EXHIBIT 1.1
_________ SHARES*
ASTROPOWER, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
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January __, 1998
Xxxxxxx & Company, Inc.
First Albany Corporation
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AstroPower, Inc., a Delaware corporation (the "Company"), proposes to issue
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and sell ________ shares (the "Firm Shares") of the Company's Common Stock,
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$0.01 par value per share (the "Common Stock"), to you and to the several other
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Underwriters named in Schedule I hereto (collectively, the "Underwriters"), for
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whom you are acting as representatives (the "Representatives"). The Company has
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also agreed to grant to you and the other Underwriters an option (the "Option")
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to purchase up to an additional ______ shares of Common Stock, on the terms and
for the purposes set forth in Section 1(b) (the "Option Shares"). The Firm
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Shares and the Option Shares are referred to collectively herein as the
"Shares."
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The Company confirms as follows its agreement with the Representatives and the
several other Underwriters:
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of
this Agreement, (i) the Company agrees to issue and sell the Firm Shares to
the several Underwriters and (ii) each of the Underwriters, severally and
not jointly, agrees to purchase from the Company the respective number of
Firm Shares set forth opposite that Underwriter's name in Schedule I
hereto, at the purchase price of $____ for each Firm Share.
(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and
not jointly, up to ______ of the Option Shares, at the same price per share
as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover
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* Plus an option to purchase up to an additional ____ shares from the Company to
cover over-allotments.
over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or
telegraphic notice (the "Option Shares Notice") by the Representatives to
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the Company no later than 12:00 noon, New York City time, at least two and
no more than five business days before the date specified for closing in
the Option Shares Notice (the "Option Closing Date"), setting forth the
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aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell
to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each Underwriter will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such
Underwriter is purchasing, as adjusted by the Representatives in such
manner as they deem advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to the
Representatives for the accounts of the Underwriters against payment of the
purchase price by certified or official bank checks or by wire transfer payable
in same-day funds to the order of the Company at the office of Xxxxxxx &
Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New
York City time, on the third (or, if the purchase price set forth in Section
1(b) hereof is determined after 4:30 p.m., Washington D.C. time, the fourth)
business day following the commencement of the offering contemplated by this
Agreement, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
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Date").
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To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
save each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-___) on Form S-1 relating to
the Shares, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and
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regulations (collectively referred to as the "Rules and Regulations") of
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the Securities and Exchange Commission (the "Commission") promulgated
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thereunder, and has been filed with the Commission. The term "Preliminary
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Prospectus" as used herein means a preliminary prospectus as contemplated
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by Rule 430 or Rule 430A of the Rules and Regulations included at any time
as part of the registration statement. Copies of such registration
statement and amendments and of each related Preliminary Prospectus have
been delivered to the Representatives. If such registration statement
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has not become effective,
a further amendment to such registration statement, including a form of
final prospectus, necessary to permit such registration statement to become
effective will be filed promptly by the Company with the Commission. If
such registration statement has become effective, a final prospectus
containing information permitted to be omitted at the time of effectiveness
by Rule 430A of the Rules and Regulations will be filed promptly by the
Company with the Commission in accordance with Rule 424(b) of the Rules and
Regulations. The term "Registration Statement" means the registration
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statement as amended at the time it becomes or became effective (the
"Effective Date"), including financial statements and all exhibits and any
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information deemed to be included by Rule 430A and includes any
registration statement relating to the offering contemplated by this
Agreement and filed pursuant to Rule 462(b) of the Rules and Regulations.
The term "Prospectus" means the prospectus as first filed with the
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Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no
such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission. On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement did
or will contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges
that the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement.
(c) The Company does not own, and at the Closing Date and, if later, the
Option Closing Date, will not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity. The Company is, and at the Closing Date and, if
later, the Option Closing Date, will be, a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company has, and at the Closing Date and, if later, the
Option Closing Date, will have, full power and authority to conduct its business
as contemplated by the Prospectus, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. The Company is, and at the Closing Date and, if
later, the Option Closing Date, will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such license or qualification necessary,
except to the extent that the failure to be so qualified or be in good standing
would not materially and adversely affect the Company or its business,
properties, business prospects, condition
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(financial or other) or results of operations. The Company is not, and at the
Closing Date and, if later, the Option Closing Date, will not be, engaged in any
discussions or a party to any agreement or understanding, written or oral,
regarding the acquisition of an interest in any corporation, firm, partnership,
joint venture, association or other entity where such discussions, agreements or
understandings would require amendment to the Registration Statement pursuant to
applicable securities laws. Complete and correct copies of the Certificate of
Incorporation and of the by-laws of the Company and all amendments thereto have
been delivered to the Representatives, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(d) All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued and are fully paid and nonassessable and were
issued in compliance with all applicable state and federal securities laws; the
Shares have been duly authorized and when issued and paid for as contemplated
herein will be validly issued, fully paid and nonassessable; no preemptive or
similar rights exist with respect to any of the Shares or the issue and sale
thereof. The Underwriters will receive good and valid title to the Shares
purchased from the Company, free and clear of all liens, claims, security
interests, pledges, charges, encumbrances, preemptive rights, stockholders'
agreements and voting trusts and other defects in title. The description of the
capital stock of the Company in the Registration Statement and the Prospectus
is, and at the Closing Date and, if later, the Option Closing Date, will be,
complete and accurate in all respects. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date and, if later,
the Option Closing Date, will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of capital stock, or any such warrants, convertible securities or obligations.
No further approval or authority of stockholders or the Board of Directors of
the Company will be required for the issuance and sale of the Shares as
contemplated herein.
(e) The audited financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company as of the respective dates thereof and the results of operations
and cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. KPMG Peat Marwick, LLP (the
"Accountants"), who have reported on such financial statements and schedules,
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are independent accountants with respect to the Company as required by the Act
and the Rules and Regulations. The summary financial and statistical data
included in the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
(f) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus and prior to the Closing Date and, if
later, the Option Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company (other than in
connection with the exercise of options to purchase the Company's Common Stock
granted pursuant to the Company's stock option plan from the shares reserved
therefor as described in the Registration Statement), or any material adverse
change in the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, arising for any reason
whatsoever, (ii) the Company has not incurred, nor will it incur, except in the
ordinary course of business as described in the Prospectus, any material
liabilities or obligations, direct or contingent, nor has the Company entered
into nor will it enter into, except in the ordinary course of business as
described in the Prospectus, any material transactions other than pursuant to
this Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
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(g) The Company is not, will not become as a result of the transactions
contemplated hereby, and does not intend to conduct its business in a manner
that would cause it to become, an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(h) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its officers in
their capacity as such, nor any basis therefor, before or by any Federal or
state court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding might materially and adversely affect the Company or the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company.
(i) The Company has, and at the Closing Date and, if later, the Option Closing
Date, will have, performed all the obligations required to be performed by it,
and is not, and at the Closing Date, and, if later, the Option Closing Date,
will not be, in default, under any contract or other instrument to which it is a
party or by which its property is bound or affected, which default could
materially and adversely affect the Company or the business, properties,
business prospects, condition (financial or other) or results of operations of
the Company. To the best knowledge of the Company, no other party under any
contract or other instrument to which it is a party is in default in any respect
thereunder, which default could materially and adversely affect the Company or
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company. The Company is not, and at the Closing
Date and, if later, the Option Closing Date, will not be, in violation of any
provision of its Certificate or Incorporation or by-laws.
(j) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
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in connection with the purchase and distribution by the Underwriters of the
Shares.
(k) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the Certificate of Incorporation or by-laws of the Company,
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 the Company is a party or by
which the Company or any of its properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company.
(l) The Company has good and marketable title to all properties and assets
described in the Prospectus as owned by it, free and clear of all liens,
charges, encumbrances or restrictions, except such as are described in the
Prospectus or are not material to the business of the Company. The Company has
valid, subsisting and enforceable leases for the properties described in the
Prospectus as leased by it. The Company owns or leases all such properties as
are necessary to its operations as contemplated by the Prospectus, except
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where the failure to so own or lease would not materially and adversely affect
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company.
(m) There is no contract, agreement, instrument, lease, license, certificate,
permit or other arrangement, whether written or oral, of a character required to
be described in the Registration Statement or the Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company is a party have been duly
authorized, executed and delivered by the Company, constitute valid and binding
agreements of the Company and are enforceable against and by the Company in
accordance with the terms thereof.
(n) No statement, representation, warranty or covenant made by the Company in
this Agreement or made in any certificate or document required by Section 5 of
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect.
(o) Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(p) No holder of securities of the Company has rights to the registration of
any securities of the Company because of the filing of the Registration
Statement, which rights have not been waived by the holder thereof as of the
date hereof.
(q) The Company has filed a registration statement pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
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register the Common Stock, has filed an application to list the Shares on the
Nasdaq National Market ("NNM"), and has received notification that the listing
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has been approved, subject to notice of issuance of the Shares.
(r) The Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offer and sale of the Shares,
other than the Preliminary Prospectus or the Prospectus or other offering
materials permitted by the Act and the Rules and Regulations to be distributed.
(s) Except as disclosed in or specifically contemplated by the Prospectus (i)
the Company owns or has adequate rights to use all trademarks, trade names,
inventions, designs, trade secrets, know-how, patent rights, copyrights or other
information (collectively, "Intellectual Property"), and has such other
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licenses, approvals and governmental authorizations sufficient to conduct its
business as now conducted and as now proposed to be conducted, (ii) to the
Company's knowledge, none of the patent rights owned or licensed by the Company
is unenforceable or invalid; the Company has duly and properly filed or caused
to be filed with the United States Patent and Trademark Office (the "PTO") and
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applicable foreign and international patent authorities all patent applications
described or referred to in the Registration Statement and Prospectus and
believes that the Company has complied with the PTO's duty of candor and
disclosure for such patent applications; the Company is unaware of any facts
which preclude the grant of a patent from its pending patent applications; the
Company has no knowledge of any facts which would preclude the Company from
having clear title to its pending patent applications; and the Company is not
aware of the granting of any patent rights to third parties or the filing of any
patent applications by third parties or any other rights of third parties to any
of the Company's Intellectual Property, (iii) the Company has no knowledge of
any infringement by it of trademarks, trade name rights, patent rights,
copyrights, licenses, trade secrets or other similar rights of others, where
such infringement could have a material and adverse effect on the Company or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company, and (iv) there is no claim being made
against the Company, or to the best of the Company's knowledge, any employee of
the
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Company, regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement which could have a material and adverse effect on
the Company or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company.
(t) The Company has filed all federal, state, local and foreign income tax
returns which have been required to be filed and has paid all taxes and
assessments received by it to the extent that such taxes or assessments have
become due. The Company has no tax deficiency which has been or, to the best
knowledge of the Company, might be asserted or threatened against it which could
have a material and adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company.
(u) The pro forma financial information set forth in the Registration
Statement reflects, subject to the limitations set forth in the Registration
Statement as to such pro forma financial information, the results of operations
of the Company purported to be shown thereby for the periods indicated and
conforms to the requirements of Regulation S-X of the Rules and Regulations and
management of the Company believes (i) the assumptions underlying the pro forma
adjustments are reasonable, (ii) that such adjustments have been properly
applied to the historical amounts in the compilation of such statements, and
(iii) that such statements present fairly, with respect to the Company, the pro
forma financial position and results of operations and the other information
purported to be shown therein at the respective dates or for the respective
periods therein specified.
(v) The Company owns or possesses all authorizations, approvals, orders,
licenses, registrations, other certificates and permits of and from all
governmental regulatory officials and bodies, necessary to conduct its business
as contemplated in the Prospectus, except where the failure to own or possess
all such authorizations, approvals, orders, licenses, registrations, other
certificates and permits would not materially and adversely affect the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company. There is no proceeding
pending or threatened (or any basis therefor known to the Company) which may
cause any such authorization, approval, order, license, registration,
certificate or permit to be revoked, withdrawn, cancelled, suspended or not
renewed; and the Company is conducting its business in compliance with all laws,
rules and regulations applicable thereto (including, without limitation, all
applicable federal, state and local environmental laws and regulations) except
where such noncompliance would not materially and adversely affect the Company
or the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company.
(w) The Company maintains insurance of the types and in the amounts generally
deemed adequate for its business, including, but not limited to, insurance
covering real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(x) Neither the Company has nor, to the best of the Company's knowledge, any
of its employees or agents at any time during the last five years (i) made any
unlawful contribution to any candidate for foreign office, or failed to disclose
fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof.
4. Agreements of the Company. The Company covenants and agrees with the
several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or
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dealer, file any amendment or supplement to the Registration Statement or
the Prospectus, unless a copy thereof shall first have been submitted to
the Representatives within a reasonable period of time prior to the filing
thereof and the Representatives shall not have objected thereto in good
faith.
(b) The Company will use its best efforts to cause the Registration Statement
to become effective, and will notify the Representatives promptly, and will
confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat thereof, (iv)
of the happening of any event during the period mentioned in the second
sentence of Section 4(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue or
that requires the making of any changes in the Registration Statement or
the Prospectus in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading and (v) of receipt by
the Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any Preliminary Prospectus or the Prospectus. If at any time
the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment. If the
Company has omitted any information from the Registration Statement
pursuant to Rule 430A of the Rules and Regulations, the Company will comply
with the provisions of and make all requisite filings with the Commission
pursuant to said Rule 430A and notify the Representatives promptly of all
such filings.
(c) The Company will furnish to each Representative, without charge, one signed
copy of each of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto and will furnish to the Representatives, without charge,
for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the Company will
deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by the several Underwriters and by
all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which in
the judgment of the Company or counsel to the Underwriters should be set
forth in the Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not misleading, or if
it is necessary to supplement or amend the Prospectus to comply with law,
the Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to each of
the Underwriters, without charge, such number of copies of such supplement
or amendment to the Prospectus as the Representatives may reasonably
request.
(f) Prior to any public offering of the Shares, the Company will cooperate with
the Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives
may request; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now
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so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(g) The Company will, so long as required under the Rules and Regulations,
furnish to its stockholders as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flow of the Company and its
consolidated subsidiaries, if any, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries, if any, for such quarter in reasonable detail.
(h) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally
to the holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of
each annual or other report it shall be required to file with the
Commission.
(i) The Company will make generally available to holders of its securities as
soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but
shall be in reasonable detail) for a period of 12 months ended commencing
after the Effective Date, and satisfying the provisions of Section 11(a) of
the Act (including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or
reimburse if paid by the Representatives all costs and expenses incident to
the performance of the obligations of the Company under this Agreement and
in connection with the transactions contemplated hereby, including but not
limited to costs and expenses of or relating to (i) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
Preliminary Prospectus, Prospectus and any amendment or supplement to the
Registration Statement or Prospectus, (ii) the preparation and delivery of
certificates representing the Shares, (iii) the printing of this Agreement,
the Agreement Among Underwriters, any Selected Dealer Agreements, any
Underwriters' Questionnaires, any Underwriters' Powers of Attorney, and any
invitation letters to prospective Underwriters, (iv) furnishing (including
costs of shipping and mailing) such copies of the Registration Statement,
the Prospectus and any Preliminary Prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold, (v) the listing of the Shares on the NNM, (vi) any
filings required to be made by the Underwriters with the NASD, and the
fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (vii) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) fees, disbursements and
other charges of counsel to the Company (but not those of counsel for the
Underwriters, except as otherwise provided herein) and (ix) the transfer
agent for the Shares.
(k) The Company will not at any time, directly or indirectly, take any action
designed or which might reasonably be expected to cause or result in, or
which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and sale of the
Shares to be sold by the Company in the manner set forth in the Prospectus
under "Use of Proceeds" and shall file such reports with
9
the Commission with respect to the sale of the Shares and the application
of the proceeds therefrom as may be required in accordance with Rule 463
under the Act.
(m) During the period beginning from the date hereof and continuing to and
including the date 360 days after the date of the Prospectus, without the
prior written consent of Xxxxxxx & Company, Inc., the Company will not
offer, sell, contract to sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities of the Company or any
other securities convertible into or exchangeable with its Common Stock or
other equity security (other than pursuant to employee stock option plans
or the conversion of convertible securities or the exercise of warrants
outstanding on the date of this Agreement). During the period of 360
days after the date of the Prospectus, the Company will not file with the
Commission or cause to become effective any registration statement relating
to any securities of the Company without the prior written consent of
Xxxxxxx & Company, Inc.
(n) During the period of 360 days after the date of the Prospectus, the
Company will not, without the prior written consent of Xxxxxxx & Company,
Inc., grant options to purchase shares of Common Stock at a price less than
the initial public offering price.
(o) The Company will cause each of its officers, directors and certain
stockholders designated by the Representatives to, enter into lock-up
agreements with the Representatives to the effect that they will not,
without the prior written consent of Xxxxxxx & Company, Inc., sell,
contract to sell or otherwise dispose of any shares of Common Stock or
rights to acquire such shares according to the terms set forth in Schedule
II hereto.
(p) The Company will not file with the Commission any registration statement on
Form S-8 relating to shares of its Common Stock prior to 90 days after the
effective date of the Registration Statement.
5. Conditions of the Obligations of the Underwriters. The obligations of each
Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective shall be
received by the Representatives not later than 5:00 p.m., New York City time, on
the date of this Agreement or at such later date and time as shall be consented
to in writing by the Representatives and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives do not object thereto
in good faith, and the Representatives shall have received certificates, dated
the Closing Date and, if later, the Option Closing Date and signed by the Chief
Executive Officer and the Treasurer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii) of this paragraph.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business
10
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and the Prospectus, and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not described in the
Registration Statement and the Prospectus, if in the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would, in the judgment of the Representatives,
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company.
(e) Each of the representations and warranties of the Company contained herein
shall be true and correct in all material respects at the Closing Date, and,
with respect to the Option Shares, at the Option Closing Date, and all covenants
and agreements contained herein to be performed on the part of the Company and
all conditions contained herein to be fulfilled or complied with by the Company
at or prior to the Closing Date and, with respect to the Option Shares, at or
prior to the Option Closing Date, shall have been duly performed, fulfilled or
complied with.
(f) The Representatives shall have received an opinion, dated the Closing Date
and, with respect to the Option Shares, the Option Closing Date, satisfactory in
form and substance to the Representatives and counsel for the Underwriters from
Opton Handler Xxxxxx & Xxxxxx, LLP, counsel to the Company, with respect to the
following matters:
(i) The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation; has full
corporate power and authority to conduct all the activities conducted by it, to
own or lease all the assets owed or leased by it and to conduct its business as
contemplated by the Prospectus; and is duly licensed or qualified to do business
and is in good standing as a foreign corporation in all jurisdictions in which
the nature of the activities conducted by it or the character of the assets
owned or leased by it makes such license or qualification necessary and where
the failure to be licensed or qualified would have a material and adverse effect
on the business or financial condition of the Company.
(ii) All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued and are fully paid and nonassessable, to such
counsel's knowledge, were issued pursuant to exemptions from the registration
and qualification requirements of federal and applicable state securities laws,
and were not issued in violation of or subject to any preemptive or, to such
counsel's knowledge, similar rights;
(iii) The specimen certificate evidencing the Common Stock filed as an
exhibit to the Registration Statement is in due and proper form under Delaware
law, the Shares have been duly authorized and, when issued and paid for as
contemplated by this Agreement, will be validly issued, fully paid and
nonassessable; and no preemptive or similar rights exist with respect to any of
the Shares or the issue and sale thereof.
11
(iv) To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any
corporation, firm, partnership, joint venture, association or other entity.
(v) The authorized and outstanding capital stock of the Company is as set
forth in the Registration Statement and the Prospectus in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement or pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities, options or
warrants referred to in the Prospectus). To such counsel's knowledge, except as
disclosed in or specifically contemplated by the Prospectus, there are no
outstanding options, warrants of other rights calling for the issuance of, and
no commitments, plans or arrangements to issue, any shares of capital stock of
the Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company. The description of the capital stock of the
Company in the Registration Statement and the Prospectus conforms in all
material respects to the terms thereof.
(vi) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company is a party or to which
any of its properties is subject that are required to be described in the
Registration Statement or the Prospectus but are not so described.
(vii) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated under
this Agreement, except such as have been obtained or made under the Act or the
Rules and Regulations and such as may be required under state securities or Blue
Sky laws or the by-laws and rules of the NASD in connection with the purchase
and distribution by the Underwriters of the Shares.
(viii) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
(ix) The execution and delivery of this Agreement, the compliance by the
Company with all of the terms hereof and the consummation of the transactions
contemplated hereby does not contravene any provision of applicable law or the
Certificate of Incorporation or By-Laws of the Company, and to the best of such
counsel's knowledge will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms and provisions of, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation 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 known to such
counsel to which the Company is a party or by which the Company or any of its
properties is bound or affected, or violate or conflict with (i) any judgment,
ruling, decree or order known to such counsel or (ii) any statute, rule or
regulation of any court or other governmental agency or body, applicable to the
business or properties of the Company.
(x) To such counsel's knowledge, there is no document or contract of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an
12
exhibit to the Registration Statement which is not described or filed as
required, and each description of such contracts and documents that is contained
in the Registration Statement and Prospectus fairly presents in all material
respects the information required under the Act and the Rules and Regulations.
(xi) The statements under the captions "Risk Factors -- Shares Eligible for
Future Sale," "Risk Factors -- Effect of Delaware Law and Certain Charter and
By-Law Provisions; Possible Issuance of Preferred Stock," "Management -- Stock
Option Plan," "Management --Employment Arrangements," "Certain Transactions,"
"Description of Capital Stock," and "Shares Eligible for Future Sale" in the
Prospectus, insofar as the statements constitute a summary of documents referred
to therein or matters of law, are accurate summaries and fairly and correctly
present, in all material respects, the information called for with respect to
such documents and matters (provided, however, that such counsel may rely on
representations of the Company with respect to the factual matters contained in
such statements, and provided further that such counsel shall state that nothing
has come to the attention of such counsel which leads them to believe that such
representations are not true and correct in all material respects).
(xii) The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(xiii) The Shares have been duly authorized for listing on the NNM, subject
to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities of the Company
has rights, which have not been waived or satisfied, to require the register
with the Commission shares of Common Stock or other securities, as part of the
offering contemplated hereby.
(xv) The Registration Statement has become effective under the Act, and to
the best of such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been instituted or is pending, threatened or contemplated.
(xvi) The Registration Statement and the Prospectus comply as to form in
all material respects with the requirement of the Act and the Rules and
Regulations (other than the financial statements, schedules and other financial
data contained in the Registration Statement or the Prospectus, as to which such
counsel need express no opinion).
(xvii) Such counsel has participated in the preparation of the Registration
Statement and Prospectus and has no reason to believe that, as of the Effective
Date the Registration Statement, or any amendment or supplement thereto, (other
than the financial statements, schedules and other financial data contained
therein, as to which such counsel need express no opinion) contained any 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
that the Prospectus, or any amendment or supplement thereto, as of its date and
the Closing Date and, if later, the Option Closing Date, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the financial statements,
schedules and other financial data contained therein, as to which such counsel
need express no opinion).
13
In rendering such opinion, such counsel may rely upon as to matters of local
law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company shall state that they are doing so, that they have no
reason to believe that they and the Underwriters are not entitled to rely on
such opinions and that copies of such opinions are to be attached to the
opinion.
(g) The Representatives shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Xxxxxx, Hall & Xxxxxxx, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to certain financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than five days
prior to the Closing Date and the Option Closing Date, as the case may be, which
would require any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date and the Option Closing
Date.
(i) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representatives a certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Treasurer of the
Company, in form and substance satisfactory to the Representatives, to the
effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects and do
not omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not untrue or misleading and (B) in the
case of the certificate delivered at the Closing Date and the Option Closing
Date, since the Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading.
(ii) Each of the representations and warranties of the Company contained in
this Agreement were, when originally made, and are, at the time such certificate
is delivered, true and correct.
(iii) Each of the covenants required to be performed by the Company herein
on or prior to the date of such certificate has been duly, timely and fully
performed and each condition herein required to be satisfied or fulfilled on or
prior to the date of such certificate has been duly, timely and fully satisfied
or fulfilled.
(j) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
14
(k) Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the NNM upon official notice of issuance.
(l) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company contained herein
or any failure of the Company to perform its obligations hereunder or under law
in connection with the transactions contemplated hereby; provided, however, that
(i) the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of any Underwriter, expressly for
inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus and (ii) the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, or damage arising out of or based on any untrue statement or omission
or alleged untrue statement or omission or alleged omission to state a material
fact in the Preliminary Prospectus which is corrected in the Prospectus if the
person asserting any such loss, claim, liability, charge or damage purchased
Shares from such Underwriter but was not sent or given a copy of the Prospectus
at or prior to the written confirmation of the sale of such Shares to such
person. The Company acknowledges that the statements set forth under the
heading "Underwriting" in the Preliminary Prospectus and the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives on behalf of the Underwriters expressly
for inclusion in the Registration Statement, the Preliminary Prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, as set forth in
Section 6(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information
15
relating to any Underwriter furnished in writing to the Company by the
Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the Preliminary Prospectus or the Prospectus. The
Company acknowledges that the statements set forth under the heading
"Underwriting" in the Preliminary Prospectus and the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the Company
by the Representatives on behalf of the Underwriters expressly for inclusion in
the Registration Statement, the Preliminary Prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
(c) Any party that proposes to assert the right to be indemnified under this
Section 6 shall, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
(d) If the indemnification provided for in this Section 6 is applicable in
accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and
(c) of this Section 6 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for
16
contribution) by such indemnified party as a result of such losses, claims,
liabilities, expenses and damages in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand. The relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand, shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Representatives on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were to be 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 into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purposes of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
6(d), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against any such party in respect of which a claim
for contribution may be made under this Section 6(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d). No party will
be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor or (iii) any termination of this
Agreement.
7. Reimbursement of Certain Expenses. In addition to its other obligations
under Section 6(a) of this Agreement, the Company hereby agrees to reimburse on
a quarterly basis the Underwriters for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon, in
whole or in part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company contained
herein or failure of the Company to perform its or their respective obligations
hereunder or under law, all as described in Section 6(a), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations
17
under this Section 7 and the possibility that such payment might later be held
to be improper; provided, however, that, to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them.
8. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company if, prior to delivery and payment for the Firm
Shares or Option Shares, as the case may be, in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission or by the Nasdaq Stock Market, (ii)
trading in securities generally on The Nasdaq Stock Market shall have been
suspended or limited or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange, by order of the Commission or any
court or other governmental authority, or by The Nasdaq Stock Market, (iii) a
general banking moratorium shall have been declared by either Federal, New York
State or [STATE WHERE CLOSING OCCURS] authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to this Section 8, the Company
shall not be under any liability to any Underwriter except as provided in
Sections 4(j), 6 and 7 hereof; but, if for any other reason the purchase of the
Shares by the Underwriters is not consummated or if for any reason the Company
shall be unable to perform its obligations hereunder, the Company will reimburse
the several Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters) incurred by them
in connection with the offering of the Shares.
9. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants and
agreements at the Closing Date and the Option Closing Date, and such
representations, warranties, covenants and agreements of the Underwriters and
the Company, including the agreements contained in Section 4 and the indemnity
and contribution agreements contained in Section 6, shall remain operative and
in full force and effect regardless of any investigation made by, or on behalf
of, the Company, the Underwriters or any person or entity which is entitled to
be indemnified under Section 6, and shall survive delivery of the Firm Shares or
the Option Shares. In addition, the provisions of Sections 6, 7, 8, 9 and 11
shall survive termination of this Agreement, whether such termination occurs
before or after the Closing Date or the Option Closing Date.
10. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares which it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm
18
Shares and the aggregate number of Firm Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase exceeds one-tenth of
the aggregate number of the Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 10 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
11. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, Xxxxx Xxxx,
Xxxxxx, XX 00000, Attention: Xxxxx Xxxxxxx, with a copy to Xxxxx Xxxxxx, Esq.,
Opton Handler Xxxxxx & Xxxxxx, LLP, or (b) if to the Underwriters, to the
Representatives at the offices of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department, with a copy to
Xxxxxxx X. Xxxxxx, Esq., Xxxxxx, Hall & Xxxxxxx, Exchange Place, 00 Xxxxx
Xxxxxx, Xxxxxx, XX 00000. Any such notice shall be effective only upon
receipt. Any notice under Section 8 or 10 may be made by telex or telephone,
but if so made shall be subsequently confirmed in writing as required herein.
This Agreement has been and is made solely for the benefit of the
several Underwriters and the Company, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from any of the
several Underwriters.
Any action required or permitted to be made by the Representatives under
this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
19
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
AstroPower, Inc.
By:
--------------------------
Xxxxx Xxxxxxx, President
Confirmed as of the date first
above mentioned:
Xxxxxxx & Company, Inc.
First Albany Corporation
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
By: Xxxxxxx & Company, Inc.
By:
-------------------------
Name:
Title:
20
SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc. ......................................
First Albany Corporation......................................
--------
Total
========
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SCHEDULE II
FORM OF LOCK-UP AGREEMENT
The undersigned is a holder of securities of AstroPower, Inc., a Delaware
corporation (the "Company"), and wishes to facilitate the public offering of
shares of the Common Stock (the "Common Stock") of the Company (the "Offering").
The undersigned recognizes that such Offering will be of benefit to the
undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Xxxxxxx & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own, for a
period commencing as of the date hereof and ending on the date which is
360 days after the date of the final Prospectus relating to the
Offering. The undersigned confirms that he, she or it understands that the
underwriters and the Company will rely upon the representations set forth in
this Agreement in proceeding with the Offering. The undersigned further
confirms that the agreements of the undersigned are irrevocable and shall be
binding upon the undersigned's heirs, legal representatives, successors and
assigns. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
securities held by the undersigned except in compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
22
