EXHIBIT 1
BRILLIAN CORPORATION
SHARES OF COMMON STOCK
UNDERWRITING AGREEMENT
________________, 2004
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX, XXXXXXXX & XXXX, INC.
X.X. XXXXXXXXX TOWBIN LLC
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Brillian Corporation, a Delaware corporation (the "Company"),
confirms its agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the "Underwriters"), for whom Friedman, Billings, Xxxxxx & Co.,
Inc., Xxxxx, Xxxxxxxx & Xxxx, Inc. and X.X. Xxxxxxxxx, Towbin LLC are acting as
representatives (in such capacity, the "Representatives"), with respect to (i)
the sale by the Company of [INSERT NUMBER OF INITIAL SHARES] shares (the
"Initial Shares") of Common Stock, par value $0.001 per share, of the Company
("Common Stock") and the purchase by the Underwriters, acting severally and not
jointly, of the respective number of shares of Common Stock set forth opposite
the names of the Underwriters in Schedule I hereto, and (ii) the grant of the
option described in Section 1(b) hereof to purchase all or any part of [INSERT
NUMBER OF OVER-ALLOTMENT SHARES] additional shares of Common Stock to cover
over-allotments (the "Option Shares"), if any, from the Company to the
Underwriters, acting severally and not jointly, in the respective numbers of
shares of Common Stock set forth opposite the names of the Underwriters in
Schedule I hereto. The [INSERT NUMBER OF INITIAL SHARES] shares of Common Stock
to be purchased by the Underwriters and all or any part of the [INSERT NUMBER OF
OPTION SHARES] shares of Common Stock subject to the option described in Section
l(b) hereof are hereinafter called, collectively, the "Shares."
The Company understands that the Underwriters propose to make a
public offering of the Shares as soon as the Underwriters deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission"), a registration statement on Form S-1 (No. 333-113295) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including all information deemed
(whether by incorporation by reference or otherwise) to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the
Closing Time (as defined below), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed pursuant
to Rule 462(b) of the Securities Act Regulations is hereinafter called the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. Each prospectus
included in the Registration Statement, or amendments thereof or supplements
thereto, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations is hereinafter called
the "Preliminary Prospectus." The term "`Prospectus" means the final prospectus,
as first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Securities Act Regulations, and any amendments thereof or
supplements thereto. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) INITIAL SHARES. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of $________, the Company agrees to sell to the Underwriters the Initial Shares
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the number of Initial Shares set forth in Schedule I opposite such
Underwriter's name, plus any additional number of Initial Shares which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 8 hereof, subject in each case, to such adjustments among the
Underwriters as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares.
(b) OPTION SHARES. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share set forth in paragraph (a), the Company hereby grants an option
to the Underwriters, acting severally and not jointly, to purchase from the
Company, all or any part of the Option Shares, plus any additional number of
Option Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof. The option hereby granted will expire 30
days after the date hereof and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Shares upon notice
by the Representatives to the Company setting forth the number of Option Shares
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Shares. Any such time and date
of delivery (a "Date of Delivery") shall be determined by the Representatives,
but shall not be later than three full business days (or earlier, without the
consent of the Company, than two full business days) after the exercise of such
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Shares, the
Company will sell the Option Shares to the Underwriters, and each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Shares then being purchased which the number of
Initial Shares set forth in Schedule I opposite the name of such Underwriter
bears to the total number of Initial Shares, subject in each case to such
adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional shares.
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2. Payment and Delivery
(a) INITIAL SHARES. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representatives by the Company
upon at least forty-eight hours' prior notice. The Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of the Representatives, 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of DTC or its
designated custodian, as the case may be (the "Designated Office"). The time and
date of such delivery and payment shall be 9:30 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by
the Representatives and the Company). The time at which such payment and
delivery are actually made is hereinafter sometimes called the "Closing Time"
and the date of delivery of both Initial Shares and Option Shares is hereinafter
sometimes called the "Date of Delivery."
(b) OPTION SHARES. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representatives may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representatives by the Company upon at least forty-eight hours'
prior notice. The Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least twenty-four
hours prior to the Date of Delivery with respect thereto at the Designated
Office. The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on the date specified by the Representatives in the notice given
by the Representatives to the Company of the Underwriters' election to purchase
such Option Shares or on such other time and date as the Company and the
Representatives may agree upon in writing.
3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set forth in the
Prospectus; the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and non-assessable,
and the Company has no subsidiaries; except as disclosed in the Prospectus,
there are no outstanding (i) securities or obligations of the Company
convertible into or exchangeable for any capital stock of the Company, (ii)
warrants, rights or options to subscribe for or purchase from the Company any
such capital stock or any such convertible or exchangeable securities or
obligations, or (iii) obligations of the Company to issue any shares of capital
stock, any such convertible or exchangeable securities or obligation, or any
such warrants, rights or options;
(b) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware with the
corporate power and authority to own its
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properties and to conduct its business as described in the Registration
Statement and Prospectus and to execute and deliver this Agreement and to
consummate the transactions contemplated herein;
(c) the Company is duly qualified or licensed and is in good standing in
each jurisdiction in which it conducts its business or in which it owns or
leases real property or otherwise maintains an office and in which the failure,
individually or in the aggregate, to be so qualified or licensed could have a
material adverse effect on the assets, business, operations, earnings,
properties or condition (financial or otherwise) of the Company taken as a whole
(any such effect or change, where the context so requires, is hereinafter called
a "Material Adverse Effect" or "Material Adverse Change"); other than as
disclosed in the Prospectus, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association;
(d) the Company is in compliance in all material respects with all
applicable laws, rules, regulations, orders, decrees and judgments, including
those relating to transactions with affiliates;
(e) the Company is not in breach of or in default under (nor has any event
occurred which with notice, lapse of time, or both would constitute a breach of,
or default under), its organizational documents, or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company is a party or by which its
properties are bound, except for such breaches or defaults which could not have
a Material Adverse Effect;
(f) the execution, delivery and performance of this Agreement, and
consummation of the transactions contemplated herein, will not (A) conflict
with, or result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time, or both would constitute a breach
of, or default under), (i) any provision of the organizational documents of the
Company, or (ii) any provision of any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the
Company is a party or by which it or its respective properties may be bound or
affected, or under any federal, state, local or foreign law, regulation or rule
or any decree, judgment or order applicable to the Company, except in the case
of this clause (ii) for such breaches or defaults which could not have a
Material Adverse Effect; or (B) result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Company;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and by general equitable principles, and except to the extent
that the indemnification and contribution provisions of Section 9 hereof may be
limited by federal or state securities laws and public policy considerations in
respect thereof;
(h) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the Company's execution,
delivery and performance of this Agreement, its consummation of the transactions
contemplated herein, and its sale and delivery of the Shares, other than (A)
such as have been obtained, or will have been obtained at the Closing Time or
the relevant Date of Delivery, as the case may be, under the Securities Act and
the Securities Exchange Act of 1934 (the "Exchange Act"), (B) such approvals as
have been obtained in connection with the approval of the quotation of the
Shares on the Nasdaq National Market and (C) any necessary qualification under
the securities or blue sky laws of the various jurisdictions in which the Shares
are being offered by the Underwriters;
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(i) the Company has all necessary licenses, authorizations, consents and
approvals and has made all necessary filings required under any federal, state
or local law, regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, required in order to conduct its
business as described in the Prospectus, except to the extent that any failure
to have any such licenses, authorizations, consents or approvals, to make any
such filings or to obtain any such authorizations, consents or approvals could
not, individually or in the aggregate, have a Material Adverse Effect; the
Company is not required by any applicable law to obtain accreditation or
certification from any governmental agency or authority in order to provide the
products and services which it currently provides or which it proposes to
provide as set forth in the Prospectus; the Company is not in violation of, in
default under, or has received any notice regarding a possible violation,
default or revocation of any such license, authorization, consent or approval or
any federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company the effect of which could result in
a Material Adverse Change; and no such license, authorization, consent or
approval contains a materially burdensome restriction that is not adequately
disclosed in the Registration Statement and the Prospectus;
(j) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are threatened by the Commission, and the Company has
complied to the Commission's satisfaction with any request on the part of the
Commission for additional information;
(k) the Preliminary Prospectus and the Registration Statement comply, and
the Prospectus and any further amendments or supplements thereto will, when they
have become effective or are filed with the Commission, as the case may be,
comply, in all material respects with the requirements of the Securities Act and
the Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representatives to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the penultimate sentence of the
first paragraph of Section 9(b) hereof);
(l) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering, Analysis, and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T;
(m) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its officers and directors or to which the properties, assets or rights
of any such entity are subject, at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority, arbitral
5
panel or agency which could result in a judgment, decree, award or order having
a Material Adverse Effect;
(n) the Company has filed all forms, reports and documents required to be
filed by the Company with the SEC since September 15, 2003 (the "Company SEC
Filings"). As of their respective dates, the Company SEC Filings (i) were
prepared and timely filed in accordance with and complied in all material
respects with the requirements of the Securities Act, or the Exchange Act, as
the case may be, and the rules and regulations of the Commission thereunder and
(ii) did not at the time they were filed (or if amended or superceded by a
filing prior to the date hereof, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(o) each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Filings (including
such financial statements as were incorporated by reference) (the "Company
Financial Statements") (i) complied in all material respects with the published
rules and regulations of the Commission with respect thereto, (ii) was prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto and, in the case of unaudited interim
financial statements, as may be permitted by the Commission on Form 10-Q, Form
8-K or any similar or successor form under the Exchange Act), and (iii) fairly
presented in all material respects the consolidated financial position of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated therein, except that the
unaudited interim financial statements may not contain footnotes and were or are
subject to normal and recurring year-end adjustments. The reserves reflected in
the Company Financial Statements have been calculated in accordance with GAAP.
(p) the Company has implemented "disclosure controls and procedures" (as
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) designed to ensure
that material information relating to the Company is made known to the Company's
chief executive officer and chief financial officer. Each required form, report
and document containing financial statements that has been filed with or
submitted to the Commission since September 15, 2003 was accompanied by the
certifications required to be filed or submitted by the Company's chief
executive officer and chief financial officer pursuant to the Exchange Act
Regulations, and at the time of filing or submission of each such certification,
such certification was true, accurate and complete, and complied with the
Exchange Act Regulations.
(q) neither the Company nor to the Company's knowledge, any director,
officer, employee, auditor, accountant or representative of the Company has
received or otherwise had or obtained knowledge of any written complaint,
allegation, assertion or claim regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or its internal accounting
controls, including any complaint, allegation, assertion or claim that the
Company has engaged in questionable accounting or auditing practices. No
attorney representing the Company, whether or not employed by the Company, has
reported evidence of a violation of securities laws, breach of fiduciary duty or
similar violation by the Company or any of its officers, directors, employees or
agents to the Company's board of directors or any committee thereof or to any
director or officer of the Company;
(r) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly the financial position
of the entities to which such financial statements relate (the "Covered
Entities") as of the dates indicated and the results of operations and changes
in financial position and cash flows of the Covered Entities for the periods
specified; such
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financial statements have been prepared in conformity with generally accepted
accounting principles as applied in the United States and on a consistent basis
during the periods involved and in accordance with Regulation S-X promulgated by
the Commission; the financial statement schedules included in the Registration
Statement and the amounts in the Prospectus under the captions "Summary
Financial Data" and "Selected Financial Information" fairly present the
information shown therein and have been compiled on a basis consistent with the
financial statements included in the Registration Statement and the Prospectus;
no other financial statements or supporting schedules are required to be
included in the Registration Statement; the unaudited pro forma financial
information (including the related notes) included in the Prospectus and any
Preliminary Prospectus complies as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Securities Act
Regulations, and the Company believes that the assumptions underlying the pro
forma adjustments are reasonable; such pro forma adjustments have been properly
applied to the historical amounts in the compilation of the information and such
information fairly presents with respect to the Company, the financial position,
results of operations and other information purported to be shown therein at the
respective dates and for the respective periods specified; no other pro forma
financial information is required to be included in the Registration Statement;
(s) Deloitte & Touche LLP, whose reports on the consolidated financial
statements of the Company are filed with the Commission as part of the
Registration Statement and Prospectus or are incorporated by reference therein
and any other accounting firm that has certified Company financial statements
and delivered its reports with respect thereto, are, and were during the periods
covered by their reports, independent public accountants as required by the
Securities Act and the Securities Act Regulations;
(t) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (A) any
Material Adverse Change or any development that could reasonably be expected to
result in a Material Adverse Change, whether or not arising in the ordinary
course of business, (B) any transaction entered into by the Company that is
material to the Company, (C) any obligation, contingent or otherwise, directly
or indirectly incurred by the Company that is material to the Company or (D) any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock;
(u) the Shares conform in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
(v) there are no persons with registration or other similar rights to have
any equity or debt securities, including securities which are convertible into
or exchangeable for equity securities, registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities Act;
(w) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim, and the issuance and sale
of the Shares by the Company is not subject to preemptive or other similar
rights arising by operation of law, under the organizational documents of the
Company or under any agreement to which the Company is a party or otherwise;
(x) the Shares have been approved for listing on the Nasdaq National
Market;
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(y) the Company has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares;
(z) neither the Company nor any of its affiliates (i) is required to
register as a "broker" or "dealer" in accordance with the provisions of the
Exchange Act, or the rules and regulations thereunder (the "Exchange Act
Regulations"), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning
of Article I of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")) any member firm of the NASD;
(aa) the Company has not relied upon the Representatives or legal counsel
for the Representatives for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(bb) any certificate signed by any officer of the Company delivered to the
Representatives or to counsel for the Underwriters pursuant to or in connection
with this Agreement shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby;
(cc) the form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the organizational documents of the Company and the
requirements of the Nasdaq National Market;
(dd) the Company has good and marketable title in fee simple to all real
property, if any, and good title to all personal property owned by it, in each
case free and clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects, except such as are disclosed in the
Prospectus or such as do not materially and adversely affect the value of such
property and do not interfere with the use made or proposed to be made of such
property by the Company; and any real property and buildings held under lease by
the Company are held under valid, existing and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company;
(ee) the descriptions in the Registration Statement and the Prospectus of
the legal or governmental proceedings, contracts, leases and other legal
documents therein described present fairly the information required to be shown,
and there are no legal or governmental proceedings, contracts, leases, or other
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement which
are not described or filed as required; all agreements between the Company and
third parties referenced in the Prospectus are legal, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and by general equitable principles;
(ff) the Company owns or possesses adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights, software
and design licenses, trade secrets, manufacturing processes, other intangible
property rights and know-how (collectively "Intangibles") necessary to entitle
the Company to conduct its business as described in the Prospectus, and the
Company has not received notice of infringement of or conflict with (and the
Company knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles which could have a Material Adverse
Effect;
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(gg) The Company owns, possesses, licenses or has other rights to use all
patents, patent applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the
"Intellectual Property") reasonably necessary for the conduct of the Company's
business as now conducted or as proposed in the Prospectus to be conducted and
(i) to the Company's knowledge, there is no material infringement by third
parties of any such Intellectual Property owned by or exclusively licensed to
the Company other than use of the term "LCOS"; (ii) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis for any
such claim; (iii) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the validity or scope of
Intellectual Property owned by or exclusively licensed to the Company, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim which could have a Material Adverse Effect; (iv) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes, or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the Company
is unaware of any other fact which would form a reasonable basis for concluding
that any such claim will be asserted, or if asserted, would be successful, or if
successfully asserted, could have a Material Adverse Effect; (v) the Company
does not in the conduct of its business as now or proposed to be conducted as
described in the Prospectus infringe or conflict with any right or patent of any
third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company,
which such infringement or conflict is reasonably likely to have a Material
Adverse Effect; (vi) there is no U.S. patent of which the Company is aware that
contains claims that interfere with the issued claims of any Intellectual
Property owned by or exclusively licensed to the Company; (vii) there is no art
of which the Company is aware that may render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company unpatentable
which has not been disclosed, or will not be disclosed in the required time
period, to the U.S. Patent and Trademark Office; (viii) no security interests
have been recorded in the U.S. Patent and Trademark Office with respect to any
Intellectual Property and no liens have been recorded against the Company with
respect to any Intellectual Property and (ix) unless the Company decides to
abandon or not pursue any Intellectual Property, the Company has paid or will
pay all maintenance and issue fees that are due or will be due, within the
required time period, and has claimed small entity status only as appropriate;
(hh) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(ii) the Company has filed on a timely basis all necessary federal, state,
local and foreign income and franchise tax returns required to be filed through
the date hereof and has paid all taxes shown as due thereon; and no tax
deficiency has been asserted against the Company, nor does the Company know of
any tax deficiency which is likely to be asserted against the Company which, if
determined adversely to the Company, could have a Material Adverse Effect; all
tax liabilities are adequately provided for on the books of the Company;
9
(jj) the Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for its business and consistent with insurance coverage maintained by
similar companies in similar businesses, including, but not limited to,
insurance covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, all of which insurance is in full force and effect;
(kk) the Company is not in violation of, and has not received notice of
any violation with respect to, any applicable environmental, safety or similar
law applicable to the business of the Company; the Company has received all
permits, licenses or other approvals required of it under applicable federal and
state occupational safety and health and environmental laws and regulations to
conduct its business, and the Company is in compliance with all terms and
conditions of any such permit, license or approval, except any such violation of
law or regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals which could not, individually or in the aggregate, result
in a Material Adverse Change;
(ll) the Company is not in violation of, and has not received notice of
any violation with respect to any federal or state law relating to
discrimination in the hiring, promotion or pay of employees, nor any applicable
federal or state wages and hours law, the violation of any of which could have a
Material Adverse Effect;
(mm) the Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Section 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder ("Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification;
(nn) neither the Company nor any officer or director purporting to act on
behalf of the Company has at any time (i) made any contributions to any
candidate for political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment to any state, federal
or foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or allowed
by applicable law, or (iii) engaged in any transactions, maintained any bank
account or used any corporate funds except for transactions, bank accounts and
funds which have been and are reflected in the normally maintained books and
records of the Company;
(oo) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company to or for the benefit of any of the officers or directors of the
Company or any of the members of the families of such persons;
(pp) neither the Company nor, to the knowledge of the Company, any
employee or agent of the Company, has made any payment of funds of the Company
or received or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus;
10
(qq) all securities issued by the Company have been issued and sold in
compliance with (i) all applicable federal and state securities laws, (ii) the
laws of the State of Delaware, and (iii) the requirements of the Nasdaq National
Market;
(rr) in connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act. Other than as contemplated by this Agreement, the Company has
not distributed and will not distribute any Prospectus or other offering
material in connection with the offer and sale of the Shares;
(ss) the Company has complied and will comply with all provisions of
Florida Statutes, Section 517.075 (Chapter 92-198, Laws of Florida); and neither
the Company nor any affiliate of the Company does business with the government
of Cuba or with any person or affiliate located in Cuba;
(tt) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated;
(uu) no relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required by the Securities
Act and the Securities Act Regulations to be described in the Registration
Statement and the Prospectus and which is not so described;
(vv) the Company is not and, after giving effect to the offering and sale
of the Shares, will not be 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 (the "Investment Company Act"); and
(ww) there are no existing or, to the knowledge of the Company, threatened
labor disputes with the employees of the Company that are likely to have
individually or in the aggregate a Material Adverse Effect.
4. Certain Covenants:
The Company hereby agrees with the Underwriters:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such jurisdictions (both domestic and foreign) as the
Representatives may designate and to maintain such qualifications in effect as
long as requested by the Representatives for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and sale of
the Shares);
(b) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representatives promptly and, if requested by
the Representatives, will confirm such advice in writing, when such
post-effective amendment has become effective;
11
(c) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus (or a term sheet as permitted by Rule 434) with the
Commission pursuant to Rule 424(b) under the Securities Act not later than 10:00
a.m. (New York City time), on the day following the execution and delivery of
this Agreement or on such other day as the parties may mutually agree and to
furnish promptly (and with respect to the initial delivery of such Prospectus,
not later than 10:00 a.m. (New York City time) on the day following the
execution and delivery of this Agreement or on such other day as the parties may
mutually agree) to the Underwriters copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) in such quantities and at such locations as the Underwriters may
reasonably request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the version created to be
transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T;
(d) to advise the Representatives immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and to
file no such amendment or supplement to which the Representatives shall
reasonably object in writing;
(e) promptly upon the reasonable request of the Representatives, to
furnish to the Representatives for a period of one year from the date of this
Agreement (i) copies of all annual, quarterly and current reports or other
communications supplied to holders of shares of Common Stock, (ii) copies of all
reports filed by the Company with the Commission, the NASD or any securities
exchange and (iii) such other information as the Representatives may reasonably
request regarding the Company and to the extent such reports, information and
communications constitute non-public information, such reports, information and
communications will be treated confidentially by the Representatives except as
required by law to be disclosed;
(f) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations which,
in the judgment of the Company or in the reasonable opinion of the
Representatives or counsel for the Underwriters, would require the making of any
change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law and, during such time, to promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any
such amendment or supplement with the Commission and thereafter promptly furnish
at the Company's own expense to the Underwriters and to dealers, copies in such
quantities and at such locations as the Representatives may from time to time
reasonably request of an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the law;
12
(g) to file promptly with the Commission any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus that may, in the
judgment of the Company or the Representatives, be required by the Securities
Act or requested by the Commission;
(h) prior to filing with the Commission any amendment to the Registration
Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424
under the Securities Act, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the Representatives to
the filing;
(i) to furnish promptly to each Representative a signed copy of the
Registration Statement, as initially filed with the Commission, and of all
amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Representatives may reasonably request;
(j) from the date hereof until the later of (i) the Date of Delivery or
(ii) such date, as in the opinion of counsel for the Underwriters, the
Prospectus is no longer required by law to be delivered in connection with sales
by an Underwriter or dealer, the Company will file all documents required to be
filed with the Commission pursuant to Section 13, 14, or 15(d) of the Exchange
Act in the manner and within the time periods required by the Exchange Act and
the Exchange Act Regulations;
(k) to make generally available to its security holders and to deliver to
the Representatives as soon as reasonably practicable, but in any event not
later than the end of the eighteenth month after the effective date of the
Registration Statement, an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities Act Regulations,)
covering a period of 12 months beginning after the effective date of the
Registration Statement;
(l) to use its best efforts to maintain the quotation of the Shares on the
Nasdaq National Market and to file with the Nasdaq National Market all documents
and notices required by the Nasdaq National Market of companies that have
securities that are traded and quotations for which are reported by the Nasdaq
National Market;
(m) to engage and maintain, at its expense, a registrar and transfer agent
for the Shares;
(n) to refrain during a period of 90 days from the date of the Prospectus,
without the prior written consent of the Representatives, from, directly or
indirectly, (i) offering, pledging, selling, contracting to sell, selling any
option or contract to purchase, purchasing any option or contract to sell,
granting any option for the sale of, or otherwise disposing of or transferring,
(or entering into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of), any share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or filing any registration statement under the
Securities Act with respect to any of the foregoing, or (ii) entering into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) any shares of Common Stock issued by the
Company upon the exercise of an option outstanding on the date hereof and
referred to in the Prospectus, or (C) options or stock granted or issued
pursuant to the Company's currently existing stock option or stock purchase
plans in accordance with the Company's past practices;
13
(o) not to, and to use its best efforts to cause its officers, directors
and affiliates not to, (i) take, directly or indirectly prior to termination of
the underwriting syndicate contemplated by this Agreement, any action designed
to stabilize or manipulate the price of any security of the Company, or which
may cause or result in, or which might in the future reasonably be expected to
cause or result in, the stabilization or manipulation of the price of any
security of the Company, to facilitate the sale or resale of any of the Shares,
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of the Shares or (iii) pay or agree to pay to any person any
compensation for soliciting any order to purchase any other securities of the
Company;
(p) to cause each officer and director of the Company to furnish to the
Representatives, prior to the first Date of Delivery, a letter or letters,
substantially in the form of Exhibit A hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (1) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or (2) will not establish or increase any
"put equivalent position" or liquidation or decrease any "call equivalent
position" or enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 90 days from the
date of the Prospectus, without the prior written consent of the Representatives
on behalf of the Underwriters; and
(q) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of copies of each to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws that the Company and the
Representatives have mutually agreed are appropriate and the determination of
their eligibility for investment under state law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters with respect to state securities or blue sky laws and the printing
and furnishing of copies of any blue sky surveys or legal investment surveys to
the Underwriters and to dealers), (v) filing for review of the public offering
of the Shares by the NASD (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters relating thereto), (vi) the fees
and expenses of any transfer agent or registrar for the Shares and miscellaneous
expenses referred to in the Registration Statement, (vii) the fees and expenses
incurred in connection with the inclusion of the Shares in the Nasdaq National
Market, (viii) making road show presentations with respect to the offering of
the Shares, (ix) preparing and distributing bound volumes of transaction
documents for the Representatives and its legal counsel and (x) the performance
of the Company's other obligations hereunder. Upon the request of the
Representatives, the Company will provide funds in advance for filing fees.
14
(b) Except as provided in subsection (a) above and subsection (c) below,
the Underwriters will pay all of their own expenses in connection with the
performance of their activities under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including, but not limited to, costs such as printing, facsimile,
courier service, direct computer expenses, accommodations and travel, and the
fees and expenses of the Underwriters' outside legal counsel and any other
advisors, accountants, appraisers, etc. (other than the fees and expenses of
counsel with respect to state securities or blue sky laws and obtaining the
filing for review of the public offering of the Shares by the NASD, all of which
shall be reimbursed by the Company pursuant to the provisions of subsection (a)
above).
(c) If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply in any material
respect with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters for all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations, travel and the fees and disbursements of
Underwriters' counsel) and any other advisors, accountants, appraisers, etc.
reasonably incurred by such Underwriters in connection with this Agreement or
the transactions contemplated herein.
6. Conditions of the Underwriters' Obligations:
(a) The obligations of the Underwriters hereunder to purchase Shares at
the Closing Time or on each Date of Delivery, as applicable, are subject to the
accuracy of the representations and warranties on the part of the Company
hereunder on the date hereof and at the Closing Time and on each Date of
Delivery, as applicable, the performance by the Company of its obligations
hereunder and to the satisfaction of the following further conditions at the
Closing Time or on each Date of Delivery, as applicable:
(b) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Xxxxxxxxx Traurig, LLP, counsel for the
Company, addressed to the Underwriters and dated the Closing Time and each Date
of Delivery and in form and substance satisfactory to Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters, stating that:
(i) the Company has an authorized capitalization as set forth
in the Prospectus; the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are
fully paid and non-assessable; to such counsel's knowledge, except
as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company convertible into or
exchangeable for any capital stock of the Company, (ii) warrants,
rights or options to subscribe for or purchase from the Company any
such capital stock or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company to
issue any shares of capital stock, any such convertible or
exchangeable securities or obligation, or any such warrants, rights
or options;
(ii) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws the State
of Delaware with the corporate power and authority to own its
properties and to conduct its business as described in the
Registration Statement and Prospectus and to execute and deliver
this Agreement and to consummate the transactions described in this
Agreement;
15
(iii) the Company is duly qualified or licensed by each
jurisdiction in which it conducts its business and in which the
failure, individually or in the aggregate, to be so licensed could
have a Material Adverse Effect, and the Company is duly qualified,
and is in good standing, in each jurisdiction in which it owns or
leases real property or maintains an office and in which such
qualification is necessary except where the failure to be so
qualified and in good standing could not have a Material Adverse
Effect; to such counsel's knowledge, other than as disclosed in the
Prospectus, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
association;
(iv) to such counsel's knowledge, the Company is in compliance
in all material respects with all applicable laws, orders, rules,
regulations and orders, including those relating to transactions
with affiliates, the non-compliance of which would have a Material
Adverse Effect;
(v) to such counsel's knowledge, the Company is not in
violation of any term or provision of its organizational documents
or in breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would constitute a breach
of, or default under), any license, indenture, mortgage, deed of
trust, loan or credit agreement or any other agreement or instrument
to which the Company is a party or by which it or its properties may
be bound or under any law, regulation or rule or any decree,
judgment or order applicable to the Company, except such breaches or
defaults which would not have a Material Adverse Effect;
(vi) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the
transactions contemplated by this Agreement do not and will not (A)
conflict with, or result in any breach of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both would constitute a breach of or default under), (1) any
provisions of the certificate of incorporation, charter or by-laws
of the Company, (2) any provision of any material license,
indenture, mortgage, deed of trust, loan, credit or other agreement
or instrument known to such counsel and to which the Company is a
party or by which it or its properties or assets may be bound, (3)
to such counsel's knowledge, any law or regulation binding upon the
Company or its properties or assets, or (4) any decree, judgment or
order known to such counsel by which the Company is bound; or (B)
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any material property or assets of the Company;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company enforceable in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally, and by
general principles of equity, and except that enforceability of the
indemnification and contribution provisions set forth in Section 9
of this Agreement may be limited by the federal or state securities
laws of the United States or public policy underlying such laws;
(viii) no approval, authorization, consent or order of or
filing with any federal or state governmental or regulatory
commission, board, body, authority or agency is
16
required in connection with the execution, delivery and performance
of this Agreement, the consummation of the transactions contemplated
herein, and the sale and delivery of the Shares by the Company as
contemplated herein, other than (A) such as have been obtained or
made under the Securities Act and the Securities Act Regulations and
the Exchange Act and Exchange Act Regulations, and (B) such as are
required by the National Association of Securities Dealers, Inc.,
and except that such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws
of the various jurisdictions in which the Shares are being offered
by the Underwriters;
(ix) to such counsel's knowledge, the Company has all
necessary material licenses, authorizations, consents and approvals
and has made all necessary filings required under any federal, state
or local law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, required
to conduct its business, as described in the Prospectus, the absence
of which would have a Material Adverse Effect; to such counsel's
knowledge, the Company is not in violation of, in default under, or
has not received any notice regarding a possible violation, default
or revocation of any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or
decree, order or judgment applicable to the Company, unless such as
would have not have a Material Adverse Effect;
(x) the Company is not subject to registration as an
investment company under the Investment Company Act of 1940, as
amended, and the transactions contemplated by this Agreement will
not cause the Company to become an investment company subject to
registration under such Act;
(xi) the Shares have been duly authorized and when the Shares
have been issued and duly delivered against payment therefor as
contemplated by this Agreement, the Shares will be validly issued,
fully paid and non-assessable, free and clear of any pledge, lien,
encumbrance, security interest, or other claim (other than any
pledge, lien, encumbrance, security interest, or other claim created
by any of the Underwriters or against any of the Underwriters by any
third party);
(xii) the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights arising by
operation of law, under the certificate of incorporation, charter or
by-laws of the Company, or under any agreement known to such counsel
to which the Company is a party or, to such counsel's knowledge,
otherwise;
(xiii) to such counsel's knowledge, there are no persons with
registration or other similar rights to have any equity or debt
securities, including securities that are convertible into or
exchangeable for equity securities, registered pursuant to the
Registration Statement or otherwise registered by the Company under
the Securities Act, except for those registration or similar rights
which have been waived with respect to the offering contemplated by
this Agreement;
(xiv) the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and
Prospectus;
17
(xv) the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the organizational
documents of the Company and the requirements of the Nasdaq National
Market;
(xvi) the Registration Statement has become effective under
the Securities Act and no stop order suspending the effectiveness of
the Registration Statement has been issued and, to such counsel's
knowledge, no proceedings with respect thereto have been commenced or
threatened;
(xvii) as of the effective date of the Registration Statement,
the Registration Statement and the Prospectus (except as to the
financial statements and other financial and statistical data contained
therein, as to which such counsel need express no opinion) complied as
to form in all material respects with the requirements of the
Securities Act and the Securities Act Regulations;
(xviii) the statements under the captions "Capitalization" and
"Description of Capital Stock" in the Registration Statement and the
Prospectus, insofar as such statements constitute a summary of the
legal matters referred to therein, constitute accurate summaries
thereof in all material respects;
(xix) the Shares have been validly registered under the
Securities Act and the Securities Act Regulations;
(xx) there are no actions, suits or proceedings, inquiries, or
investigations pending or, to such counsel's knowledge, threatened
against the Company or, to such counsel's actual knowledge, any of its
officers and directors or to which the properties, assets or rights of
the Company are subject, at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board,
body, authority, arbitral panel or agency that are required to be
described in the Prospectus but are not so described; and
(xxi) to such counsel's knowledge, there are no contracts or
documents of a character that are required to be filed as exhibits to
the Registration Statement or required to be described or summarized in
the Prospectus that have not been so filed, summarized or described,
and all such summaries and descriptions, in all material respects,
fairly and accurately set forth the material provisions of such
contracts and documents.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company, and representatives of the Representatives,
at which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus (except as and to the
extent stated in subparagraphs (xiv), (xvii), and (xix) above), they have no
reason to believe that the Registration Statement, the Preliminary Prospectus or
the Prospectus, as of their respective effective or issue date, and as of the
date of such counsel's opinion, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that, in each case, such counsel need
18
express no view with respect to the financial statements and other financial and
statistical data included in the Registration Statement, Preliminary Prospectus
or Prospectus).
(c) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of patent counsel for the Company,
addressed to the Underwriters and dated the Closing Time and each Date of
Delivery, in form and substance satisfactory to Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters.
(d) The Representatives shall have received from Deloitte & Touche LLP,
letters dated, respectively, as of the date of this Agreement, the Closing Time
and each Date of Delivery, as the case may be, addressed to the Representatives,
in form and substance satisfactory to the Representatives, relating to the
financial statements, including any pro forma financial statements, of the
Company, and such other matters customarily covered by comfort letters issued in
connection with registered public offerings.
In the event that the letters referred to above set forth any changes
in indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a further condition to the obligations of the
Underwriters that (A) such letters shall be accompanied by a written explanation
of the Company as to the significance thereof, unless the Representatives deem
such explanation unnecessary, and (B) such changes, decreases or increases do
not, in the sole judgment of the Representatives, make it impractical or
inadvisable to proceed with the purchase and delivery of the Shares as
contemplated by the Registration Statement.
(e) The Representatives shall have received at the Closing Time and on
each Date of Delivery the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.,
dated the Closing Time or such Date of Delivery, addressed to the
Representatives and in form and substance satisfactory to the Representatives.
(f) No amendment or supplement to the Registration Statement or
Prospectus shall have been filed to which the Underwriters shall have objected
in writing.
(g) Prior to the Closing Time and each Date of Delivery (i) no stop
order suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued, and no proceedings for such purpose shall have been initiated or
threatened, by the Commission, and no suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or the initiation or
threatening of any proceedings for any of such purposes, has occurred; (ii) all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Representatives; and
(iii) the Registration Statement and the Prospectus shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(h) All filings with the Commission required by Rule 424 under the
Securities Act to have been filed by the Closing Time shall have been made
within the applicable time period prescribed for such filing by such Rule.
(i) Between the time of execution of this Agreement and the Closing
Time or the relevant Date of Delivery there shall not have been any Material
Adverse Change, and no transaction which is material and unfavorable to the
Company shall have been entered into by the Company, which in the
19
Representatives' sole judgment, makes it impracticable or inadvisable to proceed
with the public offering of the Shares as contemplated by the Registration
Statement.
(j) The Shares shall have been approved for listing on the Nasdaq
National Market.
(k) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(l) The Representatives shall have received lock-up agreements from
each officer and director of the Company, in the form of Exhibit A attached
hereto, and such letter agreements shall be in full force and effect.
(m) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its Chairman of the Board, Chief
Executive Officer, President, Chief Operating Officer or Vice President and
Chief Accounting Officer or Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the date
hereof, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the date hereof;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference therein
("Incorporated Document") has been issued and no proceedings for that
purpose have been instituted or are pending or, to their knowledge,
threatened under the Securities Act;
(iii) when the Registration Statement became effective and at
all times subsequent thereto up to the date hereof, the Registration
Statement and the Prospectus, and any amendments or supplements thereto
and any Incorporated Documents, when such Incorporated Documents became
effective or were filed with the Commission, contained all material
information required to be included therein by the Securities Act or
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act or the Exchange Act
and the applicable rules and regulations of the Commission thereunder,
as the case may be; the Registration Statement and the Prospectus, and
any amendments or supplements thereto, did not and do 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 the light of the circumstances under which they were made,
not misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amendment or supplemented Prospectus which has not been so set forth;
and
(iv) subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
there has not been (a) any Material Adverse Change, (b) any transaction
that is material to the Company, except transactions entered into in
the ordinary course of business, (c) any obligation, direct or
contingent, that is material to the Company incurred by the Company,
except obligations incurred in the ordinary course of business, (d) any
change in the capital stock or outstanding
20
indebtedness of the Company, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company, or (f)
any loss or damage (whether or not insured) to the property of the
Company that has been sustained or will have been sustained that has a
Material Adverse Effect.
(n) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statements of the Company contained herein, and the performance
by the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery, as
the Underwriters may reasonably request.
7. Termination:
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of the Representatives, at any time
prior to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has been since the respective
dates as of which information is given in the Registration Statement, any
Material Adverse Change, or any development that could reasonably be expected to
result in a Material Adverse Change, or (iii) if, after the date hereof, there
has occurred any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which on the financial markets of the United States is
such as to make it, in the judgment of the Representatives, impracticable to
market the Shares or enforce contracts for the sale of the Shares, or (iv) if
trading in any securities of the Company has been suspended by the Commission or
by the Nasdaq National Market, or if trading generally on the New York Stock
Exchange or in the Nasdaq National Market has been suspended (including an
automatic halt in trading pursuant to market-decline triggers, other than those
in which solely program trading is temporarily halted), or limitations on prices
for trading (other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been required, by
such exchange or the NASD or the over-the-counter market or by order of the
Commission or any other governmental authority, or (v) if there has been any
downgrade in the rating of any of the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act), or (vi) any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which,
in the reasonable opinion of the Representatives, materially adversely affects
or will materially adversely affect the business or operations of the Company,
or (vii) any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which, in the reasonable
opinion of the Representatives, has a material adverse effect on the securities
markets in the United States.
If the Representatives elect to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or
21
liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments:
If any Underwriter shall default at the Closing Time or on a Date of
Delivery in its obligation to take up and pay for the Shares to be purchased by
it under this Agreement on such date, the Representatives shall have the right,
within 36 hours after such default, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Shares which such Underwriter shall have agreed but failed
to take up and pay for (the "Defaulted Shares"). Absent the completion of such
arrangements within such 36-hour period, (i) if the total number of Defaulted
Shares does not exceed 10% of the total number of Shares to be purchased on such
date, each non-defaulting Underwriter shall take up and pay for (in addition to
the number of Shares which it is otherwise obligated to purchase on such date
pursuant to this Agreement) the portion of the total number of Shares agreed to
be purchased by the defaulting Underwriter on such date in the proportion that
its underwriting obligations hereunder bears to the underwriting obligations of
all non-defaulting Underwriters; and (ii) if the total number of Defaulted
Shares exceeds 10% of such total, the Representatives may terminate this
Agreement by notice to the Company, without liability of any party to any other
party except that the provisions of Sections 5 and 9 hereof shall at all times
be effective and shall survive such termination.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with the same effect as
if such substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, expense, liability, damage or claim arises out
of or is based upon (A) any breach of any representation, warranty or covenant
of the Company contained herein, (B) any failure on the part of the Company to
comply with any applicable law, rule or regulation relating to the offering of
securities being made pursuant to the Prospectus, (C) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company), the Prospectus (the term Prospectus for the
purpose of this Section 9 being
22
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company), (D) any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction (domestic or foreign) in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"), (E) any
omission or alleged omission to state a material fact required to be stated in
any such Registration Statement, Prospectus or any Application or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading, or (F) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials used
in connection with the marketing of the Shares, including, without limitation,
slides, videos, films and tape recordings; except insofar as any such loss,
expense, liability, damage or claim arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representatives to the Company expressly
for use in such Registration Statement, Prospectus or Application. The indemnity
agreement set forth in this Section 9(a) shall be in addition to any liability
which the Company may otherwise have.
If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to
subsection (a) above, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses; provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be liable for
the expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the Company's
officers that signed the Registration Statement, and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) which, jointly or severally,
the Company, or any such person may incur under the Securities Act, the Exchange
Act or otherwise, but only insofar as such loss, expense, liability, damage or
claim arises out of or is based upon (A) any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by such Underwriter through the Representatives to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company),
the Prospectus, or any Application, or (B) any omission or alleged omission to
state a
23
material fact in connection with such information required to be stated either
in such Registration Statement, Prospectus or any Application or necessary to
make such information, in the light of the circumstances under which made, not
misleading. The names and corresponding Share amounts set forth after the first
paragraph under the caption "Underwriting," the statements set forth in the
fourth, seventh and eighth paragraphs under the caption "Underwriting" and the
last paragraph on the cover page immediately preceding the names of the
Underwriters in the Preliminary Prospectus and the corresponding paragraphs in
the Prospectus (to the extent such statements relate to the Underwriters)
constitute the only information furnished by or on behalf of any Underwriter
through the Representatives to the Company for purposes of Section 3(k) and this
Section 9. The indemnity agreement set forth in this Section 9(b) shall be in
addition to any liabilities that such Underwriter may otherwise have.
If any action is brought against the Company, or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by the Representatives in connection with the defense of such action
or the Representatives shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representatives shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) and (b) of this Section 9 in respect of any losses, expenses,
liabilities, damages or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, expenses, liabilities, damages or claims (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the offering of the Shares or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
of the Underwriters in connection with the statements or omissions that resulted
in such losses, expenses, liabilities, damages or claims, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company bear to the underwriting
discounts and commissions received by the Underwriters. The relative fault of
the Company and of the Underwriters shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and
24
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in subsection (c)(i) and, if applicable,
(ii) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter. 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. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival:
The indemnity and contribution agreements contained in Section 9 and
the covenants, warranties and representations of the Company contained in
Sections 3, 4 and 5 of this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, or any
person who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors and officers, or any person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the sale
and delivery of the Shares. The Company and each Underwriter agree promptly to
notify the others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers and
directors, in connection with the sale and delivery of the Shares, or in
connection with the Registration Statement or Prospectus.
11. Notices:
Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the Underwriters,
shall be sufficient in all respects if delivered to Friedman, Billings, Xxxxxx &
Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered to the Company at the offices of the Company at 0000 Xxxxx Xxxxxx
Xxxxx, Xxxxx, XX 00000-0000.
12. Governing Law; Headings:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Parties at Interest:
The Agreement herein set forth has been and is made solely for the
benefit of the Underwriters, the Company, and the controlling persons, directors
and officers referred to in Sections 9 and 10 hereof, and their respective
successors, assigns, executors and administrators. No other person, partnership,
25
association or corporation (including a purchaser, as such purchaser, from any
of the Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
14. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts that
together shall constitute one and the same agreement among the parties. A
facsimile signature shall constitute an original signature for all purposes.
26
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this Agreement shall constitute a binding agreement among
the Company and the Underwriters.
Very truly yours,
BRILLIAN CORPORATION
By ___________________________
Name:
Title:
Accepted and agreed to as of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
XXXXX, XXXXXXXX & XXXX, INC.
X.X. XXXXXXXXX, TOWBIN LLC
By: Friedman, Billings, Xxxxxx & Co., Inc.
By ______________________________
Name:
Title:
For themselves and as Representatives of the other Underwriters named on
Schedule I hereto.
27
Schedule I
Number of Initial
Underwriter Shares to be Purchased
----------- ----------------------
Friedman, Billings, Xxxxxx & Co., Inc. [ ]
Xxxxx, Xxxxxxxx & Xxxx, Inc. [ ]
X.X. Xxxxxxxxx, Towbin LLC [ ]
---------
Total.......................................... X,XXX,XXX
=========
Exhibit A
Form of Lock-Up Agreement
Brillian Corporation Lock-Up Letter Agreement
March __, 2004
Friedman, Billings, Xxxxxx & Co., Inc.
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed public offering (the "Offering") by Brillian Corporation, a
Delaware corporation (the "Company") of its Common Stock, par value $0.001 per
share, of the Company (the "Common Stock").
In order to induce you and any other underwriters for which you may act
as representative (collectively, the "Underwriters") to underwrite the Offering,
the undersigned hereby agrees that, without the prior written consent of
Friedman, Billings, Xxxxxx & Co. Inc. ("FBR"), during the period from the date
hereof until ninety (90) days from the date of the final prospectus for the
Offering (the "Lock-Up Period"), the undersigned (a) will not, directly or
indirectly, offer, sell, agree to offer or sell, solicit offers to purchase,
grant any call option or purchase any put option with respect to, pledge, borrow
or otherwise dispose of any Relevant Security (as defined below), and (b) will
not establish or increase any "put equivalent position" or liquidate or decrease
any "call equivalent position" with respect to any Relevant Security (in each
case within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder), or otherwise enter into any swap, derivative or other transaction
or arrangement that transfers to another, in whole or in part, any economic
consequences of ownership of any Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration. As used herein, "Relevant Security"
means the Common Stock, any other equity security of the Company or any of its
subsidiaries and any security convertible into, or exercisable or exchangeable
for, any Common Stock or other such equity security.
The undersigned hereby authorizes the Company during the Lock-Up Period
to cause any transfer agent for the Relevant Securities to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of FBR, during the Lock-Up Period the
undersigned (x) other than in the undersigned's capacity as an officer and/or
director in connection with the Offering, will not file or participate in the
filing with the Securities and Exchange Commission of any registration
statement, or circulate or participate in the circulation of any preliminary or
final prospectus or other disclosure document with respect to any proposed
offering or sale of a Relevant Security and (y) will not exercise any rights the
undersigned may have to require registration with the Securities and Exchange
Commission of any proposed offering or sale of a Relevant Security.
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, or (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn,
this Lock-Up Letter Agreement shall terminate on such date and the undersigned
shall be released from its obligations hereunder.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents reasonably necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia. Delivery of a signed copy of this
letter by facsimile transmission shall be effective as delivery of the original
hereof.
Yours very truly,
----------------------
Name:
