or facsimile and confirmed in
writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: _______________, with a copy to ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.; if sent to the Company, shall be mailed, delivered,
or faxed and confirmed in writing to the Company, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman, Chief
Executive Officer and President and its counsel at the addresses set forth in
the Registration Statement, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; and if sent
to the Selling Stockholders shall be mailed, delivered or faxed and confirmed
in writing to the Custodian c/o the Company, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PROVIDED, HOWEVER, that any notice
to an Underwriter pursuant to Section 7 shall be delivered or sent by mail or
facsimile transmission to such Underwriter at its address set forth in its
acceptance facsimile to you, which address will be supplied to any other
party hereto by you upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
14. PARTIES. This Agreement shall insure solely to the benefit of,
and shall be binding upon, the Underwriters, the Selling Stockholders and the
Company and the controlling persons, directors, officers, employees and agents
referred to in Sections 8 and 9 hereof, and their respective heirs, devisees,
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of Shares
from any of the Underwriters.
15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
16. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same instrument. Facsimile
36
signatures shall be treated as originals.
17. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
18. TIME IS OF THE ESSENCE. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when
the Commission's office in Washington, D.C. is open for business.
[signature page follows]
37
If the foregoing correctly sets forth the understanding between you and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
ZYGO CORPORATION
By:
-----------------------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman of the Board,
Chief Executive Officer and President
ZYGO CORPORATION, as Custodian for Selling
Stockholders By:
By:
-----------------------------------------
Name:
Title: ,
as Attorney-in-Fact for the Selling
Stockholders
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
-------------------------
Name:
Title:
On behalf of themselves and the other
38
Underwriters named in Schedule I hereto.
39
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES TO BE PURCHASED
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
------------------------------------
▇▇▇▇▇▇ Brothers Inc.
------------------------------------
ING Barings LLC
------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin
------------------------------------
Total:
------------------------------
I-1
SCHEDULE II
NUMBER OF FIRM SHARES TO BE SOLD
NAMES OF SELLING STOCKHOLDER TO THE UNDERWRITERS
----------------------------- --------------------------------
II-1
SCHEDULE III
[NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION]
III-1
EXHIBIT A
November __, 2000
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ BROTHERS INC.
ING BARINGS LLC
▇.▇. ▇▇▇▇▇▇▇▇▇, TOWBIN
as Representatives
of the several Underwriters
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Equity Capital Markets
ZYGO CORPORATION LOCK-UP AGREEMENT
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between Zygo Corporation, a Delaware corporation (the "Company"),
and you as representatives of the Underwriters named therein (the
"Underwriters") relating to an underwritten public offering (the "Offering") of
common stock, $.10 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned hereby agrees that, without the prior
written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., the undersigned will not, directly
or indirectly, during the period from the date hereof until one hundred eighty
(180) days from the date of the final prospectus for the Offering (the "Lock-Up
Period"), (i) offer, sell, agree to offer or sell, solicit offers to purchase,
grant any call option or purchase any put option with respect to, pledge, borrow
or otherwise dispose of any Relevant Security, (ii) establish or increase a "put
equivalent position" or liquidate or decrease a "call equivalent position" with
respect to any Relevant Security (in each case within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Relevant
Security, whether or not such transaction is to be settled by delivery of
Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Common Stock, any other equity security of
the Company or any of the Subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Common Stock or other such equity security.
The undersigned hereby further agrees that, during the Lock-up Period, the
undersigned (x) will not file or participate in the filing with the Securities
and Exchange Commission of any registration statement, or circulate or
participate in the circulation of any preliminary or final prospectus or other
disclosure document with respect to any proposed offering or sale of a Relevant
Security and (y) will not exercise any rights the undersigned may have to
require registration with the Securities and Exchange Commission of any proposed
offering or sale of a Relevant Security.
40
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. Delivery of a signed copy of this letter
by telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By:
---------------------------
Print Name:
-------------------
