11/24/03 DRAFT
4,000,000 Shares of Common Stock
Essex Corporation
UNDERWRITING AGREEMENT
_____________, 2003
X.X. XXXXXXXXX, TOWBIN
X.X. XXXXXXX & SONS, INC.
as Representative of the several Underwriters
000 Xxxxxxx Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Essex Corporation, a corporation organized and existing under the laws of
the Commonwealth of Virginia (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (collectively, the "Underwriters") an aggregate of 4,000,000
shares (the "Firm Shares") of its common stock, no par value per share (the
"Common Stock"). In addition, for the sole purpose of covering over-allotments
and subject to the terms and conditions stated herein, the Company proposes to
grant to the Underwriters the option to purchase up to an additional 150,000
shares (the "Company Additional Shares," and , together with the Firm Shares,
the "Company Shares") of Common Stock and the Selling Stockholders of the
Company named in Schedule II hereto (the "Selling Stockholders"), propose to
grant to the Underwriters the option to purchase up to 450,000 shares (the
"Selling Stockholder Additional Shares," and, together with the Company
Additional Shares, the "Additional Shares"). The Firm Shares and any Additional
Shares purchased by the Underwriters are collectively referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, and amendments thereto, on Form S-1
(Registration No. 333-110287) for the registration of the Company Shares under
the Securities Act of 1933, as amended (the "Act"). Such registration statement,
including the prospectus, financial statements and schedules, exhibits and all
other documents filed as a part thereof, as amended at the time of effectiveness
of the registration statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A
or Rule 434 of the Rules and Regulations of the Commission under the Act (the
"Regulations"), is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Regulations is herein called the
"462(b) Registration Statement," and after such filing, the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The prospectus,
in the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations, or filed as part of the Registration Statement at the time of
effectiveness if no Rule 424(b) or Rule 434 filing is required, is herein called
the "Prospectus." The term "preliminary prospectus" as used herein means a
preliminary prospectus as described in Rule 430 of the Regulations. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Act. The Company has complied, to
the Commission's satisfaction, with all requests of the Commission for
additional information. Neither the Commission nor the Blue Sky or securities
authority of any jurisdiction has issued a stop order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any preliminary prospectus, the Prospectus, the Registration Statement or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement or suspending the registration or qualification of the
Shares, nor has any of such authorities instituted or threatened to institute
or, to the Company's knowledge, contemplated, any proceedings with respect to a
stop order.
(b) At the respective time of the effectiveness of the Registration
Statement or any 462(b) Registration Statement, or the effectiveness of any
post-effective amendment to the Registration Statement, when the Prospectus is
first filed with the Commission pursuant to Rule 424(b) or Rule 434 of the
Regulations, when any supplement to or amendment of the Prospectus is filed with
the Commission, and at the Closing Date and the Additional Closing Date, if any
(as hereinafter respectively defined), the Registration Statement and the
Prospectus and any amendments thereof and supplements thereto (including any
prospectus wrapper) complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations (and, if filed by
electronic transmission pursuant to XXXXX, was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares), and do not or will not contain an untrue statement of a material
fact, and do not or will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in light of the circumstances under which they were made, not
misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the Registration Statement 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, if filed by electronic transmission pursuant to XXXXX, was
identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Shares), and did
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not contain an untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they were made not
misleading. There are no contracts or other documents required to be described
in the Registration Statement and the Prospectus, or to be filed as exhibits to
the Registration Statement, which have not been described or filed as required.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through you as herein stated expressly for use in connection with
the preparation thereof. If Rule 434 is used, the Company will comply with the
requirements of Rule 434.
(c) Xxxxxxx & Company, who have certified the financial statements (which
term as used herein includes the related notes thereto) and supporting schedules
included in the Registration Statement, are independent public accountants as
required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as set forth in the
Registration Statement and the Prospectus, there has been no change in the
capital stock of the Company or the long term indebtedness of the Company, and
there has been no material adverse change or any development involving a
prospective material adverse change in the business, prospects, properties,
operations, condition (financial or other), stockholders' equity or results of
operations of the Company and its subsidiary, taken as a whole, including, but
not limited to, relationships with customers and suppliers of the Company,
whether or not arising from transactions in the ordinary course of business, and
since the date of the latest balance sheet presented in the Registration
Statement and the Prospectus, neither the Company nor its subsidiary has
incurred or undertaken any liabilities or obligations, direct or contingent,
which are material to the Company and its subsidiary, taken as a whole, except
for liabilities or obligations which are reflected in the Registration Statement
and the Prospectus.
(e) This Agreement and the transactions contemplated herein have been duly
and validly authorized by the Company, and this Agreement has been duly and
validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby do not, and will not, (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) or Repayment Event (as hereinafter defined) under,
require approval or consent under, or result in the creation or imposition of
any lien, charge or other encumbrance upon any property or asset of the Company
or its subsidiary pursuant to, any agreement, instrument, franchise, license or
permit to which the Company or its subsidiary is a party, or by which the
Company or its subsidiary or their respective properties or assets may be bound,
or under which the Company or its subsidiary are entitled to any right or
benefit, or (ii) violate or conflict with (A) any provision of the articles of
incorporation, by-laws, partnership agreement, limited liability company
agreement or trust agreement, as the case may be, or other organizational
documents of the Company or its
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subsidiary, or (B) any judgment, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or its subsidiary or any of their respective
properties or assets. No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or its subsidiary or any of their respective properties or assets is required
for the execution, delivery and performance of this Agreement, or the
consummation of the transactions contemplated hereby, by the Registration
Statement and by the Prospectus, including the issuance, sale and delivery of
the Shares to be issued, sold and delivered by the Company and the Selling
Stockholders hereunder, except the registration under the Act of the Shares, and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as have been obtained or may be required
under state securities or Blue Sky laws, or with the National Association of
Securities Dealers, Inc. (the "NASD"), in connection with the purchase and
distribution of the Shares by the Underwriters. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company.
(g) All of the outstanding shares of the capital stock of the Company
(including the Shares) have been duly and validly authorized and issued, are
fully paid and nonassessable, and have been issued in compliance with federal
and state securities laws, and none of such shares was issued in violation of,
or is now subject to, any preemptive rights, rights of first refusal or similar
rights. The Firm Shares and the Company Additional Shares have been duly
authorized for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued, delivered and sold in accordance with this Agreement, will be
duly and validly issued and outstanding, fully paid and nonassessable, and will
not have been issued in violation of, or be subject to, any preemptive rights,
rights of first refusal or similar rights. No holder of Shares will be subject
to personal liability by reasons of being such a holder. The Company had, on the
date hereof, an authorized and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. The authorized capital stock of the
Company, including the Shares, conforms to the description thereof contained in
the Registration Statement and the Prospectus. Except as disclosed in the
Registration Statement and the Prospectus, there are no outstanding options,
warrants or other rights calling for the issuance of, and no commitments,
obligations, plans or arrangements to issue, any shares of capital stock of the
Company, or any security convertible into or exchangeable for capital stock of
the Company. The outstanding stock options relating to the Common Stock have
been duly authorized and validly issued and conform to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(h) Each of the Company and its subsidiary has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and its subsidiary is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its properties, whether owned, leased or
operated, or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good standing
which will not, in the aggregate, have a material adverse effect on the Company
and its subsidiary, taken as a whole. Each of the Company and its subsidiary has
all requisite power and authority, and all necessary consents, approvals,
certificates, authorizations, orders, registrations,
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qualifications, licenses and permits (collectively, "Governmental Licenses") of
and from all appropriate public, regulatory or governmental agencies and bodies,
to own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the Prospectus,
each such Governmental License is valid and in full force and effect, and no
such Governmental License contains a material restriction not adequately
disclosed in the Registration Statement and the Prospectus, and the Company has
not received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such Governmental Licenses.
(i) All of the outstanding capital stock of the Company's subsidiary are
owned by the Company, free and clear of any security interest, mortgage, pledge,
claim, lien, limitation on voting rights or other encumbrance; and all such
securities have been duly and validly authorized and issued, are fully paid and
nonassessable, and none of such securities was issued in violation of any
preemptive rights, rights of first refusal or similar rights. The Company does
not own any capital stock or any other interests in any other corporation or
entity other than the subsidiary listed in Exhibit 21.1 to the Registration
Statement.
(j) Neither the Company nor its subsidiary is (i) in violation of its
articles of incorporation, by-laws, or other organizational documents, or in
breach of any of the terms or provisions of, or in default (or would be in
default with notice or lapse of time or both) in the performance or observance
of, any material obligation, agreement, covenant or condition contained in any
bond, debenture, note or other evidence of indebtedness or in any material
contract, indenture, mortgage, deed of trust, loan or credit agreement, lease,
joint venture or other agreement or instrument to which the Company or such
subsidiary is a party or by which any of its properties may be bound, which
breach, violation, default or defaults would have, individually or in the
aggregate, a material adverse effect on the Company and its subsidiary, taken as
a whole, or (ii) in violation of any law, order, rule, regulation, writ,
injunction, judgment or decree of any court or governmental agency or body, the
violation of which would have, individually or in the aggregate, a material
adverse effect on the Company and its subsidiary, taken as a whole.
(k) Each contract described in the Registration Statement and the
Prospectus, or filed as an exhibit to the Registration Statement, to which the
Company or its subsidiary is a party, is in full force and effect, and is the
legal, valid and binding obligation of the Company or such subsidiary, as the
case may be, enforceable in accordance with its terms, except as rights to
indemnification and contribution thereunder may be limited by applicable law,
and except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors, or by general equitable principles.
(l) There is no litigation or any governmental action, suit or proceeding
which is pending or, to the knowledge of the Company, contemplated, to which the
Company or its subsidiary is or will be a party, or to which any property of the
Company or its subsidiary, whether owned, leased or operated, is or may be
subject, or which has as the subject matter thereof any officer or director of
the Company or its subsidiary, which might result in any change in the capital
stock of the Company or the long term indebtedness of the Company, or any
material adverse change or any development involving a material adverse change
in the business, prospects, properties, operations, condition (financial or
other), stockholders' equity or
5
results of operations of the Company and its subsidiary, taken as a whole, or
which is required to be disclosed in the Registration Statement and the
Prospectus.
(m) Neither the Company nor any of its directors, officers, subsidiaries or
other affiliates (as defined in the Regulations) has taken or will take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(n) The financial statements included in the Registration Statement and the
Prospectus, including the notes thereto and supporting schedules, present fairly
the consolidated financial position of the Company as of the dates indicated and
the results of operations for the periods specified. Except as otherwise stated
in the Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied on a
consistent basis; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
selected financial data and the summary financial information included in the
Registration Statement and the Prospectus present fairly the information shown
therein, and have been compiled on a basis consistent with that of the financial
statements included in the Registration Statement and the Prospectus. No other
financial statements or supporting schedules are required to be included in the
Registration Statement and the Prospectus.
(o) The pro forma financial statements of the Company and its subsidiary
and the related notes thereto set forth in the Registration Statement and the
Prospectus (and any supplement or amendment thereto) have been prepared on a
basis consistent with the historical financial statements of the Company and its
subsidiary, give effect to the assumptions used in the preparation thereof on a
reasonable basis and in good faith and present fairly the historical and
proposed transactions contemplated by the Registration Statement and the
Prospectus. Such pro forma financial statements have been prepared in accordance
with the applicable requirements of Rule 11-02 of Regulation S-X promulgated by
the Commission. The other pro forma financial and statistical information and
data set forth in the Registration Statement and the Prospectus (and any
supplement or amendment thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with the pro forma financial
statements.
(p) Each of the Company and its subsidiary has filed all federal, state,
local and foreign tax returns that have been required to be filed, and has paid
all taxes shown thereon and all assessments, fines or penalties received by it
to the extent that such taxes, assessments, fines or penalties have become due
and are not being contested in good faith. There is no tax deficiency that has
been, or might reasonably be expected to be, asserted or threatened against the
Company or its subsidiary. The Company has made adequate charges, accruals and
reserves in the applicable financial statements referred to in subsection (o)
above in respect of all federal, state, local and foreign income taxes for all
periods as to which the tax liability of the Company or its subsidiary has not
been finally determined.
(q) Each of the Company and its subsidiary has good and marketable title to
all property and assets owned by it, in each case free and clear of all security
interests, mortgages, pledges, claims, liens, encumbrances and other defects,
except such as are described or referred to in the Registration Statement and
the Prospectus or such as do not materially affect
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the value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or such subsidiary. Any real
property, buildings, improvements, equipment and personal property held under
lease by the Company or its subsidiary are held under valid, existing and
enforceable leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings by the
Company or such subsidiary.
(r) Each of the Company and its subsidiary owns or possesses valid and
enforceable licenses or other rights to use, sell, offer for sale, make,
reproduce, distribute, modify, and otherwise deal with, all inventions, patents,
patent applications, trademarks, service marks, trade names, copyrights,
technology, software, databases, Internet domain names, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), proprietary techniques
(including processes and substances) and other intellectual property rights
necessary to conduct the business now conducted or presently contemplated to be
conducted by the Company or such subsidiary as described in the Registration
Statement and the Prospectus (collectively, "Intellectual Property"), free and
clear of all security interests, mortgages, pledges, liens, claims and other
encumbrances. Each of the Company and its subsidiary has taken all reasonable
steps to protect, maintain and safeguard the Intellectual Property for which
improper or unauthorized disclosure would impair its value or validity, and has
executed appropriate invention assignment, nondisclosure and confidentiality
agreements and made appropriate filings and registrations in connection with the
foregoing. Other than as described in the Registration Statement and the
Prospectus: (i) there are no third parties who have any rights in the
Intellectual Property that could preclude the Company or its subsidiary from
conducting its business as currently conducted or as presently contemplated to
be conducted as described in the Registration Statement and the Prospectus; (ii)
there are no pending, threatened, or, to the Company's knowledge, contemplated,
actions, suits, proceedings, investigations or claims by others challenging the
rights of the Company or its subsidiary, or, if the Intellectual Property is
licensed, the licensor thereof with respect to any Intellectual Property owned
or licensed to the Company or its subsidiary; (iii) neither the Company nor its
subsidiary, nor, if the Intellectual Property is licensed, the licensor thereof,
has infringed, or has received any notice of infringement of, or conflict with,
any rights of others with respect to the Intellectual Property; and (iv) there
is no dispute between the Company or its subsidiary and any licensor with
respect to any Intellectual Property. True and correct copies of all material
licenses and other material agreements between the Company or its subsidiary and
any third party relating to the Intellectual Property, and all amendments
thereof and supplements thereto, have been provided to the Underwriters and are
accurately described in the Registration Statement and the Prospectus. Further,
nothing has come to the attention of the Company that leads the Company to
believe, with respect to any pending applications for registration of
Intellectual Property, that such applications will not eventuate in registered
Intellectual Property, or that any registrations issued, or to be issued in
respect of any such Intellectual Property applications, will not be valid or
will not afford the Company or its subsidiary reasonable protection with respect
to the subject matter thereof.
(s) No relationship, direct or indirect, exists between or among the
Company or its subsidiary or affiliates, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or its subsidiary,
on the other hand, and no other business relationships or related party
transactions involving the Company or any subsidiary or any other
7
person exists, that is required by the Act to be described in the Registration
Statement and the Prospectus that is not so described.
(t) The Common Stock (including the Company Shares) is registered pursuant
to Section 12(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and has been approved for listing on the American Stock
Exchange, subject only to official notice of issuance. The Company has taken no
action designed to terminate the registration of the Common Stock under the
Exchange Act or delist the Common Stock from the American Stock Exchange, or
that is likely to have the effect of terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the American
Stock Exchange, nor has the Company received any notification that the
Commission is contemplating terminating such registration or that the American
Stock Exchange is contemplating such delisting.
(u) Except as have been waived in writing, no holder of any securities of
the Company has any rights to the registration of securities of the Company, or
other similar rights to have any securities of the Company included in the
offering contemplated by this Agreement, because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby and the Additional Shares included in the Registration
Statement.
(v) Neither the Company nor its subsidiary is, nor upon consummation of the
transactions contemplated hereby will be, subject to registration as an
"investment company," or an entity "controlled" by an "investment company" under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
and will conduct its business in a manner so that it will not become subject to
the Investment Company Act.
(w) No labor problem or dispute with the employees of the Company or its
subsidiary exists, is threatened or, to the Company's knowledge, is imminent
(including, without limitation, any unfair labor practice complaint against the
Company or its subsidiary before the National Labor Relations Board, any state
or local labor relations board or any foreign labor relations board), and the
Company is not aware of any existing or imminent labor disturbance by the
employees of the Company's or its subsidiary's principal suppliers, contractors
or customers, in each case that could have a material adverse effect on the
Company or such subsidiary. The Company is not aware that any executive or key
employee, or group of employees of the Company or its subsidiary, plans to
terminate employment with the Company or its subsidiary.
(x) Each of the Company and its subsidiary is conducting its business in
compliance in all material respects with all applicable federal, state and local
laws, rules and regulations of the jurisdictions in which it is conducting its
business.
(y) Each of the Company and its subsidiary (i) is in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment, or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business, and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance or failure to
comply with the terms and conditions of, or failure to
8
receive, such permits, licenses or approvals will not, individually or in the
aggregate, have a material adverse effect on the Company and its subsidiary,
taken as a whole. Neither the Company nor its subsidiary has received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company or its subsidiary is in
violation of any Environmental Law. There is no claim, action or cause of action
filed with a court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written notice by any
person or entity, alleging potential liability arising out of, based on, or
resulting from, the presence, or release into the environment, of any chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, at any location owned, leased or operated by
the Company or its subsidiary, now or in the past (collectively, "Environmental
Claims"), pending, threatened or, to the knowledge of the Company, contemplated
against the Company or its subsidiary, or any person or entity whose liability
for any Environmental Claim the Company or its subsidiary has retained or
assumed, either contractually or by operation of law. There are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products, that reasonably could
result in a violation of any Environmental Law, or form the basis of a potential
Environmental Claim against the Company or its subsidiary, or any person or
entity whose liability for any Environmental Claim the Company or its subsidiary
has retained or assumed, either contractually or by operation of law. The costs
and liabilities associated with the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiary
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties) could not reasonably be
expected, in the aggregate, to have a material adverse effect on the Company and
its subsidiary, taken as a whole.
(z) Each employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), that is
maintained, administered or contributed to by the Company or its subsidiary or
their "ERISA Affiliates" (as defined below), for employees or former employees
of the Company or its subsidiary, has been, at all times during which the
Company was a sponsor of the plan, maintained in compliance with its respective
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"). "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Code, of which the Company or such
subsidiary is a member. No "prohibited transaction", within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan, excluding transactions effected pursuant to a statutory or
administrative exemption. No "reportable event" (as defined under ERISA) has
occurred, or is reasonably expected to occur, with respect to any employee
benefit plan established or maintained by the Company or its subsidiary or their
ERISA Affiliates. For each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency," as defined in Section 412 of the Code, has been incurred, whether
or not waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions) exceeded the
present value of all benefits accrued under such plan determined
9
using reasonable actuarial assumptions. Neither the Company nor its subsidiary
nor their ERISA Affiliates has incurred, or reasonably expects to incur, any
liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any employee benefit plan, or (ii) Sections 412, 4971, 4975 or
4980B of the Code. Each employee benefit plan established or maintained by the
Company, its subsidiary or any of their ERISA Affiliates, that is intended to be
qualified under Section 401(a) of the Code, is so qualified, and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.
(aa) Neither the Company nor its subsidiary, nor, any of their respective
officers or directors, nor, to the knowledge of the Company, any of their
respective employees, agents or affiliates, or any other person acting on behalf
of the Company or its subsidiary has, directly or indirectly, given or agreed to
give any money, gift or similar benefit to any customer or supplier, any
employee or agent of a customer or supplier, any official or employee of any
governmental agency (domestic or foreign), 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 its subsidiary (or assist the Company or
its subsidiary in connection with any actual or proposed transaction), which (i)
might subject the Company or its subsidiary to any damage or penalty in any
civil, criminal or governmental litigation or proceeding (domestic or foreign),
(ii) if not given in the past, might have had a material adverse effect on the
Company and its subsidiary, taken as a whole, or (iii) if not continued in the
future, might have a material adverse effect on the Company and its subsidiary,
taken as a whole.
(bb) There is no outstanding allegation of improper or illegal activities
arising from any government audit or non-audit review, including without
limitation, by the Defense Contract Audit Agency, of the Company or work
performed by the Company or its subsidiary or subcontractors. There are no
pending civil or criminal penalties or administrative sanctions arising from a
government audit or non-audit review of the Company or work performed by the
Company or its subsidiary or subcontractors, including, but not limited to,
termination of contracts, forfeiture of profits, suspension of payments, fines,
or suspension or debarment from doing business with any U.S. federal government
agency. As of the date hereof, the Company does not believe that it will be
required to make any adjustments to the financial statements included in the
Registration Statement and the Prospectus as a result of any pending government
audit or non-audit review of the Company.
(cc) Each of the Company and its subsidiary maintains a system of internal
accounting controls that, taken as a whole, is sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(dd) Each of the Company and its subsidiary maintains insurance provided by
recognized, financially sound and reputable institutions, of the types and in
the amounts generally deemed adequate for its business, including, without
limitation, insurance coverage for real and personal property owned, leased or
operated by it against theft, damage, destruction,
10
acts of vandalism and all other material risks customarily insured against, all
of which insurance is in full force and effect. The Company has no reason to
believe that it will not be able to renew, for itself and its subsidiary,
existing insurance coverage as and when such coverage expires, or to obtain
similar coverage from similar insurers as may be necessary to continue its
business, at a cost that would not likely have a material adverse effect on the
Company or its subsidiary. Neither the Company nor its subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.
(ee) Except pursuant to this Agreement, there are no contracts, agreements
or understandings between the Company and any other person that would give rise
to a valid claim against the Company or the Underwriters for a brokerage
commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Shares.
(ff) The market and industry-related information included in the
Registration and the Prospectus are derived from sources which the Company
reasonably and in good faith believes to be accurate, reasonable and reliable,
and such information agree with the sources from which they were derived.
(gg) The Company has not distributed any offering material in connection
with the offering and sale of the Shares, other than a preliminary prospectus,
the Prospectus or the Registration Statement.
(hh) The statements (including the assumptions described therein) included
in the Registration Statement and the Prospectus (i) are within the coverage of
Rule 175(b) under the Securities Act to the extent such data constitute forward
looking statements as defined in Rule 175(c), and (ii) were made by the Company
with a reasonable basis and reflect the Company's good faith estimate of the
matters described therein.
Any certificate or other document signed by an officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
2. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders represents and warrants to, and agrees with, the
Underwriters that:
(a) If such Selling Stockholder is an individual, such Selling Stockholder
has full legal capacity to enter into and deliver this Agreement and to perform
its obligations hereunder. If such Selling Stockholder is not an individual,
this Agreement and the transactions contemplated herein have been duly and
validly authorized by such Selling Stockholder. This Agreement has been duly and
validly executed and delivered by or on behalf of such Selling Stockholder.
(b) Each of (i) the Custody Agreement signed by such Selling Stockholders
with [____________________], as custodian (the "Custodian"), relating to the
deposit of any Selling Stockholder Additional Shares to be sold by such Selling
Stockholders (the "Custody Agreement"), and (ii) the Power of Attorney signed by
such Selling Stockholders appointing certain individuals named therein as such
Selling Stockholder's attorneys-in-fact (each, an "Attorney-in-Fact") to the
extent set forth therein (the "Power of Attorney"), and, in each case,
11
the transactions contemplated therein, have been duly and validly authorized by
such Selling Stockholders (if such Selling Stockholders is not an individual).
Each of the Custody Agreement and the Power of Attorney has been duly and
validly executed and delivered by such Selling Stockholders, and is a valid and
binding agreement of such Selling Stockholders, enforceable in accordance with
its terms, except as rights to indemnification and contribution thereunder may
be limited by applicable law, and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors, or by
general equitable principles.
(c) The Selling Stockholder Additional Shares represented by the
certificates held in custody for such Selling Stockholders under the Custody
Agreement are subject to the interests of the Underwriters hereunder. The
arrangements made by such Selling Stockholders for such custody, and the
appointment by such Selling Stockholders of the Attorneys-in-Fact by the Power
of Attorney, are to that extent irrevocable. The obligations of the Selling
Stockholders hereunder shall not be terminated by operation of law, whether by
the death or incapacity of any such Selling Stockholders or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership, limited
liability company or corporation, by its dissolution, or by the occurrence of
any other event. If any such Selling Stockholders, or any such executor or
trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if such partnership, limited liability company or
corporation should be dissolved, or if any other such event should occur, before
the delivery of the Selling Stockholder Additional Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of this
Agreement and the Custody Agreement, and actions taken by the Attorneys-in-Fact
pursuant to the Power of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
(d) Such Selling Stockholders is the lawful owner of the Selling
Stockholder Additional Shares to be sold by such Selling Stockholders hereunder,
and has, and on the Closing Date and the Additional Closing Date, if any, will
have, good and valid title to all of such Shares which may be sold by such
Selling Stockholders pursuant to this Agreement on such date, and the legal
right and power, and all authorizations and approvals required by law and, where
applicable, under its charter or by-laws, partnership agreement, trust agreement
or other organizational documents, to enter into this Agreement and the Custody
Agreement and Power of Attorney, to sell, transfer and deliver all of such
Selling Stockholder Additional Shares which may be sold by such Selling
Stockholders pursuant to this Agreement, and to comply with its other
obligations hereunder and thereunder, and upon sale and delivery of, and payment
for, such Shares, as provided herein, such Selling Stockholders will convey good
and marketable title to such Shares, free and clear of all security interests,
mortgages, pledges, liens, encumbrances or other claims.
(e) The execution and delivery by such Selling Stockholders of, and the
performance by such Selling Stockholders of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney, will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or
12
both, would constitute a default) or Repayment Event (as defined above) under,
require approval or consent under, or result in the creation or imposition of
any lien, charge or other encumbrance upon any property or assets of such
Selling Stockholders pursuant to, any agreement, instrument, franchise, license
or permit to which such Selling Stockholders is a party, or by which such
Selling Stockholders or its properties or assets may be bound, or under which it
is entitled to any right or benefit, or (ii) violate or conflict with (A) any
provision of the certificate of incorporation, by-laws, partnership agreement,
limited liability company agreement or trust agreement, as the case may be, or
other organizational documents of such Selling Stockholders (if such Selling
Stockholders is not an individual), or (B) any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or regulatory agency
or body having jurisdiction over such Selling Stockholders or any of its
properties or assets. No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over such Selling
Stockholders or any of its properties or assets is required for the execution,
delivery and performance of this Agreement, the Custody Agreement or the Power
of Attorney, or the consummation of the transactions contemplated hereby or
thereby, including the issuance, sale and delivery of the Selling Stockholder
Additional Shares to be issued, sold and delivered by such Selling Stockholders
hereunder, except such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as have been
obtained or may be required under state securities or Blue Sky laws, or with the
NASD, in connection with the purchase and distribution of such Shares by the
Underwriters.
(f) Except as have been waived in writing, such Selling Stockholders
does not have any rights to the registration of securities of the Company or
other similar rights to have any securities of the Company included in the
offering contemplated by this Agreement, because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby.
(g) Such Selling Stockholders does not have any preemptive right,
co-sale right or right of first refusal or other similar right to purchase any
of the Shares that are to be sold by Company to the Underwriters pursuant to
this Agreement, and, except as set forth in the Prospectus, such Selling
Stockholders does not own any warrants, options or similar rights to acquire,
and does not have any right or arrangement to acquire, any capital stock, right,
warrants, options or other securities from the Company.
(h) All information furnished by or on behalf of such Selling
Stockholders expressly for use in the Registration Statement and the Prospectus
is, and on the Closing Date and the Additional Closing Date, if any, will be,
true, correct, and complete in all material respects, and does not, and on the
Closing Date and the Additional Closing Date, if any, will not contain an untrue
statement of a material fact, and do not or will not omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and (ii)
in the case of the Prospectus, in light of the circumstances under which they
were made, not misleading. Such Selling Stockholders confirms as accurate (prior
to giving effect to the sale of the Shares) the number of shares of Common Stock
set forth opposite such Selling Stockholder's name in the Prospectus under the
caption "Principal and Selling Stockholders" or with respect to such Selling
Stockholders as described in the footnotes to the table under such caption.
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(i) Such Selling Stockholders has not taken or will take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(j) Such Selling Stockholders has not distributed any offering
material in connection with the offering and sale of the Shares, other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(k) Neither the Selling Stockholders, nor any of the Selling
Stockholders' affiliates, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, or
has any other association with (within the meaning of Article I of the By-laws
of the NASD), any member firm of the NASD.
(l) If such Selling Stockholders is not an individual, such Selling
Stockholders has been duly organized and is validly existing as a corporation,
partnership, limited liability company, trust or other entity, as the case may
be, in good standing under the laws of its jurisdiction of incorporation.
(m) Such Selling Stockholders has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not true and correct, is familiar with the Registration Statement and has no
knowledge of any material fact, condition or information not disclosed in the
therein and in the Prospectus or any supplements thereto, which has adversely
affected or may adversely affect the business of the Company or its subsidiary;
and the sale of the Selling Stockholder Additional Shares by such Selling
Stockholders pursuant hereto is not prompted by any information concerning the
Company or its subsidiary which is not set forth in the Registration Statement
and the Prospectus or any supplements thereto.
Any certificate or other document, including, without limitation, the
Custody Agreement, the Power of Attorney, any irrevocable election to sell or
any questionnaire, signed by or on behalf of such Selling Stockholders and
delivered to you or to counsel for the Underwriters shall be deemed to be a
representation and warranty by such Selling Stockholders to each Underwriter as
to the matters set forth therein.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to the Underwriters, and the
Underwriters agree, severally and not jointly, to purchase from the Company, at
a purchase price of $[___] per share, the number of Firm Shares set forth
opposite such Underwriter's name on Schedule I hereto.
In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, (i) the Selling Stockholders hereby grants to the
several Underwriters the option to purchase, severally and not jointly, from the
Selling Stockholders, all or a portion of the Selling Stockholder Additional
Shares and (ii) the Company hereby grants to the several Underwriters the option
to purchase, severally and not jointly, from the Company, all or a portion of
the Company Additional Shares,
14
in each case, as may be necessary to cover over-allotments made in connection
with the offering of the Firm Shares, at the same purchase price per share to be
paid by the Underwriters to the Company for the Firm Shares. This option may be
exercised by you on behalf of the several Underwriters at any time and from time
to time on or before the thirtieth (30th) day following the date hereof, by
written notice to the Selling Stockholders or the Company or both, as the case
may be. Such notice shall set forth the aggregate number of Selling Stockholder
Additional Shares or Company Additional Shares or both, as the case may be, as
to which the option is being exercised and the date and time when such
Additional Shares are to be delivered (such date and time being herein referred
to as an "Additional Closing Date"); provided, however, that the Additional
Closing Date shall not be earlier than the Closing Date (as defined below) nor
earlier than the second business day after the date on which the option shall
have been exercised nor later than the tenth business day after the date on
which the option shall have been exercised. The number of Additional Shares to
be sold to each Underwriter shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwrite on Schedule I hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine necessary to eliminate fractional shares).
In the event the Underwriters exercise their option to purchase the
Additional Shares with respect to less than all of the Additional Shares, the
number of Company Additional Shares to be sold by the Company and the number of
Selling Stockholder Additional Shares to be sold by each Selling Stockholder
shall be allocated pro rata relative to the total number of Additional Shares of
the Company or the Selling Stockholder, as the case may be, subject to the
Underwriters' over-allotment option.
(b) Payment of the purchase price for the Firm Shares shall be made
to the Company by wire transfer in same-day funds against delivery of the
certificates for the Firm Shares to you through the facilities of the Depository
Trust Company ("DTC") for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 9:00 A.M. (New York time) on
_____________, 2003 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 9
hereof) (such time and date of payment and delivery being herein called the
"Closing Date"). As used herein, the term "Business Day" means any day other
than a day on which banks are permitted or required to be closed in New York,
New York. Certificates for the Firm Shares shall be registered in such name or
names and in such authorized denominations as you may request in writing at
least two (2) full Business Days prior to the Closing Date. The Company will
permit you to examine and package such certificates for delivery at least one
(1) full Business Day prior to the Closing Date.
Payment of the purchase price for the Company Additional Shares shall
be made on the Additional Closing Date in the same manner at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form, registered in such names and in such
denominations as you shall specify no later than the second business day
preceding the Additional Closing Date. For the purpose of expediting the
checking and packaging of the certificates for the Additional Shares by you, the
Company agrees to make such certificates available to you for such purpose at
least one full business day preceding the Additional Closing Date.
15
Payment of the purchase price for the Selling Stockholder Additional
Shares shall be made to the Custodian on behalf of the Selling Stockholders, by
wire transfer in same-day funds against delivery of the certificates for the
Selling Stockholder Additional Shares for the respective accounts of the
Underwriters, of certificates for the Selling Stockholder Additional Shares to
be purchased by it. Certificates for the Selling Stockholder Additional Shares
shall be delivered to you in definitive form, registered in such names and in
such denominations as you shall specify no later than the second business day
preceding the Additional Closing Date. For the purpose of expediting the
checking and packaging of the certificates for the Additional Shares by you, the
Custodian will make such certificates available to you for such purpose at least
one full business day preceding the Additional Closing Date.
4. Offering.
(a) Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
set forth in the Prospectus.
(b) It is understood that you have been authorized, for your account
and the accounts of the several Underwriters, to accept delivery of and receipt
for, and make payment of the purchase price for, the Firm Shares and any
Additional Shares the Underwriters elect to purchase.
(c) Each Selling Stockholders hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Selling Stockholder Additional Shares to be sold by
the Selling Stockholders to the several Underwriters, or otherwise in connection
with the performance of the Selling Stockholderss' obligations hereunder, and
(ii) the Custodian is authorized to deduct for such payment, any such amounts
from the proceeds to such Selling Stockholders hereunder, and to hold such
amounts for the account of such Selling Stockholders with the Custodian under
the Custody Agreement.
5. Covenants of the Company. The Company covenants and agrees with the
Underwriters that:
(a) If Rule 430A is used, or the filing of the Prospectus is
otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) or Rule 434 within the prescribed time period, and will provide evidence
satisfactory to you of such timely filing. If the Company elects to rely on Rule
434, the Company will prepare and file a term sheet that complies with the
requirements of Rule 434. The Company will notify you immediately (and, if
requested by you, will confirm such notice in writing) of (i) any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (ii) the mailing or the
delivery to the Commission for filing of any amendment of or supplement to the
Registration Statement or the Prospectus, (iii) the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto, or of the initiation or the threatening of
any proceedings therefor, (iv) the receipt of any comments from the Commission,
and (v) the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction, or
the initiation or threatening of any proceeding for that purpose. If the
16
Commission shall propose or enter a stop order at any time, the Company will
make every reasonable effort to prevent the issuance of any such stop order and,
if issued, to obtain the lifting of such order as soon as possible. The Company
will not file any amendment to the Registration Statement, make any filing under
Rule 462(b) of the Regulations or file any amendment of or supplement to the
Prospectus (including the prospectus required to be filed pursuant to Rule
424(b) or Rule 434 of the Regulations) that differs from the prospectus on file
at the time of the effectiveness of the Registration Statement before or after
the effective date of the Registration Statement to which you shall reasonably
object in writing after being timely furnished in advance a copy thereof.
(b) The Company will comply with the Act and the Regulations so as
to permit the completion of the distribution of the Shares as contemplated in
this Agreement, the Registration Statement and the Prospectus. If at any time
when a prospectus relating to the Shares is required to be delivered under the
Act, any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would, in the judgment of the Underwriters or the
Company, include an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary at any time to amend or supplement the
Prospectus or Registration Statement to comply with the Act or the Regulations,
the Company will notify you promptly and prepare and file with the Commission an
appropriate amendment or supplement (in form and substance satisfactory to you)
which will correct such statement or omission and will use its best efforts to
have any amendment to the Registration Statement declared effective as soon as
possible. The Company shall, at its own expense, furnish to the Underwriters and
to dealers such copies of such amendments or supplements as you may reasonably
request.
(c) The Company, at its own expense, will promptly deliver to you
two signed copies of the Registration Statement, including exhibits and all
amendments thereto, and signed copies of all consents, and the Company, at its
own expense, will promptly deliver to each of the Underwriters, such number of
copies of any preliminary prospectus, the Prospectus, the Registration Statement
and all amendments of and supplements to such documents, if any, as you may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the Act.
(d) The Company will not distribute, prior to the later of the
Additional Closing Date and the completion of the Underwriters' distribution of
the Shares, any offering material in connection with the offering and sale of
the Shares, other than a preliminary prospectus, the Prospectus or the
Registration Statement.
(e) The Company will endeavor in good faith, in cooperation with
you, at or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating to
the offering or sale of the Shares in such jurisdictions (domestic or foreign)
as you may designate, and to maintain such qualification in effect for so long
as required for the distribution thereof; except that in no event shall the
Company be obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
17
(f) The Company will make generally available (within the meaning of
Section 11(a) of the Act) to its security holders and to you as soon as
practicable, an earnings statement (in form satisfying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve (12)
consecutive months beginning after the effective date of the Registration
Statement.
(g) During the period of 90 days from the date of the Prospectus
(the "Lock-Up Period"), the Company will not, directly or indirectly, without
your prior written consent, issue, sell, offer, agree to sell, grant any option
or contract for the sale of, pledge, make any short sale of, maintain any short
position with respect to, establish or maintain a "put equivalent position"
(within the meaning of Rule 16a-1(h) under the Exchange Act) with respect to,
enter into any swap, derivative transaction or other arrangement (whether any
such transaction is to be settled by delivery of Common Stock, other securities,
cash or other consideration) that transfers to another, in whole or in part, any
of the economic consequences of ownership, or otherwise dispose of any shares of
capital stock of the Company (or any securities convertible into, exercisable
for or exchangeable for capital stock of the Company or interest therein or any
capital stock of the Company's subsidiary), and the Company has obtained the
undertaking of each of its officers, directors, and each beneficial owner of
over 5% of the capital stock of the Company, not to engage in any of the
aforementioned transactions on their own behalf, other than (i) the Company's
sale of Company Firm Shares hereunder [(ii) the Company's issuance of Common
Stock or options to purchase Common Stock under any stock or option plan
described in the Prospectus, provided, that, if the individual who is issued
such Common Stock or options to purchase Common Stock has not already undertaken
that they will not engage in any of the aforementioned transactions during the
Lock-Up Period, the Company will obtain such undertaking], and (iii) the
Company's issuance of shares of Common Stock upon the exercise of any currently
outstanding warrant or the automatic conversion of any class of securities
outstanding on the date hereof and disclosed in the Prospectus. The Company
agrees not to waive any undertaking obtained pursuant to this paragraph.
(h) During a period of three (3) years from the effective date of
the Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders, and all communications mailed generally to its
stockholders, and (ii) all reports, financial statements and proxy or
information statements filed by the Company with the Commission or any national
securities exchange. The Company, during the period when the Prospectus is
required to be delivered under the Act, will file all documents required to be
filed with the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act and the rules and regulations of the Commission
thereunder.
(i) The Company will use its best efforts to list the Shares on the
American Stock Exchange, subject only to official notice of issuance.
(j) The Company shall maintain, at its own expense, a registrar and
transfer agent for the Common Stock.
(k) The Company will use its best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to or after the Closing Date or any Additional Closing Date,
as the case may be, and to satisfy all conditions precedent to the delivery of
the Shares.
18
You, on behalf of the several Underwriters, may, in your sole
discretion, waive in writing the performance by the Company of any one or more
of the foregoing covenants, or extend the time for their performance.
6. Covenants of the Selling Stockholders. Each Selling Shareholder
further covenants and agrees with each Underwriter:
(a) During the period of 90 days from the date of the Prospectus,
such Selling Stockholders will not, directly or indirectly, without your prior
written consent, issue, sell, offer, agree to sell, grant any option or contract
for the sale of, pledge, make any short sale of, maintain any short position
with respect to, establish or maintain a "put equivalent position" (within the
meaning of Rule 16a-1(h) under the Exchange Act) with respect to, enter into any
swap, derivative transaction or other arrangement (whether any such transaction
is to be settled by delivery of Common Stock, other securities, cash or other
consideration) that transfers to another, in whole or in part, any of the
economic consequences of ownership, or otherwise dispose of any shares of
capital stock of the Company (or any securities convertible into, exercisable
for or exchangeable for capital stock of the Company or interest therein or any
capital stock of the Company's subsidiary), other than such Selling
Stockholders' sale of Selling Stockholder Additional Shares hereunder.
(b) That such Selling Stockholders will not distribute, prior to the
later of the Additional Closing Date and the completion of the Underwriters'
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares, other than a preliminary prospectus, the
Prospectus or the Registration Statement.
(c) To deliver to you prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-8 (if the
Selling Stockholders is a non-United States person) or Form W-9 (if the Selling
Stockholders is a United States person).
(d) To advise you promptly, and if requested by you, to confirm such
advice in writing, so long as delivery of a Prospectus relating to the Shares by
an underwriter or dealer may be required under the Act, of (i) any change in the
capital stock of the Company or the long term indebtedness of the Company, or
any material adverse change or any development involving a material adverse
change in the business, prospects, properties, operations, condition (financial
or other), stockholders' equity or results of operations of the Company and its
subsidiary, taken as a whole, (ii) any change in information in the Registration
Statement and the Prospectus relating to such Selling Stockholders, or (iii) any
new material information relating to the Company and its subsidiary, or relating
to any matter stated in the Registrations Statement and the Prospectus, which
comes to the attention of such Selling Stockholders.
You, on behalf of the several Underwriters, may, in your sole discretion,
waive in writing the performance by any Selling Shareholder of any one or more
of the foregoing covenants, or extend the time for their performance.
7. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or
19
supplements thereto, and the printing and furnishing of copies of each thereof
to the Underwriters and to dealers (including costs of mailing and shipment),
(ii) the registration, issue, sale and delivery of the Shares, (iii) the
producing, word processing and/or printing of this Agreement, any agreement
among underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law as
aforesaid (including the reasonable legal fees and filing fees and other
disbursements of counsel for the Underwriters) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on the National
Association of Securities Dealers Automated Quotation National Market System and
any registration thereof under the Exchange Act, (vi) the review of the public
offering of the Shares by the NASD, including the associated filing fees and the
reasonable fees and disbursements of counsel for the Underwriters, (vii) the
costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offer and sale of the Shares
to prospective investors and the Underwriters' sales forces, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show and (ix) the performance of the
Company's other obligations hereunder.
The Company further agrees that it will be responsible for paying, directly
or by reimbursement, all fees and expenses incident to the performance of the
Company's and the Selling Stockholders' obligations under this Agreement
(including fees and costs incurred in connection with the Additional Closing, if
any) which are not otherwise specifically provided for herein, including,
without limitation, fees and expenses of the Custodian. The Company and each
Selling Stockholder acknowledge that the Underwriters shall have no
responsibility to pay any expenses or taxes incident to the sale and delivery of
the Selling Stockholder Additional Shares to be sold by the Selling Stockholders
to the Underwriters hereunder, which taxes, if any, may be deducted by the
Custodian under the provisions of Section 4(c) hereof. Each Selling Stockholders
will be responsible for the Underwriters' discounts and commissions in respect
of the Selling Stockholder Additional Shares sold by such Selling Stockholder.
8. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Shares, as provided herein, shall be
subject to the accuracy of the representations and warranties of the Company and
the Selling Stockholders herein contained, as of the date hereof and as of the
Closing Date (for purposes of this Section 8, "Closing Date" shall refer to the
Closing Date for the Firm Shares and any Additional Closing Date, if different,
for the Additional Shares), to the absence from any certificates, opinions,
written statements or letters furnished to you or to Akin Gump Xxxxxxx Xxxxx &
Xxxx LLP ("Underwriters' Counsel") pursuant to this Section 8 of any
misstatement or omission, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to the following
additional conditions:
20
(a) The Registration Statement shall have become effective not
later than 5:30 P.M., New York time, on the date of this Agreement, and, if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M., New
York time, on the second full business day after the date of this Agreement and
any registration statement pursuant to Rule 462(b) under the Act required in
connection with the offering and sale of the Shares shall have been filed and
become effective no later than 10:00 P.M., New York time, on the date of this
Agreement. At or prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date, you shall have received the opinion of
Xxxxxxxxx, Xxxxxx & Preston L.L.P., counsel for the Company, dated the Closing
Date, addressed to the Underwriters, and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each of the Company and its subsidiary has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and
its subsidiary is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of
its properties, whether owned, leased or operated, or the nature or
conduct of its business makes such qualification necessary. Each of the
Company and its subsidiary has all requisite power and authority, and all
necessary consents, approvals, certificates, authorizations, orders,
registrations, qualifications, licenses and permits (collectively,
"Governmental Licenses"), of and from all appropriate public, regulatory
or governmental agencies and bodies, to own, lease and operate its
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus, each such
Governmental License is valid and in full force and effect, and no such
Governmental License contains a material restriction not adequately
disclosed in the Registration Statement and the Prospectus, and, to such
counsel's knowledge, the Company has not received any notice of
proceedings relating to the revocation or modification of, or
non-compliance with, any such Governmental Licenses.
(ii) The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and the
Prospectus. All of the outstanding shares of the capital stock of the
Company and its subsidiary are duly and validly authorized and issued,
are fully paid and nonassessable and were not issued in violation of, or
subject to, any preemptive rights, rights of first refusal or similar
rights. The Shares to be delivered on the Closing Date have been duly and
validly authorized, when delivered to the Underwriters against payment
therefor in accordance with this Agreement, will be duly and validly
issued, fully paid and nonassessable, and will not have been issued in
violation of, or subject to, any preemptive rights, rights of first
refusal or similar rights, and no holder of such Shares will be subject
to personal liability by reasons of being such a holder. The authorized
capital stock of the Company, including the Firm Shares and the
Additional Shares, conform to the descriptions thereof contained in the
Registration Statement and the Prospectus. To such counsel's knowledge,
there are no outstanding options, warrants or other rights calling for
the issuance of, and no commitments, obligations, plans or arrangements
to issue, any shares of capital stock of the Company or
21
any security convertible into or exchangeable for capital stock of the
Company, except as disclosed in the Registration Statement and the
Prospectus. The outstanding stock options relating to the Common Stock
have been duly authorized and validly issued, and conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus. The Common Stock (including the Shares) is registered
pursuant to Section 12(b) of the Exchange Act. The Shares to be sold
under this Agreement to the Underwriters have been approved for listing
on the American Stock Exchange, subject to notice of issuance.
(iii) This Agreement and the transactions contemplated herein
have been duly and validly authorized by the Company, and this Agreement
has been duly and validly executed and delivered on behalf the Company.
(iv) Neither the Company nor its subsidiary is in violation of
its respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor its subsidiary is in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company and its
subsidiary, taken as a whole, to which the Company or its subsidiary is a
party or by which the Company or its subsidiary or their respective
property is bound.
(v) All of the outstanding capital stock of, or other ownership
interests in, the Company's subsidiary are owned by the Company, free and
clear of any security interest, mortgage, pledge, claim, lien, limitation
on voting rights or other encumbrance; and all such securities have been
duly and validly authorized and issued, are fully paid and nonassessable,
and none of such securities was issued in violation of any preemptive
rights, rights of first refusal or similar rights.
(vi) All descriptions in the Registration Statement of legal and
governmental proceedings are accurate and fairly present the information
required to be shown. To such counsel's knowledge, after due inquiry,
there is no litigation or any governmental action, suit or proceeding
which is pending or, to such counsel's knowledge, contemplated, to which
the Company or its subsidiary is or will be a party, or to which any
property of the Company or its subsidiary, whether owned, leased or
operated, is or may be subject, or which has as the subject matter
thereof any officer or director of the Company or its subsidiary, which
is required to be disclosed in the Registration Statement and the
Prospectus.
(vii) The execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby by the
Company, do not, and will not, (A) conflict with or result in a breach of
any of the terms and provisions of, or constitute a default (or an event
which with notice or lapse of time, or both, would constitute a default)
or Repayment Event (as hereinafter defined) under, require approval or
consent under, or result in the creation or imposition of any lien,
charge or other encumbrance upon any property or assets of the Company or
its subsidiary pursuant to any agreement or instrument filed as an
exhibit to the Registration Statement or listed on a schedule to such
opinion, or (B) violate or conflict with (1) any provision of the
articles of incorporation or by-laws or other organizational documents of
the Company or its
22
subsidiary, or (2) any statute, rule or regulation of any public,
governmental or regulatory agency or body having jurisdiction over the
Company or its subsidiary or any of their respective properties or assets
or any order, writ, judgment or decree known to such counsel. No consent,
approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company or its
subsidiary or any of their respective properties or assets, is required
for the execution, delivery and performance of this Agreement, or the
consummation of the transactions contemplated hereby, by the Registration
Statement and by the Prospectus, including the issuance, sale and
delivery of the Shares to be issued, sold and delivered by the Company
and the Selling Stockholders hereunder, except the registration under the
Act of the Shares and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as have been
obtained or may be required under state securities or Blue Sky laws, or
with the National Association of Securities Dealers, Inc. (the "NASD"),
in connection with the purchase and distribution of the Shares by the
Underwriters. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company.
(viii) Neither the Company nor its subsidiary is, nor upon
consummation of the transactions contemplated hereby will be, subject to
registration as an "investment company" or an entity "controlled" by an
"investment company" under the Investment Company Act of 1940, as
amended.
(ix) The Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or
incorporated by reference therein, as to which no opinion need be
rendered) comply in all material respects with the requirements of the
Act and the Regulations (and, if filed by electronic transmission
pursuant to XXXXX, was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the
Shares).
(x) The Registration Statement is effective under the Act, and
to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof or
supplement thereto, or suspending the registration or qualification of
the Shares has been issued by the Commission or the Blue Sky or
securities authority of any jurisdiction, and to such counsel's
knowledge, no such authorities have instituted or threatened to institute
any proceedings therefor. Any required filing of the Prospectus pursuant
to Rule 424(b) of the Regulations has been made in the manner and within
the time period required by such Rule 424(b).
(xi) The statements in the Registration Statement and the
Prospectus under the captions "Management," "Related Party Transactions,"
"Principal and Selling Stockholders," "Description of Capital Stock,"
"Risk Factors - U.S. Government contracts are subject to immediate
termination and are heavily regulated and audited" and "Risk Factors - If
we are unable to protect our intellectual property effectively, we may be
unable to prevent third parties from using our technologies, which would
impair our
23
competitive advantage" and in Items 14 and 15 of Part II of the
Registration Statement, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein,
fairly present and summarize, in all material respects, the matters
referred to therein.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the articles of
incorporation and by-laws of the Company, and with the requirements of
the American Stock Exchange.
(xiii) To such counsel's knowledge, except as have been waived in
writing, no holder of any securities of the Company has any rights to the
registration of securities of the Company, or other similar rights to
have any securities of the Company included in the offering contemplated
by this Agreement, because of the filing of the Registration Statement or
otherwise in connection with the sale of the Shares contemplated hereby
and the Additional Shares included in the Registration Statement.
(xiv) All descriptions in the Registration Statement of contracts
and other documents to which the Company is a party are accurate and
fairly present the information required to be shown. To such counsel's
knowledge, there are no franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement, or to be filed as
exhibits thereto, other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material
respects.
(xv) In addition, such opinion shall also contain a statement
that such counsel has participated in conferences with officers and
representatives of the Company, representatives of the independent public
accountants for the Company and the Underwriters at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed, and no facts have come to the attention of such counsel which
would lead such counsel to believe that either the Registration Statement
at the time it became effective (including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A(b) or Rule 434, if applicable), or any post-effective
amendment thereof made prior to the Closing Date as of the date of such
post-effective amendment, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus as of its date (or any post-effective amendment thereof or
supplement thereto made prior to the Closing Date as of the date of such
post-effective amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted
or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial data included or
incorporated by reference therein).
24
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
certificates or other written statements of officers of departments of various
jurisdictions having custody of documents regarding the corporate existence or
good standing of the Company and its subsidiary, provided that copies of any
such statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(c) At the Closing Date, you shall have received the opinion of
Xxxxxxxx & Xxxxxxxx LLP, intellectual property counsel to the Company, dated the
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriter's Counsel, to the effect that the Company and its
subsidiary own or possess, or can acquire on reasonable terms, all patents,
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade names
("intellectual property") currently employed by them in connection with the
business now operated by them except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not, singly or in
the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operation of the Company and its subsidiary,
taken as a whole; and, to the best of such counsel's knowledge after due
inquiry, neither the Company nor its subsidiary has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of such intellectual property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a material adverse
effect on the business, prospects, financial condition or results of operations
of the Company and its subsidiary, taken as a whole.
(d) At the Closing Date, you shall have received the opinion of
___________, counsel for the Selling Stockholders, dated the Closing Date,
addressed to the Underwriters and in form and substance satisfactory to
Underwriters' Counsel, to the effect that:
(i) Each Selling Stockholders has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws), to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholders in the manner provided in this Agreement.
(ii) If such Selling Stockholders is an individual, that such
Selling Stockholders has full legal capacity to enter into and deliver this
Agreement and to perform his or her obligations hereunder. If such Selling
Stockholders is not an individual, that this Agreement and the transactions
contemplated herein have been duly and validly authorized by such Selling
Stockholders. This Agreement has been duly and validly executed and
delivered by such Selling Stockholders, and is a valid and binding
agreement of such Selling Stockholders.
25
(iii) Each of (i) the Custody Agreement signed by such Selling
Stockholders with __________________, as custodian (the "Custodian"),
relating to the deposit of the Selling Stockholder Additional Shares to be
sold by such Selling Stockholders (the "Custody Agreement"), and (ii) the
Power of Attorney signed by such Selling Stockholders appointing
_________________ and __________________ as such Selling Stockholders'
attorneys-in-fact (each, an "Attorney-in-Fact") to the extent set forth
therein (the "Power of Attorney"), and the transactions contemplated
therein, have been duly and validly authorized, executed and delivered by
each Selling Stockholders, and is a valid and binding agreement of such
Selling Stockholders, enforceable in accordance with its terms, except as
rights to indemnification and contribution thereunder may be limited by
applicable law, and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors, or by
general equitable principles.
(iv) Such Selling Stockholders is the lawful owner of the
Selling Stockholder Additional Shares to be sold by such Selling
Stockholders hereunder, and has good and valid title to all of such Shares,
and the legal right and power, and all authorizations and approvals
required by law and, where applicable, under its charter or by-laws,
partnership agreement, trust agreement or other organizational documents,
to enter into this Agreement and its Custody Agreement and Power of
Attorney, to sell, transfer and deliver all of the Selling Stockholder
Additional Shares to be sold by such Selling Stockholders pursuant to this
Agreement, and to comply with its other obligations hereunder and
thereunder, and upon sale and delivery of, and payment for, such Shares,
such Selling Stockholders will convey good and marketable title to such
Shares, free and clear of all security interests, mortgages, pledges,
liens, encumbrances or other claims.
(v) [The Selling Stockholders has been duly organized and is
validly existing as a corporation, partnership, limited liability company,
trust or other entity, as the case may be, in good standing under the laws
of its jurisdiction of incorporation.]
(vi) The execution and delivery by such Selling Stockholders of,
and the performance by such Selling Stockholders of its obligations under,
this Agreement, the Custody Agreement and the Power of Attorney, will not
(i) conflict with or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) or Repayment Event (as defined
above) under, require approval or consent under, or result in the creation
or imposition of any lien, charge or other encumbrance upon any property or
assets of such Selling Stockholders pursuant to, any agreement, instrument,
franchise, license or permit to which such Selling Stockholders is a party
or by which such Selling Stockholders or its properties or assets may be
bound or under which it is entitled to any right or benefit, or (ii)
violate or conflict with (A) any provision of the certificate of
incorporation, by-laws, partnership agreement, limited liability company
agreement or trust agreement, as the case may be, or other organizational
documents of such Selling Stockholders, or (B) any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over such Selling
Stockholders or any of its properties or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit of or with any court or any
26
public, governmental or regulatory agency or body having jurisdiction over
such Selling Stockholders or any of its properties or assets is required
for the execution, delivery and performance of this Agreement, the Custody
Agreement or the Power of Attorney, or the consummation of the transactions
contemplated hereby or thereby, including the issuance, sale and delivery
of the Selling Stockholder Additional Shares to be issued, sold and
delivered by such Selling Stockholders hereunder, except the registration
under the Act of such Shares and such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses and permits as
have been obtained or may be required under state securities or Blue Sky
laws, or with the NASD, in connection with the purchase and distribution of
such Shares by the Underwriters.
(vii) With respect to the information furnished by or on behalf
of such Selling Stockholders for use in the Registration Statement, no
facts have come to the attention of such counsel which would lead such
counsel to believe that either at the time the Registration Statement
became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b) or Rule 434, if applicable), or any post-effective amendment
thereof made prior to the Closing Date, as of the date of such
post-effective amendment, contained an untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or the Prospectus,
as of its date (or any post-effective amendment thereof or supplement
thereto made prior to the Closing Date, as of the date of such
post-effective amendment or supplement) and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely (x) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to Underwriters'
Counsel) of other counsel reasonably acceptable to Underwriters' Counsel,
familiar with the applicable laws; (y) as to matters of fact, to the extent they
deem proper and is applicable, on certificates of officers of the Selling
Stockholders and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Selling Stockholders, provided that
copies of any such statements or certificates shall be delivered to
Underwriters' Counsel. The opinion of such counsel for the Selling Stockholders
shall state that the opinion of any such other counsel is in form satisfactory
to such counsel and, in their opinion, you and they are justified in relying
thereon.
(e) All proceedings taken in connection with the sale of the Shares
as herein contemplated shall be satisfactory in form and substance to you and to
Underwriters' Counsel, and the Underwriters shall have received from said
Underwriters' Counsel a favorable opinion dated as of the Closing Date with
respect to the issuance and sale of the Firm Shares, and as of the Additional
Closing Date with respect to the Additional Shares, the Registration Statement
and the Prospectus and such other related matters as you may reasonably require,
and the
27
Company shall have furnished to Underwriters' Counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) At the Closing Date, you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated the
Closing Date, to the effect that (i) the conditions set forth in subsection (a)
of this Section 8 have been satisfied, (ii) as of the date hereof and as of the
Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and its
subsidiary have not sustained any material loss or interference with its
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any change in the
capital stock of the Company or the long term indebtedness of the Company, or
any material adverse change, or any development involving a material adverse
change, in the business prospects, properties, operations, condition (financial
or otherwise), stockholders' equity or results of operations of the Company and
its subsidiary taken as a whole, except in each case as described in or
contemplated by the Prospectus.
(g) At the Closing Date, you shall have received a certificate of the
Selling Stockholders, dated the Closing Date, to the effect that (i) as of the
date hereof and as of the Closing Date, the representations and warranties of
such Selling Stockholders set forth in Section 2 hereof are accurate, and (ii)
as of the Closing Date, the obligations of such Selling Stockholders to be
performed hereunder on or prior thereto have been duly performed.
(h) The Underwriters shall have received, on each of the date hereof
and the Closing Date and any Additional Closing Date, a letter dated the date
hereof or the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Underwriters, from Xxxxxxx & Company,
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than the
date hereof.
(i) For the period from and after the date of this Agreement and
prior to the Closing Date, and with respect to the Additional Shares, the
Additional Closing Date, in your judgment, there shall not have occurred any
change in the capital stock of the Company or the long term indebtedness of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, in the business, prospects, properties,
operations, condition (financial or other), stockholders' equity or results of
operations of the Company and its subsidiary, taken as a whole.
(j) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to you for your review copies of the Custody
Agreement and Power of Attorney executed by the Selling Stockholders.
28
(k) Prior to the Closing Date, the Company shall have obtained an
executed lock-up agreement substantially in the form attached as Exhibit A
hereto, from each of its officers and directors, and its 5% and greater
stockholders.
(l) Prior to the Closing Date, and with respect to any Additional
Shares, prior to the Additional Closing Date, the Company and the Selling
Stockholders shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(m) At the Closing Date, the Shares shall have been approved for
listing on the American Stock Exchange, subject to official notice of issuance.
(n) The NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
If any of the conditions specified in this Section 8 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 8 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be canceled by you
at, or at any time prior to, the Closing Date, and the obligations of the
Underwriters to purchase the Additional Shares may be canceled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company, in writing, or by telephone, facsimile, telex or
telegraph, confirmed in writing.
9. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and its directors, officers, employees and each person, if any, who controls any
such Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which the Underwriters may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
or any preliminary prospectus or the Prospectus, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent, but only to the
extent, that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriters through
you expressly for use therein. This indemnity agreement will be in addition to
any liability which the Company or its subsidiary may otherwise have, including
under this Agreement.
29
(b) Each of the Selling Stockholders agrees to indemnify and hold
harmless each Underwriter and its directors, officers, employees and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which the Underwriters may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) any breach of any representation, warranty or
covenant of such Selling Stockholders contained herein, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, or any preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that each Selling Stockholders shall
not be liable in any such case to the extent, but only to the extent, that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriters through
you expressly for use therein; provided further, that the liability of each
Selling Stockholders under this Section 9(b) shall be limited to an amount equal
to the total net proceeds from the Underwriters for the Selling Stockholder
Additional Shares sold by such Selling Stockholders to the Underwriters;
provided further, that each Selling Stockholders shall only be liable in any
such case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein relating to such Selling Stockholders. This indemnity agreement will be
in addition to any liability which the Selling Stockholders may otherwise have,
including under this Agreement.
(c) The Underwriters, severally and not jointly, agree to indemnify
and hold harmless the Company and the Selling Stockholders, and each of their
respective directors, officers who shall have signed the Registration Statement,
each other person, if any, who them within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, against any losses, liabilities, claims,
damages and expenses whatsoever as incurred (including but not limited to
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
or any related preliminary prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission
30
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Underwriters through
you expressly for use therein; provided, however, that in no case shall the
Underwriters be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by the Underwriters
hereunder. This indemnity will be in addition to any liability which the
Underwriters may otherwise have, including under this Agreement. The Company and
the Selling Stockholders acknowledge that the statements set forth under the
sub-heading "Public Offering Price and Dealers Concession" and under the
sub-heading "Stabilization and Other Transactions," in each case, found under
the caption "Plan of Distribution" in the Prospectus, constitute the only
information furnished in writing by or on behalf of the Underwriters expressly
for use in the Registration Statement or in any amendment thereof, any related
preliminary prospectus or the Prospectus or in any amendment thereof or
supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement of such action
(but the failure so to notify an indemnifying party shall not relieve it from
any liability which it may have under this Section 9). In case any such action
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent it may elect by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. No
indemnifying party shall be liable to an indemnified party for any losses,
claims, damages, liabilities and judgments by reason of settlement of any action
or claim effected without its written consent, which consent shall not be
unreasonably withheld.
10. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 9 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the
31
Company or the Selling Stockholders any contribution received by the Company or
the Selling Stockholders from persons, other than the Underwriters, who may also
be liable for contribution, including persons who control them within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, their
officers who have signed the Registration Statement, and their directors) as
incurred to which the Company and one or more of the Underwriters may be
subject, in such proportions as are appropriate to reflect the relative benefits
received by the Company, the Selling Stockholders and the Underwriters from the
offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company, the
Selling Stockholders and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, each of the Selling Stockholders and the
Underwriters, respectively, shall be deemed to be in the same proportion as (a)
the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company, (b) the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by such Selling Stockholder and (c) the
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company, the Selling Stockholders and of
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Stockholders or the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 10 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 10, (i) in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section 10
and the preceding sentence, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section 10, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Underwriters, and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, and each officer who shall have signed the Registration Statement,
and each director of the Company or any Selling Stockholder shall have the same
rights to contribution as the Company and such Selling Stockholder, subject in
each case to clauses (i) and (ii) of this Section 10. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties, notify each party or
parties from whom contribution may be sought, but the omission to so notify such
32
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 10 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its consent; provided, however, that such consent was
not unreasonably withheld.
11. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if the
Firm Shares or Additional Shares with respect to which such default relates do
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters, or in
such other proportions as may be specified by you with the consent of the
non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the Firm
Shares or Additional Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such
Shares, as the case may be, to which such default relates on the terms contained
herein. In the event that within five (5) calendar days after such a default you
do not arrange for the purchase of the Firm Shares or Additional Shares, as the
case may be, to which such default relates as provided in this Section 11, this
Agreement or, in the case of a default with respect to the Additional Shares,
the obligations of the Underwriters to purchase, of the Selling Stockholders to
sell the Selling Stockholder Additional Shares and of the Company to Sell the
Company Additional Shares, this Agreement shall thereupon terminate, without
liability on the part of the Company (except, in each case, that the provisions
of Sections 7, 9, 10 and 13(b) hereof shall at all times be effective and shall
survive such termination) or the non-defaulting Underwriters with respect
thereto, but nothing in this Agreement shall relieve a defaulting Underwriter or
Underwriters of its or their liability, if any, to the other Underwriters and
the Company and the Selling Stockholders for damages occasioned by its or their
default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, either you on the one
hand or the Company and the Selling Stockholders on the other hand shall have
the right to postpone the Closing Date or an Additional Closing Date, as the
case may be for a period, not exceeding five (5) Business Days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of the Company's counsel and
Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 with like effect as if it had originally been a party to
this Agreement with respect to such Shares.
33
12. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Company, the Selling Stockholders
and the Underwriters contained in this Agreement, including the agreements
contained in Section 7 hereof, the indemnity agreements contained in Section 9
hereof and the contribution agreements contained in Section 10 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Underwriters or any controlling person thereof or by
or on behalf of the Company, the Selling Stockholders or any of their respective
officers and directors or any controlling person thereof and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Sections 1 and 2, and the agreements contained in
Sections 7, 9, 10 and 13(d) hereof shall survive the termination of this
Agreement, including termination pursuant to Section 13 hereof.
13. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule 430A under the Act
is not used, such time as you and the Company shall have received notification
of the effectiveness of the Registration Statement, or (ii) if Rule 430A under
the Act is used, upon the execution and delivery of this Agreement. If either
the public offering price or the purchase price per Share has not been agreed
upon prior to 5:00 P.M., New York time, on the fifth full Business Day after the
Registration Statement shall have become effective, this Agreement shall
thereupon terminate without liability to the Company or the Underwriters except
as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by you by notifying the Company, or it may be
terminated by the Company by notifying you. Notwithstanding the foregoing, the
provisions of this Section 13 and of Sections 1, 2, 7, 9 and 11 hereof shall at
all times be in full force and effect.
(b) The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least fifty percent (50%) of the Firm Shares, (i) if, since the
time of execution of this Agreement or the respective dates as of which
information is given in the Registration Statement and Prospectus, there has
been any material adverse change, or any development involving a prospective
material adverse change (other than as specifically identified in the
Registration Statement and Prospectus) in the business, prospects, properties,
condition (financial or otherwise) or results of operations of the Company which
would, in your judgment or in the judgment of such group of Underwriters, make
it impracticable to market the Shares, or (ii) if, at any time prior to the time
of purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or limitations or minimum prices shall have
been established on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market, or (iii) if a banking moratorium shall have been
declared either by the United States or New York State authorities, or (iv) if
any domestic or international event or act or occurrence has materially
disrupted, or in your opinion will in the immediate future materially disrupt,
the market for the Company's securities or securities in general.
(c) Any notice of termination pursuant to this Section 13 shall be by
telephone, facsimile, telex or telegraph, confirmed in writing.
34
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 13(a) hereof or (ii) Section 13(b) hereof), or if the sale
of the Shares provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth herein is not satisfied or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will, subject
to demand by you, reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of their counsel), incurred by the Underwriters
in connection herewith.
14. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, (i) if sent to the
Underwriters, shall be mailed, delivered, sent by facsimile, telex or telegraph
and confirmed in writing by letter to X.X. Xxxxxxxxx, Towbin, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: __________, fax no. (000) 000-0000, with
a copy to Akin Gump Xxxxxxx Xxxxx & Xxxx LLP, 0000 Xxx Xxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx Xxxxxxxxxx, Esq., fax no. (202)
000-0000, (ii) if sent to the Company, shall be mailed, delivered, or sent by
facsimile, telex or telegraph and confirmed in a letter to Essex Corporation,
0000 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000, Attention: Xxxxxxxx Xxxxxx, Vice
President, Finance and General Counsel, fax no. (000) 000-0000, with a copy to
Xxxxxxxxx, Xxxxxx & Preston L.L.P., Xxxxx Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: D. Xxxxx Xxxxx, Esq., fax no. (000) 000-0000.
15. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the Company, the Selling Stockholders and the Underwriters, and
the controlling persons, directors, officers, employees and agents referred to
in Sections 9 and 10, and their respective heirs, legal representatives,
distributees, beneficiaries, successors and assigns, and no other person shall
have or be construed to have any legal or equitable right, remedy or claim under
or in respect of or by virtue of this Agreement or any provision contained
herein. The term "successors and assigns" shall not include a purchaser, in its
capacity as such, of Shares from the Underwriters.
16. General Representation. 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 provisions of Section 9 and the contribution
provisions of Section 10, and is fully informed regarding said provisions. Each
of the parties hereto further acknowledges that the provisions of Sections 9 and
10 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 Securities Act and the Exchange Act.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
18. Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
35
If the foregoing correctly sets forth the understanding between you,
the Company and the Selling Stockholders, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
ESSEX CORPORATION
By: __________________________________________
Name:
Title:
The Selling Stockholders Listed on Schedule II
By: __________________________________________
Name:
Title:
As Attorney in Fact acting on behalf of the Selling
Stockholders named in Schedule II
Accepted as of the date first above written
X.X. XXXXXXXXX, TOWBIN
By: __________________________
Name:
Title: Managing Director
On behalf of each of the Underwriters
SCHEDULE I
Total Number of
Firm Shares
Underwriter To be Purchased
X.X. Xxxxxxxxx, Towbin
X.X. Xxxxxxx & Sons, Inc.
Total:
SCHEDULE II
Selling Stockholders
