Draft Dated 10/7/96
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2,500,000 Shares/1/
Viisage Technology, Inc.
Common Stock
UNDERWRITING AGREEMENT
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_____________, 1996
XXXXX & COMPANY
XXXXXXX & COMPANY, INC.
As Representatives of the Several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Viisage Technology, Inc., a Delaware corporation
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(the "Company"), and Xxx Acquisition Corp. ("Xxx"), a stockholder of the Company
(the "Selling Stockholder") propose to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 2,500,000 shares of
Common Stock, $.001 par value (the "Common Stock") of the Company, of
which 2,000,000 shares will be sold by the Company and 500,000 shares will be
sold by the Selling Stockholder. The aggregate of 2,500,000 shares so proposed
to be sold is hereinafter referred to as the "Firm Stock." The respective
amounts of the Firm Stock to be so purchased by the several Underwriters are set
forth opposite their names in Schedule A hereto. The Company Stockholder also
has granted to the Underwriters, upon the terms and conditions set forth in
Section 3 hereof, the option to purchase up to an additional 375,000 shares of
Common Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock." Xxxxx & Company ("Cowen")
and Xxxxxxx & Company, Inc. ("Xxxxxxx") are acting as representatives of the
several Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. (a) Representations and Warranties of the Company and the
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Selling Stockholder. The Company and the Selling Stockholder jointly and
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severally represent and warrant to, and agree with, the several Underwriters
that:
________________________________
/1/ Plus an option to purchase up to 375,000 additional shares from the
Company to cover over-allotments.
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(i) A registration statement on Form S-1 (File No. 333-10649)
in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall
become effective with respect to the Stock, including any preeffective
prospectuses included as part of the registration statement as
originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been
filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have
heretofore been delivered to you, have been so prepared and filed. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this Agreement
shall also include any registration statement relating to the Stock
that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. All copies of Registration Statements that have been
delivered to you are identical to the electronically transmitted copies
thereof filed with the Commission pursuant to the Commission's
Electronic Data Gathering, Analysis and Retrieval System ("XXXXX"),
except to the extent permitted by Regulation S-T. The term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement, or, (A) if the prospectus
included in the Registration Statement omits information in reliance on
Rule 430A under the Securities Act and such information is included in
a prospectus filed with the Commission pursuant to Rule 424(b) under
the Securities Act, the term "Prospectus" as used in this Agreement
means the prospectus in the form included in the Registration Statement
as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b) and
(B) if prospectuses that meet the requirements of Section 10(a) of the
Securities Act are delivered pursuant to Rule 434 under the Securities
Act, then (i) the term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined in Rule 434
(g) under the Securities Act) as supplemented by (a) the addition of
Rule 430A information or other information contained in the form of
prospectus delivered pursuant to Rule 434 (b) (2) under the Securities
Act or (b) the information contained in the term sheets described in
Rule 434 (b) (3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the term sheets. The
term "Preeffective Prospectus" as used in this Agreement means the
prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
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Prospectus. For purposes of this Agreement, all references to the
Registration Statement, any Pre-effective Prospectus, the Prospectus,
or any amendment or supplement to any of the foregoing shall be deemed
to include the respective copies thereof filed with the Commission
pursuant to XXXXX.
(ii) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and,
at its date of issue, each Preeffective Prospectus conformed in all
material respects with the requirements of the Securities Act and did
not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and, when the Registration Statement becomes
effective and at all times subsequent thereto up to and including the
Closing Dates, the Registration Statement and the Prospectus and any
amendments or supplements thereto conformed and will conform in all
material respects to the requirements of the Securities Act and the
Rules and Regulations; and when the Registration Statement became
effective, neither the Registration Statement nor any amendment or
supplement thereto, included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and, on the
Effective Date the Prospectus did not, and on the Closing Dates will
not, contain 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; provided, however, that the foregoing representations,
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warranties and agreements shall not apply to information contained in
or omitted from any Preeffective Prospectus or the Registration
Statement or the Prospectus or any such amendment or supplement thereto
in reliance upon, and in conformity with, written information furnished
to the Company by or on behalf of any Underwriter, directly or through
you (or by any Selling Stockholder), specifically for use in the
preparation thereof; there is no franchise, lease, contract, agreement
or document 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 therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or
documents contained in the Registration Statement are accurate
descriptions of such documents in all material respects.
(iii) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set
forth or contemplated in the Prospectus, the Company has not incurred
any liabilities or obligations, direct or contingent, nor entered into
any transactions not in the ordinary course of business, and there has
not been any material adverse change in the condition (financial or
otherwise), properties, business, management, net worth or results of
operations of the Company, or any change in the capital stock, or any
material change in the short-term or long-term debt of the Company.
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(iv) The financial statements, together with the related notes, set
forth in the Prospectus and elsewhere in the Registration Statement
fairly present, on the basis stated in the Registration Statement, the
financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the
respective periods therein specified. Such statements and related notes
and schedules have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as may be
set forth in the Prospectus. The selected financial and statistical
data set forth in the Prospectus under the caption "Selected Financial
Data" fairly present, on the basis stated in the Registration
Statement, the information set forth therein.
(v) Xxxxxx Xxxxxxxx LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(vi) The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of its
jurisdiction of organization, with power and authority (corporate and
other) to own or lease its business as described in the Prospectus; the
Company is in possession of and operating in material compliance with
all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its
business, all of which are valid and in full force and effect; and the
Company is duly qualified to do business and in good standing as a
foreign corporation in all other jurisdictions where its ownership or
leasing of properties or the conduct of its business requires such
qualification. The Company has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to own, lease and
operate its properties and conduct its business as now being conducted
and as described in the Registration Statement and the Prospectus, and
no such consent, approval, authorization, order, registration,
qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and
the Prospectus. The Company does not own or control, directly or
indirectly, any corporation, association or other entity.
(vii) The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Date, as set forth under
the heading "Capitalization" in the Prospectus; the outstanding shares
of capital stock (including the outstanding shares of Stock) of the
Company conform to the description thereof in the Prospectus and have
been duly authorized and validly issued and are fully paid and
nonassessable, are duly listed on the Nasdaq National Market and have
been issued in compliance with all federal and state securities laws
and were not issued in violation of or subject to any preemptive rights
or
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similar rights to subscribe for or purchase securities and conform
to the description thereof contained in the Prospectus. Except as
disclosed in and or contemplated by the Prospectus and the financial
statements of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations, except for options granted subsequent to the date of
information provided in the Prospectus pursuant to the Company's
employee and stock option plans as disclosed in the Prospectus. The
description of the Company' s stock option and other stock plans or
arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and fairly
presents the information required to be shown with respect to such
plans, arrangements, options and rights.
(viii) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of
any preemptive or similar rights and will conform to the description
thereof in the Prospectus.
(ix) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any executive
officers or directors is a party or of which any property of the
Company or any affiliate is subject, which, if determined adversely to
the Company or any executive officers or directors, might individually
or in the aggregate (i) prevent or adversely affect the transactions
contemplated by this Agreement, (ii) suspend the effectiveness of the
Registration Statement, (iii) prevent or suspend the use of the
Preeffective Prospectus in any jurisdiction or (iv) result in a
material adverse change in the condition (financial or otherwise),
properties, business, management, net worth or results of operations of
the Company; and to the best of the Company's knowledge no such
proceedings are threatened or contemplated against the Company or any
affiliate by governmental authorities or others. The Company is not a
party nor subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body or other
governmental agency or body. The description of the Company's
litigation under the heading "Legal Proceedings" in the Prospectus is
true and correct and complies with the Rules and Regulations.
(x) The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of trust, note
agreement or other material agreement or instrument to which the
Company is a party or by which it or any of its properties is or may be
bound, the Certificate of Incorporation, By-laws or other
organizational documents of the Company, or any law, order, rule or
regulation of any court or
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governmental agency or body having jurisdiction over the Company or any
of its properties or will result in the creation of a lien.
(xi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except such
as may be required by the National Association of Securities Dealers,
Inc. (the "NASD") or under the Securities Act or the securities or
"Blue Sky" laws of any jurisdiction in connection with the purchase and
distribution of the Stock by the Underwriters.
(xii) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder
(including to issue, sell and deliver the Stock), and this Agreement
has been duly and validly authorized, executed and delivered by the
Company and is a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to
the extent that rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or the public policy
underlying such laws.
(xiii) The Company is in all material respects in compliance with,
and conducts its business in material conformity with, all applicable
federal, state, local and foreign laws, rules and regulations
(including but not limited to the Foreign Corrupt Practices Act and any
laws, rules and regulations regarding government contracting and
procurement) or any court or governmental agency or body and the
Company has all permits or licenses required thereunder; to the
knowledge of the Company, otherwise than as set forth in the
Registration Statement and the Prospectus, no prospective change in any
of such federal or state laws, rules or regulations has been adopted
which, when made effective, would have a material adverse effect on the
operations of the Company.
(xiv) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and have paid
all taxes shown as due thereon or with respect to any of its
properties, and there is no tax deficiency that has been, or to the
knowledge of the Company has been threatened or is likely to be,
asserted against the Company or any of its properties or assets that
would adversely affect the financial position, business or operations
of the Company.
(xv) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement or otherwise.
(xvi) Neither the Company nor any of its officers or directors has
taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company, or which 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 the Common Stock of the Company.
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(xvii) The Company has provided you with all financial statements
since inception to the date hereof that are available to the officers
of the Company, including financial statements for the six months ended
June 30, 1996.
(xviii) The Company owns, possesses, or has rights to use all
patents, trademarks, trademark registrations, service marks, service
xxxx registrations, tradenames, copyrights, copyright registrations,
licenses, inventions, trade secrets and rights (collectively,
"Intellectual Property") necessary for the conduct of its business or
described in the Prospectus as being owned, licensed or used by it.
Other than as described in the Prospectus, the Company has not received
any notice or claim or any challenge by any other person to the rights
of the Company with respect to the Intellectual Property necessary for
the conduct of its business or described in the Prospectus as being
owned, licensed or used by it. The Company's business as now conducted
does not and will not infringe or conflict with any Intellectual
Property or franchise right of any person. Other than as described in
the Prospectus, no claim has been made against the Company alleging the
infringement by the Company of any Intellectual Property right or
franchise right of any person. None of the patents owned or licensed
by the Company are unenforceable or invalid. The Company, or the
Selling Stockholder, as the case may be, has duly and properly filed or
caused to be filed with the United States Patent and Trademark Office
(the "PTO") and applicable foreign and international patent authorities
all patent applications described or referred to in the Prospectus, and
believes it has complied with the PTO's duty of candor and disclosure
for each of the United States patent and patent applications described
or referred to in the Prospectus; neither the Company nor the Selling
Stockholder is aware of any facts which would preclude the grant of a
patent from each of its respective patent applications described or
referred to in the Prospectus; neither the Company nor the Selling
Stockholder has knowledge of any facts which would preclude it from
having clear title to its patent applications referenced in the
Prospectus; and neither the Company nor the Selling Stockholder has
terminated or breached and is not in violation of any agreement
covering any Intellectual Property rights.
(xix) No breach or default exists in the due performance and
observance by the Company of any term, covenant or condition of its
contracts. To the Company's knowledge, no other party to such contract
is in material default under or in breach of any such obligations. The
Company has not received any notice of such default or breach.
(xx) The Company is not involved in any labor dispute nor is any
such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of the
Company plans to terminate employment with the Company or (B) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would
be violated by the present or proposed business activities of
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the Company. The Company does not have or expect to have any liability
for any prohibited transaction or funding deficiency or any complete or
partial withdrawal liability with respect to any pension, profit
sharing or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which the Company
makes or ever has made a contribution and in which any employee of the
Company is or has ever been a participant. With respect to such plans,
the Company is in compliance in all material respects with all
applicable provisions of ERISA.
(xxi) The Company has, and the Company as of the Closing Dates will
have, good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by it which is
material to the business of the Company, in each case free and clear of
all liens, encumbrances and defects except such as are described the
Prospectus or such as would not have a material adverse effect on the
Company; and any real property and buildings held under lease by the
Company are, or will be as of the Closing Dates, held by it under
valid, subsisting and enforceable leases with such exceptions as would
not have a material adverse effect on the Company, in each case except
as described in or contemplated by the Prospectus.
(xxii) The Company is insured by insurers of financial
responsibility against such losses and risks and in such amounts as are
customary in the business in which it is engaged; and no such insurer
has notified or indicated to the Company that it will not be able to
renew its existing insurance coverage as and when such coverage
expires; and the Company has no reason to believe that, if such
coverage is not renewed, that it will not be able to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or
operations of the Company, except as described in or contemplated by
the Prospectus.
(xxiii) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(xxiv) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(xxv) The Company 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 authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
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management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxvi) To the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment or received or
retained any payment in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(xxvii) The Company is not or will not become 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,
after the closing of the offering and the application of the proceeds
therefrom.
(xxviii) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the
matters covered thereby.
(xxix) The Company has obtained the written agreement described in
Section 8(k) of this Agreement from each of its officers, directors,
holders of Common Stock and holders of options to purchase Common
Stock.
(xxv) Each of the Amended and Restated Asset Transfer Agreement
(the "Transfer Agreement") dated August __,1996, the Amended and
Restated License Agreement dated August 1996, the Administrations and
Services Agreement dated August __, 1996, and Use and Occupancy
Agreement dated August __, 1996 between the Company and Xxx and
pursuant to which the Company was initially organized and capitalized
(all of the foregoing agreements being referred to herein as the
"Organization Agreements") has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding
obligation of the Company enforceable in accordance with its terms. The
execution, delivery and performance of the Organization Agreements by
the Company, the consummation of the transactions therein contemplated
and compliance with the terms thereof do not and will not result in a
breach or violation of, or constitute a default under, the corporate
charter, by-laws or other governing documents of the Company, or any
agreement, mortgage, trust, loan agreement, lease, indenture or other
instrument or agreement to which the Company is a party or by which it
is bound, or to which any of its properties is subject, and do not and
will not violate any existing law, rule, administrative regulation or
decree or judgment of any court or any governmental agency or body
having jurisdiction over the Company or any of its properties, or
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company. No consent,
approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with the
consummation of the transactions contemplated by such Organization
Agreements.
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(b) Representations and Warranties and Agreements of the Selling
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Stockholder. The Selling Stockholder represents and warrants to, and
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agrees with, the several Underwriters that it:
(i) Now has, and on the Closing Dates will have, valid and
marketable title to the Stock to be sold by the Selling Stockholder,
free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on
transfer, and has full right, power and authority to enter into this
Agreement, and, that it is a corporation, duly organized and validly
existing and in good standing as a corporation under the laws of its
jurisdiction of organization.
(ii) Now has, and on the Closing Dates will have, upon delivery of
and payment for each share of Stock hereunder, full right, power and
authority and approval required by law to sell, transfer, assign and
deliver the Stock being sold by the Selling Stockholder hereunder, and
each of the several Underwriters will acquire valid and marketable
title to all of the Stock being sold to the Underwriters by the Selling
Stockholder, free and clear of any liens, encumbrances, equities
claims, restrictions on transfer or other defects whatsoever.
(iii) For a period of 180 days after the date of this Agreement,
without the prior written consent of Cowen, the Selling Stockholder
will not offer, sell, assign, transfer, encumber, contract to sell,
grant an option to purchase or otherwise dispose of any shares of
Common Stock held by such Selling Stockholder (including without
limitation any shares of Common Stock that may be deemed to be
beneficially owned by such Selling Stockholder on the date hereof in
accordance with the Rules and Regulations) or any securities
convertible into, derivative of or exercisable or exchangeable for such
Common Stock for 180 days commencing on the date of the final
prospectus, except for shares of Common Stock sold by such Selling
Stockholder pursuant to this Agreement.
(iv) Has, by execution and delivery of each of this Agreement,
created valid and binding obligations of the Selling Stockholder,
enforceable against the Selling Stockholder in accordance with the
terms of such agreements and documents.
(v) The performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby will not result in a
breach or violation by the Selling Stockholder of any of the terms or
provisions of, or constitute a default by the Selling Stockholder
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder or any of its properties is bound, or any judgment
of any court or governmental agency or body applicable to the Selling
Stockholder or any of its properties, or to the Selling Stockholder's
knowledge, any statute, decree,
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order, rule or regulation of any court or governmental agency or body
applicable to the Selling Stockholder or any of its properties.
(vi) Has reviewed the Registration Statement and Prospectus and,
nothing has come to the attention of the Selling Stockholder that would
lead the Selling Stockholder to believe that on the Effective Date, the
Registration Statement contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date the Prospectus contained and, on
the Closing Date and any later date on which Optional Stock is to be
purchased, contains any untrue statement of a material fact or omitted
or omits 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.
The Selling Stockholder agrees that its obligations hereunder shall
not be terminated by operation of law, whether by liquidation or
distribution of the Selling Stockholder, or any other event.
(vii) Owns, and will own as of each Closing Date, of record and
beneficially, the number of shares of Common Stock of the Company set
forth in the Prospectus, free and clear of any liens, encumbrances,
claims or restrictions, except as described in the Prospectus and
except that certain of such shares are reserved for issuance
pursuant to stock option and other benefit plans under which options to
purchase Common Stock of the Company owned by Xxx are granted to
certain employees, directors or consultants of Xxx.
(viii) Has completed the transfer to the Company of certain assets,
as described in the Prospectus and in the Transfer Agreement, and has
taken all required corporate and other actions. Each of the
Organization Agreements to which Xxx is a party has been duly and
validly authorized, executed and delivered by Xxx and is a valid and
binding obligation of Xxx enforceable in accordance with its terms.
The execution, delivery and performance of each of the Organization
Agreements by Xxx, the consummation of the transactions therein
contemplated and compliance with the terms thereof do not and will not
result in a breach or violation of, or constitute a default under, the
corporate charter, by-laws or other governing documents of Xxx, or any
agreement, mortgage, trust, loan agreement, lease, indenture or other
agreement or instrument to which Xxx is a party or by which it is
bound, or to which any of its properties is subject, and do not and
will not violate any existing law, rule, administrative regulation or
decree or judgment of any court or any governmental agency or body
having jurisdiction over Xxx or any of its properties, or result in the
creation or imposition of any lien, charge, claim or encumbrance upon
any property or asset of Xxx. No consent, approval, authorization or
order of any court, governmental agency or body or financial
institution is required in connection with the consummation by Xxx of
the transactions contemplated by the Organization Agreements.
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(ix) Has filed all tax returns required to be filed by it, except for
such returns for which Xxx'x failure to file would not have a material
adverse effect on Xxx or the Company, and has paid all taxes which have
become due, including without limitation, all taxes which it is
obligated to withhold for amounts owing to employees, creditors and
third parties, except for taxes for which Xxx'x failure to pay would
not have a material adverse effect on Xxx or Company. All taxes with
respect to which Xxx has become obligated pursuant to elections made by
it in accordance with generally accepted practice have been paid,
except for taxes for which Xxx'x failure to pay would not have material
adverse effect on Xxx or Company, and adequate reserves have been
established for all taxes accrued but not yet payable. No waivers of
statutes of limitation with respect to any of the returns have been
given by or requested from Xxx. No unsatisfied deficiencies have been
asserted or assessed against Xxx as a result of any audit by any
federal, state, local or foreign taxing authority. No examination or
audit by any such authority is currently in progress or, to Xxx'x
knowledge, threatened, except that Xxx'x 1991 and 1992 federal tax
returns are under audit by the Internal Revenue Service and Xxx'x
Arizona payroll tax for 1995 is under audit in the State of Arizona.
There are no liens for taxes (other than for current taxes not yet due
and payable) upon the assets of the Company. Xxx is not a party to any
agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code.
Xxx does not have and has not had a permanent establishment in any
foreign country, as defined in any applicable tax treaty or convention
between the United States of America and such foreign country.
Xxx and its shareholders made a valid election for the Company to
be treated as an "S corporation," as that term is defined in Section
1361(a) of the Code, and at all times after such election and prior to
______, 1996 Xxx was qualified as an S corporation. To Xxx'x
knowledge, each of the shareholders has timely filed all federal tax
returns with respect to S corporation taxes required to be filed
through the date hereof, and paid all S corporation taxes required to
be paid with respect to such filed tax returns. Except as provided
above in this clause 2(b)(ix), there has not been any audit of any tax
return filed by Xxx or, to Xxx'x knowledge, by any shareholder with
respect to, or which may relate to, such S corporation tax liabilities.
3. Purchase by, and Sale and Delivery to, Underwriters -- Closing
--------------------------------------------------------------
Dates. The Company and the Selling Stockholder agree, severally and not
-----
jointly, to sell to the Underwriters the Firm Stock in accordance with Section 1
hereof and on the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Underwriters agree, severally and not jointly, to purchase the Firm
Stock from the Company and the Selling Stockholder, the number of shares of Firm
Stock to be purchased by each Underwriter being set opposite its name in
Schedule A, subject to adjustment in accordance with Section 12 hereof.
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The purchase price per share to be paid by the Underwriters to the
Company and the Selling Stockholder will be $ _____ per share (the "Purchase
Price").
The Company and the Selling Stockholder will deliver the Firm Stock to
the Representatives for the respective accounts of the several Underwriters in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the First Closing Date (as defined below) or, if no such
direction is received, in the names of the respective Underwriters or in such
other names as Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine, against payment
of the aggregate Purchase Price therefor by wire transfer (same day funds),
payable to the order of the Company and the Selling Stockholder all at the
offices of Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., Twenty Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000. The time and date of the delivery and closing
shall be at 10:00 A.M., New York Time, on ___________, 1996, in accordance with
Rule 15c6-1 of the Exchange Act. The time and date of such payment and delivery
are herein referred to as the "First Closing Date". The Closing Date and the
location of delivery of, and the form of payment for, the Firm Stock may be
varied by agreement between the Company and Cowen. The Closing Date may be
postponed pursuant to the provisions of Section 12.
The Company and the Selling Stockholder shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters not later than 10:00 A.M., New York Time, on the business day
preceding the Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or Xxxxxxx, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company on behalf of any Underwriter or Underwriters, for
the Stock to be purchased by such Underwriter or Underwriters. Any such payment
by Cowen or Xxxxxxx shall not relieve such Underwriter or Underwriters from any
of its or their other obligations hereunder.
The several Underwriters agree to make an initial public offering of
the Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is advisable.
The Representatives shall promptly advise the Company and the Selling
Stockholder of the making of the initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase up to 375,000
shares. The price per share to be paid for the Optional Stock shall be the
Purchase Price. The option granted hereby may be exercised as to all or any
part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the effective date of this Agreement. No
Optional Stock shall be sold and delivered unless the Firm Stock previously has
been, or simultaneously is, sold and
-14-
delivered. The right to purchase the Optional Stock or any portion thereof may
be surrendered and terminated at any time upon notice by the Underwriters to the
Company.
The option granted hereby may be exercised by the Underwriters by
giving written notice from Cowen to the Company setting forth the number of
shares of the Optional Stock to be purchased by them and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates"). Optional Stock shall be purchased for the
account of each Underwriter in the same proportion as the number of shares of
Firm Stock set forth opposite such Underwriter's name in Schedule A hereto bears
to the total number of shares of Firm Stock (subject to adjustment by the
Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly and subject to the terms and
conditions herein set forth, to purchase the number of such shares determined as
aforesaid.
The Company will deliver the Optional Stock to the Underwriters in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company and the
Selling Stockholder given at or prior to 12:00 Noon, New York Time, on the
second full business day preceding the Option Closing Date or, if no such
direction is received, in the names of the respective Underwriters or in such
other names as Cowen may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine, against payment
of the aggregate Purchase Price therefor by wire transfer (same day funds),
payable to the order of the Company or payable as directed by the Company all at
the offices of Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., Twenty Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000. The Company shall make the certificates for the
Optional Stock available to the Underwriters for examination not later than
10:00 A.M., New York Time, on the business day preceding the Option Closing Date
at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The Option Closing Date and the location of delivery of, and the form of payment
for, the Option Stock may be varied by agreement between the Company and Cowen.
The Option Closing Date may be postponed pursuant to the provisions of Section
12.
4. Covenants and Agreements of the Company. The Company and the
---------------------------------------
Selling Stockholder covenant and agree with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A, use its best efforts to
cause the Registration Statement to become effective, (ii) if the Company
and the Representatives have determined to proceed pursuant to Rule 430A,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 424 of
the Rules and Regulations and (iii) if the Company and the
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Representatives have determined to deliver Prospectuses pursuant to Rule
434 of the Rules and Regulations, to use its best efforts to comply with
all the applicable provisions thereof. The Company will advise the
Representatives promptly as to the time at which the Registration Statement
becomes effective, will advise the Representatives promptly of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible the lifting thereof, if
issued. The Company will advise the Representatives promptly of the receipt
of any comments of the Commission or any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus
or for additional information and will not at any time file any amendment
to the Registration Statement or supplement to the Prospectus which shall
not previously have been submitted to the Representatives a reasonable time
prior to the proposed filing thereof or to which the Representatives shall
not have previously approved in writing (such approval not to be
unreasonably withheld or delayed) or which is not in compliance with the
Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to
continue the distribution of the Stock and will use its best efforts to
cause the same to become effective as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any event relating to or affecting the
Company occurs as a result of which the Prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact, or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Prospectus to comply with
the Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus which will
correct such statement or omission; and in case any Underwriter is required
to deliver a prospectus relating to the Stock nine (9) months or more after
the effective date of the Registration Statement, the Company upon the
request of the Representatives and at the expense of such Underwriter will
prepare promptly such prospectus or prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally
filed with the Commission, and all amendments thereto including all
financial statements and exhibits thereto, and will deliver to the
Representatives such number of copies of the Registration Statement,
including such financial statements, but without exhibits, and all
amendments thereto, as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives,
from time to time until the effective date
-16-
of the Registration Statement, as many copies of the Preeffective
Prospectus as the Representatives may reasonably request. The Company will
deliver or mail to or upon the order of the Representatives on the date of
the initial public offering, and thereafter from time to time during the
period when delivery of a prospectus relating to the Stock is required
under the Securities Act, as many copies of the Prospectus, in final form
or as thereafter amended or supplemented as the Representatives may
reasonably request; provided, however, that the expense of the preparation
-------- -------
and delivery of any prospectus required for use nine (9) months or more
after the effective date of the Registration Statement shall be borne by
the Underwriters required to deliver such prospectus.
(e) The Company will make generally available to its stockholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which
will be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date" (as defined
in Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such jurisdictions
as the Representatives may designate, provided that such jurisdictions are
within the United States, Guam or Puerto Rico, and at the request of the
Representatives will make such applications and furnish such consents to
service of process or other documents as may be required of it as the
issuer of the Stock for that purpose; provided, however, that the Company
-------- -------
shall not be required to qualify to do business or to file a general
consent (other than that arising out of the offering or sale of the Stock)
to service of process in any such jurisdiction where it is not now so
subject. The Company will, from time to time, prepare and file such
statements and reports as are or may be required of it as the issuer of the
Stock to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company
becomes aware of the suspension of the qualifications or registration of
(or any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives
use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its stockholders annual reports
containing financial statements certified by independent public accountants
and with quarterly summary financial information in reasonable detail which
may be unaudited.
(h) The Company will use its best efforts to list the Stock, subject
to official notice of issuance, on the Nasdaq National Market.
-17-
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its first six quarterly statements on Form 10-Q,
the Company will have its independent auditors perform a limited quarterly
review of its quarterly numbers.
(k) The Company will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option to purchase or otherwise dispose of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock
of the Company which may be deemed to be beneficially owned by the Company
in accordance with the Rules and Regulations) during the 180 days following
the date on which the price of the Common Stock to be purchased by the
Underwriters is set (except with prior written consent of each of the
Representatives), other than the Company's sale of Common Stock hereunder
and the Company's issuance of Common Stock upon the exercise of warrants
and stock options which are presently outstanding and described in the
Prospectus or pursuant to the Company's stock option plans.
(l) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the Prospectus
which description complies in all material respects with the requirements
of Item 504 of Regulation S-K.
(m) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act and the
Exchange Act.
(n) Prior to the Closing Dates, the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim financial
statements of the Company for any periods subsequent to the periods covered
by the financial statements appearing in the Registration Statement and the
Prospectus.
(o) Prior to the First Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company, the financial condition, results of
operation, business, prospects, assets or liabilities of any of them, or
the offering of the Stock, without your prior written consent. For a
period of twelve (12) months following the Closing Date, the Company will
use its best efforts to provide to you copies of each press release or
other public communications with respect to the financial condition,
results of operations, business, prospects, assets or liabilities of the
Company at least twenty-four (24) hours prior to the public issuance
thereof or such longer advance period as may reasonably be practicable.
(p) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the Representatives, to
each of the Underwriters: (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of
-18-
the Company containing the balance sheet of the Company as of the close of
such fiscal year and statements of income, stockholder's equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public accountants; (ii) as soon as practicable after the
filing thereof, copies of each proxy statement, Annual Report on Form 10-K,
Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, or the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Common
Stock and (iv) from time to time, such other information concerning the
Company as you may reasonably request.
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with or
incident to the performance of the obligations of the Company and of the Selling
Stockholder under this Agreement and in connection with the transactions
contemplated hereby, including but not limited to (i) all expenses and taxes
incident to the issuance and delivery of the Stock to the Representatives; (ii)
all expenses incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and transfer agent
of the Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the Underwriters; (vi)
fees and expenses of the Company's counsel and the Company's independent
accountants; (vii) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preeffective Prospectus and the Prospectus (including all
exhibits and financial statements) and all amendments and supplements provided
for herein, the Selling Stockholder's Powers of Attorney, the Custody
Agreements, the "Agreement Among Underwriters" between the Representatives and
the Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and the Blue Sky memoranda and this Agreement; (viii) all filing
fees, attorneys fees' and expenses incurred by the Company or the Underwriters
in connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for offer and
sale and determination of its eligibility for investment under the Blue Sky or
other securities laws of such jurisdictions as the Representatives may
designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other reasonable costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section.
(b) The Selling Stockholder will pay (directly or by reimbursement)
all fees and expenses incident to the performance of the Selling Stockholder
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to any fees and expenses of counsel for
the Selling Stockholder and all expenses and taxes incident to the sale and
delivery of the Stock to be sold by the Selling Stockholder to the Underwriters
hereunder.
(c) In addition to their other obligations under Section 6(a) hereof,
the Company and the Selling Stockholder agree that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon (i) any
-19-
misstatement or omission or any alleged misstatement or omission or (ii) any
breach or inaccuracy in their representations and warranties, they will
reimburse each Underwriter on a quarterly basis for all reasonable legal or
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's and Selling Stockholder's obligation to reimburse each Underwriter
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, each
Underwriter shall promptly return it to the Company or the Selling Stockholder,
as the case may be, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to timed by Chemical Bank, New
York, New York (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter in a timely manner as provided below shall bear
interest at the Prime Rate from the due date for such reimbursement. This
expense reimbursement agreement will be in addition to any other liability which
the Company and the Selling Stockholder may otherwise have. The request for
reimbursement will be sent to the Company with a copy to the Selling
Stockholder. In the event that the Company fails to make such reimbursement
payment within thirty (30) days of the reimbursement request, the
Representatives shall notify the Selling Stockholder of its obligation to make
such reimbursement payments within fifteen (15) days.
(d) In addition to its other obligations under Section 6(b) hereof,
each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any misstatement or omission of a material fact, or
any alleged misstatement or omission of a material fact, described in Section
6(b) hereof which relates to information furnished by the Underwriters to the
Company, it will reimburse the Company (and, to the extent applicable, each
officer, director, or controlling person or Selling Stockholder) on a quarterly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company (and, to the extent applicable, each officer, director, or
controlling person or Selling Stockholder) for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, the Company (and, to the extent
applicable, each officer, director, or controlling person or Selling
Stockholder) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (c) and/or (d) of
this Section 5, including the amounts of any requested reimbursement payments
and the method of determining such
-20-
amounts, shall be settled by arbitration conducted under the provisions of and
pursuant to the arbitration procedures of the American Arbitration Association.
Any such arbitration must be commenced by service of a written demand for
arbitration or written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice, then the
party responding to said demand or notice is authorized to do so. Such an
arbitration would be limited to the operation of the interim reimbursement
provisions contained in paragraph (c) and/or (d) of this Section 5 and would not
resolve the ultimate propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of the Securities Act and the
respective officers, directors, shareholders, partners and employees of each of
such Underwriter or person who controls such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims therefor
and counsel fees incurred in connection therewith), joint or several, which may
be based upon the Securities Act, the Exchange Act or any other statute or at
common law, on the ground or alleged ground that any Preeffective Prospectus,
the Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus as from time to time amended or
supplemented) includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, unless such statement or omission was made in reliance upon, and
in conformity with, written information furnished to the Company by any
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any Registration
Statement, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Underwriter Indemnified Party from whom the person
asserting any such losses, claims, damages or liabilities purchased the shares
of Stock concerned to the extent that any such loss, claim, damage or liability
of such Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus; provided, however, that in no case is the Company
to be liable with respect to any claims made against any Underwriter Indemnified
Party against whom the action is brought unless such Underwriter Indemnified
Party shall have notified the Company in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
claim served upon the Underwriter Indemnified Party, but failure to notify the
Company of such claim shall not relieve it from any liability which it may have
to any Underwriter Indemnified Party otherwise than on account of its indemnity
agreement contained in this paragraph. The Company will be entitled to
participate at its own expense in the defense or, if it so elects, to assume the
defense of any suit brought to enforce any such liability, but if the Company
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event the Company elects to assume the defense of any such suit
and
-21-
retain such counsel, any Underwriter Indemnified Parties, defendant or
defendants in the suit may retain additional counsel but shall bear the fees and
expenses of such counsel unless (i) the Company shall have specifically
authorized in writing the retaining of such counsel or (ii) the parties to such
suit include any such Underwriter Indemnified Parties, and the Company and such
Underwriter Indemnified Parties at law or in equity have been advised by counsel
to the Underwriters that one or more legal defenses may be available to it or
them which may not be available to the Company, in which case the Company shall
not be entitled to assume the defense of such suit notwithstanding its
obligation to bear the fees and expenses of such counsel. The Company shall not
be liable to indemnify any person for any settlement of any such claim effected
without the Company's consent. This indemnity agreement is not exclusive and
will be in addition to any liability which the Company might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to each Underwriter Indemnified Party.
(b) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter Indemnified Party against any losses, claims, damages, liabilities
or expenses (including, unless the Selling Stockholder elects to assume the
defense, the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which may be based upon the Securities Act, the Exchange Act or any other
statute or at common law, on the ground or alleged ground that any Preeffective
Prospectus, the Registration Statement or the Prospectus (or any Preeffective
Prospectus, the Registration Statement or the Prospectus, as from time to time
amended and supplemented) includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, written information any Underwriter,
directly or through Representatives, specifically for use in the preparation
thereof; provided, that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any Registration Statement, the
indemnity agreement contained in this subsection (b) shall not inure to the
benefit of any Underwriter Indemnified Party from whom the person asserting any
such losses, claims, damages or liabilities purchased the shares of Stock
concerned to the extent that any such loss, claim, damage or liability of such
Underwriter Indemnified Party results from the fact that a copy of the
Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such shares of Stock to such person as required by
the Securities Act and if the untrue statement or omission concerned has been
corrected in the Prospectus; provided, however, that in no case is such Selling
Stockholder to be liable with respect to any claims made against any Underwriter
Indemnified Party against whom the action is brought unless such Underwriter
Indemnified Party shall have notified such Selling Stockholder in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim served upon the Underwriter Indemnified
Party, but failure to notify such Selling Stockholder of such claim shall not
relieve it from any liability which it may have to any Underwriter Indemnified
Party otherwise than on account of its indemnity agreement contained in this
paragraph. The Selling Stockholder shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if the Selling Stockholder elects to
assume the defense, such defense shall be conducted by
-22-
counsel chosen by it. In the event that the Selling Stockholder elects to assume
the defense of any such suit and retain such counsel, the Underwriter
Indemnified Parties, defendant or defendants in the suit may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) the
Selling Stockholder shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include such Underwriter Indemnified
Parties, and the Selling Stockholder and such Underwriter Indemnified Parties
have been advised by counsel that one or more legal defenses may be available to
it or them which may not be available to the Selling Stockholder, in which case,
the Selling Stockholder shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Selling Stockholder against whom indemnity may be sought shall not be liable
to indemnify any person for any settlement of any such claim effective without
such Selling Stockholder's consent. This indemnity agreement is not exclusive
and will be in addition to any liability which the Selling Stockholder might
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party. The Company
and the Selling Stockholder may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to their respective
amounts of such liability for which they each shall be responsible.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively, the "Company Indemnified
Parties") and the Selling Stockholder and each person, if any, who controls a
Selling Stockholder within the meaning of the Securities Act (collectively, the
"Stockholder Indemnified Parties"), against any losses, claims, damages,
liabilities or expenses (including, unless the Underwriter or Underwriters elect
to assume the defense, the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection therewith),
joint or several, which arise out of or are based in whole or in part upon the
Securities Act, the Exchange Act or any other federal, state, local or foreign
statute or regulation, or at common law, on the ground or alleged ground that
any Preeffective Prospectus, the Registration Statement or the Prospectus (or
any Preeffective Prospectus, the Registration Statement or the Prospectus, as
from time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, but only insofar as any such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party or Stockholder Indemnified
Party against whom the action is brought unless such Company Indemnified Party
or Stockholder Indemnified Party shall have notified such Underwriter in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Company
Indemnified Party or Stockholder Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party or Stockholder Indemnified Party otherwise
than on account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to
-23-
participate at its own expense in the defense,or, if it so elects, to assume the
defense of any suit brought to enforce any such liability, but, if such
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties or Stockholder Indemnified Parties and any other Underwriter or
Underwriters or controlling person or persons, d efendant or defendants in the
suit, shall bear the fees and expenses of any additional counsel retained by
them, respectively unless (i) the Underwriter shall have specifically authorized
in writing the retaining of such counsel or (ii) the parties to such suit
----------
include the Company or a Stockholder Indemnified Party, and the Underwriters and
such Company or Stockholder Indemnified Party at law or in equity have been
advised by counsel to the Company or such Stockholder Indemnified Party that one
or more defenses may be available to them which may not be available to the
Underwriters, in which case the Underwriters shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear fees and expenses of
such counsel. The Underwriter against whom indemnity may be sought shall not be
liable to indemnify any person for any settlement of any such claim effected
without such Underwriter's consent. This indemnity agreement is not exclusive
and will be in addition to any liability which such Underwriter might otherwise
have and shall not limit any rights or remedies which may otherwise be available
at law or in equity to any Company Indemnified Party or Stockholder Indemnified
Party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) or (c) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other from the offering
of the Stock. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholder 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 (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholder or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Selling Stockholder and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro
-24-
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. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. 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.
7. Survival of Indemnities, Representations, Warranties, etc. The
---------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company, the Selling Stockholder and the several
Underwriters, as set forth in this Agreement or made by them respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Selling
Stockholder, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters Obligations. The respective
--------------------------------------
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of the Closing Dates, of the representations and warranties made
herein by the Company and the Selling Stockholder, to compliance at and as of
the Closing Dates by the Company and the Selling Stockholder with their
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Dates, and to the following additional
conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Representatives, shall be
threatened by the Commission, and any request 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 reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required
pursuant to Rule 424 (b) or Rule 434 of the Rules and Regulations,
shall have been made in the manner and within the time period required
by Rule 424(b) and Rule 434 of the Rules and Regulations, as the case
may be.
-25-
(b) The Representatives shall have been satisfied that there
shall not have occurred any change prior to the Closing Dates in the
condition (financial or otherwise), properties, business, management,
net worth or results of operations of the Company, or any change in
the capital stock, or any material change in short-term or long-term
debt of the Company, such that (i) the Registration Statement or the
Prospectus, or any amendment or supplement thereto, contains an untrue
statement of fact which, in the opinion of the Representatives, is
material, or omits to state a fact which, in the opinion of the
Representatives, is required to be stated therein or is necessary to
make the statements therein not misleading, or (ii) it is
unpracticable in the reasonable judgment of the Representatives to
proceed with the public offering or purchase the Stock as contemplated
hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's or the Selling Stockholder' ability to perform their
respective obligations under this Agreement shall have been instituted
or threatened and there shall have occurred no material adverse
development in any existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the
Representatives shall have received from Xxxxxx Xxxxxxxx LLP,
independent certified public accountants, a letter, dated the date
hereof, in form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from Xxxxxx Xxxxxxxx
LLP, independent certified public accountants, a letter, dated the
Closing Dates, to the effect that such accountants reaffirm, as of the
Closing Dates, and as though made on the Closing Date(s), the
statements made in the letter furnished by such accountants pursuant
to paragraph (d) of this Section 8.
(f) The Representatives shall have received the following
opinions:
(a) from Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., counsel
for the Company and for the Selling Stockholder, an opinion, dated the
Closing Dates, to the effect set forth in Exhibits I and II hereto;
and
(b) from Lahive & Xxxxxxxxx, patent counsel to the Company
and the Selling Stockholder, an opinion, dated the Closing Dates, to
the effect set forth in Exhibit III hereto.
(g) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, their opinion or
opinions dated the Closing Dates with respect to the incorporation of
the Company, the validity of the Stock, the Registration Statement and
the Prospectus and such other related matters as they may reasonably
request, and the Company and the Selling
-26-
Stockholder shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters.
(h) The Representatives shall have received a certificate, dated
the Closing Dates, of the Chief Executive Officer or the President and
the chief financial or accounting officer of the Company to the effect
that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any amendment
or supplement thereto, as of the time when the Registration
Statement became effective and at all times subsequent thereto up
to the delivery of such certificate, included any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, the Company has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and
there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management, net
worth or results of operations of the Company, or any change in
the capital stock, or any material change in the short-term or
long-term debt of the Company;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing
Dates, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Dates; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, (i)
there has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), properties, business, management, net worth or
results of operations of the Company; (ii) the business and
operations conducted by the Company have not sustained a loss by
strike, fire, flood, accident or other calamity (whether or not
insured) of such a
-27-
character as to interfere materially with the conduct of the
business and operations of the Company; (iii) no legal or
governmental action, suit or proceeding is pending or threatened
against the Company which is material to the Company, whether or
not arising from transactions in the ordinary course of business,
or which may materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates and except
as so disclosed, the Company has not incurred any material
liability or obligation, direct, contingent or indirect, made any
change in its capital stock (except pursuant to its stock plans),
made any material change in its short-term or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid any dividend,
or made any other distribution, upon its outstanding capital
stock payable to stockholder of record on a date prior to the
Closing Date.
(i) The Representatives shall have received a certificate, dated
the Closing Dates of the Selling Stockholder to the effect that as of
the Closing Dates its representations and warranties in this Agreement
are true and correct as if made on and as of the Closing Dates, and
that it has performed all its obligations and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Dates.
(j) The Company and the Selling Stockholder shall have furnished
to the Representatives such additional certificates as the
Representatives may have reasonably requested as to the accuracy, at
and as of the Closing Dates, of the representations and warranties
made herein by them and as to compliance at and as of the Closing
Dates by them with their covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to the Closing
Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
(k) Cowen shall have received the written agreements of the
officers, directors and holders of Common Stock and options to
purchase Common Stock listed in Schedule B that each will not offer,
sell, assign, transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of any shares of Common Stock held by
such person (including without limitation any shares of Common Stock
that may be deemed to be beneficially owned by such person on the date
hereof in accordance with the Rules and Regulations) or any securities
convertible into, derivative of or exercisable or exchangeable for
such Common Stock for 180 days commencing on the date of the final
prospectus, except for shares of Common Stock sold pursuant to this
Agreement.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the
-28-
Representatives. The Company will furnish to the Representatives conformed
copies of such opinions, certificates, letters and other documents as the
Representatives shall reasonably request. If any of the conditions hereinabove
provided for in this Section shall not have been satisfied when and as required
by this Agreement, this Agreement may be terminated by the Representatives by
notifying the Company of such termination in writing or by telegram at or prior
to the Closing Dates, but Cowen shall be entitled to waive any of such
conditions.
9. Effective Date. This Agreement shall become effective immediately
--------------
as to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. Termination. This Agreement (except for the provisions of
-----------
Section 5) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Representatives and may
be terminated by the Representatives at any time before it becomes effective in
accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
Agreement, there shall be no liability of any party to this Agreement to any
other party, other than as provided in Sections 5, 6 and 11 and other than as
provided in Section 12 as to the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date, or the Option Closing Date trading in securities on any of the New York
Stock Exchange, American Stock Exchange, or the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been established on
any such exchange or market, or a banking moratorium shall have been declared by
New York or United States authorities; (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) if at or prior to the First Closing Date or the Option Closing
Date there shall have been (A) an outbreak or escalation of hostilities between
the United States and any foreign power or of any other insurrection or armed
conflict involving the United States or (B) any change in financial markets or
any calamity or crisis which, in the judgment of the Representatives, makes it
impractical or inadvisable to offer or sell the Firm Stock or Optional Stock, as
applicable, on the terms contemplated by the Prospectus; (iv) if there shall
have been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the Representatives,
makes it impracticable or inadvisable to offer or deliver the Firm Stock or the
Optional Stock, as applicable, on the terms contemplated by the Prospectus;
(v) if there shall be any litigation or proceeding, pending or threatened,
which, in the judgment of
-29-
the Representatives, makes it impracticable or inadvisable to offer or deliver
the Firm Stock or Optional Stock, as applicable, on the terms contemplated by
the Prospectus; or (vi) if there shall have occurred any of the events specified
in the immediately preceding clauses (i) -(v) together with any other such event
that makes it, in the judgment of the Representatives, impractical or
inadvisable to offer or deliver the Firm Stock or Optional Stock, as applicable,
on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other
-----------------------------
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company or the Selling Stockholder pursuant to the first
paragraph of Section 10 or shall be terminated by the Representatives under
Section 8 or Section 10, the Company will bear and pay the expenses specified in
Section 5 hereof and, in addition to their obligations pursuant to Section 6
hereof, the Company will reimburse the reasonable out-of-pocket expenses of the
several Underwriters (including reasonable fees and disbursements of counsel for
the Underwriters) incurred in connection with this Agreement and the proposed
purchase of the Stock, and promptly upon demand the Company will pay such
amounts to you as Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters
----------------------------
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company and
the Selling Stockholder shall have the right to postpone the Closing Dates for a
period of not more than five (5) full business days in order that the Company
and the Selling Stockholder may effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company, the Selling Stockholder or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter, the Selling Stockholder or the Company, except
for expenses to be paid or reimbursed pursuant to Section 5 and except for the
provisions of Section 6.
-30-
13. Notices. All communications hereunder shall be in writing and,
-------
if sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives c/o Cowen & Company at Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 except that notices given to an Underwriter
pursuant to Section 6 hereof shall be sent to such Underwriter at the address
furnished by the Representatives or, if sent to the Company, shall be mailed,
delivered or telegraphed and confirmed at Viisage Technology, Inc., 000 Xxxx
Xxxxxx, Xxxxx, XX 00000. With respect to the Selling Stockholder, notices may
be sent to Xxx at 000 Xxxx Xxxxxx, Xxxxx, XX 00000.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and the Selling Stockholder
and their respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company and the Selling
Stockholder contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control any Underwriter or Underwriters within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and the indemnities of the several Underwriters shall also be for the
benefit of each director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control the
Company or any Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this
--------------------------------
Agreement, you will act for and on behalf of the several Underwriters, and any
action taken under this Agreement by Cowen, as Representative, will be binding
on all the Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of
------------------------
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
18. General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
-31-
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. In this Agreement, the term
"Company's knowledge" means the knowledge of the Company and the Selling
Stockholder. The section headings in this Agreement are for the convenience of
the parties only and will not affect the construction or interpretation of this
Agreement. This Agreement may be amended or modified, and the observance of any
term of this Agreement may be waived, only by a writing signed by the Company,
the Selling Stockholder and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
-32-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
Viisage Technology, Inc.
By:
-------------------------------------------
Name:
Title:
Xxx Acquisition Corp.
By:
-------------------------------------------
Name:
Title:
-33-
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
XXXXXXX & COMPANY, INC.
By: XXXXX & COMPANY
Acting on their own behalf and as Representatives of the several
Underwriters referred to in the foregoing Agreement.
By: Cowen Incorporated,
its general partner
By:
-------------------------
Name:
Title:
-34-
SCHEDULE A
Number
of Firm
Shares
to be
Name Purchased
---- ---------
Xxxxx & Company............................
Xxxxxxx & Company, Inc. ...................
Total......................................
===========
[2,500,000]
===========
-35-
SCHEDULE C
LOCKUP AGREEMENTS
[to include all stock and optionholders]
-36-
EXHIBIT I
---------
FORM OF OPINION TO BE DELIVERED BY COUNSEL TO COMPANY
-----------------------------------------------------
1. The Company has been duly organized and is validly existing and
in good standing as a corporation under the laws of its jurisdiction of
organization, with corporate power and authority to own or lease its properties
and conduct its businesses as described in the Prospectus. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where its ownership or leasing of properties on the conduct of
its business requires such qualification except to the extend that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company. To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any corporation, association or other entity.
2. On the date hereof, the authorized capital stock of the Company
consists of _______________ shares of Common Stock, $.001 par value, and
________ shares of undesignated Preferred Stock, $.01 par value. The
outstanding shares of the capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable, conform to the
description thereof contained in the Prospectus in all material respects and, to
such counsel's knowledge, have not been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first refusal or
other similar right.
3. The Stock to be issued by the Company has been duly and validly
authorized and, upon issuance, delivery and payment therefor as described in the
Underwriting Agreement will be, validly issued, fully paid and nonassessable and
free and clear of any preemptive or similar rights and will conform to the
description thereof in the Prospectus in all material respects.
4. The authorized capital stock of the Company conforms in all
material respects to the description thereof set forth in the Prospectus under
the captions "Description of Capital Stock." The certificates representing the
Stock are in proper form under the Delaware General Corporation Law assuming
conformance with the specimen certificate filed as an Exhibit to the
Registration Statement. The outstanding shares of the capital stock of the
Company (including the shares to be sold by the Selling Stockholder) have been
duly authorized and validly issued, are fully paid and nonassessable, conform to
the description thereof contained in the Prospectus in all material respects
and, to such counsel's knowledge, were not issued in violation of or subject to
any preemptive right, co-sale right, registration right, right of first refusal
or other similar right.
5. The Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and, to such counsel's
knowledge, no proceedings for that purpose have been instituted or are pending
by the Commission.
-37-
6. The Registration Statement and the Prospectus comply as to form
in all material respects with the requirements of the Securities Act and with
the Rules and Regulations, except as to the financial statements, the notes
thereto and the related schedules and other financial and statistical data
contained therein, as to which such counsel need not express an opinion.
7. To such counsel's knowledge, the Company has not received notice
of any claim or challenge regarding the ownership of any patents, trademarks,
service marks, trade names, licenses, inventions or any other rights described
in the Prospectus. To such counsel's knowledge (i) no claim has been made
against the Company alleging infringement by the Company or any of its
subsidiaries, of any patent, trademark, service xxxx, trade names, trade secret,
license in or other intellectual property or franchise rights of any person,
(ii) no legal or governmental proceedings are pending relating to the foregoing,
other than review of pending patent applications, and (iii) no such proceedings
are currently threatened by governmental authorities or others.
8. The statements under the captions "Risk Factors", "Business -
Customers and End Users", "Business - Intellectual Property and Proprietary
Rights", "Business - Legal Proceedings", "Management - Incentive and Stock
Plans", "Relationship and Certain Transactions with Xxx Technologies",
"Principal and Selling Stockholders" "Shares Eligible for Future Sale" and
"Description of Capital Stock" in the Prospectus, only to the extent that such
statements constitute a summary of documents referred to therein or matters of
law, are accurate summaries in all material respects and fairly present the
information called for by the Securities Act and the Rules and Regulations with
respect to such documents and matters. Such counsel does not know of any laws,
rules or regulations or legal or governmental proceedings applicable to the
business of the Company required to be described in the Registration Statement
or the Prospectus that are not described as required.
9. Such counsel knows of no franchise, lease, contract, agreement or
document, which is 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 therein.
10. To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company of a character required to
be disclosed in the Registration Statement or the Prospectus by the Act or the
Rules and Regulations or the applicable Rules and Regulation.
11. The Company has the corporate power and authority to enter into
the Underwriting Agreement and to perform its obligations thereunder (including
to issue, sell and deliver the Stock to be issued and sold by it), and the
Underwriting Agreement has been duly and validly authorized, executed and
delivered by the Company.
12. The execution and delivery of the Underwriting Agreement and the
issue and sale of the Stock will not result in a breach or violation of any of
the terms or provisions of or constitute a default under or violate or conflict
with the Certificate of Incorporation or Bylaws of the Company or any material
provision of any material contract or instrument to which the
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Company is a party or by which the Company is bound or any law of the United
States or the Commonwealth of Massachusetts or the Delaware General Corporation
Law, any rule or regulation of any governmental authority or regulatory body of
the United States or the Commonwealth of Massachusetts, or any judgment, order
or decree known to us and applicable to the Company or any of its subsidiaries
or any other properties or of any court, governmental authority or arbitrator or
will result in the creation of a lien.
13. To such counsel's knowledge, no person or entity has the right to
require registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the Registration Statement or
otherwise.
14. No consent, approval, authorization or order of, and no notice to
or filing with, any court or governmental agency or body is required to be
obtained or made by the Company for the issue and sale of the Stock pursuant to
the Underwriting Agreement, except such as have been obtained or made and such
as may be required under state securities or blue sky laws or by the National
Association of Securities Dealers, Inc., as to which such counsel's expresses no
opinion.
15. To such counsel's knowledge, no material default exists on the
part of the Company in the performance of any provision contained in any of the
contracts filed as exhibits to the Registration Statement.
16. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
17. The Company has the corporate power and authority to enter into
each of the Organization Agreements and to perform its obligations thereunder,
and each of the Organization Agreements has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which leads them to believe
that, at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the Closing Date and on any later date on which
Option Shares are to be purchased, the Registration Statement and any amendment
or supplement thereto when such documents became effective or were filed with
the Commission (other than the financial statements including supporting
schedules and other financial and statistical information derived therefrom, as
to which such counsel need express no comment) 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 at the
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Closing Date or any later date on which the Option Shares are to be purchased,
as the case may be, the Prospectus and any amendment or supplement thereto
(except as aforesaid) contained any untrue statement of a material fact or
omitted to stated material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions
of law not involving the laws of the United States, the Commonwealth of
Massachusetts or the State of Delaware upon opinions of local counsel, and as
to questions of fact upon representations or certificates of officers of the
Company, and of government officials, in which case their opinion is to state
that they are so relying and that they have no knowledge of any material
misstatement or inaccuracy in any such opinion, representation or certificate
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EXHIBIT II
----------
1. The Selling Stockholders is the record owner and to such
counsel's knowledge has valid and marketable title to the shares of Stock to be
sold by such Selling Stockholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any restriction on
transfer, and has full right, power and authority to enter into the Underwriting
Agreement.
2. To such counsel's knowledge, the Selling Stockholder has, upon
delivery of and payment for each share of Stock being sold by such Selling
Stockholder, the right, power and authority, and any approval required by law to
sell, transfer, assign and deliver the Stock being sold by such Selling
Stockholder pursuant to the Underwriting Agreement. Each of the several
Underwriters (assuming that the Underwriters are bona fide purchasers as defined
in Section [8-302] of the Massachusetts Uniform Commercial Code) will acquire
valid and marketable title to all of the Stock being sold to the Underwriters by
such Selling Stockholder, free and clear of any liens, encumbrances, equities
claims, restrictions on transfer or other defects whatsoever.
3. The Selling Stockholder has the corporate power and authority to
enter into the Underwriting Agreement and to perform its obligations thereunder
and the Underwriting Agreement has been duly and validly authorized, executed
and delivered by such Selling Stockholder.
4. The execution and delivery of the Underwriting Agreement and the
sale of the Stock will not result in a breach or violation of any of the terms
or provisions of or constitute a default under or violate or conflict with the
Certificate of Incorporation or Bylaws of the Selling Stockholder, or, to such
counsel's knowledge, any material provision of any material contract or
instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound, or any law of the United States or the Commonwealth of
Massachusetts or the Delaware General Corporation Law, or any rule or regulation
of any governmental authority or regulatory body of the United States or the
Commonwealth of Massachusetts, or any judgment, order or decree known to such
counsel and applicable to the Selling Stockholder or its properties or of any
court, governmental authority or arbitrator or result in the creation of a lien.
5. The Selling Stockholder has the corporate power and authority to
enter into each of the Organization Agreements and to perform its obligations
thereunder, and each of the Organization Agreements has been duly and validly
authorized, executed and delivered by the Selling Stockholder and is a valid and
binding obligation of the Selling Stockholder enforceable against such Selling
Stockholder in accordance with its terms. To such counsel's knowledge, the
Selling Stockholder has performed all of its obligations under the Transfer
Agreement.
6. The execution, delivery and performance of each of the
Organization Agreements will not result in a breach or violation of any of the
terms or provisions of or constitute a default under or violate or conflict with
the Certificate of Incorporation or bylaws of the Selling Stockholder, or, to
such counsel's knowledge, any material provision of any material contract or
instrument to which the Selling Stockholder is a party or by which the Company
is bound, or any
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law of the United States or the Commonwealth of Massachusetts or the Delaware
General Corporation Law, or any rule or regulation of any governmental authority
or regulatory body of the United States or the Commonwealth of Massachusetts, or
any judgment, order or decree of any court, governmental authority or arbitrator
known to such counsel or result in the creation of a lien known to such counsel
and applicable to the Selling Stockholder or its properties.
7. The Selling Stockholder has been duly organized and is validly
existing and in good standing as a corporation under the laws of its
jurisdiction of organization, with corporate power and authority to execute and
deliver the Underwriting Agreement and each of the Organization Agreements,
perform its obligations under the Underwriting Agreement and each of the
Organization Agreements and consummate the transactions contemplated thereby.
In rendering the opinions hereinabove set forth, such counsel may rely
upon a certificate of the Selling Stockholder in respect of matters of fact as
to ownership of, and liens, encumbrances, equities or claims on, the Stock to be
sold by such Selling Stockholder, provided that such counsel shall state that
they believe that reliance upon such certificate is justified.
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Exhibit III
(i) Such counsel has been and is counsel to Visage Technology, Inc.
(the "Company") and to Xxx Acquisition Corp. ("Xxx") with respect to technology
and intellectual property matters including issued patents, pending and
contemplated patent applications, trade secrets, trademarks, and other
intellectual property and technology that the Company and/or Xxx owns or has
rights to.
(ii) Such counsel is familiar with the technology and intellectual
property that is used by the Company in its business and that is the subject
matter of the Company's and Xxx'x patent portfolio. Such counsel has read the
Registration Statement and Prospectus and, in particular, has read the
statements in the Registration Statement and the Prospectus under the captions
"Risk Factors- Limited Protection of Intellectual Property and Proprietary
Rights; Potential Costs of Enforcement or Defense" and "Business-Intellectual
Property and Proprietary Rights".
(iii) Such counsel is unaware of any facts which would preclude the
Company from having clear title to the Company's patents, patent applications,
and contemplated patent applications referred to or described in the Prospectus.
Such counsel is unaware of any facts which would preclude Xxx from having clear
title to Xxx'x patents, patent applications, and contemplated patent
applications referred to or described in the Prospectus. To the best of such
counsel's knowledge, it and the Company and Xxx have complied with any required
duty (e.g., of candor and good faith) in dealing with the U.S. Patent and
Trademark Office and any such foreign offices, including the duty to disclose
all information known to be material to patentability. Such counsel has no
knowledge that the Company lacks or will be unable to obtain any rights or
licenses to use all patents, know-how, technology, and intellectual property
necessary to conduct the business now conducted or proposed to be conducted by
the Company as described in the Prospectus, except as described in the
Prospectus. Such counsel has no knowledge of any facts which would form a basis
for a belief that any of the patents owned or licensed by the Company or Xxx are
unenforceable or invalid. Such counsel is not aware of any patents of others,
except as described in the Prospectus, which are or would be infringed by
specific products or processes referred to in the Prospectus. Such counsel
knows of no pending or threatened action, suit, proceeding or claim by others
that the Company or Xxx is infringing any patent, except as described in the
Registration Statement and the Prospectus.
(iv) There are no legal or governmental proceedings pending relating
to any patents or patent applications owned or licensed by the Company or Xxx,
other than review of pending patent applications, including appeal and reissue
proceedings, and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or others.
(v) There are no contracts or other documents material to the
Company's patents, other intellectual property, or technology other than those
described in the Registration Statement and Prospectus.
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(vi) Nothing has come to such counsel's attention that would form a
basis for the belief that the Registration Statement or Prospectus contains any
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein not misleading.
