1,000,000 Shares*
II-VI INCORPORATED
Common Stock
(No Par Value)
UNDERWRITING AGREEMENT
______________, 1995
ADVEST, INC.
CRUTTENDEN XXXX INCORPORATED
As Representatives of the several Underwriters
c/o Advest, Inc.
Tower 49
00 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
II-VI Incorporated, a Pennsylvania corporation (the "Company"), proposes to
sell 1,000,000 shares (the "Firm Shares") of Common Stock of the Company, no par
value (the "Common Stock"), to you and to the several other Underwriters (as
defined below). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 150,000
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b) below. The Firm Shares and the Option Shares are
referred to collectively herein as the "Shares."
It is understood that, subject to the conditions hereinafter stated, the
Firm Shares will be sold to you and the several other Underwriters named in
Schedule I hereto (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives").
The Company confirms as follows its agreement with the Representatives and
the several other Underwriters as follows:
1. Agreement to Sell and Purchase
a. On the basis of the representations, warranties and agreements herein
contained and subject to all the terms and conditions of this Agreement, the
Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company the respective number of Firm Shares set forth opposite that
Underwriter's name in Schedule I hereto, at the purchase price of [$__] for each
Firm Share.
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*Plus an option to purchase up to an additional 150,000 shares to cover
over allotments.
b. Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to the maximum number of Option Shares at the same price per share
as the Underwriters shall pay for the Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of the Firm Shares by the Underwriters
and may be exercised in whole or in part at any time (but not more than once) on
or before the 30th day after the date of this Agreement upon written or
telegraphic notice (the "Option Shares Notice") by the Representatives to the
Company, no later than 12:00 noon, New York City time, at least two and no more
than three business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase. On the
Option Closing Date, the Company will sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice, and each Underwriter will
purchase such percentage of the Option Shares as is equal to the percentage of
the Firm Shares that such Underwriter is purchasing, as adjusted by the
Representatives in such manner as they deem advisable to avoid fractional
shares.
2. Delivery and Payment
Delivery of the Firm Shares shall be made to the Representatives for the
accounts of the Underwriters against payment of the purchase price by certified
or official bank checks payable in New York Clearing House (next-day) funds to
the order of the Company at the offices of
_______________________________________ at 9:30 a.m., New York City time, on the
third business day following the commencement of the offering contemplated by
this Agreement, or at such time on such other date, not later than five business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at least
24 hours prior to the Closing Date or the Option Closing Date, as the case may
be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares sold by such entity.
3. Representations and Warranties of the Company
The Company represents, warrants and covenants to each Underwriter that:
a. A registration statement (Registration No. 33-________) on Form S-3
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a
preliminary
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prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement, amendments and exhibits thereto and documents
incorporated by reference therein and of each related preliminary prospectus
have been delivered to the Representatives. If such registration statement has
not become effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective will be filed promptly by the Company with the
Commission. If the registration statement has become effective, a final
prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Rules and Regulations will be filed promptly
by the Company with the Commission in accordance with Rule 424(b) of the Rules
and Regulations. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements, all exhibits and all documents
incorporated by reference therein and any information deemed to be included by
Rule 430A. The term "Prospectus" means the prospectus as first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the Effective Date.
b. On the Effective Date, the date the Prospectus is first filed with the
Commission pursuant to Rule 424(b) (if required), at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included or incorporated by
reference in the Prospectus, did and will comply with all applicable provisions
of the Act and the Rules and Regulations and will contain all statements
required to be stated therein in accordance with the Act and the Rules and
Regulations. On the Effective Date and when any post-effective amendment to the
Registration Statement becomes effective, no part of the Registration Statement,
the Prospectus or any such amendment or supplement did or will 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 not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to any statements or omissions made
in reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. The Company acknowledges that the statements set forth in
the first two paragraphs and the fourth paragraph under the heading
"Underwriting" in the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement.
c. The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable,
and the rules and regulations of the Commission thereunder, and none of such
documents, as of such effective or filing dates, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
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d. The Company and each Subsidiary (as defined below) is, and at the
Closing Date and, if later, the Option Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company and each Subsidiary has, and at the
Closing Date and, if later, the Option Closing Date will have, full power and
authority to conduct all the activities conducted by it, to own or lease all the
material assets owned by or leased by it and to conduct its business as
described in the Registration Statement and the Prospectus. The Company and
each Subsidiary is, and at the Closing Date and, if later, the Option Closing
Date will be, duly licensed or qualified to do business and in good standing as
a foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
license or qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not materially and adversely affect
the business, properties, business prospects, condition (financial or other) or
results of operations of the Company and its Subsidiaries on a consolidated
basis. The Company (i) does not own, and at the Closing Date and, if later, the
Option Closing Date will not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity other than II-VI Delaware, Inc., a corporation
incorporated under the laws of Delaware, II-VI singapore Pte., Ltd., a
corporation incorporated under the laws of Singapore, II-VI Worldwide,
Incorporated, a corporation incorporated under the laws of Barbados, II-VI Japan
Incorporated, a corporation incorporated under the laws of Japan, and II-VI
Virgo Incorporated, a corporation incorporated under the laws of Pennsylvania
(individually, a "Subsidiary," and collectively, the "Subsidiaries") and (ii) is
not, and at the Closing Date and, if later, the Option Closing Date will not be,
engaged in any discussions or a party to any agreement or understanding, written
or oral, regarding the acquisition of an interest in any corporation, firm,
partnership, joint venture, association or other entity where such discussions,
agreements or understandings would require amendment to the Registration
Statement pursuant to applicable securities laws. Complete and correct copies
of the articles of incorporation and of the bylaws of the Company and the
constituent documents of each Subsidiary, together in each case with all
amendments thereto, have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
e. All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, were
issued in compliance with all applicable state and federal securities laws, were
not issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and conform to the description thereof
contained in the Prospectus; the Shares have been duly authorized and when
issued and paid for as contemplated herein will be validly issued, fully paid
and nonassessable and will conform to the description thereof contained in the
Prospectus; and no preemptive rights or other rights to subscribe for or
purchase exist with respect to the issuance and sale of the Shares. All of the
issued shares of capital stock of each Subsidiary have been duly and validly
authorized and issued, are fully paid and nonassessable and (except for II-VI
Singapore Pte., Ltd., 97.5% of the outstanding capital stock of which is owned
by the Company) are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims. The description of the capital
stock of the Company in the Registration Statement and the Prospectus is, and at
the Closing Date and, if later, the Option Closing Date will be, complete and
accurate in all respects. Except as set forth in the Prospectus, the Company
does not have outstanding, and at the Closing Date and, if later, the Option
Closing Date will not have outstanding, any options to purchase, or any rights
or warrants to subscribe for, or any securities or obligations convertible into,
or any contracts or commitments to issue or sell, any shares of Common Stock, or
any such warrants, convertible securities or obligations. The description of
the Company's stock option and other stock plans or arrangements, and the
options or other rights granted or exercised thereunder, set forth or
incorporated by reference in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights. No further approval or authority of the shareholders or the
Board of Directors of the Company will be required for the issuance and sale of
the Shares as contemplated herein.
f. The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present fairly the
financial condition of the Company as of the
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respective dates thereof and the results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved. No other financial statements or
schedules of the Company are required by the Act or the Rules and Regulations to
be included or incorporated by reference in the Registration Statement or the
Prospectus. Each of Xxxxxx, Xxxxxxxxx & Company and Deloitte & Touche LLP, who
have reported on such financial statements and schedules, are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations. The summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the financial statements presented
therein.
g. Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date and,
if later, the Option Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company (other than in
connection with the exercise of options to purchase the Company's Common Stock
granted pursuant to the Company's stock option plans and which were outstanding
on the date of the latest balance sheet of the Company included in the
Prospectus), or any material adverse change in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries on a consolidated basis, arising for any
reason whatsoever, (ii) neither the Company nor any Subsidiary has incurred nor
will they incur, except in the ordinary course of business as described in the
Prospectus, any material liabilities or obligations, direct or contingent, nor
has any of the Company or any Subsidiary entered into nor will it enter into,
except in the ordinary course of business as described in the Prospectus, any
material transactions other than pursuant to this Agreement and the transactions
referred to herein, and (iii) the Company has not and will not have paid or
declared any dividends or other distributions of any kind on any class of its
capital stock.
h. The Company is not, and, after giving effect to the offering and sale
of the Shares, will not be, an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
i. There are no actions, suits or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary or
any of their respective officers or directors in their capacities as such, nor
any basis therefor, before or by any federal or state court, commission,
regulatory body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding would, individually
or in the aggregate, materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries on a consolidated basis.
j. Except as disclosed in the Prospectus, the Company and the Subsidiaries
have complied with and are not in violation of any federal, state or local law,
regulation, permit, provision or ordinance relating to the protection of the
environment ("Environmental Law") (except for such violations or non-compliance
which would not have a material adverse effect on, or cause material changes to,
the condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and the Subsidiaries on a consolidated basis); and the
Company and the Subsidiaries are not aware of any administrative or judicial
action being contemplated by governmental authorities relating to Environmental
Law and neither the Company nor any of the Subsidiaries is subject to any
consent decree or compliance or administrative order issued pursuant to, or are
the subject of any pending investigation or litigation under, applicable
Environmental Law except for such actions, decrees, orders, or investigations
which do not and would not have a material adverse effect on, or cause material
changes to, the condition (financial or otherwise) earnings, business affairs or
business prospects of the Company and any of the Subsidiaries on a consolidated
basis.
k. The Company has, and at the Closing Date and, if later, the Option
Closing Date will have, performed all its obligations required to be performed
by it as of such date, and is not, and at the Closing Date
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and, if later, the Option Closing Date will not be, in default, under any
contract or other instrument to which it is a party or by which its property is
bound or affected, which default might materially and adversely affect the
Company or its business, properties, business prospects, condition (financial or
other) or results of operations. To the Company's best knowledge, no other
party under any contract or other instrument to which the Company is a party is
in default in any respect thereunder, which default would materially and
adversely affect the Company or its business, properties, business prospects,
condition (financial or other) or results of operations. The Company is not,
and at the Closing Date and, if later, the Option Closing Date will not be, in
violation of any provision of its articles of incorporation or bylaws.
l. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
m. The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms. The performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in the imposition of any lien, charge or encumbrance upon any of
the assets of the Company or any Subsidiary pursuant to the terms or provisions
of, or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any obligation under the
articles of incorporation or bylaws of the Company, any indenture, mortgage,
deed of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any Subsidiary
presently in effect, a breach or violation of which, a default under which, a
termination of which, an acceleration under which, or a conflict with which
would materially and adversely affect the business, properties, business
prospects, condition (financial or other) or results of operations of the
Company and its Subsidiaries on a consolidated basis.
n. The Company and the Subsidiaries have good and marketable title to all
properties and assets owned by them, free and clear of all liens, charges,
encumbrances or restrictions, except such liens, charges, encumbrances or
restrictions as are described in the Prospectus and those which, individually
and in the aggregate, are not material in amount or which, individually and in
the aggregate, do not adversely affect the use made or proposed to be made of
such properties and assets by the Company and the Subsidiaries. The Company and
the Subsidiaries, as lessees, have valid, subsisting and enforceable leases for
the properties as leased by them. The agreements to which the Company or any
Subsidiary is a party described in the Prospectus are valid agreements,
enforceable by the Company or such Subsidiary (as applicable), except as the
enforcement thereof may be limited by bankruptcy and laws relating to the rights
and remedies of creditors generally or by the availability of general equitable
remedies. The Company and each of its Subsidiaries owns or leases all such
properties as are necessary to its operations as now conducted or as proposed to
be conducted, except where the failure to so own or lease would not materially
and adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries on a consolidated basis.
o. There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or any Subsidiary is a party
have been duly
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authorized, executed and delivered by the Company or such Subsidiary, constitute
valid and binding agreements of the Company or such Subsidiary and are
enforceable against the Company or such Subsidiary and by the Company or such
Subsidiary against the other parties thereto in accordance with the terms
thereof, except as to (i) rights to indemnity and contribution thereunder which
may be limited by applicable law, (ii) bankruptcy and laws relating to the
rights and remedies of creditors generally, and (iii) the availability of
equitable remedies.
p. No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by Section
5(1) of this Agreement to be delivered to the Representatives was or will be,
when made, inaccurate, untrue or incorrect.
q. Neither the Company nor any of its directors, officers or controlling
persons has taken, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result, under the Act or otherwise, in, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
r. No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration
Statement, which rights have not been waived by the holder or otherwise
satisfied as of the date hereof.
s. The Common Stock is listed and duly admitted to trading on the Nasdaq
National Market (the "Nasdaq/NM"), and the Company has received notification
that the listing by the Nasdaq/NM of the Shares has been approved, subject to
official notice of issuance of the Shares.
t. (i) The Company and each Subsidiary has sufficient trademarks, trade
names, patent rights, copyrights, licenses, approvals and governmental
authorizations to conduct its business as now conducted, where the failure to
have any such right would have a material and adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries on a consolidated basis; (ii)
neither the Company nor any Subsidiary is infringing any copyrights, trade
secrets or other similar rights, trademarks, trade name rights or patent rights
of others, where such infringement would have a material and adverse effect on
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries on a consolidated
basis; and (iii) no claim has been made against the Company or any Subsidiary
regarding trademark, trade name, patent, copyright, license, trade secret or
other infringement which would have a material and adverse effect on the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries on a consolidated
basis.
u. The Company and each Subsidiary has filed all federal, state and
foreign income tax returns which have been required to be filed and has paid all
taxes and assessments received by it to the extent that such taxes or
assessments have become due. Neither the Company nor any Subsidiary has any tax
deficiency which has been or might be asserted or threatened against it which
could have a material and adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries on a consolidated basis.
v. The Company and each Subsidiary owns or possesses all authorizations,
approvals, orders, licenses, registrations, customs clearances, other
certificates and permits of and from all governmental regulatory officials and
bodies necessary to conduct its business as contemplated in the Prospectus,
except where the failure to own or possess all such authorizations, approvals,
orders, licenses, registrations, customs clearances, other certificates and
permits would not materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries on a consolidated basis. There is no
proceeding pending or threatened, or any basis therefor known to the Company,
which may cause any such authorization, approval, order, license, registration,
customs clearances certificate or permit to be revoked, withdrawn, canceled,
suspended or not renewed; and the
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Company and each Subsidiary is conducting its business in compliance with all
laws, rules and regulations applicable thereto.
w. The Company and each Subsidiary maintains insurance of the types and in
the amounts generally deemed adequate for its business, 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.
x. Neither the Company nor any Subsidiary nor, to the Company's knowledge,
any of its or any Subsidiary's employees or agents have at any time during the
last five years (i) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation of law, or
(ii) made any payment to any federal or state governmental officer or official,
or other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
y. The Company has not since the filing of the Registration Statement,
except in connection with the sale of the Shares, (i) sold, bid for, purchased,
attempted to induce any person to purchase, or paid anyone any compensation for
soliciting purchases of, the Shares or (ii) paid or agreed to pay any person any
compensation for soliciting another to purchase any other securities of the
Company.
z. Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes.
aa. Neither the Company nor any Subsidiary has any liability or obligation
of any nature (absolute, accrued, contingent or otherwise) which is not fully
reflected or adequately reserved against in the consolidated balance sheet at
June 30, 1995, except (A) for liabilities incurred in the ordinary course of
business and not required under generally accepted accounting procedures to be
reflected on the balance sheet, or (B) incurred since June 30, 1995 in the
ordinary course of business and consistent with past practice, or (C) described
in the Prospectus. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accounting for assets; and (C) reserves for obsolete inventory, bad
debts and sales returns and allowances are adequate.
4. Agreements of the Company
The Company agrees with the several Underwriters as follows:
a. The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have objected thereto in good faith.
b. The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 4(e) that makes
any statement made in the Registration Statement or the Prospectus untrue or
that
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requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading, and (v) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company
has omitted any information from the Registration Statement pursuant to Rule
430A of the Rules and Regulations, the Company will use its best efforts to
comply with the provisions of, and make all requisite filings with the
Commission pursuant to, said Rule 430A and to notify the Representatives
promptly of all such filings. The Company will file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Shares.
c. The Company will furnish to the Representatives, without charge, three
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto,
and will furnish to the Representatives, without charge, for transmittal to each
of the other Underwriters, a copy of the Registration Statement and any post-
effective amendment thereto, including financial statements and schedules, but
without exhibits.
d. The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
e. On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents, subject to the provisions of the
following sentence, to the use of the Prospectus or any amendment or supplement
thereto by the several Underwriters and by all dealers to whom the Shares may be
sold, both in connection with the offering or sale of the Shares and for any
period of time thereafter during which the Prospectus is required by law to be
delivered in connection therewith. If during the nine month period referred to
in Section 10(a)(3) of the Act any event shall occur which in the judgment of
the Company or counsel to the Underwriters should be set forth in the Prospectus
in order to make any statement therein, in light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
of such supplement or amendment to the Prospectus as the Representatives may
reasonably request.
f. Prior to any public offering of the Shares, the Company will cooperate
with the Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
g. During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives, and each other Underwriter who may
so request, copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representatives, and
each other Underwriter who may so request, a copy of each annual or other report
it shall be required to file with the Commission.
h. The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar
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quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for the applicable 12-month period
after the Effective Date, satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
i. Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or reimburse
if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (i) the preparation,
printing and filing by the Company of the Registration Statement and exhibits to
it, each preliminary prospectus, Prospectus and any amendment or supplement to
the Registration Statement or Prospectus, (ii) the preparation and delivery of
certificates representing the Shares, (iii) the printing of this Agreement, the
Agreement Among Underwriters, any Dealer Agreements and any Underwriters'
Questionnaires, (iv) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the Underwriters
or by dealers to whom Shares may be sold, (v) the listing of the Shares on the
Nasdaq/NM, (vi) any filings required to be made by the Underwriters with the
NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (vii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) fees, disbursements and other charges to the
Company (but not those of counsel for the Underwriters, except as otherwise
provided herein) and (ix) the transfer agent for the Shares.
j. If this Agreement shall be terminated by the Company pursuant to any of
the provisions hereof (otherwise than pursuant to Section 8 hereof) or if for
any reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all reasonable out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
k. The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
l. The Company will apply the net proceeds from the offering and sale of
the Company Shares in the manner set forth in the Prospectus under "Use of
Proceeds," and shall file such reports with the Commission with respect to the
sale of the Company Shares and the application of the proceeds therefrom as may
be required in accordance with Rule 463 under the Act.
m. During the period of 180 days commencing at the Closing Date, without
the prior written consent of the Representatives and other than pursuant to the
exercise of outstanding stock options or otherwise pursuant to the Company's
stock option or other stock plans disclosed in the Prospectus, the Company will
not issue, offer, sell, grant options to purchase or otherwise dispose of any of
the Company's equity securities or any other securities convertible into or
exchangeable with its Common Stock or other equity security. During a period of
180 days after the Closing Date, except for registration statements on Form S-8
relating to shares of Common Stock issuable pursuant to stock compensation plans
of the Company in effect on the date hereof, the Company will not file a
registration statement for the purpose of registering any securities of the
Company without the prior written consent of Advest, Inc.
n. The Company will cause each of its officers and directors to enter into
lock-up agreements with the Representatives to the effect that they will not,
without the prior written consent of Advest, Inc., sell, contract to sell or
otherwise dispose of any shares of Common Stock or rights to acquire such shares
according to the terms set forth in Exhibit A hereto.
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5. Conditions of the Obligations of the Underwriters
The obligations of each Underwriter hereunder are subject to the following
conditions:
a. Notification that the Registration Statement has become effective shall
be received by the Representatives not later than 5:00 p.m., New York City time,
on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives.
b. (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or registration
of the Shares under the securities or Blue Sky laws of any jurisdiction shall be
in effect and no proceeding for such purpose shall be pending before or
threatened or contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part of the
staff of the Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities, and (iv)
after the date hereof no amendment or supplement to the Registration Statement
or the Prospectus shall have been filed unless a copy thereof was first
submitted to the Representatives and the Representatives do not object thereto
in good faith, and the Representatives shall have received certificates, dated
the Closing Date and the Option Closing Date and signed by the Chief Executive
Officer and the Director of Finance and Accounting of the Company (who may, as
to proceedings threatened, rely upon the best of their knowledge), to the effect
of clauses (i), (ii) and (iii) of this Section 5(b).
c. Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, whether or not arising from
transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Prospectus,
and (ii) neither the Company nor any Subsidiary shall have sustained any
material loss or interference with its business or properties from fire,
explosion, flood, earthquake or other casualty, whether or not covered by
insurance, or from any labor dispute or any court of legislative or other
governmental action, order or decree, which is not described in the Registration
Statement and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the public offering price.
d. Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any Subsidiary or any of
their respective officers or directors in their capacities as such, before or by
any federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries on a consolidated basis.
e. Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, and all
covenants and agreements contained herein to be performed on the part of the
Company and all conditions contained herein to be fulfilled or complied with by
the Company at or prior to the Closing Date and, with respect to the Option
Shares, at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
f. The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and
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counsel for the Underwriters, from Xxxxxxxx, German & Xxxxx, P.C., counsel to
the Company, covering the following matters:
(i) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania.
Based solely on a review of certificates of appropriate public officials and a
review of the Company's and the Subsidiaries' corporate records, each Subsidiary
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation. The Company,
to the best of such counsel's knowledge after due inquiry, does not control,
directly or indirectly, any corporation, partnership, joint venture, association
or other business organization, except for the Subsidiaries. Each of the
Company and each Subsidiary is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified would
have a material adverse effect on the business, financial condition or results
of operations of the Company and the Subsidiaries on a consolidated basis.
(ii) To the best of such counsel's knowledge, and based solely on a review
of certificates of appropriate public officials and a review of the Company's
and the Subsidiaries' corporate records, the Company owns all of the outstanding
shares of capital stock of each Subsidiary, free and clear of all liens, claims,
security interests, restrictions, shareholders' agreements, voting trusts and
any other encumbrances whatsoever; and all such shares of capital stock of each
Subsidiary have been duly authorized and are duly and validly issued, fully paid
and nonassessable.
(iii) To the best of such counsel's knowledge after due inquiry, the
Company and each Subsidiary has all requisite power and authority, and all
necessary material authorizations, approvals, consents, orders, licenses,
certificates and permits to own, lease and license its respective properties and
conduct its respective businesses as now being conducted and as described in the
Registration Statement and the Prospectus; no such authorization, approval,
consent, order, license, certificate or permit contains a materially burdensome
restriction other than as disclosed in the Registration Statement and the
Prospectus; and the Company has all requisite power and authority and all
necessary authorizations, approvals, consents, orders, licenses, certificates
and permits to enter into, deliver and perform this Agreement and to issue and
sell the Shares other than those required under state and foreign "blue sky"
laws.
(iv) The Company has authorized, issued and outstanding shares of capital
stock as set forth in the Registration Statement and the Prospectus; the
certificates evidencing the Shares are in due and proper form; and all of the
outstanding shares of capital stock of the Company have been duly authorized and
are duly and validly issued, fully paid and nonassessable and none of them was
issued in violation of any preemptive or other similar right. The Shares are
duly authorized and when issued and sold pursuant to this Agreement will be duly
and validly issued, fully paid and nonassessable and free of any preemptive or
other similar right. Except as set forth in the Registration Statement and the
Prospectus, to the best of such counsel's knowledge after due inquiry, there is
no outstanding option, warrant or other right calling for the issuance of, and
no commitment, plan or arrangement to issue, any share of capital stock of the
Company or of any Subsidiary or any security convertible into or exchangeable
for capital stock of the Company or of any Subsidiary. The Common Stock and the
Shares conform to all statements in relation thereto contained in the
Registration Statement and the Prospectus.
(v) No holder of any security of the Company or of any right to receive any
security of the Company has the right to have any securities owned by such
holder included in the Registration Statement.
(vi) All necessary corporate proceedings of the Company have been duly and
validly taken to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares. This Agreement has been duly
and validly authorized, executed and delivered by the Company, and constitutes
the legal, valid and binding agreement and obligation of the Company in
accordance with its terms, except as
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such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally and by
limitations on the availability of equitable remedies.
(vii) Except as set forth in the Registration Statement and the
Prospectus, to the best of such counsel's knowledge after due inquiry, there is
no litigation or governmental or other proceeding or investigation, before any
court or before or by any public body or board pending or threatened against, or
involving the properties or business of, the Company or of any Subsidiary, which
might materially adversely affect the value or the operation or the properties
or the business, financial condition or results of operations of the Company and
the Subsidiaries on a consolidated basis.
g. The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date, from
Xxxxxxxx Xxxxxxxxx Professional Corporation, counsel to the Company, covering
the following matters:
(i) The agreements referred to in Section 4(n) of this Agreement have been
duly and validly authorized, executed and delivered by the officers, directors
and certain shareholders of the Company, as the case may be, and constitute the
legal, valid and binding agreements and obligations of such persons or entities,
enforceable against such persons or entities in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally and
by limitations on the availability of equitable remedies.
(ii) Neither the execution, delivery and performance of this Agreement nor
the consummation of any of the transactions contemplated hereby (including,
without limitation, the issuance and sale by the Company of the Shares) will
give rise to a right to terminate, or accelerate the due date of any payment due
under, or conflict with the result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under (except where written consent or waiver has
already been obtained), or require consent under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets of
the Company or of any Subsidiary pursuant to the terms of any indenture,
mortgage, deed of trust, note or other agreement or instrument of which such
counsel is aware and to which the Company or any Subsidiary is a party or by
which it or any Subsidiary or any of their respective properties or businesses
is bound, or any franchise, license, permit, judgment, decree, order, statute,
rule or regulation or violate any provision of the charter, by-laws or other
organization documents of the Company or any Subsidiary.
(iii) To such counsel's knowledge after diligent inquiry, no default
exists, and no event has occurred which with notice or lapse of time, or both,
would constitute a material default, in the due performance and observance of
any term, covenant or condition by the Company or by any Subsidiary of any
indenture, mortgage, deed of trust, note or any other material agreement or
instrument to which the Company or any Subsidiary is a party or by which it or
any Subsidiary of any of their respective properties or businesses may be bound
or affected (except where written consent or waiver has already been obtained)
where such default could have a material adverse effect upon the business,
financial condition or results of operations of the Company and its Subsidiaries
on a consolidated basis.
(iv) The statements in the Registration Statement and the Prospectus,
insofar as such statements constitute a summary of documents referred to therein
or matters of law, are fair summaries in all material respects and accurately
present the information called for with respect to such documents and matters.
All contracts and other documents known to such counsel after due inquiry
required to be filed as exhibits to, incorporated by reference in, or described
in the Registration Statement have been so filed with the Commission,
incorporated by reference, or are fairly described in the Registration
Statement, as the case may be.
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(v) The Registration Statement, all preliminary prospectuses and the
Prospectus and each amendment or supplement thereto (except for the financial
statements and schedules and other financial and statistical data included
therein, as to which such counsel expresses no opinion) comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations.
(vi) The Registration Statement has become effective under the Act, and, to
the best of such counsel's knowledge after due inquiry, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened or pending.
(vii) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to such
Closing Date (other than financial statements and related schedules and other
financial and statistical data therein, as to each of which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and such counsel has no
reason to believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue statement
of a material fact, or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such documents were so filed,
not misleading.
(viii) Except as disclosed in the Prospectus and the Registration
Statement, to the best of such counsel's knowledge after due inquiry, the
Company and the Subsidiaries have complied with and are not in violation of any
federal, state or local law, regulation, permit, provision or ordinance relating
to the protection of the environment ("Environmental Law") (except for such
violations or non-compliance which would not have a material adverse effect on,
or cause material changes to, the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and the Subsidiaries on a
consolidated basis); and such counsel is not aware of any administrative or
judicial action being contemplated by governmental authorities relating to
Environmental Law and to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of the Subsidiaries is subject to any consent decree
or compliance or administrative order issued pursuant to, or are the subject of
any pending investigation or litigation under, applicable Environmental Law
except for such actions, decrees, orders, or investigations which do not and
would not have a material adverse effect on, or cause material changes to, the
condition (financial or otherwise) earnings, business affairs or business
prospects of the Company and the Subsidiaries on a consolidated basis.
(ix) The Company is not, and, after giving effect to the offering and sale
of the Shares, will not be, an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, they may rely (a) as to
matters involving the application of laws of any jurisdiction other than the
Commonwealth of Pennsylvania or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to counsel for the
Underwriters, and (b) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
In addition, such counsel shall state that such counsel has participated in
conferences with representatives of the Representatives, representatives of the
Company and the Subsidiaries and representatives of the independent certified
public accountants of the Company and the Subsidiaries, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although such
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counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except for the accuracy and fairness
of the summaries referred to in clause (iv) above), on the basis of the
foregoing (relying as to certain factual matters on the information provided to
such counsel by the Company and not an independent investigation, but in the
absence of information to the contrary), such counsel has no reason to believe
that, as of the Effective Date, the Registration Statement or any further
amendment thereto made by the Company prior to such Closing Date (other than the
financial statements and related schedules and other financial and statistical
data therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that, as of its date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Closing Date (other than the financial
statements and related schedules and other financial and statistical data
therein, as to which such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading or that, as of such Closing Date, either the Registration
Statement or the Prospectus or any further amendment or supplement thereto made
by the Company prior to such Closing Date (other than the financial statements
and related schedules and other financial and statistical data therein, as to
which such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading;
and such counsel do not know of any amendments to the Registration Statement
required to be filed.
h. The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date, from
Xxxxxxxxxxx & Xxxxxxxx LLP, counsel to the Underwriters, which opinion shall be
satisfactory in all respects to the Representatives.
i. The Representatives shall have received, on or prior to the Closing
Date, agreements from all directors and executive officers of the Company in the
form of which is attached as Exhibit A hereto, stating that each of such
persons, without the prior written consent of Advest, Inc., will not offer,
sell, contract to sell, or grant any option to purchase or otherwise transfer or
dispose of any Common Stock, or any securities convertible into or exchangeable
for Common Stock of the Company (including, without limitation, Common Stock of
the Company that may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and Common Stock that may be issued upon exercise of a stock option),
or rights to acquire such Common Stock, exclusive of any shares of Common Stock
purchased in the public offering or the Shares contemplated herein or hereafter
acquired in the public market, from the date hereof through the dates specified
in Exhibit A and in such agreements.
j. Concurrently with the execution and delivery of this Agreement, Xxxxxx,
Xxxxxxxxx & Company shall have furnished to the Representatives a letter, dated
the date of its delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations and with respect to certain financial and other
statistical and numerical information contained in the Registration Statement
for the fiscal years ended June 30, 1993, 1994 and 1995. At the Closing Date,
and, as to the Option Shares, the Option Closing Date, Xxxxxx, Xxxxxxxxx &
Company shall have furnished to the Representatives a letter, dated the date of
its delivery, which shall confirm, on the basis of a review in accordance with
the procedures set forth in the letter, that nothing has come to their attention
during the period from the date of each letter referred to in the prior sentence
to a date (specified in each letter) not more than five days prior to the
Closing Date and the Option Closing Date, as the case may be, which would
require any change in either letter dated the date hereof if they were required
to be dated and delivered at the Closing Date and the Option Closing Date.
k. The Representatives shall have received, on or prior to the Closing
Date, copies of a letter to the Company from Xxxxxx, Xxxxxxxxx & Company stating
that their review of the Company's system of internal
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accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's financial statements as of and at
June 30, 1995, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
l. Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, with respect to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives a certificate, dated the
date of its delivery, signed by the Chief Executive Officer and the Director of
Finance and Accounting of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the Registration
Statement and the Prospectus and (A) as of the date of such certificate, the
Registration Statement and the Prospectus do not 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 not misleading and (B) in
the case of the certificate delivered at the Closing Date and the Option Closing
Date, since the Effective Date no event has occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect.
(ii) Each of the representations and warranties of the Company contained in
this Agreement were, when originally made, and are, at the time such certificate
is delivered, true and correct in all material respects.
(iii) Each of the covenants required to be performed by the Company herein
on or prior to the date of such certificate has been duly, timely and fully
performed and each condition herein required to be satisfied or fulfilled on or
prior to the date of such certificate has been duly, timely and fully satisfied
or fulfilled.
m. The Shares shall be qualified for sale in such jurisdictions as the
Representatives may, pursuant to the provisions of Section 4(f), reasonably
request, and each such qualification shall be in effect and not subject to any
stop order or other proceeding on the Closing Date or the Option Closing Date.
n. Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the Nasdaq/NM upon official notice of issuance.
o. The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
6. Indemnification
a. The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls, within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, each Underwriter, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted) to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages (i)
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission
-16-
to state in such document a material fact required to be stated in it or
necessary to make the statements in it not misleading in light of the
circumstances in which they were made, (ii) arise out of or are based in whole
or in part on any inaccuracy in the respective representations and warranties of
the Company contained herein, or (iii) arise out of or are based upon any
failure of the Company to perform its obligations hereunder or under law in
connection with the transactions contemplated hereby; provided that the Company
will not be liable to the extent that such loss, claim, liability, expense or
damage arises from the sale of the Shares in the public offering to any person
by an Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of any Underwriter, expressly for inclusion in
the Registration Statement, the preliminary prospectus or the Prospectus, or any
amendment or supplement thereto, and provided further that the Company will not
be liable to any Underwriter, the directors, officers, employees or agents of
such Underwriter or any person controlling such Underwriter with respect to any
loss, claim, liability, expense, or damage arising out of or based on any untrue
statement or omission or alleged untrue statement or omission or alleged
omission to state a material fact in the preliminary prospectus which is
corrected in the Prospectus if the person asserting any such loss, claim,
liability, charge or damage purchased any of the Shares from such Underwriter
but was not sent or given a copy of the Prospectus at or prior to the written
confirmation of the sale of such Shares to such person. The Company
acknowledges that the statements set forth in the first two paragraphs and the
fouth paragraph under the heading "Underwriting" in the preliminary prospectus
and the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf of the
Underwriters expressly for inclusion in the Registration Statement, the
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that the Company might otherwise have.
b. Each Underwriter will indemnify and hold harmless the Company, and each
director of the Company and each officer of the Company who signs the
Registration Statement, and each person, if any, who controls, within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, the Company,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, as set forth in Section 6(a), but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives, on behalf of such Underwriter,
expressly for use in the Registration Statement, the preliminary prospectus or
the Prospectus, or any amendment or supplement thereto. The Company
acknowledges that the statements set forth in the first two paragraphs under the
heading "Underwriting" in the preliminary prospectus and the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives on behalf of the Underwriters expressly
for inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. This indemnity will be in addition to any liability that each
Underwriter might otherwise have.
c. Any party that proposes to assert the right to be indemnified under
this Section 6 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified
-17-
party will have the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) there are legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (iii) the indemnified
party has reasonably concluded that a conflict or potential conflict exists
(based on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the indemnified
party), or (iv) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All
such fees, disbursements and other charges will be reimbursed by the
indemnifying party promptly as they are incurred. Any indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
d. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms, but for
any reason is held to be unavailable from the Company or the Underwriters, the
indemnifying party will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the Underwriters,
such as persons who control the Company within the meaning of the Act, officers
of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and any
one or more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company and the
Underwriters. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence, but also the relative fault of the
Company and the Underwriters with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any over method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purpose of this Section 6(d), 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 Section 6(d), no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations
-18-
and not joint. For purposes of this Section 6(d), any person who controls a
party to this Agreement within the meaning of the Act will have the same rights
to contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against any such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought from any other obligation it or they may have under
this Section 6(d). No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).
e. The indemnity and contribution agreements contained un this Section 6
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor, or (iii) any termination of this
Agreement.
7. Reimbursement of Certain Expenses
In addition to its other obligations under Section 6(a) of this Agreement,
the Company hereby agrees to reimburse on a quarterly basis the Underwriters for
all reasonable legal and other expenses incurred in connection with
investigating or defending any claim, action, investigation, inquiry or other
proceeding arising out of or based upon in whole or part, (i) as described in
Section 6(a), any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus, or the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading in light of the circumstances in which they were made, (ii)
any inaccuracy in the representations and warranties of the Company contained
herein, or (iii) any failure of the Company to perform its obligations hereunder
or under law in connection with the transactions contemplated hereby,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligations under this Section 7 and the possibility that
such payment might later be held to be improper; provided, however, that, to the
extent any such payment is ultimately held to be improper, the persons receiving
such payments shall promptly refund them.
8. Termination
The obligations of the several Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from the Representatives, without liability on the part of any Underwriter to
the Company or the Selling Shareholder if, prior to delivery and payment for the
Firm Shares or Option Shares, as the case may be, in the sole judgment of the
Representatives, (a) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists the
Shares or by the Nasdaq/NM, (b) trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or minimum or maximum prices
shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court or other governmental authority, (c) a
general banking moratorium shall have been declared by either Federal or New
York State authorities, (d) any material adverse change in the financial or
securities markets in the United States, or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or other calamity or crises, shall have occurred, the effect of
which is such as to make it, in the sole judgment of the Representatives,
impracticable to market the Shares, (e) there has been a material adverse change
since the respective dates as of which information is given in the Registration
Statement and the Prospectus in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and
-19-
the Prospectus, or (f) the Company has sustained any material loss or
interference with its business or properties from fire, explosion, flood,
earthquake or other casualty, whether or not covered by insurance, or from any
labor dispute or any court of legislative or other government action, order or
decree, which is not described in the Registration Statement and the Prospectus,
if in the judgment of the Representatives any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the Shares
by the Underwriters at the public offering price.
9. Substitution Of Underwriters
If any one or more of the Underwriters shall fail or refuse to purchase the
Shares which it or they have agreed to purchase hereunder, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of Shares, the other Underwriters shall be obligated, severally, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Shares which they
have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Shares which all such nondefaulting Underwriters have so
agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by more than one-ninth of such number of Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Shares and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase exceeds one-tenth of the aggregate number of the
Shares and arrangements satisfactory to the Representatives and the Company for
the purchase of such Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any nondefaulting
Underwriter, or the Company for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
10. Miscellaneous
Notice given pursuant to any of the provisions of this Agreement shall be
in writing and, unless otherwise specified, shall be mailed or delivered (a) if
to the Company, at the offices of the Company, with copies to Xxxxxx Xxxxx,
Esq., Xxxxxxxx Xxxxxxxxx Professional Corporation, One Oxford Centre, 20th
Floor, 000 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000, and Xxxxxx X. German, Esq.,
Xxxxxxxx, German & Xxxxx, P.C., 00xx Xxxxx, Xxx Xxxxxx Xxxxx, Xxxxxxxxxx, XX
00000, or (b) if to the Underwriters, to the Representatives at the offices of
Advest, Inc., Tower 49, 00 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Xxxxxxx X. XxXxxx, Esq.,
Xxxxxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx Xxxxxxxx, Xxxxxxxxxx, XX 00000. Any
such notice shall be effective only upon receipt. Any notice may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and the controlling persons, directors and officers
referred to in Section 6, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall
not include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
-20-
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the Agreement among
the Company and the several Underwriters.
Very truly yours,
II-VI INCORPORATED
By:_____________________________________________
Title:__________________________________________
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
ADVEST, INC.
CRUTTENDEN XXXX INCORPORATED
As Representatives of the several Underwriters
listed on Schedule I
By: ADVEST, INC.
By:________________________________________
Title:______________________________________
-21-
Schedule I
SCHEDULE OF UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Advest, Inc. ......................................
Cruttenden Xxxx Incorporated.......................
Total......................................... 1,000,000
=========
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
The undersigned is a holder of securities of II-VI Incorporated, a
Pennsylvania corporation (the "Company"), and wishes to facilitate the
underwritten public offering (the "Offering") of shares of the Common Stock of
the Company (the "Common Stock"). The undersigned acknowledges that such
Offering will be of benefit to the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Advest, Inc.,
acting on its own behalf and/or on behalf of the other underwriters, directly or
indirectly, sell, contract to sell, make any short sale, pledge, or otherwise
dispose of, any shares of the Common Stock, options to acquire shares of the
Common Stock or securities exchangeable for or convertible into shares of the
Common Stock which he, she or it may own, exclusive of any shares of Common
Stock purchased in connection with the Company's public offering or purchased in
the public trading market, for a period beginning on the date hereof and ending
on the date which is one hundred eighty (180) days after the date of the closing
of the Offering. The undersigned confirms that he, she or it understands that
the underwriters and the Company will rely upon the agreements set forth in this
Agreement in proceeding with the Offering. The undersigned further confirms
that the agreements of the undersigned are irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of securities held by the
undersigned except in compliance with this Agreement.
Dated __________________, 1995
-------------------------------------------
Print Name of Holder
By:___________________________________________
Signature
-------------------------------------------
Print Name of Person Signing
-------------------------------------------
Title of Person Signing
