EXHIBIT 1.1
ALYN CORPORATION
2,750,000 Shares of Common Stock, $.001 Par Value
UNDERWRITING AGREEMENT
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October __, 0000
XXXXXX XXXX LLC
XXXXXXX & COMPANY, INC.
As Representatives of the
several Underwriters
c/o Xxxxxx Xxxx LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
1. Introduction; Certain Definitions. Alyn Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell to the several
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Underwriters named in Schedule I hereto (the "Underwriters"), for which Xxxxxx
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Xxxx LLC and Xxxxxxx & Company, Inc. are acting as representatives (the
"Representatives"), an aggregate of 2,750,000 shares (the "Firm Shares") of the
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Company's common stock, $.001 par value (the "Common Shares"). In addition, the
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Company is granting to the Underwriters an option to purchase up to an
additional 412,500 Common Shares (the "Additional Shares") from the Company for
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the purpose of covering over-allotments in connection with the sale of the Firm
Shares. The "Offered Shares" shall mean the Firm Shares and the Additional
Shares, if any. The Company will also grant 211,000 warrants (the "Warrants")
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to Xxxxxx Xxxx LLC to purchase an aggregate of 211,000 shares of common stock
(the "Warrant Shares"). The Warrants will be issued pursuant to a warrant
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agreement (the "Warrant Agreement") to be dated the date hereof between the
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Company and Xxxxxx Xxxx LLC. The words "you" and "your" refer to the
Representatives of the Underwriters.
The Company hereby agrees with the several Underwriters as follows:
2. Representations and Warranties. The Company represents, warrants and
agrees with each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-09143) under
the Securities Act of 1933, as amended (the "Act"), with respect to the
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Offered Shares, including a form of prospectus subject to completion, has
been prepared by the Company in conformity with the
requirements of the Act and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder
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(the "Rules and Regulations"). Such registration statement has been filed
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with the Commission under the Act, and one or more amendments to such
registration statement may also have been so filed. The Company represents
and warrants that copies of such registration statement (including all
amendments thereto) have heretofore been delivered by the Company to you.
After the execution of this Agreement, the Company shall file with the
Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if the Company relies on Rule 434 under the Act, a Term Sheet
(as hereinafter defined) relating to the Offered Shares, that shall
identify the Preliminary Prospectus (as hereinafter defined) that it
supplements and containing such information as is required or permitted by
Rules 434, 430A and 424(b) under the Act or (B) if the Company does not
rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement filed with the
Commission (or, if no such amendment shall have been filed, in such
registration statement), with such insertions and changes as are required
by Rule 430A under the Act or permitted by Rule 424(b) under the Act, and
in the case of either clause (i)(A) or (i)(B) of this sentence as shall
have been provided to and approved by the Representatives prior to the
filing thereof or (ii) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under the
Act, a further amendment to such registration statement, including a form
of prospectus, a copy of which amendment has been furnished to and approved
by the Representatives prior to the filing thereof. As used in this
Agreement, the term "Registration Statement" means such registration
statement, as amended at the time when it was or is declared effective,
including all financial schedules and exhibits thereto; the Registration
Statement shall be deemed to include any information omitted therefrom
pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each
prospectus subject to completion contained in such Registration Statement
or any amendment thereto (including the prospectus subject to completion,
if any, included in the Registration Statement or any amendment thereto or
filed pursuant to Rule 424(a) under the Act at the time it was or is
declared effective); the term "Prospectus" means: (A) if the Company relies
on Rule 434 under the Act, the Term Sheet relating to the Offered Shares
that is first filed pursuant to Rule 424(b)(7) under the Act, together with
the Preliminary Prospectus identified therein that such Term Sheet
supplements; (B) if the Company does not rely on Rule 434 under the Act,
the prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or (C) if the Company does not rely on Rule 434 under the
Act and if no prospectus is required to be filed pursuant to Rule 424(b)
under the Act, the prospectus included in the Registration Statement; and
the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference to the "date" of a Prospectus
that contains a Term Sheet shall mean the date of such Term Sheet. The
Company has timely made any filing required under rule 462(b) under the Act
("Rule 462(b)") and such filing complies in form with the applicable Rules
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and Regulations.
(b) The Commission has not issued any order preventing or suspending
the use of the Registration Statement or any Preliminary Prospectus and has
not instituted or, to the best of our knowledge, threatened to institute
any proceedings with respect to such an order. When any Preliminary
Prospectus was filed with the Commission it (i) contained all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the Act and the Rules and
Regulations and (ii) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein,
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in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or
is declared effective, it (1) contained or will contain all statements
required to be stated therein in accordance with, and complied or will
comply in all material respects with the requirements of, the Act and the
Rules and Regulations and (2) did not or will not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein not misleading. When the Prospectus
or any Term Sheet that is a part thereof and when any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule
424(b) (or, if the Prospectus or part thereof or such amendment or
supplement is not required to be so filed, when the Registration Statement
and when any amendment thereto containing such amendment or supplement to
the Prospectus was or is declared effective) and at all times subsequent
thereto up to and including the Closing Date (as defined in Section 3
hereof) and the Option Closing Date (as defined in Section 9 hereof), the
Prospectus, as amended or supplemented at any such time, (A) contained or
will contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the
requirements of, the Act and the Rules and Regulations and (B) did not or
will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) shall not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or
any amendment thereto or the Prospectus or any amendment or supplement
thereto in reliance upon, and in conformity with, information furnished in
writing to the Company by or on behalf of the Underwriters through the
Representatives expressly for use therein.
(c) The Company (i) is a duly incorporated, validly existing
corporation and is in good standing under the laws of the state of
Delaware, with full power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and (ii) is duly
qualified to do business and is in good standing in each jurisdiction in
which the nature of its properties or the conduct of its business requires
such qualification (except for those jurisdictions in which the failure so
to qualify has not had and will not have a Material Adverse Effect (as
hereinafter defined)). The Company has no subsidiary or subsidiaries and
does not control, directly or indirectly, any corporation, partnership,
joint venture, association or other business organization. The Company
does not own, lease or license any property or conduct any business outside
the United States of America. "Material Adverse Effect" means, when used
in connection with the Company, any development, change or effect that, by
itself or in combination with other developments, changes or effects of any
nature whatsoever, is materially adverse to the business, properties,
assets, liabilities, net worth, condition (financial or other), results of
operations or prospects of the Company.
(d) As of June 30, 1996, the Company had a duly authorized and validly
outstanding capitalization as set forth under the Caption "Capitalization"
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), and the Company will have the Pro Forma As
Adjusted capitalization set forth therein on the Closing Date, based on the
assumptions set forth therein. The securities of the Company conform to the
descriptions thereof contained in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus). The outstanding
shares of capital stock of the Company have been duly authorized and
validly issued by the Company and are fully paid and nonassessable. Except
as created hereby or pursuant
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to the Company's 1996 Stock Incentive Plan (the "Stock Option Plan") or
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described in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), there are no outstanding options,
warrants, rights or other arrangements requiring the Company at any time to
issue any capital stock. No holders of outstanding shares of capital stock
of the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Offered Shares and neither the filing of the
Registration Statement nor the offering or sale of the Offered Shares as
contemplated by this Agreement give rise to any rights for or relating to
the registration of any securities of the Company. The issuance and sale of
the Offered Shares and the Warrants by the Company under this Agreement and
the Warrant Agreement have been duly authorized by the Company. On the
Closing Date, after payment for the Firm Shares in accordance with the
terms of this Agreement, (i) the Firm Shares to be issued by the Company
hereunder will be validly issued, fully paid and non-assessable and will
not be issued in violation of any preemptive, subscription or other similar
rights and (ii) good title to the Firm Shares will pass to the Underwriters
on the Closing Date free and clear of any and all liens, encumbrances,
charges, security interests, claims or other restrictions on title
whatsoever. On the Option Closing Date, after payment for the Additional
Shares in accordance with the terms of this Agreement, (i) the Additional
Shares to be issued by the Company hereunder will be validly issued, fully
paid and non-assessable and will not be issued in violation of any
preemptive, subscription or other similar rights and (ii) good title to the
Additional Shares will pass to the Underwriters on the Option Closing Date
free and clear of any and all liens, encumbrances, charges, security
interests, claims or other restrictions on title whatsoever. The Warrant
Shares, when issued and paid for upon exercise of the Warrants, in
accordance with the terms of the Warrant Agreement, (i) will be validly
issued, fully paid and non-assessable and will not be issued in violation
of any preemptive, subscription or other similar rights and (ii) good title
to the Warrant Shares will pass to Xxxxxx Xxxx LLC free and clear of any
and all liens, encumbrances, charges, security interests, claims or other
restrictions on title whatsoever. No Common Shares have been issued in
violation of preemptive rights or other rights to subscribe for any of the
Offered Shares. The Company has received approval to have the Offered
Shares quoted on the Nasdaq National Market and the Company knows of no
reason or set of facts which is likely to adversely affect any such
approval.
(e) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial condition, results of
operations, cash flows, changes in stockholders' equity and other
information purported to be shown therein of the Company on the basis
stated in the Registration Statement at the respective dates and for the
respective periods to which they apply. Such financial statements and the
related notes and schedules thereto have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein), and all
adjustments necessary for a fair presentation of the results for such
periods have been made. Such financial statements as are audited have been
examined by Price Waterhouse LLP, who is and during all periods covered by
its reports was, an independent public accountant with regard to the
Company within the meaning of the Act and the Rules and Regulations, as
indicated in its report filed therewith. The financial information and data
(including, without limitation, pro forma and adjusted financial
information or data) set forth in the sections of the Prospectus (or if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
entitled "Summary Financial Data," "Capitalization," "Selected Financial
Data" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and the other financial information
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and statistical data set forth in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), have been
properly derived from the financial statements and other operating records
of the Company.
(f) The Company has filed all necessary federal, state and local
income, franchise and other material tax returns and has paid or has caused
to be paid all taxes due in connection therewith other than those contested
in good faith for which adequate reserves have been provided. The Company
has no knowledge of any material tax deficiency which might be assessed
against the Company.
(g) The Company maintains insurance of the types and in amounts which
it reasonably believes to be adequate for its business, in such amounts and
with such deductibles as is customary for companies in the same or similar
business, all of which insurance is in full force and effect.
(h) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there is no
pending or, to the best of our knowledge, threatened action, suit,
proceeding or investigation before or by any court arbitrator or other
tribunal, or any regulatory body or administrative agency or any other
governmental agency or body, domestic or foreign, which (i) questions the
validity of the capital stock of the Company or this Agreement or any
action taken or to be taken by the Company pursuant to or in connection
with this Agreement (ii) is required to be disclosed in the Registration
Statement and which is not so disclosed (and such proceedings, if any, as
are summarized in the Registration Statement or incorporated therein by
reference are accurately summarized in all respects), or (iii) would
otherwise interfere with or adversely affect the issuance and validity of
the Offered Shares.
(i) The Company has full legal right, power and authority to enter
into this Agreement and the Warrant Agreement and to consummate the
transactions provided for herein and therein. This Agreement and the
Warrant Agreement have been duly authorized, executed and delivered by the
Company and, assuming they are binding agreements of each other party
hereto and thereto, constitute legal, valid and binding agreements of the
Company enforceable against the Company in accordance with their terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be limited
by federal or state securities laws and the public policy underlying such
laws) and none of the Company's execution or delivery of this Agreement,
the Warrant Agreement, its performance hereunder and thereunder, its
consummation of the transactions contemplated herein and therein, its
application of the net proceeds of the offering in the manner set forth
under the caption "Use of Proceeds" or the conduct of its business as
described in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), conflicts or will conflict with or
results or will result in any breach or violation of any of the terms or
provisions of, or constitutes or will constitute a default under, or causes
or will cause (or permits or will permit) the maturation or acceleration of
any liability or obligation or the termination of any right under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to the terms of (i) the
Certificate of Incorporation or bylaws (or similar governing instruments)
of the Company, (ii) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement or
instrument to which
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the Company is a party or by which it is or may be bound or to which its
property is or may be subject or (iii) any statute, judgment, decree,
order, rule or regulation applicable to the Company of any government,
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its activities or properties.
(j) The Warrants have been duly and validly authorized for issuance
and sale to Xxxxxx Xxxx LLC by the Company pursuant to the Warrant
Agreement and, when issued in accordance with the terms of the Warrant
Agreement and delivered against payment therefor in accordance with the
terms thereof, will be the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be limited
by federal or state securities laws and the public policy underlying such
laws).
(k) All agreements filed as exhibits to the Registration Statement to
which the Company is a party or by which it is or may be bound or to which
any of its assets, properties or businesses is or may be subject have been
duly and validly authorized, executed and delivered by the Company and
constitute the legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be limited
by federal or state securities laws and the public policy underlying such
laws). The descriptions in the Registration Statement of such contracts
and other documents are accurate and fairly present the information
required to be shown with respect thereto by the Act and the Rules and
Regulations, and there are no contracts or other documents which are
required by the Act or the Rules and Regulations to be described in the
Registration Statement or filed as exhibits to the Registration Statement
which are not described or filed as required, and the exhibits which have
been filed are complete and correct copies of the documents of which they
purport to be copies.
(l) Subsequent to the most recent dates as of which information is
given in the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), and except as expressly contemplated
therein, the Company has not (i) incurred, other than in the ordinary
course of its business, any material liabilities or obligations, direct or
contingent, (ii) purchased any of its outstanding capital stock, (iii) paid
or declared any dividends or other distributions on its capital stock or
(iv) entered into any material transactions not in the ordinary course of
business, and there has been no material change in capital stock or debt or
any material adverse change in the business, properties, assets,
liabilities, net worth, condition (financial or other), results of
operations or prospects of the Company. The Company (or the manner in which
it conducts its business) is not in breach or violation of, or in default
under, any term or provision of (X) its Certificate of Incorporation or
bylaws (or similar governing instruments), (Y) any indenture, mortgage,
deed of trust, voting trust agreement, stockholders' agreement, note
agreement or other material agreement or instrument to which it is a party
or by which it is or may
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be bound or to which any of its property is or may be subject, or any
indebtedness or (Z) any statute, judgment, decree, order, rule or
regulation applicable to the Company or of any arbitrator, court,
regulatory body, administrative agency or any other governmental agency or
body, domestic or foreign, having jurisdiction over the Company or any of
its activities or properties.
(m) The Company is not involved in any labor disputes nor, to the
Company's knowledge, are any such disputes threatened, which disputes could
reasonably be expected to, either singly or in the aggregate, have a
Material Adverse Effect.
(n) Since its inception, the Company has not incurred any liability
arising under or as a result of the application of the provisions of the
Act or the Rules and Regulations.
(o) No consent, approval, authorization or order of or filing, notice
or declaration to or with any court, regulatory body, administrative agency
or any other governmental agency or body is required for the performance of
this Agreement or the Warrant Agreement or the consummation of the
transactions contemplated hereby and thereby, except such as have been or
may be obtained under the Act or may be required under state securities or
Blue Sky laws in connection with the Underwriters' purchase and
distribution of the Offered Shares.
(p) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities under the Registration Statement
(other than those that have been disclosed in the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
that have not been waived with respect to the Registration Statement.
(q) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Rules and Regulations) nor, to the
Company's best knowledge, any of the persons set forth under the caption
"Principal Stockholders" in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) has taken, directly or
indirectly, any action designed to stabilize or manipulate the price of any
security of the Company, or which has constituted or which might in the
future reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company, to facilitate the
sale or resale of the Offered Shares or otherwise.
(r) The Company has good and marketable title to, or valid and
enforceable leasehold interests in, all properties and assets owned or
leased by it, free and clear of any and all liens, mortgages, pledges,
encumbrances, charges, security interests, restrictions, equities, claims
and defects, except (A) such as are described in the Registration Statement
and Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or such as do not materially adversely affect the
value of any of such properties or assets taken as a whole and do not
materially interfere with the use made and proposed to be made of any of
such properties or assets and (B) liens for taxes not yet due and payable
as to which appropriate reserves have been established and reflected in the
financial statements included or incorporated by reference in the
Registration Statement. The Company owns or leases all such properties as
are necessary to its operations as now conducted, and as proposed to be
conducted as set forth in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and the properties and business of the Company conform in all
material respects to the descriptions thereof contained in the Registration
Statement and the
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Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). All the material leases and subleases of the
Company under which the Company holds properties or assets as lessee or
sublessee constitute valid leasehold interests of the Company, free and
clear of liens, mortgages, pledges, encumbrances, charges, security
interests, restrictions, equities, or defects and are in full force and
effect, and the Company is not in default in respect of any such material
leases or subleases, and the Company has no notice of any claim which has
been asserted by anyone adverse to the Company's rights as lessee or
sublessee under any material lease or sublease, or affecting or questioning
the Company's right to the continued possession of the leased or subleased
premises under any such material lease or sublease, which could reasonably
be expected to have a Material Adverse Effect. Each material agreement
pursuant to which the Company has the right to acquire land constitutes the
legal, valid and binding obligation of the Company, the owner of such land
and any other party thereto, no such party is in default under any such
agreement and each such agreement is enforceable by the Company, according
to its terms.
(s) The Company has not violated any applicable existing federal,
state, local or foreign statutes, laws, rules or regulations, including,
but not limited to, (i) any foreign, federal, state or local statute, law,
rule or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) any federal or state statute,
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law, rule or regulation relating to discrimination in the hiring, promotion
or pay of employees, (iii) any applicable federal or state wages and hours
laws and (iv) any provisions of the Employee Retirement Income Security Act
and the rules and regulations promulgated thereunder, which in each case
could reasonably be expected to result in a Material Adverse Effect.
(t) All franchises, licenses, permits, approvals, certificates and
other authorizations from federal, state, local, foreign and other
governmental or regulatory authorities, including, without limitation,
under any applicable Environmental Laws, necessary to the ownership,
leasing and operation of the properties of the Company or required for the
Company's operations as now conducted, and as proposed to be conducted as
set forth in the Registration Statement and the Prospectus (or if the
Prospectus is not in existence, the most recent Preliminary Prospectus) are
in full force and effect and the Company is in compliance therewith except
where any non-compliance herewith would not have a Material Adverse Effect.
(u) The Company owns or possesses, free and clear of any security
interest, mortgage, pledge, claim, lien, charge or encumbrance, all
patents, patent rights, licenses, inventions, copyrights, know-how
(including, without limitation, trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property") material to the business of the Company. The use
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of such Intellectual Property in connection with the business and
operations of the Company does not, to the Company's best knowledge,
infringe on the rights or claimed rights of any person. No other person is,
to the Company's best knowledge, infringing upon any of the Intellectual
Property or has notified the Company that it is claiming ownership of, or
the right to use, any Intellectual Property. The Company has taken all
reasonable steps to protect the Intellectual Property from infringement by
any other person. The Company has not received (i)
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any notice of infringement of or conflict with assessed rights of others
with respect to any Intellectual Property or (ii) any notice of an action
or proceeding seeking to limit, cancel or question the validity of any
Intellectual Property, which singly or in the aggregate, if the subject of
any unfavorable decision, ruling or finding, might have a Material Adverse
Effect.
(v) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company shall retain
Price Waterhouse LLP to oversee the production of the Company's quarterly
financial statements until such time as Price Waterhouse LLP deems the
Company's accounting systems to be adequate for the purposes intended.
(w) No transaction has occurred between or among the Company and any
of its officers or directors or any affiliate or affiliates of any such
officer or director, that is required to be described in and is not
described in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(x) Except as set forth in the Registration Statement, the Company has
not incurred any liability for a fee, commission or other compensation on
account of the employment of a broker or finder in connection with the
transactions contemplated by this Agreement.
(y) The Company is neither (A) an "Investment Company" within the
meaning of the Investment Company Act of 1940, as amended (the "'40 Act"),
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nor (B) a "Holding Company" or a "Subsidiary Company" of a "Holding
Company" within the meaning of the Public Utility Holding Company Act of
1935, as amended (the "'35 Act"), and the offer and sale of the Offered
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Shares will not subject the Company to regulation under, or result in a
violation of, either of such acts.
3. Purchase, Sale and Delivery of the Offered Shares. On the basis of
the representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, the Firm Shares set forth opposite such Underwriter's
name on Schedule I hereto at a purchase price of $_____ per share.
Delivery of certificates and payment of the purchase price for the Firm
Shares shall be made at the offices of Xxxxxx Xxxx LLC at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other location as shall be agreed upon by the
Company and the Representatives. Such delivery and payment shall be made at
9:00 a.m., New York City time, on October __, 1996 or at such other time and
date not more than ten business days thereafter as shall be agreed upon by the
Representatives and the Company. The time and date of such delivery and payment
are herein called the "Closing Date." Delivery of the certificates for the Firm
Shares shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price for the Firm Shares by certified or
official bank check in New York Clearing House (next day) funds or, at the
request
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of the Company and at its expense, immediately available funds, in either case
drawn to the order of the Company for the Firm Shares sold by it. The
certificates for the Firm Shares to be so delivered will represent Firm Shares
in fully registered form, will bear no restrictive legends and will be in such
denominations and registered in such names as the Representatives shall request,
not less than three full business days prior to the Closing Date. The Company
will make the certificates for the Firm Shares available to the Representatives
at such office or such other place as the Representatives may designate for
inspection, checking and packaging not later than 9:30 a.m., New York City time,
on the business day prior to the Closing Date.
4. Public Offering of the Offered Shares. It is understood that the
Underwriters propose to make a public offering of the Offered Shares at the
prices and upon the other terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
of the Underwriters that:
(a) The Company will use all reasonable efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
practicable. If required, the Company will file the Prospectus or any Term
Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period
required by Rules 434, 430A and 424(b) under the Act. During any time when
a prospectus relating to the Offered Shares is required to be delivered
under the Act, the Company (A) will comply with all requirements imposed
upon it by the Act and the Rules and Regulations to the extent necessary to
permit the continuance of sales of or dealings in the Offered Shares in
accordance with the provisions hereof and of the Prospectus, as then
amended or supplemented and (B) will not file with the Commission the
prospectus, Term Sheet or the amendment referred to in Section 2(a) hereof,
any amendment or supplement to such prospectus, Term Sheet or any amendment
to the Registration Statement of which the Representatives shall not
previously have been advised and furnished with a copy a reasonable period
of time prior to the proposed filing and as to which filing the
Representatives shall not have given their consent, which consent shall not
be unreasonably withheld. If the Company has made a filing under Rule
462(b), the Company shall timely transfer by wire sufficient funds to the
proper account of the Commission as required for such filing.
(b) As soon as the Company is advised or obtains knowledge thereof,
the Company will advise the Representatives (A) when the Registration
Statement, as amended, has become effective, if the provisions of Rule 430A
promulgated under the Act will be relied upon, when the Prospectus has been
filed in accordance with said Rule 430A and when any post-effective
amendment to the Registration Statement becomes effective, (B) of any
request made by the Commission for amending the Registration Statement, for
supplementing any Preliminary Prospectus or the Prospectus or for
additional information or (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or the institution or threat of any investigation or
proceeding for that purpose, and will use all reasonable efforts to prevent
the issuance of any such order and, if issued, to obtain the lifting
thereof as soon as possible.
10
(c) The Company will (A) use all reasonable efforts to arrange for the
qualification of the Offered Shares for offer and sale under the state
securities or Blue Sky laws of such jurisdictions as the Representatives
may designate, (B) continue such qualifications in effect for as long as
may be necessary to complete the distribution of the Offered Shares and (C)
make such applications, file such documents and furnish such information as
may be required for the purposes set forth in clauses (A) and (B) hereof;
provided, however, that the Company shall not be required to qualify as a
foreign corporation or file a general or unlimited consent to service of
process in any such jurisdiction.
(d) The Company consents to the use of the Prospectus (and any
amendment or supplement thereto) by the Underwriters and all dealers to
whom the Offered Shares may be sold, in connection with the offering or
sale of the Offered Shares and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection therewith. If,
at any time when a prospectus relating to the Offered Shares is required to
be delivered under the Act, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it becomes
necessary at any time to amend or supplement the Prospectus to comply with
the Act or the Rules and Regulations, the Company promptly will so notify
the Representatives and, subject to Section 5(a) hereof, will prepare and
file with the Commission an amendment to the Registration Statement or an
amendment or supplement to the Prospectus which will correct such statement
or omission or effect such compliance, each such amendment or supplement to
be reasonably satisfactory to counsel to the Underwriters.
(e) As soon as practicable, but in any event not later than 45 days
after the end of the 12-month period beginning on the day after the end of
the fiscal quarter of the Company during which the effective date of the
Registration Statement occurs (90 days in the event that the end of such
fiscal quarter is the end of the Company's fiscal year), the Company will
make generally available to its security holders, in the manner specified
in Rule 158(b) of the Rules and Regulations, and to the Representatives, an
earnings statement which will be in the detail required by, and will
otherwise comply with, the provisions of Section 11(a) of the Act and Rule
158(a) of the Rules and Regulations, which statement need not be audited
unless required by the Act or the Rules and Regulations, covering a period
of at least 12 consecutive months after the effective date of the
Registration Statement.
(f) For a period of five years after the date hereof, the Company will
furnish to its stockholders, as soon as practicable, annual reports
(including financial statements audited by independent public accountants)
and unaudited quarterly reports of earnings, and will deliver to the
Representatives:
(i) concurrently with furnishing such quarterly reports to its
stockholders, a balance sheet of the Company as at the end of the
preceding quarter, together with statements of operations,
stockholders' equity and cash flows of the Company for each quarter in
the form furnished to the Company's stockholders and certified by the
Company's principal financial or accounting officer or a copy of the
Company's Quarterly Report on Form 10-Q filed with the Commission;
11
(ii) concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of operations,
stockholders' equity and cash flows of the Company for such fiscal
year, accompanied by a copy of the report thereon of independent
public accountants, or a copy of the Company's Annual Report on Form
10-K filed with the Commission;
(iii) as soon as they are available, copies of all information
(financial or other) mailed to stockholders;
(iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the
National Association of Securities Dealers, Inc. ("NASD") or any
----
securities exchange; and
(v) every press release and every material news item in respect
of the Company or its affairs which was released or prepared by the
Company.
During such five-year period, if the Company has active subsidiaries,
the foregoing financial statements will be on a consolidated basis to the
extent that the accounts of the Company and its subsidiaries are
consolidated, and will be accompanied by similar financial statements for
any significant subsidiary which is not so consolidated.
(g) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of organization of the Company, a registrar (which may be
the same entity as the transfer agent) for its Common Shares.
(h) The Company will furnish, without charge, to the Representatives
or on the Representatives' order, at such place as the Representatives may
designate, copies of each Preliminary Prospectus, the Registration
Statement and any pre-effective or post-effective amendments thereto (one
of which copies will be manually signed and will include all financial
statements and exhibits) and the Prospectus, and all amendments and
supplements thereto, in each case as soon as available and in such
quantities as the Representatives may reasonably request. Without limiting
the application of this Section 5(h), the Company, not later than (A) 6:00
p.m., New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 12:00 Noon,
New York City time, on such date or (B) 6:00 p.m., New York City time, on
the business day following the date of determination of the public offering
price, if such determination occurred after 12:00 Noon, New York City time,
on such date, will deliver to the Representatives, without charge, as many
copies of the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming orders
that are expected to settle on the Closing Date.
(i) The Company will not, for a period of nine months following the
date of the Prospectus, directly or indirectly, without the prior written
consent of the Representatives, offer, sell, contract to sell, grant any
option to purchase, or otherwise dispose of any Common Shares or any
security convertible into or exercisable or exchangeable for such Common
Shares or in any other manner transfer all or a portion of the economic
consequences associated with the ownership
12
of any such Common Shares (except to the Underwriters pursuant to this
Agreement or pursuant to the Company's Stock Option Plan).
(j) The Company will cause each person listed on Schedule II hereto to
enter into an agreement to the effect that they will not, for a period of
nine months following the date of the Prospectus, directly or indirectly,
without the prior written consent of the Representatives, offer, sell,
contract to sell, grant any option to purchase, or otherwise dispose of any
Common Shares or any security convertible into or exercisable or
exchangeable for such Common Shares or in any other manner transfer all or
a portion of the economic consequences associated with the ownership of any
such Common Shares, except that Common Shares may be pledged as long as the
pledgee agrees in writing to be bound by all of the restrictions applicable
to the pledgor relating to such Common Shares (each, a "Prohibited
----------
Transfer"). The Company will also cause Xxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxxxx to agree not to offer, sell or otherwise dispose (or announce any
offer, sale or other disposition) of more than 107,500 shares of Common
Shares during any three-month period in the six months following the
expiration of the initial nine-month period. The Company also agrees to
take such other actions as the Representatives may reasonably request to
prevent parties listed on Schedule II hereto from consummating a Prohibited
Transfer.
(k) The Company will cause the Offered Shares to be duly included for
quotation on the Nasdaq National Market prior to the Closing Date and the
Company will use its best efforts to maintain such inclusion for a period
of five years after the effective date of the Registration Statement.
(l) The Company will cooperate and assist in any filings required to
be made with the NASD and in the performance of any due diligence
investigation by any broker/dealer participating in the sale of the Offered
Shares.
(m) Neither the Company nor any of its officers or directors, nor
affiliates of the Company (within the meaning of the Rules and
Regulations), will take, directly or indirectly, any action designed to, or
which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any securities of the
Company.
(n) The Company will apply the net proceeds of the offering received
by it in the manner set forth under the caption "Use of Proceeds" in the
Prospectus.
(o) The Company will timely file all such reports, forms or other
documents as may be required from time to time, under the Act, the Rules
and Regulations, the Securities Exchange Act of 1934 (the "Exchange Act"),
------------
the rules and regulations thereunder, and any applicable foreign securities
laws or regulations and all such reports, forms and documents filed will
comply as to form and substance with the applicable requirements under the
Act, the Rules and Regulations, the Exchange Act, the rules and regulations
thereunder and any applicable foreign securities laws or regulations.
(p) Except as required by law and pursuant to the advice of its
counsel, the Company shall, prior to the Closing Date, issue no press
release or other communication directly or indirectly and hold no press
conference with respect to the Company, its condition (financial or
13
otherwise), results of operations, business, properties, assets,
liabilities, net worth or prospects or the offering of the Offered Shares
without the prior written consent of the Representatives.
(q) To reserve and continue to reserve as long as any Warrants are
outstanding, a sufficient number of Common Shares for issuance upon
exercise of the Warrants.
(r) The Company will use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement and the
Warrant Agreement by it prior to the Closing Date or the Option Closing
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Offered Shares.
6. Expenses. (a) Regardless of whether the transactions contemplated in
this Agreement are consummated, and regardless of whether for any reason this
Agreement is terminated, the Company will pay, and hereby agrees to indemnify
and hold each Underwriter harmless from and against, all fees and expenses
incident to the performance of the obligations of the Company under this
Agreement, including, but not limited to, (i) fees and expenses of accountants
and counsel for the Company, (ii) all costs and expenses incurred in connection
with the preparation, duplication, printing (including, without limitation, word
processing costs), filing, delivery and shipping of copies of the Registration
Statement and any pre-effective or post-effective amendments thereto, any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto (including postage costs related to the delivery by the Underwriters of
any Preliminary Prospectus or Prospectus, or any amendment or supplement
thereto), this Agreement, the Warrant Agreement, any Selected Dealer Agreement,
Underwriters' Questionnaire, Underwriters' Power of Attorney, and all other
documents in connection with the transactions contemplated herein, including,
without limitation, the cost of all copies thereof, (iii) fees and expenses
relating to qualification of the Offered Shares under state securities or Blue
Sky laws, including, without limitation, the cost of preparing and mailing the
preliminary and final Blue Sky memoranda and filing fees and disbursements and
fees of counsel and other related expenses, if any, in connection therewith,
(iv) filing fees of the Commission and the NASD relating to the Offered Shares,
including, without limitation, the admission of the Company to the Nasdaq
National Market, (v) costs and expenses incident to the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Offered
Shares, including, without limitation, transfer agent's and registrar's fees,
and (vi) costs and expenses incident to any meetings with prospective investors
in the Offered Shares (other than as shall have been specifically approved by
the Representatives to be paid for by the Underwriters).
(b) If the purchase of the Offered Shares as herein contemplated is not
consummated for any reason other than the Underwriters' default under this
Agreement or other than by reason of Section 11(a), the Company shall reimburse
the several Underwriters for their out-of-pocket expenses (including reasonable
counsel fees and disbursements) in connection with any investigation made by
them, and any preparation made by them in respect of marketing of the Offered
Shares or in contemplation of the performance by them of their obligations
hereunder.
7. Conditions of the Underwriters' Obligations. The several obligations
of the Underwriters to purchase and pay for the Offered Shares, as provided
herein, shall be subject to the absence from any certificates, opinions, written
statements or letters furnished pursuant to this Section 7 to the Underwriters
or to Underwriters' counsel of any misstatement or omission and to the
satisfaction of each of the following additional conditions:
14
(a) All of the representations and warranties of the Company contained
herein shall be true and correct on the date hereof and on the Closing Date
with the same force and effect as if made on and as of the date hereof and
the Closing Date, respectively. The Company shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed pursuant to Rule 430A
under the Securities Act Regulations, such post-effective amendment shall
become effective) not later than 5:00 p.m., New York City time, on the date
of this Agreement or at such later time and date as shall have been
consented to in writing by the Representatives and all filings, if any,
required by Rules 424, 434 and 430A under the Act shall have been timely
made. At or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or, to the best of our knowledge, threatened by the Commission;
and every request for additional information on the part of the Commission
(including, without limitation, any request or comment with respect to the
Registration Statement, the Prospectus or any document incorporated by
reference therein) shall have been complied with in all material respects.
No stop order suspending the sale of the Offered Shares in any jurisdiction
designated by the Representatives shall have been issued and no proceedings
for that purpose shall have been commenced or be pending or, to the best
knowledge of the Company, be contemplated.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or regulatory authority which would, as of the Closing Date, prevent
the issuance of the Offered Shares; and no action, suit or proceeding shall
have been commenced and be pending against or affecting or, to the best
knowledge of the Company, threatened against, the Company before any court
or arbitrator or any governmental body, agency or official that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect.
(d) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, and except as disclosed therein
or contemplated thereby, (i) there shall not have been any material adverse
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt, or
material increase in the short-term debt, of the Company from that set
forth in the Registration Statement and the Prospectus, (ii) no dividend or
distribution of any kind shall have been declared, paid or made
by the Company on any class of its capital stock and (iii) the Company
shall not have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company and that are required to be disclosed on a balance sheet or notes
thereto in accordance with generally accepted accounting principles and are
not disclosed on the latest balance sheet or notes thereto included in the
Registration Statement and the Prospectus or otherwise disclosed or
contemplated in the Prospectus. Since the date hereof and since the dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have occurred any material adverse change in
the business, properties, assets, liabilities, net worth, condition
(financial or other), results of operations or prospects of the Company.
15
(e) The Underwriters shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by (i) Xxxxx X. Xxxxxx,
President and Chief Executive Officer and (ii) Xxxxxx X. Xxxxxxxx,
Executive Vice President, Chief Operating Officer and Secretary, in form
and substance reasonably satisfactory to the Underwriters, confirming, as
of the Closing Date, the matters set forth in paragraphs (a), (b), (c) and
(d) of this Section 7 and that, as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and stating that each signer of such certificate has examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents do not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein (in the case
of the Prospectus, in the light of the circumstances under which such
statements were made) not misleading and (B) since the date the
Registration Statement was declared effective, no event has occurred as a
result of which it is necessary to amend or supplement the Registration
Statement or Prospectus in order to make the statements therein not untrue
or misleading in any material respect and (C) there has been no document
required to be filed under the Exchange Act and the regulations thereof
that upon such filing would be incorporated by reference into the
Prospectus that has not been so filed.
(f) At the Closing Date, the Underwriters shall have received the
opinion of Battle Xxxxxx LLP, counsel for the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Underwriters and
Underwriters' counsel, to the effect set forth in Exhibit A hereto.
(g) At the Closing Date, the Underwriters shall have received the
opinion of Xxxxxx & Xxxxxx LLP, special patent counsel for the Company,
dated the Closing Date, addressed to the Underwriters and in form and
substance satisfactory to the Underwriters' counsel, to the effect set
forth in Exhibit B hereto.
(h) At the time this Agreement is executed and at the Closing Date the
Underwriters shall have received from Price Waterhouse LLP, independent
certified public accountants for the Company, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed
to the Underwriters and in form and substance satisfactory to the
Underwriters and counsel to the Underwriters with respect to the financial
statements and certain financial information of the Company contained in
the Registration Statement and the Prospectus.
(i) Xxxxxx & Xxxxxxx shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 7 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(j) On or prior to the Closing Date, the Underwriters shall have
received the executed agreements referred to in Section 5(j) hereof.
(k) The Company shall have entered into the Warrant Agreement and the
Underwriters shall have received counterparts, conformed as executed,
thereof.
16
(l) Prior to the Closing Date, the Company shall have furnished to the
Underwriters such further information, certificates and documents as the
Underwriters may reasonably request.
(m) The Offered Shares shall have been duly authorized for quotation
on the Nasdaq National Market.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to the Underwriters or to
Underwriters' counsel pursuant to this Section 7 shall not be reasonably
satisfactory in form and substance to the Underwriters and to Underwriters'
counsel, all of the obligations of the Underwriters hereunder may be cancelled
by the Underwriters at, or at any time prior to, the Closing Date.
8. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
against any and all costs, losses, claims, damages, expenses and liabilities,
joint or several (and actions in respect thereof), to which such Underwriter or
such controlling person may become subject, under the Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the information
deemed to be a part of the Registration Statement pursuant to Rule 430A(b)
promulgated under the Act, if applicable, or the Prospectus (including any
amendment or supplement thereto) or any preliminary prospectus, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading and will reimburse, as incurred, such Underwriter or such controlling
persons for any reasonable legal or other expenses incurred by such Underwriter
or such controlling persons in connection with investigating, defending or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any of such
documents in reliance upon and in conformity with information furnished in
writing to the Company on behalf of such Underwriter through the Representatives
expressly for use therein. The indemnity agreement in this paragraph (a) shall
be in addition to any liability which the Company may otherwise have.
(b) Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any and all costs, losses, claims, damages, expenses
and liabilities (and actions in respect thereof) to which the Company or any
such director, officer, or controlling person may become subject, under the Act
or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such costs, losses, claims, damages, expenses or
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the information deemed to be a
part of the Registration Statement pursuant to Rule 430A(b) promulgated under
the Act, if applicable, or the Prospectus (including any amendment or supplement
thereto) or any preliminary prospectus, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in
17
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with information furnished
in writing by that Underwriter through the Representatives to the Company
expressly for use therein; and will reimburse, as incurred, all reasonable legal
or other expenses incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discounts and commissions received by such Underwriter, as set
forth on the cover page of the Prospectus. The Company acknowledges that the
statements with respect to the public offering of Offered Shares set forth under
the heading "Underwriting" and the stabilization legend in the Prospectus have
been furnished by the Underwriters to the Company expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus. The indemnity agreement contained
in this paragraph (b) shall be in addition to any liability which the
Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against one or more indemnifying parties
under this Section 8, notify such indemnifying party or parties of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under paragraph (a) or (b) of this Section 8 except to the extent
that the indemnifying party was materially adversely affected by such omission.
In case any such action is brought against an indemnified party and it notifies
an indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there are legal defenses that it and/or other
indemnified parties may assert which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses (other than the reasonable costs of investigation) subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party has employed such counsel in connection with the
assumption of such different or additional legal defenses in accordance with the
proviso to the immediately preceding sentence, (ii) the indemnifying party has
not employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized
18
in writing the employment of counsel for the indemnified party at the expense of
the indemnifying party, provided, however, that the indemnifying party under
paragraph (a) or (b) above, shall only be liable for the legal expenses of one
counsel (in addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under paragraph (a) or (b)
above in respect of any losses, claims, damages, expenses or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such costs, losses, claims, damages, expenses or liabilities (or
actions in respect thereof) (i) in such proportion as is appropriate to reflect
the relative benefits received by each of the contributing parties, on the one
hand, and the party to be indemnified, on the other hand, from the offering of
the Offered Shares or (ii) 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 each of the contributing parties, on the one hand, and the party to be
indemnified, on the other hand, in connection with the statements or omissions
that resulted in such costs, losses, claims, damages, expenses or liabilities,
as well as any other relevant equitable considerations. In any case where the
Company is the contributing party and the Underwriters are the indemnified
party, the relative benefits received by the Company on the one hand, and the
Underwriters, on the other, shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Offered Shares (before deducting
expenses) bear to the total underwriting discounts received by the Underwriters
hereunder, in each case as set forth in the table on the cover page of the
Prospectus. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an indemnified
party as a result of the costs, losses, claims, damages, expenses or liabilities
(or actions in respect thereof) referred to above in this paragraph (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph (d), the
Underwriters shall not be required to contribute any amount in excess of the
underwriting discount applicable to the Offered Shares purchased by the
Underwriters hereunder. The Underwriters' obligations to contribute pursuant to
this paragraph (d) are several in proportion to their respective underwriting
obligations, and are not joint. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), (i) each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter and (ii) each director of the Company, each officer of the
Company who has signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company, subject in each case to this paragraph
(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
to which a claim for contribution may be made against another party or parties
under this paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties shall not
relieve the party or parties from whom contribution may be sought (x) from any
other obligation it or they may have hereunder or otherwise than under this
paragraph (d) or (y) to the extent that such party or parties were not
materially adversely affected by such omission. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent; provided, however, that such written consent was not unreasonably
withheld. The contribution agreement set forth in this paragraph (d) shall be
in addition to any liabilities which any indemnifying party may otherwise have.
19
9. Right to Increase Offering. At any time during a period of 30 days
from the date of the Prospectus (or, if such 30th day shall be a Saturday or
Sunday or a holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading), the Underwriters, by no less than two business
days' prior notice to the Company, may designate a closing (which may be
concurrent with, and part of, the closing on the Closing Date with respect to
the Firm Shares or may be a second closing held on a date subsequent to the
Closing Date, in either case such date shall be referred to herein as the
"Option Closing Date") at which the Underwriters may purchase all or less than
--------------------
all of the Additional Shares in accordance with the provisions of this Section 9
at the purchase price to be paid for the Firm Shares. In no event shall the
Option Closing Date be later than three business days after written notice of
election to purchase Additional Shares is given.
The Company agrees to sell to the several Underwriters on the Option
Closing Date the number of Additional Shares specified in such notice and the
Underwriters agree severally, and not jointly, to purchase such Additional
Shares on the Option Closing Date. Such Additional Shares shall be purchased
for the account of each Underwriter in the same proportion as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule I hereto
bears to the total number of Firm Shares (subject to adjustment by you to
eliminate fractional shares) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Shares.
No Additional Shares shall be sold or delivered unless the Firm Shares
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Additional Shares or any portion thereof may be surrendered and
terminated at any time upon notice by you to the Company.
Except to the extent modified by this Section 9, all provisions of this
Agreement relating to the transactions contemplated to occur on the Closing Date
for the sale of the Firm Shares shall apply, mutatis mutandis, to the Option
Closing Date for the sale of the Additional Shares.
10. Survival of Certain Provisions. The respective representations,
warranties, agreements, covenants, indemnities and statements of, and on behalf
of, the Company and its officers and the Underwriters, respectively, set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters, and
will survive delivery of and payment for the Offered Shares. Any successors to
the Underwriters shall be entitled to the indemnity, contribution and
reimbursement agreements contained in this Agreement.
11. Effective Date and Termination. (a) This Agreement shall become
effective upon the later of (i) the execution of this Agreement or (ii) when the
Underwriters and the Company shall have received notification from the
Commission of the effectiveness of the Registration Statement, unless prior to
such time the Representatives shall have received written notice from the
Company that it elects that this Agreement shall not become effective, or the
Representatives shall have given written notice to the Company that the
Representatives on behalf of the Underwriters elect that this Agreement shall
not become effective; provided, however, that the provisions of this Section 11
and of Section 6 and Section 8 hereof shall at all times be effective. For
purposes of this Section 11(a), the Offered Shares to be purchased hereunder
shall be deemed to have been so released upon the earlier of notification by the
Representatives to securities dealers releasing such Offered Shares for offering
or the release by the Representatives for publication of the first newspaper
advertisement which is subsequently published relating to the Offered Shares.
20
(b) This Agreement (except for the provisions of Sections 6 and 8 hereof)
may be terminated by the Representatives by notice to the Company in the event
that the Company has failed to comply in any material respect with any of the
provisions of this Agreement required on its part to be performed at or prior to
the Closing Date or the Option Closing Date, respectively, or if any of the
representations or warranties of the Company is not accurate in any material
respect or if the covenants, agreements or conditions of, or applicable to, the
Company herein contained have not been complied with in any material respect or
satisfied within the time specified on the Closing Date or the Option Closing
Date, respectively, or if prior to the Closing Date or the Option Closing Date,
respectively:
(i) the Company shall have sustained a loss by strike, fire, flood,
accident or other calamity or act of God of such a character as to
interfere materially with the conduct of the business and operations of the
Company, regardless of whether or not such loss was insured;
(ii) trading in the Offered Shares shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange or the Nasdaq National Market shall have
been suspended or a material limitation on such trading shall have been
imposed or minimum or maximum prices shall have been established on any
such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities, or a moratorium in foreign exchange trading by
major international banks or persons shall have been declared;
(iv) there shall have been an outbreak or escalation of hostilities
between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States; or
(v) there shall have been a material adverse change in (A) general
economic, political or financial conditions or (B) the present or
prospective business or condition (financial or other) of the Company that,
in the Representatives' judgment, makes it impracticable or inadvisable to
make or consummate the public offering, sale or delivery of the Offered
Shares on the terms and in the manner contemplated in the Prospectus and
the Registration Statement.
(c) Termination of this Agreement under this Section 11 or Section 12 after
the Firm Shares have been purchased by the Underwriters hereunder shall be
applicable only to the Additional Shares. Termination of this Agreement shall
be without liability of any party to any other party other than as provided in
Sections 6 and 8 hereof.
12. Substitution of Underwriters. If one or more of the Underwriters
shall fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 7 or 11 hereof) to
purchase and pay for (a) in the case of the Closing Date, the number of Firm
Shares agreed to be purchased by such Underwriter or Underwriters upon tender to
you of such Firm Shares in accordance with the terms hereof or (b) in the case
of the Option Closing Date, the number of Additional Shares agreed to be
purchased by such Underwriter or Underwriters upon tender to you of such
Additional Shares in accordance with the terms hereof, and the number of such
Offered Shares shall not exceed 10% of the Firm Shares or Additional Shares
required to be purchased on the Closing Date or the Option Closing Date, as the
case may be, then, each of the non-defaulting Underwriters shall purchase and
21
pay for (in addition to the number of such Offered Shares which it has severally
agreed to purchase hereunder) that proportion of the number of Offered Shares
which the defaulting Underwriter or Underwriters shall have so failed or refused
to purchase on such Closing Date or Option Closing Date, as the case may be,
which the number of Offered Shares agreed to be purchased by such non-defaulting
Underwriter bears to the aggregate number of Offered Shares so agreed to be
purchased by all such nondefaulting Underwriters on such Closing Date or Option
Closing Date, as the case may be. In such case, you shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may be, to a
date not exceeding seven full business days after the date originally fixed as
such Closing Date or the Option Closing Date, as the case may be, pursuant to
the terms hereof in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 7 or 11 hereof) to purchase and pay for (a) in the case of
the Closing Date, the number of Firm Shares agreed to be purchased by such
Underwriter or Underwriters upon tender to you of such Firm Shares in accordance
with the terms hereof or (b) in the case of the Option Closing Date, the number
of Additional Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Additional Shares in accordance with the terms
hereof, and the number of such Offered Shares shall exceed 10% of the Firm
Shares or Additional Shares required to be purchased by all the Underwriters on
the Closing Date or the Option Closing Date, as the case may be, then (unless
within 48 hours after such default arrangements to your satisfaction shall have
been made for the purchase of the defaulted Offered Shares by an Underwriter or
Underwriters), this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or on the part of the Company except as otherwise
provided in Sections 6 and 8 hereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
paragraph. Nothing in this Section 12, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
13. Notices. All communications hereunder shall be in writing and if sent
to the Representatives or the Underwriters shall be mailed or delivered, or sent
by facsimile transmission and confirmed by letter, or telecopied and confirmed
by letter to x/x Xxxxxx Xxxx LLC at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department or, if sent to the Company, shall be mailed or
delivered, or sent by facsimile transmission and confirmed by letter, or
telecopied and confirmed by letter to Alyn Corporation, 00000 Xxxx Xxxxxx,
Xxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx, President.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Company and each Underwriter and the Company's and each
Underwriter's respective successors and assigns, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that the
representations, warranties, indemnities and contribution agreements of the
Company contained in this Agreement shall also be for the benefit of any person
or persons, if any, who control any Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, and except that the Underwriters'
indemnity and contribution agreements shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons, if any, who control the
Company within the meaning of Section 15 of the Act or Section 20
22
of the Exchange Act. No purchaser of Offered Shares from the Underwriters will
be deemed a successor because of such purchase.
15. Applicable Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the choice of law or conflict of law principles thereof. Each party
hereto consents to the jurisdiction of each court in which any action is
commenced seeking indemnity or contribution pursuant to Section 8 above and
agrees to accept, either directly or through an agent, service of process of
each such court.
16. Headings. The headings of the paragraphs and sections of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
[Signature Page to Follow]
23
If the foregoing correctly sets forth our understanding, please indicate
the Underwriters' acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
ALYN CORPORATION
By:
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President, Chief Executive Officer
and Director
Accepted as of the date first
above written:
XXXXXX XXXX LLC
XXXXXXX & COMPANY, INC.
By: Xxxxxx Xxxx LLC
Acting on its own behalf and as
one of the Representatives of
the several Underwriters
referred to in the foregoing
Agreement
By:
-------------------------
Name:
Title:
By: Xxxxxxx & Company, Inc.
Acting on its own behalf and as
one of the Representatives of
the several Underwriters
referred to in the foregoing
Agreement
By:
-------------------------
Name:
Title:
SCHEDULE I
Number of Common Shares
Underwriters to be Purchased
------------ ----------------------------
Xxxxxx Xxxx LLC ................................................................
Xxxxxxx & Company, Inc. ........................................................
--------------
Total 2,750,000
26
SCHEDULE II
Stockholder Lock-ups
--------------------
1. Xxxxx X. Xxxxxx
2. Xxxxxx X. Xxxxxxxx
3. Xxxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxx
4. Art Liang
5. Xxxxx Xxxx
6. Xxxxxxx and Xxxxxxx Xxxxx
7. Xxxx and Xxxxxxxxx Xxxxxxxx
8. Frontier PTY Limited, Trustee for Frontier Trust
9. First Pacific Capital
10. Xxxxxxx X. and Xxxxx Xxxx
11. Xxx Xxxxxxxx
12. Xxxxx Xxxxxxxx
13. Xxxxx X. Xxxxxx, Xx.
14. Xxxxx X. Xxxxxx, Xx. Trustee under agreement dated May 1, 1987, for the
benefit of Xxxx X. Xxxxxx
15. Xxxxx X. Xxxxxx, Xx. and Xxxx X. Xxxxxx, Trustees under agreement dated
January 1, 1989, for the benefit of Xxxx X. Xxxxxx
16. Xxxx Xxxxxxxx
17. Xxxxxxx Technology Partners III
18. Kingdon Associates, L.P.
19. Kingdon Partners, L.P.
20. X. Xxxxxxx Offshore NV
21. Kingdon Capital Management Corp.
22. Xxxxx Xxxxxxxx
23. Bergen Enterprises Corp.
24. Xxxxx Xxxxxxxx, as trustee under an agreement dated September 2, 1993, for
the benefit of Alexander and Xxxx Xxxxxxxx
25. Xxxxxx Xxxxx
26. Xxxxxxxxx Xxxx Xxxxxxxx
27. Xxxxxx Xxxxxxxx
28. Xxxxxx Xxx
29. Xxxxxxxx Xxxxxxxx
30. Xxxxxx Xxxx Xxxxxx
00. Xxxxxx Xxxx
00. Xxxxx Xxxxxxx
33. Xxxxxxx Xxxxxxxxxxx
34. Xxxxxxx X. Xxxxxxxxx
27
EXHIBIT A
---------
Form of Opinion of Battle Xxxxxx LLP
[To be provided]
28
EXHIBIT B
---------
Form of Opinion of Xxxxxx & Xxxxxx LLP
[To be provided]
29
