Exhibit 1.1
3,000,000 Shares
X-XXX.xxx Corp.
Common Stock
UNDERWRITING AGREEMENT
February 13, 2002
CIBC World Markets Corp.
SoundView Technology Corporation
Xxxxxxx Bros., L.P.
H.C. Xxxxxxxxxx & Co., Inc.
c/o CIBC World Markets Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several Underwriters named on Schedule I attached hereto.
Ladies and Gentlemen:
X-XXX.xxx Corp., a Pennsylvania corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as Representatives (the "Representatives"), an aggregate
of 3,000,000 shares (the "Firm Shares") of the Company's Common Stock, $0.05 par
value (the "Common Stock"). The respective amounts of the Firm Shares to be
purchased by each of the several Underwriters are set forth opposite their names
on Schedule I hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 450,000 shares (the
"Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
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On the basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a price of $15.20 per share (the "Initial Price"), the number of
Firm Shares set forth opposite the name of such Underwriter under the column
"Number of Firm Shares to be Purchased" on Schedule I to this Agreement, subject
to adjustment in accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option to purchase,
severally and not jointly, all or any part of the Option Shares at the Initial
Price. The number of Option Shares to be purchased by each Underwriter shall be
the same percentage (adjusted by the Representatives to eliminate fractions) of
the total number of Option Shares to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm Shares. Such option may be exercised only
to cover over-allotments in the sales of the Firm Shares by the Underwriters and
may be exercised in whole or in part at any time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date (as
defined below), and from time to time thereafter within 30 days after the date
of this Agreement, in each case upon written, facsimile or telegraphic notice,
or verbal or telephonic notice confirmed by written, facsimile or telegraphic
notice, by the Representatives to the Company no later than 12:00 noon, New York
City time, on the business day before the Firm Shares Closing Date or at least
two business days before the Option Shares Closing Date (as defined below), as
the case may be, setting forth the number of Option Shares to be purchased and
the time and date (if other than the Firm Shares Closing Date) of such purchase.
2. Delivery and Payment. Payment of the purchase price for, and delivery
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of certificates for, the Firm Shares shall be made at the offices of CIBC World
Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00
a.m., New York City time, on the third business day following the date of this
Agreement or at such time on such other date, not later than ten (10) business
days after the date of this Agreement, as shall be agreed upon by the Company
and the Representatives (such time and date of delivery and payment are called
the "Firm Shares Closing Date").
In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and delivery of
the certificates, for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on the date of delivery as specified in the notice from the
Representatives to the Company (such time and date of delivery and payment are
called the "Option Shares Closing Date"). The Firm Shares Closing Date and the
Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Payment shall be made to the Company by wire transfer of immediately
available funds or by certified or official bank check or checks payable in New
York Clearing House (same day) funds drawn to the order of the Company, against
delivery of the certificates to the Representatives for the respective accounts
of the Underwriters for the Shares to be purchased by them.
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of
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Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be delivered by or on behalf of the Company to the
Representatives through the facilities of the Depository Trust Company ("DTC")
for the account of each Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and packaging, at such
place as is designated by the Representatives, on the full business day before
the Firm Shares Closing Date (or the Option Shares Closing Date in the case of
the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The Company has
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prepared and filed in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the published rules and regulations
thereunder (the "Rules") adopted by the Securities and Exchange Commission (the
"Commission") a Registration Statement (as hereinafter defined) on Form S-3 (No.
333-75888) and such amendments thereof as may have been required to the date of
this Agreement. A prospectus supplement specifically relating to the Shares, the
terms of the offering thereof and the other matters set forth therein has been
prepared and will be filed pursuant to Rule 424 under the Securities Act in the
form used to confirm sales of the Shares (the "Prospectus Supplement"). Copies
of such Registration Statement (including all amendments thereof) have
heretofore been delivered by the Company to you. The term "Registration
Statement" as used in this Agreement means the initial shelf registration
statement (including all exhibits, financial schedules and information deemed to
be a part of the Registration Statement through incorporation by reference), as
amended at the time and on the date it became effective (the "Effective Date").
If the Company has filed an abbreviated registration statement to register
additional Shares pursuant to Rule 462(b) under the Rules (the "462(b)
Registration Statement"), then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration Statement.
The term "Prospectus" as used in this Agreement means the basic prospectus in
the form included in the Registration Statement at the time of effectiveness,
including the Prospectus Supplement. Reference made herein to the Prospectus
shall be deemed to refer to and include any documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the date
of the Prospectus, and any reference to any amendment or supplement to the
Prospectus shall be deemed to refer to and include any document filed under the
United States Securities Exchange Act of 1934 (the "Exchange Act") after the
date of the Prospectus and incorporated by reference in the Prospectus.
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus. The
Company hereby confirms that the Underwriters and dealers have been authorized
to distribute the Prospectus (as from time to time amended or supplemented if
the Company furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Underwriter as follows:
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(a) On the Effective Date, the Registration Statement complied, and on the
date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or amendment
to the Prospectus is filed with the Commission and each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the rules and regulations of the Commission
thereunder. The Registration Statement did not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and on the other dates referred to in the preceding
sentence above neither the Registration Statement nor the Prospectus, nor any
amendment thereof or supplement thereto, will contain any untrue statement of a
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copy thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
If Rule 434 is used, the Company will comply with the requirements of Rule 434
and the Prospectus shall not be "materially different," as such term is used in
Rule 434, from the Prospectus included in the Registration Statement at the time
it became effective. Notwithstanding the foregoing, none of the representations
and warranties in this paragraph 4(a) shall apply to statements in, or omissions
from, the Registration Statement or the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished in
writing by the Representatives on behalf of the several Underwriters for use in
the Registration Statement or the Prospectus is the statements contained in the
third paragraph under the caption "Underwriting" in the Prospectus Supplement.
(b) The Registration Statement is effective under the Securities Act and
no stop order preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been instituted or are threatened under
the Securities Act. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) of the Rules has been or will be made in the
manner and within the time period required by such Rule 424(b).
(c) All contracts and other documents required to be filed as exhibits to
the Registration Statement have been filed with the Commission as exhibits to
the Registration Statement, except for this Agreement, which will be filed
pursuant to a Form 8-K. The documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they became effective or
were filed with the Commission, as the case may be, complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and any further
documents so filed and incorporated by reference in the Registration Statement
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and the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder (the "Rules") and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(d) The consolidated financial statements of the Company (including all
notes and schedules thereto) included or incorporated by reference in the
Registration Statement and Prospectus present fairly the financial position, the
results of operations and cash flows and the shareholders' equity of the Company
at the respective dates and for the respective periods to which they apply; and
such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of the results
for such periods have been made.
(e) KPMG LLP, whose reports are filed with the Commission as a part of the
Registration Statement, are and, during the periods covered by their reports,
were independent public accountants as required by the Securities Act and the
Rules.
(f) The Company and its subsidiaries have each been duly organized, are
validly existing and, except for ADC Phasor Electronics GMBH and ADC Argentina,
S.R.L., are in good standing under the laws of the jurisdiction of their
respective organization. Each of the Company and its subsidiaries is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification necessary
except for such jurisdictions where the failure to so qualify would not have a
material adverse effect on the assets or properties, business, results of
operations or financial condition of the Company and its subsidiaries, taken as
a whole. Each of the Company and its subsidiaries has all requisite corporate
power and authority, and all necessary authorizations, approvals, consents,
orders, licenses, certificates and permits of and from all governmental or
regulatory bodies or any other person or entity, to own, lease and license its
assets and properties and conduct its businesses as now being conducted and as
described in the Registration Statement and the Prospectus except for such
authorizations, approvals, consents, orders, material licenses, certificates and
permits the failure to so obtain would not have a material adverse effect upon
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its subsidiaries, taken as
a whole; and the Company has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses, certificates and permits
to enter into, deliver and perform this Agreement and to issue and sell the
Shares.
(g) Each of the Company and its subsidiaries owns or possesses adequate
and enforceable rights to use all trademarks, trademark applications, trade
names, service marks, copyrights, copyright applications, licenses, know-how and
other similar rights and proprietary knowledge (collectively, "Intangibles")
necessary for the conduct of its business as described in the Registration
Statement and the Prospectus, except where the failure to own or possess such
enforceable rights would not have a material adverse effect on the Company and
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its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries has received any notice of, or is aware of, any infringement of or
conflict with asserted rights of others with respect to any Intangibles.
(h) The Company and each of its subsidiaries has good and marketable title
in fee simple to all items of real property and good and marketable title to all
personal property described in the Prospectuses as being owned by it. Any real
property and buildings described in the Prospectuses as being held under lease
by the Company and each of its subsidiaries is held by it under valid, existing
and enforceable leases, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are described in the Registration
Statement and the Prospectus or would not have a material adverse effect on the
assets or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries taken as a whole.
(i) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board pending
or, to the Company's best knowledge, threatened against, or involving the
assets, properties or business of, the Company or any of its subsidiaries which
would materially adversely affect the value or the operation of any such assets
or properties or the business, results of operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries taken as a whole or
which is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as described therein, (i)
there has not been any material adverse change in the assets or properties,
business, results of operations, prospects or condition (financial or
otherwise), of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business; (ii) the Company
and its subsidiaries taken as a whole have not sustained any material loss or
interference with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree; and (iii) since the date of the
latest balance sheet included or incorporated by reference in the Registration
Statement and the Prospectus, except as reflected therein, neither the Company
nor any of its subsidiaries has (A) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money, except for
such liabilities or obligations incurred in the ordinary course of business and
such securities issued to employees or directors in connection with the grant or
exercise of options to acquire the Company's Common Stock consistent with past
practice and securities to be issued in connection with the transactions with
Silicon Valley Communications, Inc. or (B) declared or paid any dividend or made
any distribution on any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares of its
stock.
(k) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. Each agreement listed in the Exhibits to the Registration Statement or
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incorporated by reference therein is in full force and effect and is valid and
enforceable by and against the Company in accordance with its terms, assuming
the due authorization, execution and delivery thereof by each of the other
parties thereto. Neither the Company, nor to the best of the Company's
knowledge, any other party is in default in the observance or performance of any
term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event would have a material adverse
effect on the assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company and its subsidiaries taken
as a whole. No default exists, and no event has occurred which with notice or
lapse of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company or any of its
subsidiaries of any other agreement or instrument to which the Company or any
such subsidiary is a party or by which it or its properties or business may be
bound or affected which default or event would have a material adverse effect on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its subsidiaries taken as
a whole.
(l) Neither the Company nor any of its subsidiaries is in violation of any
term or provision of its charter or by-laws or of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a material adverse effect on the
assets or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(m) Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Shares) will give rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any of its subsidiaries or violate any provision of
the charter or by-laws of the Company or any of its subsidiaries, except for
such consents or waivers which have already been obtained and are in full force
and effect.
(n) The Company has an authorized and outstanding capital stock as set
forth under the caption "Description of Capital Stock" in the Prospectus. All of
the outstanding shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares, when issued and sold pursuant to
this Agreement, will be duly and validly issued, fully paid and nonassessable
and none of them will be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statement and the Prospectus,
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except for securities issued to employees or directors in connection with the
grant of options to acquire the Company's Common Stock consistent with past
practice, and except for securities to be issued in connection with the
acquisition of Silicon Valley Communications, Inc. and MobileForce Technologies,
Inc., there is no outstanding option, warrant or other right calling for the
issuance of, and there is no commitment, plan or arrangement to issue, any share
of stock of the Company or any security convertible into, or exercisable or
exchangeable for, such stock. The Common Stock and the Shares conform in all
material respects to all statements in relation thereto contained or
incorporated by reference in the Registration Statement and the Prospectus. All
outstanding shares of capital stock of each subsidiary have been duly authorized
and validly issued, and are fully paid and nonassessable and are owned directly
by the Company or by another wholly-owned subsidiary of the Company free and
clear of any security interests, liens, encumbrances, equities or claims, other
than those described in the Prospectus.
(o) No holder of any security of the Company has the right to have any
security owned by such holder included in the Registration Statement or to
demand registration of any security owned by such holder during the period
ending 60 days after the date of this Agreement, except any such rights as may
have been duly waived or relate to securities that have been included in the
Company's Registration Statements on Form S-3 (File No. 333-82697 or File No.
333-90011), which are related to the Agreement and Plan of Merger dated as of
May 15, 1999 among the Company, C-COR Acquisition Corp. and Xxxxxxxxxxx.xxx
Corporation, and the Agreement and Plan of Merger dated as of July 13, 1999
among the Company, X-XXX.xxx Acquisition Corp. and Silicon Valley
Communications, Inc. Each director and officer of the Company has delivered to
the Representatives his enforceable written agreement that he will not, for a
period of 60 days after the date of this Agreement, without the prior written
consent of CIBC World Markets Corp., on behalf of the Representatives, offer for
sale, sell, distribute, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, or exercise any registration rights with respect to,
any shares of Common Stock (or any securities convertible into, exercisable for,
or exchangeable for any shares of Common Stock) beneficially owned by him (each,
a "Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement
and the issuance and sale of the Shares by the Company. This Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles or (B) to the extent that rights
to indemnity or contribution under this Agreement may be limited by Federal and
state securities laws or the public policy underlying such laws.
(q) Neither the Company nor any of its subsidiaries is involved in any
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse effect on the assets or
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properties, business, results of operations, prospects or condition (financial
or otherwise) of the Company and its subsidiaries taken as a whole.
(r) No transaction has occurred between or among the Company or any of its
subsidiaries and any of its officers or directors or any affiliate or affiliates
of any such officer or director that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of any of the Shares.
(t) The Company and its subsidiaries have filed all Federal, state, local
and foreign tax returns which are required to be filed through the date hereof,
which returns are true and correct in all material respects, or has received
extensions thereof, and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are material and have
become due. There are no tax audits or investigations pending, which if
adversely determined would have a material adverse effect on the Company, its
business, financial condition or results of operations; nor are there any
material proposed additional tax assessments against the Company or any of its
subsidiaries.
(u) The Company has made, or will prior to the Closing have made, all
required filings with the National Association of Securities Dealers Automated
Quotation ("Nasdaq") National Market System with regard to the Shares.
(v) The Company is not and, after giving effect to the offering and sale
of the Shares and the application of the net proceeds therefrom as described in
the Prospectus, will not be, an "investment company" as defined in the
Investment Company Act of 1940.
(w) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement or any amendment thereto, the
Prospectus or any amendment or supplement thereto, or other materials, if any,
permitted by the Act.
(x) The books, records and accounts of the Company and its subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company
and its subsidiaries. The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
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(y) The Company and its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are customary in the businesses in which they are engaged; all policies of
insurance and fidelity or surety bonds insuring the Company or any of its
subsidiaries or the Company's or its subsidiaries' respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company and each of its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and neither the Company nor
any subsidiary of the Company has reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to continue
its business. Neither the Company nor any subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(z) The Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or the quotation of the Common Stock on the Nasdaq National Market, nor has
the Company received any notification that the Commission or the Nasdaq National
Market is contemplating terminating such registration or quotation.
(aa) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(bb) There are no affiliations with the NASD among the Company's officers,
directors or, to the best knowledge of the Company, any five percent or greater
stockholder of the Company, except as set forth in the Registration Statement or
otherwise disclosed in writing to the Representatives.
(cc) Each of the Company and its subsidiaries is in compliance in all
material respects with all rules, laws and regulation relating to the use,
treatment, storage and disposal of toxic substances and protection of health or
the environment which are applicable to its business, except where such failure
to comply would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(dd) The Company, its subsidiaries, or any other person associated with or
acting on behalf of the Company or its subsidiaries including, without
limitation, any director, officer, agent or employee of the Company or its
subsidiaries has not, directly or indirectly, while acting on behalf of the
Company or its subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
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government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
5. Conditions of the Underwriters' Obligations. The obligations of the
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Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the Representatives and the Prospectus shall have
been timely filed with the Commission in accordance with Section 6(a) of this
Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the Commission
and the Representatives.
(c) The representations and warranties of the Company contained in this
Agreement and in the certificates delivered pursuant to Section 5(d) shall be
true and correct when made and on and as of each Closing Date as if made on such
date. The Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company to the effect that (i) the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such Closing Date
with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge, no
proceedings for that purpose have been instituted or are pending under the
Securities Act.
(e) The Representatives shall have received, at the time this Agreement is
executed and on each Closing Date, a signed letter from KPMG LLP addressed to
the Representatives and dated, respectively, the date of this Agreement and each
such Closing Date, in form and substance reasonably satisfactory to the
Representatives containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in, or
incorporated by reference in, the Registration Statement and the Prospectus.
- 11 -
(f) The Representatives shall have received on each Closing Date from
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, and stating in
effect that:
(i) The Company has been duly incorporated and is validly subsisting
as a corporation under the laws of Pennsylvania. The Company is duly qualified
to do business and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased or licensed) or the nature of its businesses makes such
qualification necessary, except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or properties,
business, results of operations, prospects or condition (financial or otherwise)
of the Company.
(ii) The Company has all requisite corporate power and authority to
own, lease and license its assets and properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus; and the Company has all requisite corporate power and authority and
all necessary authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and perform its obligations
under this Agreement and to issue and sell the Shares.
(iii) The Company has authorized and issued capital stock as set forth
in the Registration Statement and the Prospectus; the certificates evidencing
the Shares are in due and proper legal form and have been duly authorized for
issuance by the Company; and none of the outstanding shares of Common Stock of
the Company have been issued in violation of any preemptive or other similar
right. The Shares when issued and sold pursuant to this Agreement, will be duly
and validly issued, outstanding, fully paid and nonassessable and none of them
will have been issued in violation of any preemptive or other similar right. To
such counsel's knowledge, except as disclosed in the Registration Statement and
the Prospectus, there are no preemptive or other rights to subscribe for or to
purchase or any restriction upon the voting or transfer of any securities of the
Company pursuant to the Company's Articles of Incorporation or by-laws, each as
amended to date, or other governing documents or any agreements or other
instruments to which the Company is a party or by which it is bound. To such
counsel's knowledge, except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right calling for
the issuance of, and no commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into, exercisable for, or
exchangeable for stock of the Company, except for options, warrants or other
rights calling for the issuance of, or commitments, plans or arrangements to
issue, shares of stock of the Company in connection with acquisitions by the
Company that are the subject of Form 8-Ks filed with the Commission. The Common
Stock and the Shares conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus.
(iv) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares. This Agreement has been duly
and validly authorized, executed and delivered by the Company.
- 12 -
(v) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company of
the Shares) will violate any provision of the charter or by-laws of the Company
or any of its subsidiaries or give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or result in the breach
of any term or provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default) under, or require
any consent or waiver under, or result in the execution or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company or any
of its subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, note or other agreement or instrument of which such counsel is aware and
to which the Company or any of its subsidiaries is a party or by which it or any
of its assets, properties or businesses is bound, or any statute, rule or
regulation of which such counsel is aware.
(vi) No consent, approval, authorization, license, registration,
qualification or order of any court or governmental agency or body is required
for the due authorization, execution, delivery or performance of this Agreement
by the Company or the consummation of the transactions contemplated hereby or
thereby, except such as have been obtained under the Securities Act and such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters.
(vii) Except as disclosed in the Registration Statement, to such
counsel's knowledge, there is no litigation or governmental or other proceeding
or investigation, before any court or before or by any public body or board
pending or threatened against, or involving the assets, properties or businesses
of, the Company or any of its subsidiaries which would have a material adverse
effect upon the assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company and its subsidiaries taken
as a whole.
(viii) The statements in the Prospectus and in Item 15 of the
Registration Statement, insofar as such statements constitute a summary of
documents referred to therein or matters of law, are accurate in all material
respects and fairly present the information called for with respect to such
documents and matters. Copies of all contracts and other documents required to
be filed as exhibits to, or described in, the Registration Statement have been
so filed with the Commission.
(ix) The Registration Statement and the Prospectus and each amendment
or supplement thereto (except for the financial statements and schedules and
other financial and statistical data included or incorporated therein, as to
which such counsel expresses no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Rules and the
documents incorporated by reference in the Registration Statement and the
Prospectuses and any further amendment or supplement to any such incorporated
document made by the Company (except for the financial statements and schedules
and other financial and statistical data included therein, as to which such
counsel expresses no opinion) when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
- 13 -
with the requirements of the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
(x) The Registration Statement has become effective under the
Securities Act, and to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are threatened, pending or
contemplated.
(xi) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock."
(xii) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, they may rely as to matters of
fact on certificates of responsible officers of the Company and public officials
and on the opinions of other counsel satisfactory to the Representatives as to
matters which are governed by laws other than the laws of the Commonwealth of
Pennsylvania and the Federal laws of the United States; provided that such
counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the Representatives and representatives of the independent
certified public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that the
Registration Statement (including all exhibits and information deemed to be a
part thereof through incorporation by reference) at the time it became effective
(except with respect to the financial statements, notes and schedules thereto
and other financial data, as to which such counsel need express no belief)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as amended or supplemented (except with
respect to the financial statements and notes schedules thereto and other
financial data, as to which such counsel need make no statement) on the date
thereof contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
- 14 -
(g) All proceedings taken in connection with the sale of the Firm Shares
and the Option Shares as herein contemplated shall be reasonably satisfactory in
form and substance to the Representatives and their counsel and the Underwriters
shall have received from Xxxx and Xxxx LLP a favorable opinion, addressed to the
Representatives and dated such Closing Date, with respect to the Shares, the
Registration Statement and the Prospectus, and such other related matters, as
the Representatives may reasonably request, and the Company shall have furnished
to Xxxx and Xxxx LLP such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(o).
(i) The Company shall have furnished or caused to be furnished to the
Representatives such further certificates or documents as the Representatives
shall have reasonably requested.
6. Covenants of the Company.
------------------------
(a) The Company covenants and agrees as follows:
(i) The Company shall prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement.
(ii) The Company shall promptly advise the Representatives in writing
(i) of any proposal to amend or supplement the Registration Statement or the
Prospectus with regard to the offer and sale of the Shares and will afford the
Representatives a reasonable opportunity to comment on any such proposed
amendment or supplement, (ii) of the filing of any such amendment or supplement,
(iii) of any request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information with regard to the
offer and sale of the Shares, (iv) of the prevention or suspension of the use of
any preliminary prospectus or the Prospectus or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
with regard to the offer and sale of the Shares and (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
- 15 -
or supplement the Prospectus to comply with the Securities Act or the Rules, the
Company promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 6(a), an amendment or
supplement which shall correct such statement or omission or an amendment which
shall effect such compliance.
(iv) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not later than 45
days after the end of the 12-month period beginning at the end of the fiscal
quarter of the Company during which the Effective Date occurs (or 90 days if
such 12-month period coincides with the Company's fiscal year), an earning
statement (which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the Securities
Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto) and
all amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
If applicable, the copies of the Registration Statement and Prospectus and each
amendment and supplement thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(vi) The Company shall cooperate with the Representatives and their
counsel in endeavoring to qualify the Shares for offer and sale under the laws
of such jurisdictions as the Representatives may designate and shall maintain
such qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the Company shall not be required in connection
therewith, as a condition thereof, to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction.
(vii) The Company, during the period when the Prospectus is required
to be delivered under the Securities Act and the Rules or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the regulations promulgated thereunder.
(viii) Without the prior written consent of CIBC World Markets Corp.,
for a period of 60 days after the date of this Agreement, the Company shall not
issue, sell or register with the Commission (other than on Form S-8 or on any
successor form), or otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into, exercisable for
or exchangeable for equity securities of the Company), except for the issuance
of the Shares pursuant to the Registration Statement, the issuance of shares
- 16 -
pursuant to the Company's existing stock option plan or bonus plan and the
issuance of warrants in connection with the Company's acquisition of Mobile
Force Technologies, Inc. In the event that during this period, (i) any shares
are issued pursuant to the Company's existing stock option plan or bonus plan
that are exercisable during such 60 day period or (ii) any registration is
effected on Form S-8 or on any successor form relating to shares that are
exercisable during such 60 period, the Company shall obtain the written
agreement of such grantee or purchaser or holder of such registered securities
that, for a period of 60 days after the date of this Agreement, such person will
not, without the prior written consent of CIBC World Markets Corp., offer for
sale, sell, distribute, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, or exercise any registration rights with respect to,
any shares of Common Stock (or any securities convertible into, exercisable for,
or exchangeable for any shares of Common Stock) owned by such person.
(ix) On or before completion of this offering, the Company shall make
all filings required under applicable securities laws and by the Nasdaq National
Market (including any required registration under the Exchange Act).
(x) Prior to the Closing Date, the Company will issue no press release
or other communication directly or indirectly and hold no press conference with
respect to the Company, the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company, or the offering of the
Shares without the prior written consent of the Representatives unless in the
judgment of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
(xi) The Company will apply the net proceeds from the offering of the
Shares in the manner set forth under "Use of Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus and any
document incorporated by reference therein, and the printing, filing and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the various jurisdictions referred to in Section 6(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky memoranda;
(iv) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold; (v)
inclusion of the Shares for quotation on the Nasdaq National Market; and (vi)
- 17 -
all transfer taxes, if any, with respect to the sale and delivery of the Shares
by the Company to the Underwriters. Subject to the provisions of Section 9, the
Underwriters agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence, including,
without limitation, the fees and disbursements of counsel for the Underwriters.
7. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or the Prospectus or
any amendment thereof or supplement thereto, or in any Blue Sky application or
other information or other documents executed by the Company filed in any state
or other jurisdiction to qualify any or all of the Shares under the securities
laws thereof (any such application, document or information being hereinafter
referred to as a "Blue Sky Application") or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of any
losses, claims, damages or liabilities arising from the sale of the Shares to
any person by such Underwriter if such untrue statement or omission or alleged
untrue statement or omission was made in such preliminary prospectus, the
Registration Statement or the Prospectus, or such amendment or supplement
thereto, or in any Blue Sky Application in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on behalf
of any Underwriter specifically for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company, and each officer of the Company who
signs the Registration Statement, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, contained in the third paragraph under
the caption "Underwriting" in the Prospectus; provided, however, that the
obligation of each Underwriter to indemnify the Company (including any
- 18 -
controlling person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) or contribution provided for in Section 8 shall be
available to any party who shall fail to give notice as provided in this Section
7(c) if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to give
such notice but the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve it from any liability that it may
have to any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and the approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such indemnified party in connection with
the defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by
such indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it which are different from
or in addition to those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying parties
shall not have employed counsel to assume the defense of such action within a
reasonable time after notice of the commencement thereof, in each of which cases
the fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnification provided for in Section 7(a) or
7(b) is due in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
- 19 -
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company,
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities 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 clauses (i) and (ii) in the
immediately preceding sentence of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. Upon notification to the contributing party of the commencement
thereof, the contributing party shall be entitled to participate in, and to the
extent that it shall wish, jointly with any other contributing party, to assume
the defense thereof, with counsel reasonably satisfactory to such contributing
- 20 -
party, and after notice from the contributing party to such party seeking
contribution of its election so to assume the defense thereof and the approval
by the party seeking contribution of such counsel, the contributing party shall
not be liable to such party seeking contribution for any legal or other
expenses, except as provided below and except for the reasonable costs of
investigation subsequently incurred by such party seeking contribution in
connection with the defense thereof. The party seeking contribution shall have
the right to employ its counsel in any such action, but the fees and expenses of
such counsel shall be at the expense of such party unless (i) the employment of
counsel by such party has been authorized in writing by the contributing
parties, (ii) the party seeking contribution shall have been advised by counsel
that there may be one or more legal defenses available to it which are different
from or in addition to those available to the contributing party (in which case
the contributing parties shall not have the right to direct the defense of such
action on behalf of the party seeking contribution) or (iii) the contributing
parties shall not have employed counsel to assume the defense of such action
within a reasonable time after notice of the commencement thereof, in each of
which cases the fees and expenses of counsel shall be at the expense of the
contributing parties. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its written consent. The
Underwriter's obligations to contribute pursuant to this Section 8 are several
in proportion to their respective underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to the
-----------
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if on or prior to such date, any domestic or international
event or act or occurrence has materially disrupted, or in the opinion of the
Representatives will in the future materially disrupt, the securities markets;
(ii) if there has occurred any new outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representatives, inadvisable to proceed with the offering; (iii) if there shall
be such a material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial markets in
the United States is such as to make it, in the judgment of the Representatives,
inadvisable or impracticable to market the Shares; (iv) if trading in the Shares
has been suspended by the Commission or trading generally on the New York Stock
Exchange, Inc., on the American Stock Exchange, Inc. or the Nasdaq National
Market has been suspended or limited, or minimum or maximum ranges for prices
for securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the Commission,
the National Association of Securities Dealers, Inc., or any other governmental
or regulatory authority; or (v) if a banking moratorium has been declared by any
state or Federal authority; or (vi) if, in the judgment of the Representatives,
there has occurred a material adverse effect on the assets or properties,
business, results of operations or financial condition of the Company and its
subsidiaries, taken as a whole, or
(b) at or before any Closing Date, that any of the conditions specified in
Section 5 shall not have been fulfilled when and as required by this Agreement.
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If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters shall
----------------------------
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date
(a) if the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date shall not exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then each of the
nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting Underwriters
on such Closing Date shall exceed 10% of the Shares that all the Underwriters
are obligated to purchase on such Closing Date, then the Company shall be
entitled to one additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Representatives and the Company. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
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Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company and without liability on the part
of the Company, except in both cases as provided in Sections 6(b), 7, 8 and 9.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations, warranties,
-------------
indemnities and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 6(b), 7, 8 and 9 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Representatives, c/o CIBC World Markets Corp., 000 Xxxxx Xxxxxx Xxx
Xxxx, Xxx Xxxx 00000 with a copy to Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq. and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxxxx X. Xxxxxxx, Esq.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE FULLY
PERFORMED THEREIN.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
[remainder of page intentionally left blank]
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Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
X-XXX.xxx Corp.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Title: President and CEO
Confirmed:
CIBC WORLD MARKETS CORP.
SOUNDVIEW TECHNOLOGY CORPORATION
XXXXXXX BROS., L.P.
H.C. XXXXXXXXXX & CO., INC.
Acting severally on behalf of itself and as representative of the several
Underwriters named in Schedule I annexed hereto.
By CIBC WORLD MARKETS CORP.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---------------------------------- --------------
CIBC World Markets Corp. 1,920,000
SoundView Technology Corporation 600,000
Xxxxxxx Bros., L.P. 240,000
X.X. Xxxxxxxxxx & Co., Inc. 240,000
---------------------------------- ------------
Total 3,000,000
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