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EXHIBIT 1.1
UNDERWRITING AGREEMENT
BETWEEN
OBJECTIVE COMMUNICATIONS, INC.
AND
SOUTHEAST RESEARCH PARTNERS, INC.
DATED: June __, 1999
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OBJECTIVE COMMUNICATIONS, INC.
2,000,000 Units
UNDERWRITING AGREEMENT
New York, New York
June __, 1999
Southeast Research Partners, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
Ladies and Gentlemen:
The undersigned, Objective Communications, Inc., a Delaware
corporation ("Company"), hereby confirms its agreement with Southeast Research
Partners, Inc. (being referred to herein variously as "you", "SERP" or the
"Representative") and with the other underwriters named on Schedule I hereto for
which SERP is acting as Representative (the Representative and the other
Underwriters being collectively called the "Underwriters" or, individually, an
"Underwriter") as follows:
1. Purchase and Sale of Securities.
1.1 Firm Units.
1.1.1 Purchase of Firm Units. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell, severally and
not jointly, to the several Underwriters, an aggregate of 2,000,000 units ("Firm
Units") at a purchase price (net of commissions) of $____ per Firm Unit. Each
Firm Unit consists of three shares of the Company's common stock, par value $.01
per share ("Common Stock"), and two Redeemable Common Stock Purchase Warrants
("Warrant(s)"). The shares of Common Stock and the Warrants included in the Firm
Units will not be detachable or separately transferable, and may be traded only
as Units, until 90 days from the date hereof or such earlier date as you may
determine. Each Warrant entitles its holder to purchase one share of Common
Stock at an initial purchase price of $4.00 per share commencing one year after
the Effective Date (as hereinafter defined) until the fifth anniversary of the
Effective Date. The Underwriters, severally
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and not jointly, agree to purchase from the Company the number of Firm Units set
forth opposite their respective names on Schedule I attached hereto and made a
part hereof at a purchase price (net of commissions) of $_____ per Unit.
1.1.2 Payment and Delivery. Delivery and payment for the Firm
Units shall be made at 10:00 A.M., New York time, on or before the third
business day following the date the Firm Units commence trading or at such
earlier time as the Representative shall determine, or at such other time as
shall be agreed upon by the Representative and the Company, at the offices of
the Representative or at such other place as shall be agreed upon by the
Representative and the Company. The hour and date of delivery and payment for
the Firm Units are called the "Closing Date." Payment for the Firm Units shall
be made on the Closing Date by wire transfer of immediately available funds to
the account of the Company upon delivery to the Representative of a certificate
of the Company's transfer agent stating that the Firm Units have been registered
in book entry form in such name or names and in such denominations as are
requested by the Representative. The Company shall not be obligated to sell or
deliver the Firm Units except upon tender of payment by the Underwriters for all
the Firm Units.
1.2 Over-Allotment Option.
1.2.1 Option Units. For the purposes of covering any
over-allotments in connection with the distribution and sale of the Firm Units,
on the basis of the representations and warranties herein contained, but subject
to the terms conditions herein set forth, the Company hereby grants to the
Underwriters, severally and not jointly, an option ("Over-allotment Option") to
purchase up to an additional _______ Units from the Company ("Option Units").
Each Option Unit is identical to a Firm Unit. The Firm Units and the Option
Units are, together with the Common Stock and Warrants underlying such Units and
the shares of Common Stock issuable upon exercise of the Warrants, hereinafter
referred to collectively as the "Public Securities." The purchase price to be
paid for the Option Units will be the same price per Option Unit as the price
per Firm Unit set forth in Section 1.1.1 hereof.
1.2.2 Exercise of Option. The Over-allotment Option granted
pursuant to Section 1.2.1 hereof may be exercised by the Representative on
behalf of the Underwriters as to all or any part of the Option Units at any
time, from time to time, within forty-five days after the effective date
("Effective Date") of the Registration Statement (as hereinafter defined). The
Over-allotment Option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of the
Firm Units. The Underwriters will not be under any obligation to purchase any
Option Units prior to the exercise of the Over- allotment Option. The
Over-allotment Option granted hereby may be exercised by the giving of oral
notice to the Company from the Representative, which must be confirmed by a
letter or telecopy setting forth the number of Option Units to be purchased, the
date and time for delivery of and payment for the Option Units and stating that
the Option Units referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Units.
If such notice is given at least two full business days prior to the Closing
Date, the date set forth therein for such delivery and payment will be the
Closing Date. If such notice is given thereafter, the date
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set forth therein for such delivery and payment will not be earlier than three
full business days after the date of the notice, unless we mutually agree to an
earlier date. If such delivery and payment for the Option Units does not occur
on the Closing Date, the date and time of the closing for such Option Units will
be as set forth in the notice (hereinafter the "Option Closing Date"). Upon
exercise of the Over-allotment Option, subject to the terms and conditions set
forth herein, the Company will become obligated to convey to the Underwriters
and the Underwriters will become obligated to purchase the number of Option
Units specified in such notice.
1.2.3 Payment and Delivery. Payment for the Option Units shall be
made by wire transfer on the Closing Date or the Option Closing Date, as the
case may be, of immediately available funds to the account of the Company upon
delivery to the Representative of a certificate of the Company's transfer agent
stating that the Option Units have been registered in book entry form in such
name or names and in such denominations as are requested by the Representative.
1.3 Representative's Purchase Option.
1.3.1 Purchase Option. The Company hereby agrees to issue and
sell to the Representative (and/or its designees) on the Closing Date, for an
aggregate purchase price of $100, an option ("Representative's Purchase Option")
exercisable, at any time, in whole or in part, for a period of four years
commencing one year from the Effective Date, for the purchase of an aggregate of
_______ Units ("Representative's Units") at an initial exercise price of 165% of
the initial offering price of a Unit (i.e., $____ per Unit). The
Representative's Units are identical to the Firm Units. The Representative's
Purchase Option, the Representative's Units, the shares of Common Stock and
Warrants ("Representative's Warrants") issuable upon exercise of the
Representative's Purchase Option and the shares of Common Stock issuable upon
exercise of the Representative's Warrants are hereinafter referred to
collectively as the "Representative's Securities." The Public Securities and the
Representative's Securities are hereinafter referred to collectively as the
"Securities."
1.3.2 Payment and Delivery. Delivery and payment for the
Representative's Purchase Option shall be made on the Closing Date. The Company
shall deliver to the Representative, upon payment therefor, certificates
evidencing the Representative's Purchase Option in the name or names and in
such authorized denominations as the Representative may request. The
Representative's Purchase Option shall be exercisable for a period of four
years commencing one year from the Effective Date.
2. Representations and Warranties of the Company. The Company represents and
warrants to the Underwriters as follows:
2.1 Filing of Registration Statement. The Company has filed with the
Securities and Exchange Commission ("Commission") a registration statement and
an amendment or amendments thereto, on Form SB-2 (File No. 333-72429),
including any related preliminary prospectus ("Preliminary Prospectus"),
covering the registration of the Securities under the Securities Act of 1933,
as amended ("Act"), which registration statement and amendment or
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amendments have been prepared by the Company in conformity with the
requirements of the Act, and the rules and regulations ("Regulations") of the
Commission under the Act. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as of
such time pursuant to paragraph (b) of Rule 430A of the Regulations), is herein
called the "Registration Statement," and the form of the final prospectus dated
the Effective Date (or, if applicable, the form of final prospectus filed with
the Commission pursuant to Rule 424 of the Regulations), is herein called the
"Prospectus." The Registration Statement has been declared effective by the
Commission under the Act.
2.2 No Stop Orders, Etc. No stop order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus has been issued under the Act and no proceedings for that
purpose have been instituted or are pending or, to the best knowledge of the
Company, are contemplated. No state regulatory authority has issued, to the best
knowledge of the Company, any order preventing or suspending the offering or
sale of the Securities in such jurisdiction, or threatened to institute any
proceedings with respect to such order.
2.3 Disclosures in Registration Statement.
2.3.1 Securities Act Representation. At the time the Registration
Statement became effective and at all times subsequent thereto up to and
including the Closing Date and the Option Closing Date, if any, the Registration
Statement and the Prospectus and any amendment or supplement thereto contained
and will contain all material statements that are required to be stated therein
in accordance with the Act and the Regulations, and conformed and will conform
in all material respects to the requirements of the Act and the Regulations;
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, during such time period and on such dates, contained or will
contain any untrue statement of a material fact or omitted or will 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. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement for the
registration of the Securities or any amendment thereto or pursuant to Rule
424(a) of the 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 did not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The representation and warranty made in this Section 2.3.1 does not
apply to statements made or statements omitted in reliance upon and in
conformity with written information furnished to the Company with respect to the
Underwriters by the Representative expressly for use in the Registration
Statement or Prospectus or any amendment thereof or supplement thereto.
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2.3.2 Disclosure of Contracts. The description in the
Registration Statement and the Prospectus of contracts and other documents is
accurate in all material respects and presents fairly the information required
to be disclosed and there are no contracts or other documents required to be
described in the Registration Statement or the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement that have not been so
described or filed. Each contract or other instrument (however characterized or
described) to which the Company is a party or by which its property or business
is or may be bound or affected and (i) that is referred to in the Prospectus,
or (ii) is otherwise material to the Company's business, has been duly and
validly executed, is in full force and effect in all material respects and is
enforceable against the Company and, to the Company's knowledge, the other
parties thereto, in accordance with its terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (ii) as enforceability of
any indemnification provision may be limited under the federal and state
securities laws, and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought, and none of such contracts or instruments has been
assigned by the Company, and, except as described in the Prospectus, neither
the Company nor, to the best of the Company's knowledge, any other party is in
default thereunder and, to the best of the Company's knowledge, no event has
occurred which, with the lapse of time or the giving of notice, or both, would
constitute a default thereunder. None of the provisions of such contracts or
instruments violates or will result in a violation of any existing applicable
law, rule, regulation, judgment, order or decree of any governmental agency or
court having jurisdiction over the Company or any of its respective assets or
businesses, including, without limitation, those relating to environmental laws
and regulations, except where such violation, singly or in the aggregate, would
not have a material adverse effect on the business, operations, assets,
financial condition or prospects of the Company (a "Material Adverse Effect").
2.4 Changes After Dates in Registration Statement.
2.4.1 No Material Adverse Changes. Since the respective dates as
of which information is given in the Registration Statement and the Prospectus,
except as otherwise specifically stated therein, (i) there has been no material
adverse change in the business, operations, assets, financial condition or
prospects of the Company, including, but not limited to, a material loss or
interference with its business from fire, storm, explosion, flood or other
casualty, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, whether or not arising in the
ordinary course of business, (ii) there have been no transactions entered into
by the Company, other than those in the ordinary course of business, that are
material with respect to the condition, financial or otherwise, or to the
results of operations, business or business prospects of the Company; and (iii)
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of capital stock or repurchase or redemption by the
Company of any class of capital stock.
2.4.2 Recent Securities Transactions, Etc. Subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, and except as
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may otherwise be indicated or contemplated herein or therein, the Company has
not (i) issued any securities or incurred any liability or obligation, direct
or contingent, for borrowed money; or (ii) declared or paid any dividend or
made any other distribution on or in respect to its capital stock.
2.5 Independent Accountants. PricewaterhouseCoopers LLP, whose report is
filed with the Commission as part of the Registration Statement, are independent
accountants as required by the Act and the Regulations.
2.6 Financial Statements. The financial statements, including the notes
thereto and supporting schedules included in the Registration Statement and
Prospectus, fairly present in all material respects the financial position and
the results of operations of the Company at the dates and for the periods to
which they apply; and such financial statements have been prepared in conformity
with generally accepted accounting principles, consistently applied throughout
the periods involved except as may be otherwise stated therein; and the
supporting schedules included in the Registration Statement present fairly in
all material respects the information required to be stated therein. The pro
forma financial information set forth in the Registration Statement and
Prospectus reflects all significant assumptions and adjustments relating to the
business and operations of the Company. The historical financial data set forth
in the Prospectus under the captions "Prospectus Summary--Summary Financial
Data", "Selected Financial Data" and "Capitalization" fairly present in all
material respect the information set forth therein and have been compiled on a
basis consistent with that of the audited financial statements contained in the
Registration Statement.
2.7 Authorized Capital; Options; Etc. The Company had at the date or
dates indicated in the Prospectus duly authorized, issued and outstanding actual
capitalization as set forth in the Registration Statement and the Prospectus.
Based on the assumptions stated in the Registration Statement and the
Prospectus, the Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in the Registration
Statement and the Prospectus, on the Effective Date and on the Closing Date
there will be no options, warrants, or other rights to purchase or otherwise
acquire, or preemptive rights with respect to the issuance or sale of, any
shares of Common Stock of the Company, including any obligations to issue any
shares pursuant to anti-dilution provisions, or any security convertible into
shares of Common Stock of the Company, or any contracts or commitments to issue
or sell shares of Common Stock or any such options, warrants, rights or
convertible securities.
2.8 Valid Issuance of Securities; Etc.
2.8.1 Outstanding Securities. All issued and outstanding
securities of the Company have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by reason of
being such holders; and none of such securities were issued in violation of the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company. The outstanding options and warrants
to purchase shares of Common Stock constitute the valid and binding obligations
of the Company, enforceable in accordance with
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their terms. The authorized Common Stock and outstanding options and warrants
to purchase shares of Common Stock conform in all material respects to all
statements relating thereto contained in the Registration Statement and the
Prospectus. The offers and sales of the outstanding Common Stock, options and
warrants to purchase shares of Common Stock were at all relevant times either
registered under the Act and registered or qualified under the applicable state
securities or Blue Sky Laws or exempt from such registration or qualification
requirements.
2.8.2 Securities Sold Pursuant to this Agreement. The Securities
have been duly authorized and, when issued and paid for in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable;
the holders thereof are not and will not be subject to personal liability by
reason of being such holders; the Securities are not and will not be subject to
the preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required to
be taken for the authorization, issuance and sale of the Securities has been
duly and validly taken. When issued and paid for in accordance with the terms
of this Agreement, the Representative's Purchase Option, the Representative's
Warrants and the Warrants will constitute valid and binding obligations of the
Company to issue and sell, upon exercise thereof and payment of the respective
exercise prices therefor, the number and type of securities of the Company
called for thereby and the Representative's Purchase Option, the
Representative's Warrants and the Warrants will be enforceable against the
Company in accordance with their respective terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, (ii) as enforceability of
any indemnification or contribution provision may be limited under the federal
and state securities laws, and (iii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
2.9 Registration and Anti-Dilution Rights of Third Parties. Except as
described in the Prospectus, no holders of any securities of the Company or of
any options or warrants or other securities exercisable for or convertible or
exchangeable into securities of the Company (i) have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company; or (ii) have rights to have the exercise or conversion prices of their
securities lowered and/or the number of securities that they may purchase
increased as a result of the issuance by the Company of securities for a price
less than such exercise or conversion price.
2.10 Validity and Binding Effect of Agreements. This Agreement, the
Representative's Purchase Option and the Warrant Agreement (as hereinafter
defined) have been duly and validly authorized by the Company and constitute, or
when executed and delivered, will constitute, the valid and binding agreements
of the Company, enforceable against the Company in accordance with their
respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable
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relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought.
2.11 No Conflicts, Etc. The execution, delivery, and performance by the
Company of this Agreement, the Representative's Purchase Option and the Warrant
Agreement, the consummation by the Company of the transactions herein and
therein contemplated and the compliance by the Company with the terms hereof and
thereof do not and will not, with or without the giving of notice or the lapse
of time or both, (i) result in a breach of, or conflict with any of the terms
and provisions of, or constitute a default under, or result in the creation,
modification, termination or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of, any indenture,
mortgage, deed of trust, note, loan or credit agreement or any other agreement
or instrument evidencing an obligation for borrowed money, or any other
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the property or assets of the Company is
subject, except where such breach, conflict, default, creation, modification,
termination or imposition, singly or in the aggregate, would not have a Material
Adverse Effect; (ii) result in any violation of the provisions of the
certificate of incorporation or the bylaws of the Company; (iii) violate any
existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company or any of its properties or business ("Laws"), except where such
violation singly or in the aggregate, would not have a Material Adverse Effect;
(iv) have any effect on any permit, license, certificate, registration,
approval, consent or franchise (collectively, "Permits") necessary for the
Company to own or lease and operate any of its properties or to conduct its
business, except for such effects as would not, singly or in the aggregate, have
a Material Adverse Effect.
2.12 No Defaults; Violations. Except as described in the Prospectus, no
default exists in the due performance and observance of any term, covenant or
condition of any license, contract, indenture, mortgage, deed of trust, note,
loan or credit agreement, or any other agreement or instrument evidencing an
obligation for borrowed money, or any other agreement or instrument to which the
Company is a party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject, including the Agency Agreement
dated as of January 25, 1999 by and between the Company and SERP, except where
such default, singly or in the aggregate, would not have a Material Adverse
Effect. The Company is not in violation of any term or provision of (i) its
certificate of incorporation or bylaws or (ii) any franchise, license, permit,
or applicable Law, except, in the case of (ii), where such violation, singly or
in the aggregate, would not have a Material Adverse Effect.
2.13 Corporate Power; Licenses; Consents.
2.13.1 Conduct of Business. The Company has all requisite
corporate power and authority, and has all necessary Permits of and from all
governmental or regulatory officials and bodies to own or lease its properties
and conduct its business as described in the Prospectus, except where the lack
of any Permit, singly or in the aggregate, would not have a Material Adverse
Effect. The Company is, and has been doing business, in compliance with all such
Permits and
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all applicable Laws, except where a lack of compliance, singly or in the
aggregate, would not have a Material Adverse Effect. The description in the
Registration Statement of federal, state and local regulation and their effects
on the Company's business as currently conducted and as contemplated to be
conducted is accurate in all material respects and does not omit to state a
material fact required to be stated therein or necessary, in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
2.13.2 Transactions Contemplated Herein. The Company has all
corporate power and authority to enter into this Agreement and to carry out the
provisions and conditions hereof, and all consents, authorizations, approvals
and orders required in connection therewith have been obtained. No consent,
approvals, authorizations or orders of, and no filing with, any court,
government agency or other body is required for the valid authorization,
issuance, sale and delivery of the Securities and the consummation of the
transactions and agreements contemplated by this Agreement, the Representative's
Purchase Option and the Warrant Agreement, and as contemplated by the
Prospectus, except with respect to applicable federal and state securities laws.
2.14 Title to Property; Insurance. The Company has good and defensible
title to, or valid and enforceable leasehold estates in, all items of real and
personal property (tangible and intangible) owned or leased by it, free and
clear of all liens, encumbrances, claims, security interests, defects and
restrictions of any material nature whatsoever, other than those referred to in
the Prospectus (including the financial statements and notes thereto), purchase
money security interests, liens for taxes not yet due and payable and such as
would not, singly or in the aggregate, have a Material Adverse Effect. The
Company has insurance covering its properties against loss or damage by fire,
theft, damage, destruction, acts of vandalism or other casualty and maintains
insurance in commercially reasonable amounts.
2.15 Litigation; Governmental Proceedings. Except as described in the
Prospectus, there is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding pending or, to the
Company's knowledge, threatened against, or involving the properties or business
of, the Company that might, if determined adversely, have a Material Adverse
Effect, or that questions the validity of the capital stock of the Company or
this Agreement or of any action taken or to be taken by the Company pursuant to,
or in connection with, this Agreement. There are no outstanding orders,
judgments or decrees of any court, governmental agency or other tribunal,
domestic or foreign, naming the Company and enjoining the Company from taking,
or requiring the Company to take, any action, or to which the Company, its
properties or business is bound or subject, except as set forth in the
Prospectus or such as would not singly or in the aggregate, have a Material
Adverse Effect.
2.16 Good Standing. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of the state of
its incorporation. The Company is duly qualified and licensed and in good
standing as a foreign corporation in each jurisdiction in which ownership or
leasing of any properties or the character of its operations requires such
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qualification or licensing, except where the failure to qualify would not have
a Material Adverse Effect.
2.17 Taxes. The Company has filed all returns (as hereinafter defined)
required to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof, except where the
failure to file would not, singly or in the aggregate, have a Material Adverse
Effect. The Company has paid all taxes (as hereinafter defined) shown as due on
such returns that were filed and has paid all taxes imposed on or assessed
against the Company, except where the failure to pay would not, singly or in the
aggregate, have a Material Adverse Effect. The provisions for taxes payable, if
any, shown on the financial statements filed with or as part of the Registration
Statement are sufficient for all accrued and unpaid taxes, whether or not
disputed, and for all periods to and including the dates of such financial
statements. No material issues have been raised (and are currently pending) by
any taxing authority in connection with any of the returns or taxes asserted as
due from the Company, and no waivers of statutes of limitation with respect to
the returns or collection of taxes have been given by or requested from the
Company. The term "taxes" mean all federal, state, local, foreign, and other net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments, or charges of any
kind whatever, together with any interest and any penalties, additions to tax,
or additional amounts with respect thereto. The term "returns" means all
returns, declarations, reports, statements, and other documents required to be
filed in respect to taxes.
2.18 Transactions Affecting Disclosure to NASD.
2.18.1 Finder's Fees. Except as set forth on SCHEDULE 2.18.1,
there are no claims, payments, issuances, arrangements or understandings for
services in the nature of a finder's, consulting or origination fee with respect
to the introduction of the Company to the Representative or any of the other
Underwriters or the sale of the Securities hereunder and, except for the
arrangements, agreements, understandings, payments or issuances between the
Company and the Underwriters that are described in the "Underwriting" section of
the Prospectus, there are no other arrangements, agreements, understandings,
payments or issuances pursuant to which the Company has made or will make a
payment (i) to any member of the National Association of Securities Dealers,
Inc. ("NASD"), or (ii) to any person or entity that has any direct or indirect
affiliation or association with any NASD member.
2.18.2 Payments Within Twelve Months. Except as set forth on
SCHEDULE 2.18.2, and other than payments to the Representative and Ladenburg
Xxxxxxxx & Co. Inc., the Company has not made or become obligated to make any
direct or indirect payments (in cash, securities or otherwise) to (i) any
person, as a finder's fee, investing fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who
provided capital to the Company, or (ii) to any NASD member, or (iii) to any
person or entity that has any direct or indirect affiliation or association with
any NASD member within the 12-month period prior to the
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date on which the Registration Statement was filed with the Commission ("Filing
Date") or thereafter.
2.18.3 Use of Proceeds. Except as set forth on SCHEDULE 2.18.3, or
as specifically authorized herein, none of the net proceeds of the offering
will be paid by the Company to any NASD member or any affiliate or associate of
any NASD member.
2.18.4 Insiders' NASD Affiliation. Except as set forth on
SCHEDULE 2.18.4, no officer or director of the Company or owner of any of the
Company's unregistered securities has any direct or indirect affiliation or
association with any NASD member. The Company will advise the Underwriters and
the NASD if any officer, director or stockholder of the Company is or becomes
an affiliate or associated person of an NASD member participating in the
offering.
2.19 Foreign Corrupt Practices Act. Neither the Company nor any of
its officers, directors, employees, agents or any other person acting on their
behalf has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the
ordinary course of business) to any customer, supplier, employee or agent of a
customer or supplier, or official or employee of any governmental agency or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or other person who was, is, or
may be in a position to help or hinder the business of the Company (or assist
it in connection with any actual or proposed transaction) that (i) might
subject the Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not given in the past, might
have had a Material Adverse Effect on the Company as reflected in any of the
financial statements contained in the Prospectus or (iii) if not continued in
the future, might have a Material Adverse Effect on the Company. The Company's
internal accounting controls and procedures are sufficient to cause the Company
to comply with the Foreign Corrupt Practices Act of 1977, as amended.
2.20 Nasdaq SmallCap Market Eligibility. As of the Effective Date, the
Securities have been approved for quotation on the Nasdaq SmallCap Market.
2.21 Intangibles. The Company owns or possesses the requisite licenses
or other rights to use all trademarks, service marks, service names, trade
names, patents and patent applications, copyrights, intellectual property rights
and other rights (collectively, "Intangibles") used by the Company in its
business or relating to products or services sold or currently proposed to be
sold by the Company. The Company's Intangibles are listed on SCHEDULE 2.21.
Intangibles that have been registered in the United States Patent and Trademark
Office have been fully maintained and are in full force and effect. There is no
claim or action by any person pertaining to, or proceeding pending or, to the
Company's knowledge, threatened, and the Company has not received any notice of
conflict with the asserted rights of others that challenges the exclusive
rights of the Company with respect to, any Intangibles used in the conduct of
the Company's business. To the Company's knowledge, the Intangibles and the
Company's current products, services and processes do not infringe on any
intangibles held by any third party, and no others have infringed upon the
Intangibles of the Company. The Company has in place all confidentiality
agreements
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with its employees, consultants and third parties as are reasonably necessary
to protect the Company's Intangibles.
2.22 Relations With Employees.
2.22.1 Employee Matters. The Company has generally enjoyed a
satisfactory employer-employee relationship with its employees and is in
compliance with all federal, state and local laws and regulations respecting the
employment of its employees and employment practices, terms and conditions of
employment and wages and hours relating thereto, except where non-compliance,
singly or in the aggregate, would not have a Material Adverse Effect. There are
no pending investigations involving the Company by the U.S. Department of Labor
or any other governmental agency responsible for the enforcement of such
federal, state or local laws and regulations. There is no unfair labor practice
charge or complaint against the Company pending before the National Labor
Relations Board or any strike, picketing, boycott, dispute, slowdown or stoppage
pending or threatened against or involving the Company or any predecessor
entity, and none has ever occurred. No question concerning representation exists
respecting the employees of the Company and no collective bargaining agreement
or modification thereof is currently being negotiated by the Company. No
grievance or arbitration proceeding is pending under any expired or existing
collective bargaining agreements of the Company, if any.
2.22.2 Employee Benefit Plans. Other than as set forth in the
Registration Statement, the Company neither maintains, sponsors nor contributes
to, nor is it required to contribute to, any program or arrangement that is an
"employee pension benefit plan," an "employee welfare benefit plan," or a
"multi-employer plan" as such terms are defined in Sections 3(2), 3(1) and
3(37), respectively, of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") ("ERISA Plans"). The Company does not maintain or contribute
to, and has at no time maintained or contributed to, a defined benefit plan, as
defined in Section 3(35) of ERISA. If the Company does maintain or contribute to
a defined benefit plan, any termination of the plan on the date hereof would not
give rise to liability under Title IV of ERISA. No ERISA Plan (or any trust
created thereunder) has engaged in a "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended ("Code"), that could subject the Company to any tax penalty for
prohibited transactions and which has not adequately been corrected. Each ERISA
Plan is in compliance with all material reporting, disclosure and other
requirements of the Code and ERISA as they relate to any such ERISA Plan.
Determination letters have been received from the Internal Revenue Service with
respect to each ERISA Plan that is intended to comply with Code Section 401(a),
stating that such ERISA Plan and the attendant trust are qualified thereunder.
The Company has never completely or partially withdrawn from a "multi-employer
plan."
2.23 Officers' Certificate. Any certificate signed by any duly
authorized officer of the Company and delivered to you or to your counsel on the
Closing Date and the Option Closing Date, if any, shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
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2.24 Lock-Up Agreements. The Company has delivered legally binding and
enforceable agreements pursuant to which (i) the holders of the 162,844 shares
of Common Stock sold in the Company's private placement offering in February
1999 agree not to sell any shares of Common Stock owned by them (except by
means of a private transaction in connection with which the transferee agrees
to the same lockup agreement) for a period of 180 days following the Effective
Date, (ii) the directors and officers of the Company (including their family
members and affiliates) and certain other holders of Common Stock, all of which
are listed on SCHEDULE 2.24 attached hereto, agree not to sell any shares of
Common Stock owned by them (except by means of a private transaction in
connection with which the transferee agrees to the same lockup agreement) for a
period of 15 months following the Effective Date, (iii) the holders of the
[823,809] shares of Common Stock issuable upon conversion of the Company's 5%
Convertible Debentures due 2003 agree not to sell any shares of Common Stock
owned by them (except by means of a private transaction in connection with
which the transferee agrees to the same lockup agreement) for a period of 12
months following the Effective Date, and (iv) the holders of the 61,680 shares
of Common Stock issuable upon conversion of the Company's Series B 5%
Convertible Preferred Stock and ___ Shares of Common Stock issuable upon
exercise of warrants issued in connection with the Company's 5% Convertible
Debentures due 2003 agree not to sell any shares of Common Stock owned by them
for a period of 6 months following the Effective Date; in each case except with
the consent of the Representative.
2.25 Waivers of Registration Rights. The Company has delivered legally
binding and enforceable agreements pursuant to which any defaults by the Company
that may have occurred with respect to the Company's failure to register any of
its securities on a registration statement filed with the Commission and/or to
maintain the effectiveness of such registration statement have been waived by
the holders of all relevant registration rights.
2.26 Waivers of Anti-Dilution Provisions. Except as set forth on
SCHEDULE 2.26, the Company has delivered legally binding and enforceable
agreements pursuant to which the holders of a sufficient number of securities
effective to waive the application of any anti-dilution provisions that may be
triggered by the issuance of securities in the offering contemplated by this
Agreement to purchase (i) additional shares of Common Stock or other securities
of the Company, or (ii) any securities of the Company at a reduced price.
2.27 Subsidiaries. The Company does not own an interest in any
corporation, partnership, joint venture, trust or other business entity. The
Company has no subsidiaries.
2.28 Government Contracts. The Company is not a party to any
contract with any agency or instrumentality of the U.S. Government. The
Company has never been denied a security clearance.
2.29 Product Liability Insurance. The Company maintains product
liability insurance of the types and in the amounts that are commercially
reasonable for its business as currently conducted and as proposed to be
conducted.
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2.30 Year 2000. All operating codes, programs, utilities and other
software and all computer hardware used by the Company in its business or
manufactured and sold by the Company in its product are designed to record,
store, process and present calendar dates falling on or after January 1, 2000
in the same manner and with the same functionality as on or before December 31,
1999. After due inquiry, the Company has no reason to believe that it will
incur material expenses arising from or relating to the failure of any of its
products or material systems to record, store, process or present calendar
dates falling on or after January 1, 2000, in the same manner and with the same
functionality as on or before December 31, 1999.
2.31 Company not an Investment Company. The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and after receipt of payment
for the Securities will not be, an "investment company" within the meaning of
the Investment Company Act, and will conduct its business in a manner so that it
will not become subject to the Investment Company Act.
2.32 Related-Party Transactions. There are no business relationships or
related-party transactions involving the Company or any other person required to
be described in the Prospectus that have not been described as required.
2.33 Warrant Agreement. The Company has entered into a warrant agreement
with respect to the Warrants and the Representative's Warrants substantially in
the form filed as an exhibit to the Registration Statement ("Warrant Agreement")
with Continental Stock Transfer & Trust Company, in form and substance
satisfactory to the Representative, providing for, among other things, (i) no
redemption of the Warrants without the consent of the Representative and (ii)
the payment of a warrant solicitation fee as contemplated by Section 3.10.1
hereof.
3. Covenants of the Company. The Company covenants and agrees as follows:
3.1 Amendments to Registration Statement. The Company will deliver to
the Representative, prior to filing, any amendment or supplement to the
Registration Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the Representative
shall reasonably object.
3.2 Federal Securities Laws.
3.2.1 Compliance. During the time when a Prospectus or Selling
Stockholder Prospectus (as defined in the Registration Statement) is required to
be delivered under the Act, the Company will use all reasonable efforts to
comply with all requirements imposed upon it by the Act, the Regulations, the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and the
regulations under the Exchange Act, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in the Public
Securities and the shares of common stock ("Selling Stockholder Shares") being
registered in the Registration Statement on behalf of certain selling
stockholders ("Selling Stockholders") in accordance with the provisions hereof,
the Prospectus and the Selling Stockholder Prospectus and, in the case of
Selling Stockholders who
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acquired such shares in the Company's private placement of Units that took
place in February 1999 ("February 1999 Private Placement"), the Subscription
Agreement between the Company and each of such Selling Stockholders. If at any
time when a Prospectus relating to the Public Securities or the Selling
Stockholder Shares is required to be delivered under the Act any event shall
have occurred as a result of which, in the opinion of counsel for the Company
or counsel for the Representative, the Prospectus or the Selling Stockholder
Prospectus, as then amended or supplemented, includes an untrue statement of a
material fact 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, or if it is necessary at any time
to amend the Prospectus or the Selling Stockholder Prospectus to comply with
the Act, the Company will notify the Representative promptly and prepare and
file with the Commission, subject to Section 3.1 hereof, an appropriate
amendment or supplement in accordance with Section 10 of the Act.
3.2.2 Filing of Final Prospectus. If required, the Company shall
file the Prospectus (in form and substance satisfactory to the Representative)
with the Commission (including the information required by Rule 430A of the
Regulations) pursuant to the requirements of Rule 424 of the Regulations; or
the Company shall file a post-effective amendment to the Registration Statement
(in form and substance satisfactory to the Representative) containing the
information required by such Rule 430A; or, if the Company elects to rely upon
Rule 434 of the Regulations and obtains the Representative's consent thereto,
the Company shall file a term sheet with the Commission in the manner and
within the time period required by Rule 424(b) of the Regulations.
3.2.3 Exchange Act Registration. For a period of five years from
the Effective Date, the Company will use its best efforts to maintain the
registration of the Common Stock under the provisions of the Exchange Act.
3.3 Blue Sky Filings. The Company will endeavor in good faith, in
cooperation with the Representative, at or prior to the time the Registration
Statement becomes effective, to qualify the Securities and the Selling
Stockholder Shares for offering and sale under the securities laws of such
jurisdictions as the Representative may reasonably designate, provided that no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or to
taxation as a foreign corporation doing business in such jurisdiction. In each
jurisdiction where such qualification shall be effected, the Company will,
unless the Representative agrees that such action is not at the time necessary
or advisable, use all reasonable efforts to file and make such statements or
reports at such times as are or may be required by the laws of such
jurisdiction.
3.4 Delivery to Underwriters of Prospectuses. The Company will deliver
to each of the several Underwriters, without charge, from time to time during
the period when the Prospectus is required to be delivered under the Act or the
Exchange Act, such number of copies of each Preliminary Prospectus and the
Prospectus as such Underwriter may reasonably request and, as soon as the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to each of you two original executed Registration Statements, including
exhibits, and all
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post-effective amendments thereto and copies of all exhibits filed therewith or
incorporated therein by reference and all original executed consents of
certified experts.
3.5 Events Requiring Notice to the Representative. The Company will
notify the Representative immediately and confirm the notice in writing (i) of
the effectiveness of the Registration Statement and any amendment thereto, (ii)
of the issuance by the Commission of any stop order or of the initiation, or the
threatening, of any proceeding for that purpose, (iii) of the issuance by any
state securities commission of any proceedings for the suspension of the
qualification of the Securities for offering or sale in any jurisdiction or of
the initiation, or the threatening, of any proceeding for that purpose, (iv) of
the mailing and delivery to the Commission for filing of any amendment or
supplement to the Registration Statement or Prospectus, (v) of the receipt of
any comments or request for any additional information from the Commission, and
(vi) of the happening of any event during the period described in Section 3.4
hereof that, in the judgment of the Company, makes any statement of a material
fact 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 light of the
circumstances under which they were made, not misleading. If the Commission or
any state securities commission shall enter a stop order or suspend such
qualification at any time, the Company will make every reasonable effort to
obtain promptly the lifting of such order.
3.6 Reserved.
3.7 Reserved.
3.8 Reserved.
3.9 Nasdaq Maintenance; De-listing of Units. For a period of five years
from the date hereof, the Company will use its best efforts to maintain the
quotation by The Nasdaq Stock Market of the Units, Common Stock and Warrants.
Upon request by the Representative, the Company agrees to take immediately all
actions necessary to de-list the Units from the Nasdaq Stock Market, provided
that at such time the Common Stock and Warrants are permitted to trade
separately.
3.10 Warrant Solicitation and Registration of Common Stock Underlying
the Warrants.
3.10.1 Warrant Solicitation and Representative Warrant
Solicitation Fees. The Company hereby engages the Representative, on a
non-exclusive basis, as its agent for the solicitation of the exercise of the
Warrants. The Company, at its cost, will (i) assist the Representative with
respect to such solicitation, if requested by the Representative and will (ii)
provide to the Representative, and direct the Company's transfer and warrant
agent to provide to the Representative, lists of the record and, to the extent
known, beneficial owners of the Company's Warrants. Commencing one year from the
Effective Date, the Company will pay to the Representative a commission of five
percent of the Warrant exercise price for each Warrant exercised, payable on the
date of such exercise, on the terms provided for in the Warrant Agreement, if
allowed under the rules and regulations of the NASD and only if the
Representative
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has provided bona fide services to the Company in connection with the exercise
of Warrants and has received written confirmation from the holder that the
Representative has solicited such exercise. In addition to soliciting, either
orally or in writing, the exercise of Warrants, such services may also include
disseminating information, either orally or in writing, to Warrantholders about
the Company or the market for the Company's securities, and the assisting in
the processing of the exercise of Warrants. The Representative may engage
sub-agents who are members of the NASD in its solicitation efforts, provided,
however, nothing herein shall obligate the Company to make any payment to any
such sub-agent. The Company will disclose the arrangement to pay such
solicitation fees to the Representative in any prospectus used by the Company
in connection with the registration of the shares of Common Stock underlying
the Warrants. The Company shall not be obligated to reimburse the
Representative for any of its expenses incurred in connection with such
solicitation.
3.10.2 Registration of Common Stock. The Company agrees that
prior to the date that the Warrants become exercisable, it shall file with the
Commission a post-effective amendment to the Registration Statement, if
possible, or a new registration statement, to register, under the Act, and it
shall take such action as is necessary to qualify for sale, in those states in
which the Warrants were initially offered by the Company, the Common Stock
issuable upon exercise of the Warrants. In either case, the Company shall cause
the same to become effective at or prior to the date that the Warrants become
exercisable, and maintain the effectiveness of such registration statement and
keep current a prospectus thereunder and maintain such qualification until the
expiration of the Warrants in accordance with the provisions of the Warrant
Agreement. The provisions of this Section 3.10.2 may not be modified, amended or
deleted without the prior written consent of the Representative.
3.11 Reserved.
3.12 Reports to the Representative and Others.
3.12.1 Periodic Reports, Etc. For a period of five years from the
Effective Date, the Company will promptly furnish to the Representative, and to
each other Underwriter that may so request, copies of such financial statements
and other periodic and special reports as the Company from time to time files
with any governmental authority or furnishes generally to holders of any class
of its securities (at substantially the same time as such information is filed
with the governmental authority or furnished to security holders), and promptly
furnish to the Representative (i) a copy of each periodic report the Company
shall be required to file with the Commission, (ii) a copy of every press
release issued by the Company, (iii) a copy of each Form 8-K or Schedules 13D,
13G, 14D-1 or 13E-4 received or prepared by the Company, and (iv) such
additional public documents and information with respect to the Company and the
affairs of any future subsidiaries of the Company as the Representative may from
time to time reasonably request.
3.12.2 Transfer Sheets and Weekly Position Listings. For a period
of five years from the Closing Date, the Company will furnish to the
Representative at the Company's sole expense such transfer sheets and position
listings of the Company's securities as the
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Representative may request, including the daily, weekly and monthly
consolidated transfer sheets of the transfer agent of the Company and the
weekly security position listings of the Depository Trust Company.
3.13 Representative's Purchase Option. On the Closing Date, the Company
will execute and deliver the Representative's Purchase Option to the
Representative substantially in the form filed as an exhibit to the Registration
Statement.
3.14 Disqualification of Form SB-2 or S-1 (or other appropriate form).
For a period equal to five years from the date hereof, the Company will use
its reasonable efforts to take such action or actions as may be necessary to
permit the Company to remain eligible to use Form SB-2 or Form S-1 (or other
appropriate form) for the registration of the Representative's Securities under
the Act and will not take any action or actions that may prevent the Company's
use of such forms.
3.15 Payment of Expenses.
3.15.1 General Expenses. The Company hereby agrees to pay on or
promptly after the Closing Date and, to the extent not paid on the Closing
Date, on the Option Closing Date, all expenses incident to the performance of
the obligations of the Company under this Agreement, including but not limited
to (i) the preparation, printing, filing, delivery and mailing (including the
payment of postage with respect to such mailing) of the Registration Statement,
any post-effective amendments thereto, the Prospectus and the Preliminary
Prospectuses and the printing and mailing of this Agreement and related
documents, including the cost of all copies thereof and any amendments thereof
or supplements thereto supplied to the Underwriters in quantities as may be
required by the Underwriters, (ii) the printing, engraving, issuance and
delivery of the Units, the shares of Common Stock and the Warrants included in
the Units and the Representative's Purchase Option, including any transfer or
other taxes payable thereon, (iii) the qualification of the Public Securities
under state or foreign securities or Blue Sky laws, including the filing fees
under such Blue Sky laws, the costs of printing and mailing the "Preliminary
Blue Sky Memorandum" and all amendments and supplements thereto, fees up to an
aggregate of $______ (of which $15,000 has been paid to date) and disbursements
of Representative's counsel, (v) filing fees, costs and expenses (including
fees and disbursements of the Representative's counsel) incurred in registering
the offering with the NASD, (vi) costs of placing "tombstone" advertisements in
the Wall Street Journal, The New York Times and a third publication to be
selected by the Representative, (vii) fees and disbursements of the transfer
agent, (viii) the Company's expenses associated with "due diligence" meetings
arranged by the Underwriters, (ix) the preparation, binding and delivery of
transaction "bibles," in quantity, form and style satisfactory to the
Representative and transaction lucite cubes or similar commemorative items in a
style and quantity as reasonably requested by the Representative, (x) any
listing of the Public Securities on The Nasdaq Stock Market, and (xi) all other
costs and expenses incident to the performance of its obligations hereunder
that are not otherwise specifically provided for in this Section 3.15.1. The
Representative may deduct from the net proceeds of the offering payable to the
Company on the Closing Date, or the Option Closing Date, if any, the expenses
set forth herein to be paid by the Company to the Representative and/or to
third parties.
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3.15.2 Non-Accountable Expenses. The Company further agrees that,
in addition to the expenses payable pursuant to Section 3.15.1, it will pay to
the Representative a non-accountable expense allowance equal to three percent
(3%) of the gross proceeds received by the Company from the sale of the Public
Securities, of which $50,000 has been paid to date, and the Company will pay
the balance on the Closing Date and any additional monies owed attributable to
the Option Securities or otherwise on the Option Closing Date by certified or
bank cashier's check or, at the election of the Representative, by deduction
from the proceeds of the offering contemplated herein. If, for any reason
whatsoever, the offering contemplated by this Agreement is not consummated,
then the following provisions shall apply: The Company's liability for payment
to the Representative of the non-accountable expense allowance shall be equal
to the sum of the Representative's actual out-of-pocket expenses (including,
but not limited to, counsel fees, "road- show" and due diligence expenses). The
Representative shall retain such part of the non-accountable expense allowance
previously paid as shall equal its actual out-of-pocket expenses. If the amount
previously paid is insufficient to cover such actual out-of-pocket expenses,
the Company shall remain liable for and promptly pay any other actual
out-of-pocket expenses. If the amount previously paid exceeds the amount of the
actual out-of-pocket expenses, the Representative shall promptly remit to the
Company any such excess.
3.16 Application of Net Proceeds. The Company will apply the net
proceeds from the offering received by it in a manner consistent with the
application described under the caption "Use of Proceeds" in the Prospectus. The
Company hereby agrees that, except as so described, the Company will not apply
any net proceeds from the offering to pay (i) any debt for borrowed money; (ii)
any obligations (including indebtedness, both principal and any interest
thereon, for borrowed funds and unpaid salaries, fees or other compensation)
owed to any officers, directors, Significant Stockholders (as hereinafter
defined) of the Company or any of their respective family members of affiliates
(excluding salaries or fees payable on a current basis to officers and directors
in the ordinary course of the Company's business). The term "Significant
Stockholders" means those persons and entities that beneficially own at least
two percent of the Company's Common Stock as of the Effective Date.
3.17 Delivery of Earnings Statements to Security Holders. The Company
will make generally available to its security holders as soon as practicable,
but not later than the first day of the fifteenth full calendar month following
the Effective Date, an earnings statement (which need not be certified by
independent public or independent certified public accountants unless required
by the Act or the Regulations, but which shall satisfy the provisions of Rule
158(a) under Section 11(a) of the Act) covering a period of at least twelve
consecutive months beginning after the Effective Date.
3.18 Reserved.
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3.19 Stabilization. Neither the Company, nor, to its knowledge, any of
its employees, directors or stockholders has taken or will take, directly or
indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Public Securities.
3.20 Internal Controls. The Company maintains and will continue to
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with
management's general or specific authorization, (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.21 Sale of Securities. The Company agrees to take all reasonable
actions to prevent a private or public sale or private or public offering of any
of its securities (except by means of private transactions in connection with
which the transferee agrees to be bound by the same lockup agreement that the
transferor is bound by) owned nominally or beneficially by any of the security
holders referenced in Section 2.24 for the respective periods set forth in
Section 2.24 without obtaining the prior written consent of the Representative.
3.22 Options/Warrants. The Company agrees that (i) during the 12 months
following the Effective Date, the Company will not grant options to directors,
officers, employees or consultants of the Company for more than an aggregate
number of shares equal to 15% of the outstanding shares of Common Stock on the
Effective Date plus the number of shares included in the Firm Units and any
Option Units purchased pursuant to this Agreement and the shares underlying the
Warrants included in such Firm Units and Option Units (which number shall be
adjusted up or down for any stock splits or reverse stock splits effected during
such period), (ii) if the Company adopts a new stock option plan on or after the
Effective Date, all options issued to directors, officers, employees and
consultants during the 12 months following the Effective Date will be granted
under such new plan, and (iii) for a period of 12 months after the Effective
Date, the Company will not grant any option, or issue any warrants, pursuant to
the new stock option plan or otherwise, having an exercise price less than the
greater of $______ per share or the fair market value of the Common Stock on the
date of grant or the date of issue, as the case may be.
3.23 No Waivers, Etc. The Company shall not waive any provision of,
modify or amend in any respect, or terminate, without the prior written consent
of the Representative, any agreement between the Company and any securityholder
of the Company or any other person (i) relating to fees or compensation payable
to any member of the NASD or associated persons of a member of the NASD, (ii)
restricting the ability of security holders to sell securities of the Company,
(iii) waiving any registration and/or antidilution rights of securityholders
with respect to securities of the Company, (iv) waiving any defaults in the
Company's obligations under any registration rights, or (v) relating to the
deferred payment of accrued and unpaid salary.
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3.24 Amendment of Bylaws. On or before the Closing Date, the Company
shall have amended its Amended and Restated Bylaws to provide that special
meetings of stockholders shall be called at the request of the holders of at
least 10% of the outstanding shares of Common Stock entitled to vote at such
meetings.
3.25 Amendment of Outstanding Options and Warrants. On or before the
Closing Date, the Company shall have amended all outstanding options and
warrants that are not "incentive stock options" within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended, and that are exercisable
more than five years after the Effective Date, so that such options and warrants
may not be exercised more than five years after the Effective Date.
3.26 Preferred Stock. From and after the Closing Date, any issuance of
preferred stock of the Company will be approved by a majority of the Company's
independent directors who do not have an interest in any such issuance and have
access, at the Company's expense, to the Company's counsel or independent
counsel.
3.27 Nasdaq Filing. On the Effective Date, simultaneously with the
closing of the offering of Securities contemplated by this Agreement, the
Company shall file with The Nasdaq Stock Market, Inc. and the Commission a
report on Form 8-K evidencing the satisfaction of the conditions for continued
listing on the Nasdaq Small Cap market described in that certain letter from The
Nasdaq Stock Market, Inc. dated April 28, 1999, including (i) evidencing that
the Company has at least $9,000,000 in net tangible assets, and (ii)
demonstrating the Company's compliance with all of the requirements for
continued listing on the Nasdaq SmallCap Market, including the submission of all
outstanding forms and fees. Such filing shall include a May 31, 1999, balance
sheet with pro forma adjustments for any significant events or transactions
occurring on or before the date of such report is filed.
4. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Securities, as provided herein, shall
be subject to the continuing accuracy of the representations and warranties of
the Company as of the date hereof and as of each of the Closing Date and the
Option Closing Date, if any, to the accuracy of the statements of officers of
the Company made pursuant to the provisions hereof and to the performance by
the Company of its obligations hereunder and to the following conditions:
4.1 Regulatory Matters.
4.1.1 Effectiveness of Registration Statement. The Registration
Statement has been declared effective on the date of this Agreement and, at each
of the Closing Date and the Option Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for such purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, contemplated by the Commission and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Xxxxxxxx Xxxxxx & Xxxxxx,
counsel to the Underwriters.
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4.1.2 NASD Clearance. By the Effective Date, the Representative
shall have received clearance from the NASD as to the amount of compensation
allowable or payable to the Underwriters as described in the Registration
Statement.
4.1.3 No Blue Sky Stop Orders. No order suspending the sale of
the Securities in any jurisdiction designated by the Representative pursuant to
Section 3.3 hereof shall have been issued on either on the Closing Date or the
Option Closing Date, and no proceedings for that purpose shall have been
instituted or shall be contemplated.
4.1.4 Unaudited Financials. The Company shall have furnished to
the Representative as early as practicable prior to the date hereof a copy of
the latest available unaudited interim financial statements ("Unaudited
Financials") of the Company (that in no event shall be as of a date more than 30
days prior to the Effective Date) which have been read by the Company's
independent accountants, as stated in their letter to be furnished pursuant to
Section 4.3 hereof.
4.2 Opinions of Counsel.
4.2.1 Opinion of Company Counsel. On each of the Closing Date and
the Option Closing Date, if any, the Representative shall have received the
favorable opinion of Xxxx Xxxxxxx, counsel to the Company, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Representative and in form and substance satisfactory to Xxxxxxxx Mollen &
Xxxxxx, counsel to the Representative, to the effect that:
(i) The Company is a corporation validly existing and
in good standing under the laws of the State of Delaware. The Company is duly
qualified and in good standing in the Commonwealth of Virginia and the State of
New Hampshire.
(ii) The Company has all corporate power and authority to
enter into this Agreement, the Representative's Purchase Option and the Warrant
Agreement and to carry out its obligations hereunder and thereunder. No
consents, approvals, authorizations or orders of, and no filings with, any
court or governmental agency or body, are required for the Company to execute,
deliver and perform its obligations under this Agreement, or to authorize,
issue, sell and deliver the Securities, and to consummate the transactions and
agreements contemplated by this Agreement, the Representative's Purchase Option
and the Warrant Agreement, except for those authorizations, approvals,
consents, orders and filings as have been made or obtained and are in full
force and effect and except for such authorizations, approvals, consents,
orders and filings under the Act and the Blue Sky laws of any state or
jurisdiction in the United States in which the Units may be offered, as to
which we express no opinion.
(iii) All issued and outstanding shares of Common Stock of
the Company have been duly authorized and validly issued and are fully paid and
non-assessable. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column titled "Actual" under
the caption "Capitalization" as of the date stated therein, except
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that the Company also has authorized 500,000 shares of Series A Convertible
Preferred Stock, none of which is issued and outstanding as of the date of this
opinion. To such counsel's knowledge, all of the issued and outstanding shares
of Common Stock were issued in compliance with the registration requirements of
the Securities Act and the rules and regulations promulgated thereunder and the
applicable state securities or Blue Sky laws or pursuant to an exemption from
such registration requirements. None of the holders of the Common Stock are
subject to personal liability under the certificate of incorporation or bylaws
of the Company or the General Corporation Law of the State of Delaware solely
by reason of being such a holder. None of the issued and outstanding shares of
Common Stock were issued in violation of statutory preemptive rights of any
holders of such securities of the Company or, to such counsel's knowledge, were
issued in violation of similar contractual rights granted by the Company. All
of the issued and outstanding options and warrants to purchase shares of Common
Stock were validly authorized by the Board of Directors and constitute valid
and binding obligations of the Company enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent
conveyance and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity.
(iv) The Securities have been duly authorized for issuance
and sale by the Company by all requisite corporate action by the Company. When
issued and delivered by the Company in accordance with the terms of this
Agreement, against payment of the consideration set forth herein, the
Securities will be fully paid and non-assessable. The holders of the Securities
will not be subject to personal liability under the Certificate of
Incorporation or Bylaws of the Company or the General Corporation Law of the
State of Delaware solely by reason of being such holders. The Securities are
not and will not be subject to the preemptive rights of any holders of any
security of the Company or, to the best of such counsel's knowledge after due
inquiry, similar contractual rights granted by the Company. The forms of
certificate used to evidence the Units, Common Stock and Warrants comply with
the applicable requirements of the Certificate of Incorporation and Bylaws of
the Company and the General Corporation Law of the State of Delaware.
(v) To the best of such counsel's knowledge, after due
inquiry, except as fully disclosed in the Prospectus, no holders of any
securities of the Company or of any options, warrants or other securities of the
Company exercisable for or convertible or exchangeable into securities of the
Company (i) have the right to require the Company to register any such
securities of the Company under the Act or to include any such securities in a
Registration Statement filed by the Company, or (ii) have rights to have the
exercise or conversion prices of their securities lowered and/or the number of
securities that they may purchase increased as a result of the issuance by the
Company of securities for a price less than such exercise or conversion price.
(vi) To the best of such counsel's knowledge, after due
inquiry, the Securities have been approved for quotation on the Nasdaq SmallCap
Market.
(vii) This Agreement, the Representative's Purchase
Option and the Warrant Agreement have each been duly and validly authorized
and, when executed and delivered by the
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Company, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject to, in each case: (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general principles of equity, (ii) the fact
that the indemnification and contribution provisions set forth in this
Agreement, the Representative's Purchase Option and the Warrant Agreement may
be limited under federal and applicable state securities laws and by public
policy, and (iii) the fact that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(viii) The execution, delivery and performance by the
Company of this Agreement, the Representative's Purchase Option and the Warrant
Agreement, the issuance and sale of the Securities, the performance by the
Company of its obligations hereunder and thereunder (other than the performance
by the Company of its obligations under the indemnification and contribution
provisions of this Agreement, the Representative's Purchase Option and the
Warrant Agreement, as to which no opinion need be rendered), do not and will
not, (a) result in any violation of the provisions of the certificate of
incorporation or the bylaws of the Company, (b) to such counsel's knowledge,
will not constitute a breach of, or a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company pursuant to, any material contracts, agreements, instruments,
leases or licenses to which the Company is a party or by which the Company or
any of its properties or assets may be bound, or (c) to such counsel's
knowledge, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company.
(ix) The Registration Statement, each Preliminary
Prospectus and the Prospectus and any post-effective amendments or supplements
thereto (other than the financial statements and supporting schedules included
therein, or the financial statements and supporting schedules included in
exhibits to or excluded from the Registration Statement, as to which no opinion
need be rendered) comply as to form in all material respects with the applicable
requirements of the Act and Regulations. The Securities and all other securities
issued or issuable by the Company conform in all respects to the description
thereof contained in the Registration Statement and the Prospectus. The
statements in the Prospectus under "Description of Securities" and "Shares
Eligible for Future Sale," have been reviewed by such counsel, and insofar as
such statements constitute matters of law, summaries of legal matters, of the
Company's Certificate of Incorporation or of Bylaw provisions, or legal
conclusions, have been reviewed by such counsel and fairly present and
summarize, in all material respects, the matters referred to therein. No statute
or regulation or legal or governmental proceeding required to be described in
the Prospectus is not described as required. To such counsel's knowledge, there
are no contracts or documents to which the Company is a party required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement pursuant to the Act or the Regulations
that are not so described or filed as required.
(x) The Registration Statement was declared effective
under the Act on June __, 1999, and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness
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of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the Act by the
Commission.
(xi) To such counsel's knowledge, the Company is not (i)
in violation of its Certificate of Incorporation or Bylaws or any law
applicable to the Company, or any administrative regulation or administrative
or court decree known to such counsel and applicable to the Company, or (ii) in
default in the performance or observance of any obligation, agreement, covenant
or condition contain in any material contracts, agreements, instruments, leases
and licenses to which the Company is a party or by which the Company or any of
its properties or assets may be bound, except in each such case for such
violations or defaults as would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xii) To the best of such counsel's knowledge, after due
inquiry, except as set forth in the Prospectus, there is no action, suit or
proceeding pending or threatened against the Company that might reasonably be
expected to have a Material Adverse Effect.
(xiii) To the best of such counsel's knowledge, the
Company owns or possesses, free and clear of all liens or encumbrances and
rights thereto or therein by third parties, other than as described in the
Prospectus, the requisite licenses or other rights to use all Intangibles and
other rights necessary to conduct its business (including, without limitation,
any such licenses or rights described in the Prospectus as being licensed to or
owned or possessed by the Company) and there is no claim or action by any person
pertaining to, or proceeding, pending or threatened that challenges the
exclusive rights of the Company with respect to any Intangibles used in the
conduct of its business (including without limitation any such licenses or
rights described in the Prospectus as being owned or possessed by the Company).
To the best of such counsel's knowledge, the Company's current products,
services and processes do not infringe on any intangible held by third persons.
The Company's Intangibles that have been registered in the United States Patent
and Trademark Office have been fully maintained and are in full force and
effect.
(xiv) The statements in the Prospectus under the captions
"Risk Factors-- Uncertain Protection of Intellectual Property" and "Business--
Intellectual Property" have been reviewed by such counsel, and insofar as they
refer to statements of law, descriptions of statutes, licenses, rules or
regulations or legal conclusions pertaining to intellectual property, do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. No
statute or regulation or legal or governmental proceeding pertaining to
intellectual property required to be described in the Registration Statement is
not described as required.
Counsel to the Company will also deliver the following
statement to the Representative with the foregoing opinions: On the basis of
such counsel's participation, as counsel to the Company, with representatives
of the Company in the preparation of the Registration Statement and the
Prospectus and such counsel's participation with representatives of the
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Company and the Underwriters at meetings in which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and the examination by such counsel of such corporate records, statutes,
documents and questions of law as such counsel deemed necessary, but without
independent verification by such counsel of the accuracy, completeness and
fairness of the statements contained in the Registration Statement and the
Prospectus except as specifically set forth in such counsel's opinion, and
without commenting as to the financial statements and the notes thereto and the
schedules and other financial data included or incorporated by reference
therein, nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or the Prospectus, or any
amendment or supplement thereto (except for the financial statements and the
notes thereto and the schedules and other financial data included or
incorporated by reference therein or omitted therefrom, as to which no
statement need be rendered), as of its date and as of the Closing Date,
contained or contains any untrue statement of material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
4.2.2 Reliance. In rendering such opinions, such counsel may rely
(i) 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 deem proper and to the extent specified in such opinions, 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, and (ii) as to matters of fact, to
the extent they deem proper, on certificates or other written statements of
officers of departments of various jurisdiction having custody of documents
respecting the corporate existence or good standing of the Company and
certificates of officers of the Company, provided that copies of any such
statements or certificates shall be delivered to Underwriters' counsel if
requested. The opinions relied upon by counsel to the Company and intellectual
property counsel to the Company, and the opinions of counsel to the Company and
intellectual property counsel to the Company, shall include statements to the
effect that they may be relied upon by counsel to the Underwriters in its
opinion delivered to the Underwriters.
4.3 Cold Comfort Letters.
4.3.1 Cold Comfort Letter of PricewaterhouseCoopers LLP. At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, you shall have received a letter, addressed to the
Underwriters and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to Xxxxxxxx Xxxxxx & Xxxxxx, counsel to the
Underwriters, from PricewaterhouseCoopers LLP dated, respectively, as of the
date of this Agreement and as of the Closing Date and the Option Closing Date,
if any:
(i) Confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable Regulations;
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(ii) Stating that in their opinion the financial statements and
the financial statement schedules of the Company included (or incorporated by
reference) in the Registration Statement and Prospectus comply as to form in
all material respects with the applicable accounting requirements of the Act
and the published Regulations thereunder;
(iii) Stating that, based on the performance of procedures
specified by the American Institute of Certified Public Accountants for a review
of the latest available unaudited interim financial statements of the Company
(as described in Statement on Auditing Standards ("SAS") No. 71-- "Interim
Financial Information"), with an indication of the date of the latest available
unaudited interim financial statements, a reading of the latest available
minutes of the stockholders and board of directors and the various committees of
the board of directors, consultations with officers and other employees of the
Company responsible for financial and accounting matters and other specified
procedures and inquiries, nothing has come to their attention that would lead
them to believe that (a) the unaudited financial statements of the Company
included or incorporated by reference in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Regulations or any material modification should
be made to the unaudited interim financial statements included in the
Registration Statement for them to be in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited financial statements of the Company included or incorporated by
reference in the Registration Statement, (b) at a date not later than five days
prior to the Effective Date, Closing Date or Option Closing Date, as the case
may be, there was any change in the capital stock, increase in long-term debt or
any decreases in net current assets (working capital) or in stockholders' equity
of the Company as compared with amounts shown on the December 31, 1998 condensed
balance sheet included in the Registration Statement, (c) for the period from
January 1, 1999 to a specified date not later than five days prior to the
Effective Date, Closing Date or Option Closing Date, as the case may be, there
were any decreases, as compared with the corresponding period in the preceding
year, in net sales or in the total or per-share amounts of income before
extraordinary items or of net income;
(iv) Setting forth, at a date not later than five days prior to
the Effective Date, the amount of liabilities of the Company (including a
break-down of commercial paper and notes payable to banks);
(v) Stating that they have compared specific dollar amounts,
numbers of shares, percentages of net sales and net income, statements and other
financial information pertaining to the Company set forth in the Prospectus in
each case to the extent that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records and work sheets
of the Company with the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted auditing
standards) set forth in the letter and found them to be in agreement;
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(vi) Statements as to such other matters incident to the
transaction contemplated hereby as you may reasonably request.
4.4 Officers' Certificates.
4.4.1 Officers' Certificate. At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Chairman of the Board or the President
and the Secretary of the Company, dated the Closing Date or the Option Closing
Date, as the case may be, respectively, to the effect that the Company has
performed all covenants and complied with all conditions required by this
Agreement to be performed or complied with by the Company prior to and as of
the Closing Date, or the Option Closing Date, as the case may be, and that the
conditions set forth in Section 4.5 hereof have been satisfied as of such date
and that, as of the Closing Date and the Option Closing Date, as the case may
be, the representations and warranties of the Company set forth in Section 2
hereof are true and correct. In addition, the Representative will have received
such other and further certificates of officers of the Company as the
Representative may reasonably request.
4.4.2 Secretary's Certificate. At each of the Closing Date and the
Option Closing Date, if any, the Representative shall have received a
certificate of the Company signed by the Secretary of the Company, dated the
Closing Date or the Option Date, as the case may be, respectively, certifying
(i) that the Bylaws and Certificate of Incorporation, as amended, of the
Company are true and complete, have not been modified and are in full force and
effect, (ii) that the resolutions relating to the public offering contemplated
by this Agreement are in full force and effect and have not been modified,
(iii) all correspondence between the Company or its counsel and the Commission,
(iv) all correspondence between the Company or its counsel and the NASD
concerning inclusion of the Securities on the Nasdaq National Market or
SmallCap, and (v) as to the incumbency of the officers of the Company. The
documents referred to in such certificate shall be attached to such
certificate.
4.5 No Material Changes. Prior to and on each of the Closing Date and
the Option Closing Date, if any, (i) there shall have been no material adverse
change or development involving a prospective material change in the business,
operations, assets, financial condition or prospects of the Company from the
latest dates as of which such condition is set forth in the Registration
Statement and Prospectus, (ii) there shall have been no transaction, not in the
ordinary course of business, entered into by the Company from the latest date as
of which the financial condition of the Company is set forth in the Registration
Statement and Prospectus which is materially adverse to the Company, taken as a
whole, (iii) the Company shall not be in default under any provision of any
instrument relating to any outstanding indebtedness which default would have a
material adverse effect on the Company, (iv) no material amount of the assets of
the Company shall have been pledged or mortgaged, except as set forth in the
Registration Statement and Prospectus, (v) no action suit or proceeding, at law
or in equity, shall have been pending or threatened against the Company or
affecting any of its property or business before or by any court or federal or
state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition
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or income of the Company, except as set forth in the Registration Statement and
Prospectus, (vi) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission,
and (vii) the Registration Statement and the Prospectus and any amendments or
supplements thereto contain all material statements that are required to be
stated therein in accordance with the Act and the Regulations and conform in
all material respects to the requirements of the Act and the Regulations, and
neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto contains any untrue statement of a material fact 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.
4.6 Delivery of Representative's Purchase Option. The Company shall have
delivered to the Representative an executed copy of the Representative's
Purchase Option dated the Closing Date.
4.7 Opinion of Counsel for the Underwriters. All proceedings taken in
connection with the authorization, issuance or sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to you and
to Xxxxxxxx Xxxxxx & Xxxxxx, counsel for the Underwriters, and you shall have
received from such counsel a favorable opinion, dated the Closing Date and the
Option Closing Date, if any, with respect to such of these proceedings as you
may reasonably require. On or prior to the Effective Date, the Closing Date and
the Option Closing Date, as the case may be, counsel for the Underwriters shall
have been furnished such documents, certificates and opinions as they may
reasonably require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 4.7, or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
5. Indemnification.
5.1 Indemnification of the Underwriters. Subject to the conditions set
forth below, the Company agrees to indemnify and hold harmless each of the
Underwriters, its directors, officers, agents and employees and each person, if
any, who controls any Underwriter ("controlling person") within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all
loss, claim, damage, liability and expense whatsoever (including but not limited
to any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, or any claims whatsoever
commenced or threatened, whether arising out of any action between either of the
Underwriters and the Company or between either of the Underwriters and any third
party or otherwise) to which they or any of them may become subject under the
Act, the Exchange Act or any other statute or at common law or otherwise or
under the laws of foreign countries (including in settlement of any litigation,
if such settlement is effected with the written consent of the Company), arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact (i) contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus (as from time to time each may be amended and
supplemented, and including any information deemed to be a part thereof pursuant
to Rule 430A or Rule 434 of the
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Regulations); (ii) contained in any post-effective amendment or amendments or
any new registration statement and prospectus in which are included securities
of the Company issued or issuable upon exercise of the Underwriters' Purchase
Option; (iii) contained in any application or other document or written
communication (in this Section 5 collectively called "application") executed by
the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Securities or this offering under the
securities laws thereof or filed with the Commission, any state securities
commission or agency, the NASD (including Nasdaq and NASD Regulation, Inc.) or
any securities exchange; or the omission or alleged omission therefrom of 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; (iv) based in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; (v) based in
whole or in part upon any failure of the Company to perform its obligations
hereunder or under law; or (vi) based in whole or in part on any act or failure
to act or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Common Stock or the offering
contemplated hereby, and that is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any
matter covered by clauses (i), (ii) or (iii) above; provided that the Company
shall not be liable under this clause (vi) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such
loss, claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Underwriter
through its bad faith or willful misconduct; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon, and in strict conformity with, written
information furnished to the Company with respect to any Underwriter by or on
behalf of such Underwriter expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus, or any amendment or supplement thereof,
or in any application, as the case may be, and provided further, that with
respect to any preliminary prospectus, the foregoing indemnity agreement shall
not inure to the benefit of any Underwriter from whom the person asserting any
loss, claim, damage, liability or expense purchased Securities, or any person
controlling such Underwriter, if copies of the Prospectus were timely delivered
to the Underwriters pursuant to Section 3.4 and a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 5.1 shall be in addition to any
liabilities that the Company may otherwise have. The Company agrees promptly to
notify the Representative of the commencement of any litigation or proceedings
against the Company or any of its officers, directors or controlling persons in
connection with the issue and sale of the Securities or in connection with the
Registration Statement or Prospectus.
5.2 Indemnification of the Company. Each Underwriter, severally and not
jointly, agrees to indemnify and hold harmless the Company against any and all
loss, liability, claim, damage and expense described in the foregoing indemnity
from the Company to the several Underwriters, as
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incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, directly relating to the transactions effected
by the Underwriters in connection with this offering made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereto or in any application in reliance upon, and in strict
conformity with, written information furnished to the Company with respect to
such Underwriter by or on behalf of such Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application. The Company hereby
acknowledges that the only information that the Underwriters have furnished to
the Company expressly for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in the table following the first paragraph under the
caption "Underwriting" in the Prospectus and in the tenth, eleventh and
thirteenth paragraphs under the caption "Underwriting" in the Prospectus; and
the Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 5.2 shall be in addition to any liabilities
that each Underwriter may otherwise have.
5.3 Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 5 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability that
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 5 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnifying party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, 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
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
upon advice of legal counsel that a conflict may arise between the positions of
the indemnifying party and the indemnified party in conducting the defense of
any such action or that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so as to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 5 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than once separate counsel (together with local
counsel), approved by the indemnifying party (the Representative, in the case of
Sections 5.2 and 5.5), representing the indemnified parties who are parties to
such action) or
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(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
5.4 Settlements. The indemnifying party under this Section 5 shall not
be liable for any settlement of any proceedings effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
5.3 hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnifying party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party or
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
5.5 Contribution. If the indemnification provided for in Sections 5.1
through 5.4 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to herein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the Public
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above, but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
or inaccuracies in the representations and warranties herein that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, in connection
with the offering of the Public Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of the Public Securities pursuant to this Agreement (before
deducting expenses) received by the Company, and the total underwriting discount
received by the Underwriters, in each case as set forth on the front cover page
of the Prospectus (or, if Rule 434 of the Regulations is used, the corresponding
location on the term sheet filed pursuant to such Rule) bear to the aggregate
initial public offering price of the Public Securities as set forth on such
cover. The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by
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reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact or any such inaccurate or alleged inaccurate representation or
warranty related to information supplied by the Company, on the one hand, or
the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
included, subject to the limitations set forth in Section 5.3, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 5.3 with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 5.5; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 5.3 for purposes of
identification.
The Company and the Representative agree that it would not be
just and equitable if contribution pursuant to this Section 5.5 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 that does not take account of
the equitable considerations referred to in this Section 5.5.
Notwithstanding the provisions of this Section 5.5, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the
Public Securities underwritten by it and distributed to the public. No person
guilty of fraudulent misrepresentations (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. The Underwriters' obligations to contribute
pursuant to this Section 5.5 are several and not joint, in proportion to their
respective underwriting commitments as set forth on Schedule I hereto. For
purposes of this Section 5.5, each officer and employee of an Underwriter and
each person, if any, who controls an Underwriter within the meaning of the
Securities Act and Exchange Act shall have the same rights to contribution as
such Underwriter.
6. Default by an Underwriter.
6.1 Default Not Exceeding 10% of Firm Units or Option Units. If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units if exercised, hereunder, and if the
number of the Firm Units or Option Units with respect to which such default
relates does not exceed in the aggregate 10% of the number of Firm Units or
Option Units that all Underwriters have agreed to purchase hereunder, then such
Firm Units or Option Units to which the default relates shall be purchased by
the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
6.2 Default Exceeding 10% of Firm Units or Option Units. In the event
that such default relates to more than 10% of the Firm Units or Option Units,
you may in your discretion arrange for yourself or for another party or parties
to purchase such Firm Units or Option Units to which such
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default relates on the terms contained herein. If within one business day after
such default relating to more than 10% of the Firm Units or Option Units you do
not arrange for the purchase of such Firm Units or Option Units, then the
Company shall be entitled to a further period of one business day within which
to procure another party or parties satisfactory to you to purchase said Firm
Units or Option Units on such terms. In the event that neither you nor the
Company arrange for the purchase of the Firm Units or Option Units to which a
default relates as provided in this Section 6, this Agreement may be terminated
by you or the Company without liability on the part of the Company (except as
provided in Sections 3.15 and 5 hereof) or the several Underwriters (except as
provided in Section 5 hereof); provided, however, that if such default occurs
with respect to the Option Units, this Agreement will not terminate as to the
Firm Units; and provided further that nothing herein shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters and to
the Company for damages occasioned by its default hereunder.
6.3 Postponement of Closing Date. In the event that the Firm Units or
Option Units 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 Option Closing Date for a reasonable period, but not in any event
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 to the Registration Statement or the Prospectus that in the opinion of
counsel for the Representative may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Units.
7. Additional Covenants.
7.1 Board Designee. For a period of three years from the Effective Date,
the Company will appoint a designee of SERP who is reasonably acceptable to the
Company as a member of its Board of Directors. Alternatively, SERP shall have
the right to send a representative (who need not be the same individual from
meeting to meeting) to observe each meeting of the Board of Directors. Such
designee or representative, as the case may be, shall be entitled to receive
reimbursement for all reasonable costs incurred in attending such meetings,
including, but not limited to, food, lodging and transportation. The Company
agrees to give SERP written notice of each such meeting and to provide SERP with
an agenda and minutes of the meeting no later than it gives such notice and
provides such items to the other directors. To the extent permitted by law, the
Company will agree to indemnify SERP and its designee for the actions of such
designee as a director of the Company. In the event the Company maintains a
liability insurance policy affording coverage for the acts of its officers and
directors, it will, if possible, include each of SERP and its designee as an
insured under such policy.
7.2 Press Releases. The Company will not issue a press release or engage
in any other publicity (other than customary advertisements for its products and
services) until 10 days after the Effective Date without SERP's prior consent.
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8. Representations and Agreements to Survive Delivery. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Dates and such representations, warranties and
agreements of the Underwriters and Company, including the indemnity agreements
contained in Section 5 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Company or any controlling person, and shall survive termination of this
Agreement or the issuance and delivery of the Securities to the several
Underwriters until the earlier of the expiration of any applicable statute of
limitations and the seventh anniversary of the later of the Closing Date or the
Option Closing Date, if any, at which time the representations, warranties and
agreements shall terminate and be of no further force and effect.
9. Effective Date of This Agreement and Termination Thereof.
9.1 Effective Date. This Agreement shall become effective on the
Effective Date at the time that the Registration Statement is declared
effective.
9.2 Termination. You shall have the right to terminate this Agreement at
any time prior to any Closing Date, (i) if any domestic or international event
or act or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, general securities markets in the United
States; or (ii) if trading on the New York Stock Exchange, the Nasdaq National
Market, Nasdaq SmallCap Market or in the over-the-counter 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 fixed, or maximum
ranges for prices for securities shall have been required on the
over-the-counter market by the NASD or by order of the Commission or any other
government authority having jurisdiction, or (iii) if the United States shall
have become involved in a war or major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or (v) if
a moratorium on foreign exchange trading has been declared that materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act that, whether or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Securities, or (vii) if the
Company has breached any of its representations or warranties, or failed to
perform in any material respect any of its obligations, hereunder, or (viii) if
the Representative shall have become aware after the date hereof of such a
material adverse change in the condition (financial or otherwise), business, or
prospects of the Company, or such adverse material change in general market
conditions as in the Representative's judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Securities or to enforce
contracts made by the Underwriters for the sale of the Securities.
9.3 Expenses. In the event that this Agreement shall not be carried out
for any reason whatsoever, within the time specified herein or any extensions
thereof pursuant to the terms hereof, the obligations of the Company to pay the
expenses related to the transactions contemplated herein shall be governed by
Section 3.15 hereof.
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9.4 Indemnification. Notwithstanding any contrary provision contained
in this Agreement, any election hereunder or any termination of this Agreement,
and whether or not this Agreement is otherwise carried out, the provisions of
Section 5 shall not be in any way affected by such election or termination or
failure to carry out the terms of this Agreement or any part hereof.
10. Miscellaneous.
10.1 Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and shall be mailed, delivered or
telecopied and confirmed
If to the Representative:
Research Partners International, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 0000
Attention: Xxxxxx Xxxxxx
Copy to:
Xxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx Xxxxxx, Esq.
If to the Company:
Objective Communications, Inc.
00 Xxxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Copy to:
Xxxx Xxxxxxx
0000 Xxxxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx Xxxxx, Esq.
10.2 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
10.3 Amendment. This Agreement may be amended only by a written
instrument executed by each of the parties hereto.
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10.4 Entire Agreement. This Agreement (together with the other
agreements and documents being delivered pursuant to or in connection with this
Agreement) and the Agency Agreement, dated as of January 25, 1999, between SERP
and the Company, constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
10.5 Binding Effect. This Agreement shall inure solely to the benefit of
and shall be binding upon, the Representative, the Underwriters, the Company,
the controlling persons, directors and officers referred to in Section 5 hereof,
and their respective successors, legal representatives 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 provisions
herein contained.
10.6 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the law of the State of New York,
without giving effect to principles of conflicts of law. Each of the parties
hereto hereby agrees that any action, proceeding or claim against it arising out
of or relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the parties hereto hereby waives
any objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Any such process or summons to be served upon the Company
may be served by transmitting a copy thereof by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address set
forth in Section 10.1 hereof. Such mailing shall be deemed personal service and
shall be legal and binding upon the Company in any action, proceeding or claim.
The parties hereto agree that the prevailing party(ies) in any such action shall
be entitled to recover from the other party(ies) all of its reasonable
attorneys' fees and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.
10.7 Execution in Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become effective when one
or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.
10.8 Waiver, Etc. The failure of any of the parties hereto at any time
to enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of any of the
parties hereto thereafter to enforce each and every provision of this Agreement.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Agreement shall be effective unless set forth in a written
instrument executed by the party or parties against whom or which enforcement of
such waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
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10.9 Sophistication. Each of the parties hereto acknowledges that it is
a sophisticated business person who was adequately represented by counsel
during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 5 and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 5 hereto fairly allocate the risks
in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in
the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Act and the
Exchange Act.
10.10 Representative's Right to Assign. The Representative shall be
entitled at any time to assign any or all of its rights or duties hereunder,
without the consent of the Company or any other person, to any registered
broker-dealer a majority of the outstanding equity securities of which is owned
by Research Partners International, Inc.
If the foregoing correctly sets forth the understanding between
the Underwriters and the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
OBJECTIVE COMMUNICATIONS, INC.
By:
---------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
Accepted as of the date
first above written.
New York, New York
SOUTHEAST RESEARCH PARTNERS, INC.
Acting on behalf of itself and
as the Representative of the
several Underwriters named in
Schedule I hereto
By:
---------------------------
Name:
Title:
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SCHEDULE I
OBJECTIVE COMMUNICATIONS, INC.
2,000,000 UNITS
Number of Firm Units
Underwriter to Be Purchased
----------- ---------------
Southeast Research Partners, Inc.
Ladenburg Xxxxxxxx & Co. Inc.
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