EXHIBIT 1.1
[1,500,000] Units
INTERNATIONAL SPORTS WAGERING INC.
UNDERWRITING AGREEMENT
_____ __, 1996
Barington Capital Group, L.P.
GKN Securities Corp.
As Representatives of the several
Underwriters named in
Schedule I attached hereto
c/o Barington Capital Group, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned, International Sports Wagering Inc., a Delaware corporation
(the "Company"), hereby confirms its agreement with you (the "Representatives")
and the other underwriters named in Schedule I hereto (you and the other
underwriters being herein collectively called the "Underwriters") in connection
with a proposed offering of securities (the "Offering") as follows:
1. Introductory. The Company proposes to issue and sell to the Underwriters
[1,500,000] units (the "Units"), each Unit consisting of one share of Common
Stock, par value $.001 per share, of the Company (the "Common Stock") and one
Common Stock Purchase Warrant (the "Warrants"). In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant the
Underwriters the option to purchase from it up to an additional [225,000] Units
(the "Additional Units") identical to the Units.
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), a
registration statement, and may have filed one or more amendments thereto, on
Form SB-2 (Registration No. 333- ), including in such registration statement and
each such amendment a related Preliminary Prospectus (as hereinafter defined)
for the registration of (i) the Units; (ii) the shares of Common Stock (the
"Firm Stock") and Warrants (the "Firm Warrants" and collectively with the Firm
Stock, the "Firm Securities") comprising the Units; (iii) the Additional
Units; (iv) the shares of Common Stock
(the "Additional Stock") and Warrants (the "Additional Warrants" and,
collectively with the Additional Stock, the "Additional Securities") comprising
the Additional Units; (v) the shares of Common Stock underlying the Firm
Warrants (the "Firm Warrant Stock") and the Additional Warrants (the "Additional
Warrant Stock"); (vi) the Units (the "Representatives' Units") underlying the
Unit purchase option referred to in Section 5(s) (the "Representatives'
Options"); (vii) the shares of Common Stock (the "Representatives' Unit Stock")
and Warrants (the "Representatives' Unit Warrants") comprising the
Representatives' Units; (viii) the shares of Common Stock underlying the
Representatives' Unit Warrants (the "Representatives' Warrant Stock") and (ix)
the shares of Common Stock (the "Bridge Stock") issuable upon exercise of the
warrants (the "Bridge Warrants") issued to investors in connection with the
bridge financing (the "Bridge Financing") consummated prior to the Offering
(the Units, Firm Securities, the Additional Units, the Additional Securities,
the Firm Warrant Stock, the Additional Warrant Stock, the Representatives'
Options, the Representatives' Units, the Representatives' Unit Stock, the
Representatives' Unit Warrants, the Representatives' Warrant Stock, the Bridge
Warrants, and the Bridge Stock are collectively referred to as the
"Securities").
The term "Registration Statement" as used in this Agreement shall mean such
registration statement, including all exhibits and financial statements, all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, and any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Offering (herein called a
"Rule 462(b) registration statement"), and, in the event of any amendment
thereto after the effective date of such registration statement (herein called
the "Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Units first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
"Preliminary Prospectus" as used in this Agreement shall mean each prospectus
subject to completion included in such registration statement and any amendment
thereto (including the prospectus subject to completion, if any, included in the
Registration Statement or any amendment thereto at the time it is declared
effective).
(b) When any Preliminary Prospectus was filed with the Commission it (i)
contained all statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder (the "Regulations"), and (ii)
did not include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto becomes effective, and at all
times subsequent thereto to and including the Closing Date (as defined in
Section 3) and each Additional Closing Date (as defined in Section 3), and
during such longer period as the Prospectus may be required to be delivered in
connection with sales by the Underwriter or a dealer, and during such longer
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period until any post-effective amendment thereto shall become effective, the
Registration Statement (and any post-effective amendment thereto) and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement to the Registration Statement or the
Prospectus) will: (i) contain all statements required to be stated therein in
accordance with, and will comply in all material respects with the requirements
of the Act and the Regulations, and (ii) not include any 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 not misleading; no event shall have
occurred which should have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not then been set forth in
such an amendment or supplement; if a Prospectus containing such information
(the "Rule 430A Information") as is required or permitted by Rule 430A of the
Act is included in the Registration Statement at the time it becomes effective,
the Prospectus filed pursuant to Rules 430A and 424(b)(1) or (4) will: (i)
contain all Rule 430A Information, (ii) contain all statements which are
required to be stated therein in accordance with the Act or the Regulations, and
will comply with the Act and the Regulations, and (iii) will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statement therein not misleading.
The foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company as stated in Section 8(b) with respect to any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b), then (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt, and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(d) Neither the Commission nor the "blue sky" or securities authority of
any jurisdiction have issued an order (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 any
of the Securities, nor has any of such authorities instituted or threatened to
institute any proceedings with respect to a Stop Order.
(e) Any contract, agreement, instrument, lease, or license required to be
described in the Registration Statement or the Prospectus has been properly
described therein. Any contract, agreement, instrument, lease, or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to the Registration Statement.
(f) The Company has no subsidiaries (as defined in the Regulations). The
Company is a corporation duly organized, validly existing, and in good standing
under the laws of
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Delaware, with full corporate power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to carry on the business in the
manner described in the Prospectus. The Company is duly qualified to do business
and is in good standing in every jurisdiction in which its ownership, leasing,
licensing, or use of property and assets or the conduct of its business makes
such qualification necessary.
(g) The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, of which 6,024,277 shares are outstanding, and 2,000,000
shares of undesignated preferred stock, par value $.001 per share, of which no
shares are outstanding. Each outstanding share of Common Stock is validly
authorized, validly issued, fully paid, and nonassessable, without any personal
liability attaching to the ownership thereof, has not been issued and is not
owned or held in violation of any preemptive rights of stockholders. There is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of capital stock of the
Company or any security or other instrument which by its terms is convertible
into, exercisable for, or exchangeable for capital stock of the Company, except
as may be properly described in the Prospectus. There is outstanding no security
or other instrument which by its terms is convertible into or exchangeable for
capital stock of the Company except for (i) options to purchase no more than an
aggregate of 1,467,398 shares of Common Stock pursuant to the Company's existing
stock option plans, and (ii) warrants to purchase 195,000 shares of Common Stock
issued in connection with the Bridge Financing, all of which have been properly
described in the Prospectus. There is outstanding no indebtedness other than (i)
trade payables incurred in the ordinary course of business, (ii) certain capital
lease obligations, and (iii) $650,000 principal amount of 10% Senior Promissory
Notes issued in connection with the Bridge Financing.
(h) The financial statements of the Company included in the Registration
Statement and the Prospectus fairly present the financial position, the results
of operations, and the other information purported to be shown therein at the
respective dates and for the respective periods to which they apply. Such
financial statements have been prepared in accordance with generally accepted
accounting principles (except to the extent that certain footnote disclosures
regarding any stub period may have been omitted in accordance with the
applicable rules of the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), consistently applied throughout the periods
involved, are correct and complete, and are in accordance with the books and
records of the Company. The accountants whose report on the audited financial
statements is filed with the Commission as a part of the Registration Statement
are, and during the periods covered by their report(s) included in the
Registration Statement and the Prospectus were, independent certified public
accountants within the meaning of the Act and the Regulations. No other
financial statements are required by Form SB-2 or otherwise to be included in
the Registration Statement or the Prospectus. There has at no time been a
material adverse change in the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company
from the latest information set forth in the Registration Statement or the
Prospectus, except as may be properly described in the Prospectus.
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(i) There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or in
prospect (or any basis therefor) with respect to the Company, or any of its
operations, business, properties, assets, liabilities or future prospects,
except as may be properly described in the Prospectus or such as individually or
in the aggregate do not now have and will not in the future have a material
adverse effect upon the operations, business, properties, or assets of the
Company. The Company is not in violation of, or in default with respect to, any
law, rule, regulation, order, judgment, or decree except as may be properly
described in the Prospectus or such as in the aggregate do not now have and will
not in the future have a material adverse effect upon the operations, business,
properties, or assets of the Company; nor is the Company required to take any
action in order to avoid any such violation or default.
(j) The Company has good and marketable title in fee simple absolute to all
real properties and good title to all other properties and assets which the
Prospectus indicates are owned by it, free and clear of all liens, security
interests, pledges, charges, encumbrances, and mortgages (except as may be
properly described in the Prospectus). No real property owned, leased, licensed,
or used by the Company lies in an area which is, or to the knowledge of the
Company will be, subject to zoning, use, or building code restrictions which
would prohibit, and no state of facts relating to the actions or inaction of
another person or entity or his or its ownership, leasing, licensing, or use of
any real or personal property exists or will exist which would prevent, the
continued effective ownership, leasing, licensing, or use of such real property
in the business of the Company as presently conducted or as the Prospectus
indicates it contemplates conducting (except as may be properly described in the
Prospectus).
(k) The Company, or to the knowledge of the Company any other party, is not
now or not expected by the Company, to be in violation or breach of, or in
default with respect to, complying with any material provision of any contract,
agreement, instrument, lease, license, arrangement, or understanding which is
material to the Company, and each such contract, agreement, instrument, lease,
license, arrangement, and understanding is in full force and is the legal,
valid, and binding obligation of the parties thereto and is enforceable as to
them in accordance with its terms. The Company enjoys peaceful and undisturbed
possession under all leases and licenses under which it is operating. The
Company is not a party to or bound by any contract, agreement, instrument,
lease, license, arrangement, or understanding, or subject to any charter or
other restriction, which has had or may in the future have a material adverse
effect on the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Company. The Company is not in
violation or breach of, or in default with respect to, any term of its
certificate of incorporation (or other charter document) or by-laws.
(l) All patents, patent applications, trademarks, trademark applications,
trade names, service marks, copyrights, franchises, and other intangible
properties and assets (all of the foregoing being herein called "Intangibles")
that the Company owns or has pending, or under which it is licensed, are in good
standing and uncontested. The "SportsXction" name and its related logo is a
trademark and service xxxx used by the Company to identify its products, and
such trademarks and service marks are protected by registration in the name of
the Company on the principal register in the United States Patent and Trademark
Office. There is no right
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under any Intangible necessary to the business of the Company as presently
conducted or as the Prospectus indicates it contemplates conducting (except as
may be so designated in the Prospectus.) The Company has not infringed, is not
infringing, and has not received notice of infringement with respect to asserted
Intangibles of others. To the knowledge of the Company, there is no infringement
by others of Intangibles of the Company. To the knowledge of the Company, there
is no Intangible of others which has had or may in the future have a materially
adverse effect on the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of the Company.
(m) Neither the Company nor any director, officer, agent, employee, or
other person associated with or acting on behalf of the Company has, directly or
indirectly: used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
or made any bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment.
(n) The Company has all requisite corporate power and authority to execute,
deliver, and perform each of (i) this Agreement, (ii) the Warrant Agreement
between the Company and American Stock Transfer & Trust Company, as Warrant
Agent (the "Warrant Agent"), relating to the Firm Warrants, Additional Warrants,
and Representatives' Unit Warrants (the "Public Warrant Agreement"), (iii) the
Firm Warrants, the Additional Warrants and the Representatives' Unit Warrants,
and (iv) the certificates evidencing the Representatives' Options (the
"Representatives' Option Agreement", and collectively with this Agreement, the
Public Warrant Agreement, the Firm Warrants, the Additional Warrants, and the
Representatives' Unit Warrants, the "Company Documents"). All necessary
corporate proceedings of the Company have been duly taken to authorize the
execution, delivery, and performance of each of the Company Documents by the
Company. This Agreement has been duly authorized, executed, and delivered by
the Company, is the legal, valid, and binding obligation of the Company, and
is enforceable as to the Company in accordance with its terms. Each of the
other Company Documents has been duly authorized by the Company and, when
executed and delivered by the Company, will be, the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms. No consent, authorization, approval, order, license, certificate,
or permit of or from, or declaration or filing with, any federal, state, local,
or other governmental authority or any court or other tribunal is required by
the Company for the execution, delivery, or performance by the Company of any
of the Company Documents (except filings under the Act which have been or will
be made before the Closing Date and such consents consisting only of consents
under "blue sky" or state securities laws which have been obtained at or prior
to the date of this Agreement). No consent of any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
the Company is a party, or to which any of its properties or assets are subject,
is required for the execution, delivery, or performance of the Company
Documents; and the execution, delivery, and performance of any of the Company
Documents will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any such contract, agreement, instrument,
lease, license, arrangement, or understanding, or violate or result in a
breach of any term of the
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certificate of incorporation (or other charter document) or by-laws of the
Company or violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on the Company or to which any of
its operations, businesses, properties, or assets are subject.
(o) The Firm Stock and the Additional Stock are validly authorized and,
when issued and delivered in accordance with this Agreement, will be validly
issued, fully paid, and nonassessable, without any personal liability attaching
to the ownership thereof, and will not be issued in violation of any preemptive
rights of stockholders. The Underwriters will receive good title to the Firm
Securities and Additional Securities purchased by them, respectively, free and
clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts.
(p) The Firm Warrant Stock and Additional Warrant Stock are validly
authorized and reserved for issuance and, when issued and delivered upon
exercise of the Firm Warrants or Additional Warrants, as the case may be, in
accordance with the Public Warrant Agreement, will be validly issued, fully paid
and non-assessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive rights of
stockholders; and the holders of the Firm Warrants or Additional Warrants, as
the case may be, will receive good title to the securities purchased by them,
respectively, free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts.
(q) The Representatives' Units, including the Representatives' Unit Stock,
the Representatives' Unit Warrants, and the Representatives' Warrant Stock, are
validly authorized and reserved for issuance and, when issued and delivered upon
exercise of the Representatives' Options or Representatives' Unit Warrants, as
the case may be, in accordance with the Representatives' Option Agreement or the
Public Warrant Agreement, as the case may be, the Representatives' Unit Stock
and Representatives' Warrant Stock will be validly issued, fully paid and
non-assessable, without any personal liability attaching to ownership thereof,
and will not be issued in violation of any preemptive rights of stockholders;
and the holders of the Representatives' Options or Representatives' Unit
Warrants, as the case may be, will receive good title to the securities
purchased by them, respectively, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements, and voting
trusts.
(r) The Common Stock, the Securities and the Public Warrant Agreement
conform to all statements relating thereto contained in the Registration
Statement or the Prospectus.
(s) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and except as may otherwise be
properly described in the Prospectus, the Company has not (i) issued any
securities or incurred any liability or obligation, primary or contingent, for
borrowed money, (ii) entered into any transaction not in the ordinary course of
business, or (iii) declared or paid any dividend on its capital stock.
(t) Neither the Company nor any of its officers, directors, or affiliates
(as defined in the Regulations), has taken or will take, directly or indirectly,
prior to the termination of the
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underwriting syndicate contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the Company, or which has
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of the Units or
Additional Units.
(u) The Company has obtained from each of its directors, officers, and
affiliates (as defined in the Regulations), and from each other person or entity
who beneficially owned, as of the effective date of the Registration Statement,
any unregistered shares of Common Stock (an "Original Stockholder"), an
enforceable written agreement, in form and substance satisfactory to counsel for
the Underwriters, that for a period of 12 months from the effective date of the
Registration Statement he, she or it will not, without the prior written consent
of Barington Capital Group, L. P. ("Barington"), offer, pledge, sell, contract
to sell, grant any option for the sale of, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any security or other instrument which
by its terms is convertible into, exercisable for, or exchangeable for shares of
Common Stock or other securities of the Company, including, without limitation,
any shares of Common Stock issuable under any outstanding stock options other
than (i) the sale of an aggregate of 25,000 shares of Common Stock underlying
outstanding stock options held by employees of the Company other than ________,
and (ii) transfers by an Original Stockholder (a) by gift, will or by the laws
of descent and distribution, or otherwise to an Original Stockholder's spouse,
children or grandchildren, (b) a trust for the benefit of an Original
Stockholder's spouse, children or grandchildren, (c) a partnership, the general
partner of which is the Original Stockholder or a corporation, a majority of
whose outstanding stock is owned of record or beneficially by the Original
Stockholder or any of the foregoing, or (d) partners of the Original Stockholder
in connection with a distribution of the Company's Common Stock to such
partners; provided that, in each such case, each such transferee agrees in
writing to be bound by such transfer restrictions as if such transferee were a
party thereto.
(v) No person or entity has the right, other than any such person who has
delivered a waiver of such right, to require the Company to register any
securities for offering and sale under the Act by reason of the filing of the
Registration Statement with the Commission or the issue and sale of the
Securities.
(w) Except as may be set forth in the Prospectus, the Company has not
incurred any liability for a fee, commission, or other compensation on account
of the employment of a broker or finder in connection with the transactions
contemplated by this Agreement.
(x) The Company has obtained from each existing Principal Stockholder (as
defined in Section 5(x)) his enforceable written agreement in form and substance
satisfactory to counsel for the Underwriters, to comply with the provisions of
Section 5(x).
(y) Neither the Company nor any of its subsidiaries or affiliates is
presently doing business with the government of Cuba or with any person or
affiliate located in Cuba. If, at any time after the date that the Registration
Statement is declared effective with the Commission or with the Florida
Department of Banking and Finance (the "Florida
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Department"), whichever date is later, and prior to the end of the period
referred to in the first clause of Section 2(b), the Company commences engaging
in business with the government of Cuba or with any person or affiliate located
in Cuba, the Company will so inform the Florida Department within ninety days
after such commencement of business in Cuba, and during the period referred to
in Section 2(b) will inform the Florida Department within ninety days after any
change occurs with respect to previously reported information.
(z) The Securities have been approved for quotation on the NASDAQ SmallCap
Market, subject to official notice of issuance.
(aa) Except as contemplated herein or therein or as may have been waived,
no person or entity has any right of first refusal, preemptive right, right to
any compensation, or other similar right or option, in connection with the
Offering, this Agreement, the Representatives' Options or any of the
transactions contemplated hereby or thereby.
3. Purchase, Sale, and Delivery of the Units and the Additional Units. On
the basis of the representations, warranties, covenants, and agreements of the
Company herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the several Underwriters, and the
Underwriters, severally and not jointly, agree to purchase from the Company, the
numbers of Units set opposite the respective names of the Underwriters in
Schedule I hereto.
The purchase price per Unit to be paid by the several Underwriters shall be
$__________. The initial public offering price per Unit shall be $_________.
Payment for the Units by the Underwriters shall be made by certified or
official bank check or checks drawn upon or by New York Clearing House bank and
payable in next day funds to the order of the Company at the offices of
Barington Capital Group, L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at such other place in the New York City Metropolitan Area as you shall
determine and advise the Company by at least two full days' notice in writing,
upon delivery of the Units to you for the respective accounts of the
Underwriters. Such delivery and payment shall be made at 10:00 A.M., New York
City Time, on the third business day following the commencement of the Offering,
or at such other time as shall be agreed upon between you and the Company. The
time and date of such delivery and payment are herein called the "Closing Date."
Certificates for the Units shall be registered in such name or names and in
such authorized denominations as you may request in writing at least two full
business days prior to the Closing Date. The Company shall permit you to examine
and package such certificates for delivery at least one full business day prior
to the Closing Date.
In addition, the Company hereby grants to the several Underwriters the
option to purchase all or a portion of the Additional Units as may be necessary
to cover over-allotments,
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at the same purchase price per share to be paid by the several Underwriters to
the Company for the Units as provided for in this Section 3. The Additional
Units shall be purchased by the several Underwriters from the Company as
provided herein, pro rata in accordance with the ratio which the number of Units
set forth opposite such Underwriter's name on Schedule I bears to the total
number of Units, subject to adjustment to avoid fractional shares. This option
may be exercised only to cover over-allotments in the sale of Units by the
several Underwriters. This option may be exercised by you on the basis of the
representations, warranties, covenants, and agreements of the Company herein
contained, but subject to the terms and conditions herein set forth, at any time
and from time to time on or before the forty-fifth day following the effective
date of the Registration Statement, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Units
as to which the option is being exercised and the time and date, as determined
by you, when such Additional Units are to be delivered (such time and date are
herein called an "Additional Closing Date"); provided, however, that no
Additional Closing Date shall be earlier than the Closing Date nor earlier than
the second business day after the date on which the notice of the exercise of
the option shall have been given nor later than the eighth business day after
the date on which such notice shall have been given.
Payment for the Additional Units by the Underwriters shall be made by
certified or official bank check or checks drawn upon or by New York Clearing
House bank and payable in next day funds to the order of the Company at the
offices of Barington Capital Group, L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other place in the New York City Metropolitan Area as you
shall determine and advise the Company by at least two full day's notice in
writing, upon delivery of the Additional Units to you for the
respective accounts of the Underwriters.
Certificates for the securities comprising the Additional Units shall be
registered in such name or names and in such authorized denominations as you
may request in writing at least two full business day prior to the Additional
Closing Date with respect thereto. The Company shall permit you to examine and
package such certificates for delivery at least one full business day prior to
the Additional Closing Date with respect thereto.
4. Offering. The Underwriters are to make a public offering of the Units as
soon, on or after the effective date of the Registration Statement, as you deem
it advisable so to do. The Units are to be initially offered to the public at
the initial public offering price as provided for in Section 3 (such price being
herein called the "public offering price"). After the initial public offering,
you may from time to time increase or decrease the public offering price, in
your sole discretion, by reason of changes in general market conditions or
otherwise.
5. Covenants of the Company. The Company covenants that it will:
(a) Use its best efforts to cause the Registration Statement, if not
effective at the time of execution of this Agreement, and any amendments thereto
to become effective as promptly as possible. If the Registration Statement has
become or becomes effective with a form of prospectus omitting Rule 430A
Information, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will file the Prospectus, properly completed, pursuant
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to Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. During any time when a prospectus
relating to the Units, the Additional Units, the Firm Securities and the
Additional Securities is required to be delivered hereunder or under the Act or
the Regulations, the Company (i) will comply with all requirements imposed upon
it by the Act, as now existing and hereafter amended, and the Regulations, as
from time to time in force, to the extent necessary to permit the continuance of
sales of or dealings in the Units, the Additional Units, the Firm Securities and
the Additional Securities, in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission the Prospectus, any amendment or supplement to the Prospectus, or any
amendment to the Registration Statement of which the Representatives shall not
have given its consent. The Company will prepare and file with the Commission,
in accordance with the rules and regulations of the Commission, promptly upon
request by the Representatives or counsel for the Underwriters, any amendments
to the Registration Statement or amendments or supplements to the Prospectus
that may be necessary or advisable in connection with the distribution of the
Units, the Additional Units, the Firm Securities and the Additional Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible.
(b) Notify you immediately, and confirm such notice in writing, (i)
when the Registration Statement and any post-effective amendment thereto become
effective, (ii) of the receipt of any comments from the Commission or the "blue
sky" or securities authority of any jurisdiction regarding the Registration
Statement, any post-effective amendment thereto, the Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, and (iii) of the receipt of
any notification with respect to a Stop Order or the initiation or threatening
of any proceeding with respect to a Stop Order. The Company will use its best
efforts to prevent the issuance of any Stop Order and, if any Stop Order is
issued, to obtain the lifting thereof as promptly as possible.
(c) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Units, the Additional Units, the Firm Securities and
the Additional Securities is required to be delivered hereunder or under the Act
or the Regulations, or (ii) the Additional Closing Date, any event occurs as a
result of which the Registration Statement or the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the
Registration Statement or the Prospectus to comply with the Act or the
Regulations, the Company will promptly notify the Representatives thereof and,
subject to Section 5(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(d) The Company will, without charge, provide (i) to each of the
Representatives and to counsel for the Underwriters a signed copy of the
Registration Statement and each amendment thereto (in each case including
exhibits thereto), (ii) to each
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other Underwriter, a conformed copy of such registration statement and each
amendment thereto (in each case without exhibits thereto), and (iii) so long as
a prospectus relating to the Units, the Additional Units, the Firm Securities
and the Additional Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus or the Prospectus, or any amendment or
supplement thereto, as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, no later
than (A) 6:00 P.M., New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 12:00 Noon,
New York City time, on such date or (B) 6:00 P.M., New York City time, on the
business day following the date of determination of the public offering price,
if such determination occurred after 12:00 Noon, New York City time, on such
date, will deliver to the Representatives, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representatives
may reasonably request for purposes of confirming orders that are expected to
settle on the Closing Date.
(e) Endeavor in good faith, in cooperation with you, at or prior to
the time the Registration Statement becomes effective, to qualify the Units, the
Additional Units, the Firm Securities and the Additional Securities for offering
and sale under the "blue sky" or securities laws of such jurisdictions as you
may designate; provided, however, that no such qualification shall be required
in any jurisdiction where, as a result thereof, the Company would be subject to
service of general process or to taxation as a foreign corporation doing
business in such jurisdiction to which it is not then subject. In each
jurisdiction where such qualification shall be effected, the Company will,
unless you agree in writing that such action is not at the time necessary or
advisable, file and make such statements or reports at such times as are or may
be required by the laws of such jurisdiction.
(f) Use its best efforts to keep the Prospectus and the Registration
Statement current and effective by filing post-effective amendments, as
necessary.
(g) Make generally available (within the meaning of Section 11(a) of
the Act and the Regulations) to its security holders as soon as practicable, but
not later than ____________, 1997, an earnings statement (which need not be
certified by independent certified public accountants unless required by the Act
or the Regulations, but which shall satisfy the provisions of Section 11(a) of
the Act and the Regulations) covering a period of at least 12 months beginning
after the effective date of the Registration Statement.
(h) For a period of 12 months after the date of the Prospectus, not,
without your prior written consent, offer, issue, sell, contract to sell, grant
any option for the sale of, or otherwise dispose of, directly or indirectly, any
shares of Common Stock or other securities of the Company (or any security or
other instrument which by its terms is convertible into, exercisable for, or
exchangeable for shares of Common Stock or other securities of the Company)
except as provided in Section 3 and except for (i) the issuance of Common Stock
issuable upon the exercise of stock options and warrants outstanding on the date
hereof which are properly described in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), and (ii) the issuance
of the Securities.
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(i) For a period of five years after the effective date of the
Registration Statement, furnish you, without charge, the following:
(i) within 90 days after the end of each fiscal year, three
copies of financial statements certified by independent certified
public accountants, including a balance sheet, statement of income,
and statement of cash flows of the Company and its then existing
subsidiaries, with supporting schedules, prepared in accordance with
generally accepted accounting principles, as at the end of such fiscal
year and for the 12 months then ended, which may be on a consolidated
basis;
(ii) as soon as practicable after they have been sent to
stockholders of the Company or filed with the Commission, three copies
of each annual and interim financial and other report or communication
sent by the Company to its stockholders or filed with the Commission;
(iii) as soon as practicable, two copies of every press release
and every material news item and article in respect of the Company or
its affairs which was released by the Company; and
(iv) such additional documents and information with respect to
the Company and its affairs and the affairs of any of its subsidiaries
as you may from time to time reasonably request.
(j) Apply the net proceeds received by it from the Offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
(k) Furnish to you as early as practicable prior to the Closing Date
and any Additional Closing Date, as the case may be, but no less than two full
business days prior thereto, a copy of the latest available unaudited interim
consolidated financial statements of the Company and its consolidated
subsidiaries which have been read by the Company's independent certified public
accountants, as stated in their letters to be furnished pursuant to Section
7(e).
(l) Comply with all registration, filing, and reporting requirements
of the Exchange Act which may from time to time be applicable to the Company.
(m) Comply with all provisions of all undertakings contained in the
Registration Statement.
(n) Prior to the Closing Date or any Additional Closing Date, as the
case may be, issue no press release or other communication directly or
indirectly, and hold no press conference with respect to the Company, the
financial conditions, results of operations, business, properties, assets,
liabilities of the Company, or this offering, without your prior written
consent.
- 13 -
(o) File timely with the Commission an appropriate form to register
the Units, Common Stock, and Warrants pursuant to Section 12(b) under the
Exchange Act.
(p) File timely and accurate reports on Form SR with the Commission in
accordance with Rule 463 of the Regulations or any successor provision.
(q) If the principal shareholders, officers, or directors of the
Company are required by the "blue sky" or securities authority of any
jurisdiction selected by you pursuant to Section 5(e) to escrow or agree to
restrict the sale of any security of the Company owned by them for the Company
to qualify or register the Common Stock for sale under the "blue sky" or
securities laws of such jurisdiction, cause each such person to escrow or
restrict the sale of such security on the terms and conditions and in the form
specified by the securities administrator of such jurisdiction.
(r) Use its best efforts to cause the application for quotation of the
Units, the the Common Stock and the Warrants on the Nasdaq SmallCap Market
("NASDAQ") to be approved as soon as possible.
(s) On or prior to the Closing Date, sell to the Representatives (or
their respective designees), individually and not as representatives of the
Underwriters, the Representatives' Options to purchase an aggregate of [150,000]
Units, which Representatives' Options shall be evidenced by the Representatives'
Option Agreement in the form set forth as an exhibit to the Registration
Statement.
(t) Until expiration of the Firm Warrants and any Additional Warrants
which may be issued, keep reserved sufficient shares of Common Stock for
issuance upon exercise thereof.
(u) Until expiration of the Representatives' Options, keep reserved
sufficient Units, including shares of Common Stock and Warrants, for issuance
upon exercise of the Representatives' Options; and until expiration of the
Representatives' Unit Warrants, keep reserved sufficient shares of Common Stock
for issuance upon exercise of the Representatives' Unit Warrants.
(v) Deliver to you, without charge, within a reasonable period after
the last Additional Closing Date or the expiration of the period in which the
Underwriters may exercise the over-allotment option, three bound volumes of the
Registration Statement and all related materials.
(w) For a period of five years after the Closing Date, supply to the
appropriate parties such information as may be necessary or desirable, and
otherwise use its best efforts, so that during such five-year period the Company
will be listed in one or more of the securities manuals published by Standard &
Poor's Corporation and Xxxxx'x Investors Service, Inc. and
- 14 -
that at all times during such period such listing will, at a minimum, contain
the names of the Company's officers and directors, a balance sheet as of a date
not more than 18 months prior to such time, and a statement of operations for
either the fiscal year preceding such date or the most recent fiscal year of
operations.
(x) Until the expiration of two years from the Closing Date, afford
Barington, individually and not as a representative of the Underwriters, the
right of first refusal to purchase for Barington's own account or to sell for
the account of the Company or any subsidiary of or successor to the Company, or
any of the Company's stockholders owning at least five percent (5%) of the
Common Stock (the "Principal Stockholders"), any securities of the Company or
any such subsidiary or successor which the Company or any such subsidiary or
successor or any of the Principal Stockholders may seek to sell (other than (i)
sales in connection with a joint venture, strategic partnership or other similar
arrangement or to a strategic investor approved by the Company, (ii) sales in
connection with a debt financing or equipment leasing arrangement, or (iii)
sales of small amounts of securities by Principal Stockholders through brokers
in open market transactions), whether pursuant to registration under the Act or
otherwise. Any of the Company or any subsidiary or successor to the Company
intending to make such an offering is hereinafter referred to as a "Company
Offeror." If during such two-year period any Company Offeror or Principal
Stockholder intends to make an offering, the Company shall notify Barington of
such intention and of the proposed terms of the offering and will offer to
Barington the opportunity to purchase or sell all (but not less than all) such
securities on terms not more favorable to the Company Offeror or Principal
Stockholder, as the case may be, than those of the proposed offering. The
Company shall thereafter promptly furnish you with such information concerning
the operations, business, properties, or assets of the Company or such
subsidiary or successor and, if applicable, the Principal Stockholder shall
furnish such information concerning himself, as you may reasonably request. If
within 10 business days (5 business days with respect to any non-public sale of
such stock) after such notice Barington does not accept in writing the offer to
purchase or sell such securities for Barington's own account, as aforesaid with
respect to such offering upon the terms proposed, the Company Offeror or
Principal Stockholder, as the case may be, shall be free to enter into
discussions with other underwriters with respect to such offering and to effect
such offering upon such proposed terms. Before the Company Offeror or Principal
Stockholder, as the case may be, shall accept any proposal less favorable to it
or him than that conveyed to Barington in such notice, the rights set forth in
this Section 5(x) shall be reinstated and the same procedure with respect to
such modified proposal as provided above shall be adopted. Barington's failure
to exercise its rights under this Section 5(x) with respect to any particular
proposed offering shall not affect its rights under this section 5(x) with
respect to any other proposed offering. Notwithstanding the foregoing, in the
event that such future proposal relates to an underwritten public offering to be
lead managed by an institutionally-based major bracket or large regional
underwriting firm, Barington agrees that it shall only have the right to
co-manage such offering (right hand side of prospectus) provided Barington
receives at least 25% of the total economics and 25% of the total number of
shares to be issued or sold in such offering. In lieu of the foregoing
preferential right, the Company may elect to pay Barington a fee of $300,000
upon the closing of any sale of securities to which such right would otherwise
have applied. Payment of such fee will release the Company Offerors and the
Principal Stockholders of any and all obligations to Barington with respect to
such preferential
- 15 -
right for that transaction as well as all future transactions to which such
right might otherwise have applied. The Company will use its best efforts to
cause its Principal Stockholders to comply with the provisions of this Section
5(x).
6. Payment of Expenses. The Company hereby agrees to pay all expenses
(other than fees of counsel for the Underwriters, except as provided in
Sections 6(c) and 6(e)) in connection with (a) the preparation, printing,
filing, distribution, and mailing of the Registration Statement, any
Preliminary Prospectus, the Prospectus and the printing, filing,
distribution, and mailing of this Agreement, any Agreement Among
Underwriters, any selected dealers agreement, any Blue Sky Survey, and if
appropriate, any Underwriter's Questionnaire and Power of Attorney, and
related documents, including the cost of all copies thereof and of the
Preliminary Prospectuses and of the Prospectus and any amendments or
supplements thereto supplied to the Underwriters in quantities as hereinabove
stated, (b) the issuance, sale, transfer, and delivery of the Units and the
Additional Units, including any transfer or other taxes payable thereon, (c)
the qualification of the Units and the Additional Units under state or
foreign "blue sky" or securities laws, including the costs of printing and
mailing the preliminary and final "Blue Sky Survey" and the fees of counsel
for the Underwriters (up to a maximum of $30,000) and related disbursements
in connection therewith, (d) the filing fees payable to the Commission, the
NASD, and the jurisdictions in which such qualification is sought, (e) the
reasonable fees of counsel for the Underwriters and the disbursements in
connection therewith relating to all filings with the NASD, (f) the quotation
of the Units, Common Stock and Warrants on the NASDAQ SmallCap Market, (g)
the fees and expenses of the Company's transfer agent and registrar and the
Warrant Agent, (h) the fees and expenses of the Company's legal counsel and
accountants, (i) the costs of placing a "tombstone" advertisement in the
national edition of the Wall Street Journal and in such other publications as
the Representatives shall determine which shall not exceed $10,000, and (j)
the costs of preparing a reasonable number of bound volumes. In addition, the
Company hereby agrees to pay to the Representatives a non-accountable expense
allowance equal to 3% of the aggregate gross proceeds received by the Company
from the sale of the Units and the Additional Units, which amounts (less
amounts, if any, previously paid to you in respect of such non-accountable
expense allowance) shall be paid to you on the Closing Date (with respect to
Units sold by the Company on the Closing Date) and, if applicable, on the
Closing Date and any Additional Closing Date (with respect to Additional
Units sold by the Company on the Closing Date or such Additional Closing
Date).
7. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Units and the Additional Units, as
provided herein, shall be subject, in their discretion, to the continuing
accuracy of the representations and warranties of the Company contained herein
and in each certificate and document contemplated under this Agreement to be
delivered to you, as of the date hereof and as of the Closing Date (or the
Additional Closing Date, as the case may be), to the performance by the Company
of its obligations hereunder, and to the following conditions:
- 16 -
(a) The Registration Statement shall have become effective not later
than 6:00 P.M., New York City Time, on the date of this Agreement or such later
date and time as shall be consented to in writing by you.
(b) At the Closing Date and any Additional Closing Date, as the case
may be, you shall have received the favorable opinion of Xxxxx Xxxx Xxxxx
Constant & Xxxxxxxx, counsel for the Company, dated the date of delivery,
addressed to the Underwriters, and in form, scope and satisfactory to counsel
for the Underwriters, with reproduced copies or signed counterparts thereof for
each of the Underwriters, to the effect that:
(i) the Company has no subsidiaries (as defined in the
Regulations). The Company is a corporation, duly organized, validly
existing, and in good standing under the laws of Delaware with full
corporate power and authority, and all necessary consents,
authorizations, approvals, orders, certificates, and permits of and
from, and declarations and filings with, all federal, state, local,
and other governmental authorities and all courts and other tribunals,
to own, lease, license, and use its properties and assets and to
conduct its business in the manner described in the Prospectus. The
Company is duly qualified to do business and is in good standing in
every jurisdiction in which its ownership, leasing, licensing, or use
of property and assets or the conduct of its business makes such
qualification necessary, except where the failure to be so qualified
does not now have and will not in the future have a material adverse
effect on the operations, business, properties, or assets of the
Company.
(ii) the authorized capital stock of the Company consists of
20,000,000 shares of Common Stock, of which 6,024,277 shares are
outstanding, and 2,000,000 shares of undesignated preferred stock, par
value $.001 per share, of which no shares are outstanding. Each
outstanding share of Common Stock is validly authorized, validly
issued, fully paid, and nonassessable, without any personal liability
attaching to the ownership thereof has not been issued and is not
owned or held in violation of any preemptive right of stockholders. To
the knowledge of such counsel, there is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or other
right calling for the issuance of, any share of capital stock of the
Company, or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital stock
of the Company, except as may be properly described in the Prospectus.
There is outstanding no security or other instrument which by its
terms is convertible into or exchangeable for capital stock of the
Company except as may be properly described in the Prospectus;
(iii) to the knowledge of such counsel, there is no litigation,
arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect (or
any basis therefor) with respect to the Company, or any of its
operations, businesses, properties, or assets except as may be
properly described in the Prospectus or as individually or in the
aggregate do not now have and will not in the future have a material
adverse effect upon the operations, business, properties, or assets of
the Company. To
- 17 -
the knowledge of such counsel, the Company is not in violation of, or
in default with respect to, any law, rule, regulation, order,
judgment, or decree, except as may be properly described in the
Prospectus or such as in the aggregate do not now have and will not in
the future have a material adverse effect upon the operations,
business, properties, or assets of the Company; nor is the Company
required to take any action in order to avoid any such violation or
default;
(iv) to the knowledge of such counsel, neither the Company nor
any other party is now or is expected by the Company to be in
violation or breach of, or in default with respect to, complying with
any material provision of any contract, agreement, instrument, lease,
license, arrangement, or understanding known to such counsel which is
material to the Company;
(v) the Company is not in violation or breach of, or in default
with respect to, any term of its certificate of incorporation (or
other charter document) or by-laws;
(vi) the Company has all requisite corporate power and authority
to execute, deliver, and perform each of the Company Documents. All
necessary corporate proceedings of the Company have been taken to
authorize the execution, delivery, and performance by the Company of
the Company Documents. Each Company Document has been duly authorized
by the Company. Each Company Document has been duly executed and
delivered by the Company. Each Company Document is the legal, valid,
and binding obligation of the Company, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the enforceability of
creditors' rights generally) is enforceable as to the Company in
accordance with its terms. No consent, authorization, approval, order,
license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or
any court or other tribunal is required by the Company for the
execution, delivery, or performance by the Company of any of the
Company Documents (except filings under the Act which have been made
prior to the Closing Date and consents consisting only of consents
under "blue sky" or securities laws). No consent of any party to any
contract, agreement, instrument, lease, license, arrangement, or
understanding known to such counsel to which the Company is a party,
or to which any of its properties or assets are subject, is required
for the execution, delivery, or performance of any of the Company
Documents; and the execution, delivery, and performance of the Company
Documents will not violate, result in a breach of, conflict with, or
(with or without the giving of notice or the passage of time or both)
entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement, or
understanding known to such counsel, or violate or result in a breach
of any term of the certificate of incorporation (or other charter
document) or by-laws of the Company, or violate, result in a breach
of, or conflict with any law, rule, regulation, order, judgment, or
decree binding on the
- 18 -
Company or to which any of its operations, business, properties, or
assets are subject;
(vii) the Units and the Additional Units are validly authorized.
Such opinion delivered at the Closing Date or any Additional Closing
Date shall state that each share of Units or Additional Units, as the
case may be, to be delivered on that date is validly issued, fully
paid, and nonassessable, with no personal liability attaching to the
ownership thereof, and is not issued in violation of any preemptive
rights of stockholders, and the Underwriters have received good title
to the Firm Securities and Additional Securities purchased by them,
respectively, from the Company, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements,
and voting trusts;
(viii) the Firm Warrant Stock and Additional Warrant Stock are
validly authorized and reserved for issuance and, when issued and
delivered upon exercise of the Firm Warrants or Additional Warrants,
as the case may be, in accordance with the Public Warrant Agreement,
will be validly issued, fully paid and nonassessable, without any
personal liability attaching solely by virtue of the ownership
thereof, and will not be issued in violation of any preemptive rights
of stockholders; and the holders of the Firm Warrants or Additional
Warrants, as the case may be, will receive good title to the
securities purchased by them, respectively, free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts;
(ix) the Representatives' Units, including the Representatives'
Unit Stock, the Representatives' Unit Warrants, and the
Representatives' Warrant Stock have been duly and validly reserved for
issuance. Such opinion delivered at the Closing Date shall state that
the Representatives' Options have been duly and validly issued and
delivered. The Representatives' Units, including the Representatives'
Unit Stock, the Representatives' Unit Warrants, and the
Representatives' Warrant Stock, when issued and delivered in
accordance with the Representatives' Option Agreement or Public
Warrant Agreement, as the case may be, will be validly authorized,
validly issued, fully paid, and nonassessable, with no personal
liability attaching to the ownership thereof, and will not have been
issued in violation of any preemptive rights of stockholders; and the
holders of the Representatives' Options or Representatives' Unit
Warrants, as the case may be, will receive good title to the
securities purchased by them, respectively, free and clear of all
liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts;
(x) the Common Stock, the Securities and the Public Warrant
Agreement conform to all statements relating thereto contained in the
Registration Statement or the Prospectus;
(xi) to the knowledge of such counsel, any contract, agreement,
instrument, lease, or license required to be described in the
Registration
- 19 -
Statement or the Prospectus has been properly described therein. To
the knowledge of such counsel, any contract, agreement, instrument,
lease, or license required to be filed as an exhibit to the
Registration Statement has been filed with the Commission as an
exhibit to the Registration Statement;
(xii) insofar as statements in the Prospectus purport to
summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements,
instruments, leases, or licenses, such statements have been prepared
or reviewed by such counsel and accurately reflect the status of such
litigation and provisions purported to be summarized and are correct
in all material respects;
(xiii) to the knowledge of such counsel, the conditions for use
of Form SB-2 have been satisfied with respect to the Registration
Statement;
(xiv) the Securities have been approved for listing on the
[Philadelphia Stock Exchange], subject to official notice of issuance;
(xv) to the knowledge of such counsel, no person or entity has
the right, other than any such person who has delivered a waiver of
such right, to require the Company to register any securities for
offering and sale under the Act by reason of the filing or
effectiveness of the Registration Statement with the Commission or the
issue and sale of the Securities, except as may be properly described
in the Prospectus;
(xvi) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b). To the knowledge of such counsel, no Stop Order has been
issued and no proceedings for that purpose have been instituted or
threatened;
(xvii) the Registration Statement and the Prospectus, and any
amendment or supplement thereto (other than financial statements and
other financial data and schedules which are or should be contained in
any thereof, as to which such counsel need express no opinion), comply
as to form in all material respects with the requirements of the Act
and the Regulations;
(xviii) such counsel has no reason to believe that the
Registration Statement or the Prospectus, or any amendment or
supplement thereto (other than financial statements and other
financial data and schedules which are or should be contained in
any thereof, as to which such counsel need express no opinion),
contains any untrue statement of a material fact or omits to state a
- 20 -
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(xix) to the knowledge of such counsel, since the effective date
of the Registration Statement, no event has occurred which should have
been set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been set forth in such an
amendment or supplement; and
(xx) any right of first refusal, preemptive right, right to
compensation, or other similar right or option, in connection with the
Offering, this Agreement, the Underwriter's Options or the Consulting
Agreement, or any of the transactions contemplated hereby or thereby
known to such counsel and not contemplated by the Offering, this
Agreement, the Underwriter's Options or the Consulting Agreement has
been waived.
In rendering such opinion, counsel for the Company may rely (A) as to
matters involving the application of laws other than the laws of the United
States, the laws of the State of New York and the General Corporation Law of the
State of Delaware, to the extent counsel for the Company deems proper and to the
extent specified in such opinion, upon an opinion or opinions (in form and
substance satisfactory to counsel for the Underwriters) of other counsel,
acceptable to counsel for the Underwriters, familiar with the applicable laws,
in which case the opinion of counsel for the Company shall state that the
opinion or opinions of such other counsel are satisfactory in scope, form, and
substance to counsel for the Company and that reliance thereon by counsel for
the Company and the Underwriters is reasonable; (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company; and (C) to the extent they deem proper, upon written statements or
certificates of officers of departments of various jurisdictions having custody
of documents respecting the corporate existence or good standing of the Company,
provided that copies of any such statements or certificates shall be delivered
to counsel for the Underwriters.
(c) At the Closing Date and any Additional Closing Date, as the case
may be, you shall have received the favorable opinion of Xxxxxx & Xxxxxxx,
patent counsel for the Company, dated the date of delivery addressed to the
Underwriters, and in form, scope and substance satisfactory to counsel for the
Underwriters, with reproduced copies or signed counterparts thereof for each of
the Underwriters, to the effect that the statements in the Prospectus and the
Registration Statement under "Risk Factors-Uncertainties Regarding Intellectual
Property" and "Business-Intellectual Property" and other references to
intellectual property therein in so far as such statements constitute a summary
of the terms of legal matters, documents or proceedings referred to therein,
such statements fairly present the information called for with respect to such
terms, legal matters, documents and proceedings.
(d) Xxxxxxx Xxxxx Xxxxxxxx Xxxxxxx & Xxxxxxx, regulatory counsel for
the Company, dated the date of delivery addressed to the Underwriters, and, in
form, scope and substance satisfactory to counsel for the Underwriters, with
reproduced copies or signed counterparts thereof for each of the Underwriters,
to the effect that insofar as the statements in the Prospectus and the
Registration Statement under "Risk Factors-Governmental
- 21 -
Regulation" and "Business-Governmental Regulation," and other references to
regulatory matters therein in so far as such statements constitute a summary of
the terms of legal matters, documents or proceedings referred to therein, such
statements fairly present the information called for with respect to such terms,
legal matters, documents and proceedings.
(e) At the Closing Date and any Additional Closing Date, as the case
may be, you shall have received a certificate of the chief executive officer and
of the chief financial officer of the Company, dated the Closing Date or such
Additional Closing Date, as the case may be, to the effect that the condition
set forth in Section 7(a) has been satisfied, that as of the date of this
Agreement and as of the Closing Date or such Additional Closing Date, as the
case may be, the representations and warranties of the Company contained herein
were and are accurate, and that as of the Closing Date or such Additional
Closing Date, as the case may be, the obligations to be performed by the Company
hereunder on or prior thereto have been fully performed.
(f) At the time this Agreement is executed and at the Closing Date and
any Additional Closing Date, as the case may be, you shall have received a
letter from KPMG Peat Marwick LLP, certified public accountants, dated the date
of delivery and addressed to the Underwriters, in form and substance
satisfactory to you, with reproduced copies or signed counterparts thereof for
each of the Underwriters.
(g) All proceedings taken in connection with the issuance, sale,
transfer, and delivery of the Units and the Additional Units shall be
satisfactory in form and substance to you and to counsel for the Underwriters,
and the Underwriters shall have received from such counsel for the Underwriters
a favorable opinion, dated as of the Closing Date and the Additional Closing
Date, as the case may be, with respect to such of the matters set forth under
Section 7 (b), and with respect to such other related matters, as you may
reasonably request.
(h) The NASD, upon review of the terms of the public offering of the
Units and the Additional Units, shall not have objected to the Underwriters'
participation in such offering.
(i) Prior to or on the Closing Date, the Company shall have entered
into the Representatives' Option Agreement with the Representatives.
(j) Prior to or on the Closing Date, the Company shall have provided
to you copies of the agreements referred to in Sections 2(u) and (x).
(k) On or prior to the Closing Date and any Additional Closing Date,
as the case may be, the Underwriters shall have been furnished such information,
documents, certificates, and opinions as they may reasonably require for the
purpose of enabling them to review the matters referred to in Section 7(b), and
in order to evidence the accuracy, completeness, or satisfaction of any of the
representations, warranties, covenants, agreements, or conditions herein
contained, or as you may reasonably request.
Any certificate or other document signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the
- 22 -
Company hereunder to the Underwriters as to the statements made therein. If any
condition to the Underwriters' obligations hereunder to be fulfilled prior to or
at the Closing Date or any Additional Closing Date, as the case may be, is not
so fulfilled, you may on behalf of the several Underwriters terminate this
Agreement or, if you so elect, in writing waive any such conditions which have
not been fulfilled or extend the time for their fulfillment.
8. Indemnification and Contribution. (a) Subject to the conditions set
forth below, the Company agrees to indemnify and hold harmless each Underwriter,
its officers, directors, partners, employees, agents, and counsel, 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 loss,
liability, claim, damage, and expense whatsoever (which shall include, for all
purposes of this Section 8, but not be limited to, attorneys' fees and any and
all expense 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) as and when
incurred arising out of, based upon, or in connection with (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus (as from
time to time amended and supplemented), or any amendment or supplement thereto,
or (B) in any application or other document or communication (in this Section 8
collectively called an "application") executed by or on behalf of the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify any of the Securities under the "blue sky"
or securities laws thereof or filed with the Commission or any securities
exchange; or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company as stated in Section 8(b) with
respect to any Underwriter by or on behalf of such Underwriter through the
Representative expressly for inclusion in any Preliminary Prospectus, any Rule
430A Prospectus, the Registration Statement or the Prospectus, or any amendment
or supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant, or agreement of the Company
contained in this Agreement. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Agreement.
If any action is brought against an Underwriter or any of its officers,
directors, partners, employees, agents, or counsel, or any controlling persons
of an Underwriter (an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such indemnified
party or parties shall promptly notify the Company in writing of the institution
of such action (but the failure so to notify shall not relieve the Company from
any liability it may have pursuant to this Section 8(a) or otherwise) and the
Company shall promptly assume the defense of such action, including the
employment of counsel (satisfactory to such indemnified party or parties) and
payment of expenses. Such 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
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall not
have promptly employed counsel satisfactory to such indemnified party or parties
to have charge of
- 23 -
the defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be one or more legal defenses available to
it or them or to other indemnified parties which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent, which shall not be unreasonably withheld. The
Company shall not, without the prior written consent of each indemnified party
that is not released as described in this sentence, settle or compromise any
action, or permit a default or consent to the entry of judgment in or otherwise
seek to terminate any pending or threatened action, in respect of which
indemnity may be sought hereunder (whether or not any indemnified party is a
party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the
Underwriters of the commencement of any litigation or proceedings against the
Company or any of its officers or directors in connection with the sale of the
Units or the Additional Units, any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or any
application.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who shall
have signed the Registration Statement, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, to the same extent as the foregoing indemnity from
the Company to the several Underwriters in Section 8 (a), but only with respect
to statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement, or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any application in
reliance upon and in conformity with written information furnished to the
Company as stated in this Section 8(b) with respect to any Underwriter by or on
behalf of such Underwriter through the Representatives expressly for inclusion
in the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or in any application, as the case may be; provided, however, that the
obligation of each Underwriter to provide indemnity under the provisions of this
Section 8(b) shall be limited to the amount which represents the product of the
number of Units and Additional Units underwritten by such Underwriter
hereunder and the initial public offering price per Unit set forth on the cover
page of the Prospectus. For all purposes of this Agreement, the amounts of the
selling concession and reallowance set forth in the Prospectus constitute the
only information furnished in writing by or on behalf of any Underwriter
expressly for inclusion in any Preliminary Prospectus, any the Registration
Statement, or the Prospectus (as from time to time amended or supplemented), or
any amendment or supplement thereto, or in any application, as the case may be.
If any action shall be brought against the Company or any other person so
indemnified based on any Preliminary Prospectus, the Registration Statement, or
the Prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against any Underwriter pursuant
to this Section 8(b), such Underwriter shall have the rights and duties given to
the Company, and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
8(a).
- 24 -
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 8(a) or
8(b) (subject to the limitations thereof) but it is found in a final judicial
determination, not subject to further appeal, that such indemnification may not
be enforced in such case, even though this Agreement expressly provides for
indemnification in such case, or (ii) any indemnified or indemnifying party
seeks contribution under the Act, the Exchange Act, or otherwise, then the
Company (including for this purpose any contribution made by or on behalf of any
director of the Company, any officer of the Company who signed the Registration
Statement, and any controlling person of the Company), as one entity, and the
Underwriters, in the aggregate (including for this purpose any contribution by
or on behalf of an indemnified party), as a second entity, shall contribute to
the losses, liabilities, claims, damages, and expenses whatsoever to which any
of them may be subject, so that the Underwriters are responsible for the
proportion thereof equal to the percentage which the underwriting discount per
Unit set forth on the cover page of the Prospectus represents of the initial
public offering price per Unit set forth on the cover page of the Prospectus
and the Company is responsible for the remaining portion; provided, however,
that if applicable law does not permit such allocation, then other relevant
equitable considerations such as the relative fault of the Company and the
Underwriters in the aggregate in connection with the facts which resulted in
such losses, liabilities, claims, damages, and expenses shall also be
considered. The relative fault, in the case of an untrue statement, alleged
untrue statement, omission, or alleged omission, shall be determined by, among
other things, whether such statement, alleged statement, omission, or alleged
omission relates to information supplied by the Company or by the Underwriters,
and the parties relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement, alleged statement, omission,
or alleged omission. The Company and the Underwriters agree that it would be
unjust and inequitable if the respective obligations of the Company and the
Underwriters for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if the Underwriters and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 8(c). In no
case shall any Underwriter be responsible for a portion of the contribution
obligation imposed on all Underwriters in excess of its pro rata share based on
the number of Units underwritten by it as compared to the number of
Units underwritten by all Underwriters who do not default in their
obligations under this Section 8(c). No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 8(c), 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 and each officer, director, partner, employee, agent,
and counsel of an Underwriter shall have the same rights to contribution as such
Underwriter and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of
the Company who shall have signed the Registration Statement, and each director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the provisions of this Section 8(c). Anything in this
Section 8(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 8(c) is intended to supersede any
right to contribution under the Act, the Exchange Act, or otherwise.
- 25 -
9. Default by an Underwriter. (a) If any Underwriter or Underwriters shall
default in its or their obligation to purchase Units or Additional Units
hereunder, and if the number of Units or Additional Units to which the
defaults of all Underwriters in the aggregate relate does not exceed 10% of the
number of Units or Additional Units, as the case may be, which all
Underwriters have agreed to purchase hereunder, then such Units or Additional
Units to which such defaults relate shall be purchased by the non-defaulting
Underwriters in proportion to their respective commitments hereunder.
(b) If such defaults exceed in the aggregate 10% of the number of
Units or Additional Units, as the case may be, which all Underwriters
have agreed to purchase hereunder, you may in your discretion arrange for
yourself or for another party or parties to purchase such Units or Additional
Units, as the case may be, to which such default relates on the terms contained
herein. If you do not arrange for the purchase of such Units or Additional
Units, as the case may be, within one business day after the occurrence of
defaults relating to in excess of 10% of the Units or the Additional Units, as
the case may be, then the Company shall be entitled to a further period of one
business day within which to procure another party or parties satisfactory to
you to purchase such Units or Additional Units, as the case may be, on such
terms. If you or the Company do not arrange for the purchase of the Units or
Additional Units, as the case may be, to which such defaults relate
as provided in this Section 9(b), this Agreement may be terminated by you or by
the Company without liability on the part of the Company (except that the
provisions of Sections 6, 8, 10, and 13 shall survive such termination) or the
several Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter of its liability, if any, to the other several Underwriters and to
the Company for any damages occasioned by its default hereunder.
(c) If the Units or Additional Units to which such defaults relate are
to be purchased by the non-defaulting Underwriters, or are to be purchased by
another party or parties as aforesaid, you or the Company shall have the right
to postpone the Closing Date or the Additional Closing Date, as the case may be,
for a reasonable period but not in any event more than seven 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 with
respect to the Units or the Additional Units, and the Company agrees to prepare
and file promptly any amendment or supplement to the Registration Statement or
the Prospectus which in the opinion of counsel for the Underwriters may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any party substituted under this Section 9 as if such party had
originally been a party to this Agreement and had been allocated the number of
Units and Additional Units actually purchased by it as a result of its original
commitment to purchase Units and Additional Units and its purchase of Units or
Additional Units pursuant to this Section 9.
10. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and any Additional Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters and
the Company, including the indemnity and contribution agreements contained in
Section 8, shall remain operative and in full force and effect regardless of any
investigation
- 26 -
made by or on behalf of any Underwriter or any indemnified person, or by or on
behalf of the Company or any person or entity which is entitled to be
indemnified under Section 8(b), and shall survive termination of this Agreement
or the delivery of the Units and the Additional Units to the several
Underwriters. In addition, the provisions of Sections 6, 8, 10, 11, and 13 shall
survive termination of this Agreement, whether such termination occurs before or
after the Closing Date or any Additional Closing Date.
11. Effective Date of This Agreement and Termination Thereof. (a) This
Agreement shall become effective at 9:30 A.M., New York City Time, on the first
full business day following the day on which the Registration Statement becomes
effective or at the time of the initial public offering by the Underwriters of
the Units, whichever is earlier. The time of the initial public offering shall
mean the time, after the Registration Statement becomes effective, of the
release by you for publication of the first newspaper advertisement which is
subsequently published relating to the shares or the time, after the
Registration Statement becomes effective, when the Units are first released by
you for offering by the Underwriters or dealers by letter or telegram, whichever
shall first occur. You or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except as noted
below in this Section 11, by giving the notice indicated in Section 11(c) before
the time this Agreement becomes effective.
(b) In addition to the right to terminate this Agreement pursuant to
Sections 7 and 9 hereof, you shall have the right to terminate this Agreement
at any time prior to the Closing Date or any Additional Closing Date, as the
case may be, by giving notice to the Company if any domestic or international
event, act, or occurrence has materially disrupted, or in your opinion will
in the immediate future materially disrupt, the securities markets; or if
there shall have been a general suspension of, or a general limitation on
prices for, trading in securities on the New York Stock Exchange, the
American Stock Exchange, the NASDAQ SmallCap Market or in the over-the-counter
market; or if there shall have been an outbreak of major hostilities or
other national or international calamity; or if a banking moratorium has
been declared by a state or federal authority; or if a moratorium in foreign
exchange trading by major international banks or persons has been declared;
or if there shall have been a material interruption in the mail service or
other means of communication within the United States; or if the Company
shall have sustained a material or substantial loss by fire, flood,
accident, hurricane, earthquake, theft, sabotage, or other calamity or
malicious act which, whether or not such loss shall have been insured,
will, in your opinion, make it inadvisable to proceed with the offering,
sale, or delivery of the Units or the Additional Units, as the case may be;
or if there shall have been such change in the market for securities in
general or in political, financial, or economic conditions as in your
judgment makes it inadvisable to proceed with the offering, sale, and
delivery of the Units or the Additional Units, as the case may be,
on the terms contemplated by the Prospectus.
(c) If you elect to prevent this Agreement from becoming effective, as
provided in this Section 11, or to terminate this Agreement pursuant to Section
7, 9, or this Section 11, you shall notify the Company promptly by telephone,
telex, or telegram, confirmed by letter. If the Company elects to prevent this
Agreement from becoming effective, as provided in this
- 27 -
Section 11, or to terminate this Agreement pursuant to Section 9 of this
Agreement, the Company shall notify you promptly by telephone, telex, or
telegram, confirmed by letter.
(d) Anything in this Agreement to the contrary notwithstanding other
than Section 11(e), if this Agreement shall not become effective by reason of an
election pursuant to this Section 11 or if this Agreement shall terminate or
shall otherwise not be carried out within the time specified herein by reason of
any failure on the part of the Company to perform any covenant or agreement or
satisfy any condition of this Agreement by it to be performed or satisfied, the
sole liability of the Company to the several Underwriters, in addition to the
obligations the Company assumed pursuant to Section 6, will be to (i) reimburse
the several Underwriters for such out-of-pocket expenses (including the fees and
disbursements of their counsel) as shall have been incurred by them in
connection with this Agreement or the proposed offer, sale, and delivery of the
Units and the Additional Units, and upon demand the Company agrees to pay
promptly the full amount thereof to you for the respective accounts of the
Underwriters, and (ii) if the Company has elected to prevent this Agreement from
becoming effective or if you terminate this Agreement pursuant to Section 7, the
provisions of Section 5(x) of this Agreement shall become operative and shall
remain in full force and effect for a period of two years from the date of such
election or termination.
(e) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 6, 8, 10, and 13 shall not be in any way affected by such
election or termination or failure to carry out the terms of this Agreement or
any part hereof.
12. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
by letter, to such Underwriter, to Barington Capital Group, L.P., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxx; or if sent to the
Company, shall be mailed, delivered, or telexed or telegraphed and confirmed by
letter, to the Company, International Sports Wagering Inc., 000 Xxxxx Xxxxx
Xxxx, Xxxxxx Xxxxx, Xxx Xxxxxx 00000. All notices hereunder shall be effective
upon receipt by the party to which it is addressed.
13. Parties. You represent that you are authorized to act on behalf of the
several Underwriters named in Schedule I hereto, and the Company shall be
entitled to act and rely on any request, notice, consent, waiver, or agreement
purportedly given on behalf of the Underwriters when the same shall have been
given by either of you on such behalf. This Agreement shall inure solely to the
benefit of, and shall be binding upon, the several Underwriters and the Company
and the persons and entities referred to in Section 8 who are entitled to
indemnification or contribution, and their respective successors, legal
representatives, and assigns (which shall not include any buyer, as such, of the
Units or the Additional Units), and no other person shall have or be construed
to have any legal or equitable right, remedy, or claim under or in respect of or
by virtue of this Agreement or any provision herein contained. Notwithstanding
anything contained in this Agreement to the contrary, all of the obligations of
the Underwriters hereunder are several and not joint.
- 28 -
14. Construction. This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to conflict of laws. TIME
IS OF THE ESSENCE IN THIS AGREEMENT.
15. Consent to Jurisdiction. The Company irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out of
or relating to this Agreement, any document or instrument delivered pursuant to,
in connection with or simultaneously with this Agreement, or a breach of this
Agreement or any such document or instrument. In any such action or proceeding,
the Company waives personal service or any summons, complaint or other process
and agrees that service thereof may be made in accordance with Section 12.
Within 30 days after such service, or such other time as may be mutually agreed
upon in writing by the attorneys for the parties to such action or proceeding,
the Company shall appear or answer such summons, complaint or other process.
- 29 -
If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
INTERNATIONAL SPORTS WAGERING INC.
By:
--------------------------------------
Xxxxx Xxxxxx, Chairman of the Board
Accepted as of the date first above written.
New York, New York
BARINGTON CAPITAL GROUP, L.P.
By: LNA CAPITAL CORP.,
General Partner
By:
-----------------------------------------
GKN SECURITIES CORP.
By:
-----------------------------------------
Name:
Title:
On behalf of itself and the other several
Underwriters named in Schedule I hereto.
- 30 -
SCHEDULE I
Total
Number
of Units
to be
Underwriter Purchased
----------- ---------
Barington Capital Group, L.P. [insert number of Units]
GKN Securities Corp.
---------
Total 1,500,000
=========
- 31 -
