EXHIBIT 1
RELM WIRELESS CORPORATION
STANDBY UNDERWRITING AGREEMENT
__________________,
Noble International Investments, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Ladies and Gentlemen:
Relm Wireless Corporation, a Nevada corporation (the "Company"), with
principal offices located at 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxxxx, XX 00000,
has offered to its Equity Holders the non-transferable right to purchase
"Units," each Unit consisting of one share of Common Stock and one warrant to
purchase one share of Common Stock (the "Warrants") on the basis of one right
for each Equity Position owned by an Equity Holder, subject to pro rata
reduction if an oversubscription occurs, at a price equal to the Exercise Price.
An Equity Holder who fully exercises his or her Rights will have the privilege
to oversubscribe for any remaining Units on a pro-rata basis, based on the
amount of oversubscriptions. The Common stock and Warrant, which comprise each
Unit, will not be separable unless and until approved by Noble.
The Company has __________ shares of Common Stock and ______ Equity
Positions (excluding Shares) issued and outstanding on the date hereof. The
Company is hereby entering into this Standby Agreement with Noble, the terms of
which are set forth hereinafter, for the purpose of effectuating the exercise of
all of the Rights. The exercise of the Rights and the terms of this Standby
Agreement are more fully described in the Registration Statement.
1. Certain Definitions.
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The following shall constitute the definitions of certain additional terms
used in this Standby Agreement.
(a) "Act" shall refer to the Securities Act of 1933, as amended.
(b) "Closing" means 10:00 a.m., Miami time on the third business day after
the Expiration Date, or at such other time or such other date, not later than
________ ___, 2002, as shall be agreed to by the Company and Noble.
(c) "Closing Date" shall be the third business day after the expiration of
the Rights.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Commission" shall mean the Securities and Exchange Commission.
(f) "Common Stock" shall refer to the Common Stock, $.60 par value, of the
Company.
(g) "Company" shall refer to Relm Wireless Corporation and its
subsidiaries.
(h) "Convertible Shares" shall mean such number of shares of Common Stock
an Equity Holder would own if it exercised any outstanding option or warrant or
converted any outstanding conversion right into Common Stock of the Company.
(i) "Effective Date" shall be the date upon which the Registration
Statement becomes effective pursuant to notice from the Commission and/or the
passage of time in accordance with the Act.
(j) "Equity Holders" shall mean collectively, the Company's equity holders
which are owners of any of the Company's shares, warrants, options or conversion
rights.
(k) "Equity Position" shall mean each share of Common Stock and each
Convertible Share.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "Exercise Price" of the Rights shall equal the closing bid price of
the Company's Common Stock on the Nasdaq Small-Cap Market on the trading date
immediately prior to the Effective Date, less ten percent (10%). In the event
the closing bid price of the Company's Common Stock on the Expiration Date is
less than the closing bid price on the Effective Date, the Units shall be re-
priced and the Exercise Price shall be reduced, up to $0.20 per Unit, to an
amount equal to the closing bid price of the Company's Common Stock on the
Expiration Date, less ten percent (10%).
(n) "Expiration Date" shall mean 5:00 p.m., Miami time, on ________, 2002,
which shall be 21 days after the Effective Date.
(o) "Financial Advisory Agreement" shall mean that agreement attached
hereto as Exhibit A, pursuant to which Noble shall provide financial advisory
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services to the Company.
(p) "Investment Company Act" means the Investment Company Act of 1940, as
amended.
(q) "Material Adverse Effect" means a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs,
financial position, value, operations, properties, results of operation or
business of the Company.
(r) "Maximum Exercise Price" shall mean the closing bid price of the
Company's Common Stock on the Nasdaq Small-Cap Market on the trading date
immediately prior to the Effective Date, less ten percent (10%).
(s) "Minimum Exercise Price" shall mean the amount that is $.20 less than
the Maximum Exercise Price.
(t) "NASD" means National Association of Securities Dealers, Inc.
(u) "Noble" shall refer to Noble International Investments, Inc.
(v) "Noble's Warrant" shall mean the warrants referred to in Section 2(d)
hereof.
(w) "Noble Warrant Agreement" shall mean the agreement with respect to the
grant of Noble's Warrant.
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(x) "Prospectus" shall refer to the Prospectus that is part of the
Registration Statement filed by the Company, as amended.
(y) "Registration Statement" shall refer to the Registration Statement
filed by the Company, including exhibits and financial statements, under
Commission File Number 333-_____.
(z) "Regulations" shall refer to the rules and regulations of the
Commission, as amended.
(aa) "Rights" shall mean each Right offered pursuant to the Registration
Statement whereby each Equity Holder of the Company may purchase one Unit at the
Exercise Price for each Equity Position owned by the Equity Holder, subject to
pro rata reduction if an oversubscription occurs. The Rights shall expire 21
days after the Effective Date.
(bb) "Securities" shall mean the Rights, the Units, the Shares underlying
the Units, the Warrants, and the Shares underlying the Warrants.
(cc) "Share" shall mean one (1) share of Common Stock, $.60 par value, of
the Company.
(dd) "Standby Agreement" shall mean this Standby Underwriting Agreement
between the Company and Noble.
(ee) "Subscription Agency Agreement" shall refer to the agreement between
the Company and Transfer Agent with respect to the grant and exercise of the
Rights.
(ff) "Standby Units" shall mean 2,500,000 Units, unless the Exercise Price
is less than the Maximum Exercise Price, in which case it shall be adjusted
upward proportionately, based upon the difference between the Maximum Exercise
Price less the Exercise Price divided by $.20 and multiplied by 500,000. The
number of Standby Units shall never be greater than 3,000,000.
(gg) "Termination Date" shall refer to the date upon which this Standby
Agreement shall terminate for whatever reason.
(hh) "Transfer Agent" shall mean ________________________________.
(ii) "Unsubscribed Units" shall mean the difference between the number of
Standby Units and the number of Units sold pursuant to the exercise of the
Rights to buy Units by Equity Holders on or before 21 days after the Effective
Date.
(jj) "Warrant" shall mean the right to purchase one share of Common Stock,
at an exercise price of 120% of the Exercise Price (the "Warrant Exercise
Price") per Share commencing one year after the Effective Date (or earlier with
the consent of Noble, which consent must be given or withheld in Noble's sole
discretion) and expiring three years after the Effective Date. The Warrants may
be called for redemption by the Company at a redemption price equal to $.10 per
Warrant provided that, commencing one year after the Effective Date, the closing
bid price of the Company's Common Stock for the twenty consecutive trading days
ending on the third day prior to the date on which the Company gives notice of
redemption has been at least 150% of the Warrant Exercise Price (after giving
effect to any stock dividends or stock splits) occurring after the Effective
Date.
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(kk) "Warrant Agreement" shall refer to the agreement between the Company
and the Transfer Agent with respect to the Warrants.
2. Terms of the Standby Agreement.
------------------------------
(a) On the Closing Date, subject to all the terms and conditions set forth
herein, the Company hereby agrees to sell to Noble and Noble agrees to purchase
from the Company that number of Standby Units that are Unsubscribed Units at the
Exercise Price. The determination of the number of Standby Units to be
purchased by Noble shall be made by the Transfer Agent, acting as Subscription
Agent, pursuant to the Subscription Agency Agreement.
(b) The Company shall pay to Noble at Closing a fee (the "Standby Fee") in
the sum of $________ (i.e. an amount equal to ten percent (10%) of the gross
proceeds from the sale of the Standby Units), which fee is payable irrespective
of any amount required to be paid by Noble to the Company for Unsubscribed Units
pursuant to Section 4 hereunder.
(c) The Company shall also pay to Noble all of Noble's reasonable out-of-
pocket fees, expenses and costs (including, but not limited to, legal (subject
to the limitation as set forth in Section 5(m) below), accounting, travel
accommodations, telephone, computer, courier and supplies) in connection with
the performance of its services under this Standby Agreement. All such fees,
expenses and costs may be billed at any time by Noble and are immediately
payable by the Company when invoiced. In this connection, the Company shall pay
Noble a non-refundable expense allowance of $40,000. Noble acknowledges that it
has already received this non-refundable expense allowance. All outstanding
invoices not paid as of the Closing Date shall be paid at Closing.
(d) At the Closing, the Company shall sell and deliver to Noble warrants
in the form attached hereto as Exhibit B ("Noble's Warrant") to purchase ______
---------
Units at an exercise price equal to the Exercise Price. Noble's Warrant shall
be exercisable during the four-year period commencing 12-months after the
Effective Date. During the 12-months commencing on the Effective Date, Noble
will not sell, transfer, assign or hypothecate any of Noble's Warrants or the
securities underlying Noble's Warrants except to officers, consultants or
partners of Noble (and to selected dealers, if any, as may be permitted and in
full compliance with applicable federal and state securities laws and rules and
regulations of the Commission and the National Association of Securities Dealers
("NASD").
(e) At the Closing, the Company and Noble shall enter into the Financial
Advisory Agreement, in the form attached hereto as Exhibit A, and the Company
---------
shall pay to Noble the amount due thereunder on the Closing Date.
(f) The Company agrees to use its best efforts to secure prompt and
maximum exercise of the Rights by the Equity Holders prior to the Expiration
Date.
(g) Noble shall offer the Unsubscribed Units for sale at a price equal to
the Exercise Price.
(h) For a period of 45 days after the Expiration Date and upon ___ days
written notice, the Company agrees to sell to Noble, from time to time, all or
part of up to ______ Units
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(the "Option Units") at the Exercise Price for the sole purpose of covering
over-allotments that may be made in connection with Noble's offering and
distribution of the Unsubscribed Units. Delivery of the Option Units shall be
made concurrently with payment therefor. Option Units may be purchased by Noble
only for the purpose of covering over-allotments that may be made in connection
with its offering and distribution of the Unsubscribed Units.
(i) The Company shall be obligated to pay to Noble the compensation set
forth in this Section 2 irrespective of how many Standby Units are actually
required to be purchased by Noble pursuant to Section 4 of this Standby
Agreement.
3. Representations and Warranties of the Company.
---------------------------------------------
(a) The Registration Statement, including the Prospectus, has been
carefully prepared by the Company in conformity with the requirements of the
Act, and such Registration Statement has been filed with the Commission, and one
or more amendments to said Registration Statement, has or have been filed; and
the Company may file on or prior to the Effective Date an additional amendment
to said Registration Statement, a copy of which amendment has been furnished to
and approved by Noble prior to the execution of this Standby Agreement.
(b) The Commission has not issued any order preventing or suspending the
use of any Prospectus with respect to this transaction and each Prospectus has
conformed in all material respects with the requirements of the Act and the
Regulations and has not included any fact required to be stated therein or
necessary to make the statements therein not misleading. On the Effective Date
and on the Closing Date, the Registration Statement will conform in all material
respects with the requirements of the Act and the applicable Regulations, and
the Registration Statement and any further amendments or supplements thereto
will contain all statements which are required to be stated therein or necessary
to make the statements therein not misleading; provided, however, the Company
does not make any representations or warranties as to information contained in
or omitted from the Registration Statement or Prospectus in reliance upon
written information furnished by Noble, specifically for use therein or in any
amendments or supplements thereto.
(c) The Company and each of its subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to transact
business and are in good standing as foreign corporations in each jurisdiction
in which their respective ownership or leasing of any properties or the
character or conduct of their respective operations requires such qualification,
except where failures to be so qualified, individually or in the aggregate,
would not result in a Material Adverse Effect. Other than the subsidiaries
listed on Schedule A hereto, the Company does not own any stock of or other
----------
equity in, or otherwise control directly or indirectly, any corporation, firm,
partnership, trust, joint venture or other business entity.
(d) The consolidated financial statements and schedules of the Company
included in the Registration Statement, the Prospectus and any amendment or
supplement thereto fairly present the consolidated financial position and
results of operations of the Company as of the dates and for the periods therein
specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles as in effect in the
United
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States and as consistently applied throughout the periods involved and in
accordance with the Regulations. The selected consolidated financial data set
forth under the caption "SELECTED CONSOLIDATED FINANCIAL DATA" in the Prospectus
fairly present, on the basis stated therein, the information included therein.
The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company's internal accounting controls are designed to cause the Company to
comply in all material respects with the Foreign Corrupt Practices Act of 1977,
as amended. Ernst & Young, LLP, whose reports are filed with the Commission as a
part of the Registration Statement, are independent auditors as required by the
Act and the Regulations. Since January 1, 1997, Ernst & Young, LLP has been the
only public accountants engaged by the Company, and the Company has not had any
disagreement with Ernst &Young, LLP, and has not experienced any reportable
event since that date.
(e) The Company is not in violation of any term or provision of its
charter documents or bylaws, or of any material agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation.
(f) The minutes books of the Company and each of its subsidiaries made
available to Nobel's counsel, (i) contain minutes and consents from all meetings
and actions of the Company's (and its subsidiaries') stockholders, boards of
directors, and the committees of such board since the respective dates of
organization of the Company and each of its subsidiaries and (ii) reflect all
transactions referred to in such minutes accurately in all material respects.
(g) The Company has all requisite power and authority (corporate and
other) to enter into this Standby Agreement, the Noble Warrant Agreement, the
Financial Advisory Agreement, Subscription Agency Agreement and the Warrant
Agency Agreement and to consummate the transactions provided for herein and
therein; and this Standby Agreement, the Noble Warrant Agreement, the Financial
Advisory Agreement, Subscription Agency Agreement and Warrant Agency Agreement
have been duly authorized by the Company. This Standby Agreement and other
agreements have been duly executed and delivered by the Company. Each of this
Standby Agreement, the Noble Warrant Agreement, the Financial Advisory
Agreement, Subscription Agency Agreement and the Warrant Agency Agreement
constitutes, assuming due authorization, execution and delivery by the other
parties to such agreement, the legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, subject to
the effect of general principles of equity (including standards of materiality,
good faith, fair dealing and reasonableness) whether applied by a court of law
or equity, and except as rights to indemnity and contribution hereunder may be
limited by applicable law, statutory duties or public policy. The Company's
execution and delivery of this Standby Agreement, Noble Warrant Agreement, the
Financial Advisory Agreement, Subscription Agency Agreement and the Warrant
Agency Agreement its performance of its obligations hereunder and thereunder,
the consummation of the transactions contemplated hereby and thereby by it, and
its conduct of its business as described in the Registration Statement, the
Prospectus and any amendment or
6
supplement thereto, will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any material liens, charges, claims, encumbrances,
pledges, security interests, defects or other like restrictions or material
equities of any kind whatsoever upon, any material right, property or assets
(tangible or intangible) of the Company or any of its subsidiaries pursuant to
the terms of (i) the charter or bylaws, each as amended to date, of the Company
or any of its subsidiaries, (ii) any lease, license, permit, contract,
indenture, mortgage, deed of trust, voting trust agreement, stockholders
agreement, note, loan or credit agreement (including any related to
indebtedness) or any other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is or by which any of them may be bound or to which any of their
respective properties or assets (tangible or intangible) is or may be subject,
except to the extent that any such conflict, breach, violation or default,
individually or in the aggregate, does not and would not result in a Material
Adverse Effect and does not and would not interfere with the offering or (iii)
any statute, judgment, decree, order, rule or regulation applicable to the
Company or any of its subsidiaries or any of their respective activities or
properties adopted or issued by an arbitrator, court, regulatory body or
administrative agency or other governmental agency or body (including those
having jurisdiction over environmental or similar matters), domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or of their
respective activities or properties (other than such as may be required under
state securities or "Blue Sky" laws and such as may be required by the bylaws
and rules of the NASD in connection with the purchase and distribution of the
Unsubscribed Units by Noble and Noble's provision of services pursuant to the
Financial Advisory Agreement).
(h) The Company and each of its subsidiaries have all requisite power and
authority (corporate and other), and have obtained and currently maintains in
full force and effect and are operating in compliance with any and all
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
(including those having jurisdiction over environmental or similar matters)
necessary or required to own or lease their respective properties and conduct
their respective business as described in the Registration Statement, the
Prospectus and any amendment or supplement thereto, except where the failure to
so maintain or operate would not result in a Material Adverse Effect. The
Company and each of its subsidiaries are and have been doing business in
compliance with all such authorizations, approvals, orders, licenses,
certificates, franchises and permits and all federal, state, local and foreign
laws, rules and regulations (including without limitation those relating to
employment matters and the payment of taxes) except as disclosed in the
Prospectus and except where failures to be in compliance, individually or in the
aggregate, would not result in a Material Adverse Effect. Neither the Company
nor any of its subsidiaries has received any notice or notices of proceedings
relating to the revocation or modification of any such authorization, approval,
order, license, certificate, franchise or permit that if the subject of
unfavorable decisions, rulings or findings, would, individually or in the
aggregate, result in a Material Adverse Effect.
(i) The authorized, issued and outstanding capital stock of the Company is
set forth, and conforms to the description thereof contained, in the
Registration Statement, the Prospectus, and any amendment or supplement thereto.
All of the issued shares of capital stock of the Company, have been duly
authorized and validly issued, and are fully paid and nonassessable; the holders
thereof have no rights of rescission against the Company with respect thereto
and are
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not subject to personal liabilities solely by reason of being such holders
(except to the extent that as a result of acquiring a substantial number of
shares of Common Stock a holder may be subject to claims of personal liability
as an affiliate or control person of the Company, as to which no representation
is made hereby); and none of such shares have been issued in violation of the
preemptive rights of any security holders of the Company arising as a matter of
law or under or pursuant to the Company's Articles of Incorporation, as amended,
the Company's Bylaws, as amended, or any agreement or instrument to which the
Company is a party or by which it is bound. The Securities have been duly
authorized and at the Closing Date, after payment therefor in accordance
herewith or in accordance with the terms and conditions of each Security (as the
case may be), will be validly issued, fully paid and nonassessable and not
subject to any adverse claim, with no personal liability attaching to the holder
solely as a result of the ownership thereof. Upon the issuance and delivery
pursuant to this Standby Agreement of the Units to be sold by the Company, Noble
will acquire good and marketable title to the Unsubscribed Units (and to each of
the Securities therein), free and clear of any liens, charges, claims,
preemptive rights, encumbrances, pledges, security interests, defects or other
like restrictions or like material equity of any kind whatsoever. The terms of
each of the Securities conform to the respective descriptions thereof contained
in the Prospectus. There are no preemptive or other rights to subscribe for or
to purchase nor any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company's Articles of Incorporation or Bylaws, as
each amended to date, or pursuant to any agreement among stockholders to which
the Company is a party, by which it is bound or of which it has knowledge, and
the Securities, are not otherwise subject to any preemptive or other similar
rights of any security holder. The Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to issue any capital
stock, rights, warrants, options or other securities, except for this Standby
Agreement and as described in the Prospectus. No holder of any securities of the
Company has the right to include any securities issued by the Company in the
Registration Statement or any registration statement to be filed by the Company
during a period commencing on the date the Registration Statement is declared
effective by the Commission and ending 180 days following the Expiration Date or
to require the Company to file a registration statement under the Act during
such period. All of the Securities (except the Rights) to be issued by the
Company as contemplated herein have been approved for quotation upon notice of
issuance on the Nasdaq Small Cap Market of the Nasdaq Stock Market.
(j) No consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required in connection with the
offer, issuance and sale of the Securities or upon exercise of the Rights or
Warrants, the Company's performance of its obligations hereunder, or the
consummation by the Company of the other transactions contemplated hereby,
except (i) such as may be required under the state securities or "Blue Sky" laws
of any jurisdiction or as may be required by the bylaws and rules of the NASD in
connection with the purchase and distribution of the Unsubscribed Units by
Noble, (ii) any filing of the Prospectus pursuant to Rule 424(b) or 430A of the
Regulations and, if the Registration Statement has not been declared effective,
an order of the Commission declaring the Registration Statement effective under
the Act, and (iii) such other approvals as have been obtained and remain in full
force and effect.
(k) Except as disclosed in the Registration Statement or the Prospectus,
each employee benefit plan, within the meaning of Section 3(3) of ERISA that is
maintained,
8
administered or contributed to by the Company or any of its affiliates for
employees or former employees of the Company and its affiliates has been
maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and
the Code; no prohibited transaction, within the meaning of Section 406 of ERISA
or Section 4975 of the Code has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan which is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
(l) Other than as disclosed in the Prospectus there is not pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries or involving the properties or business of the Company or any of
its subsidiaries or involving the properties or business of the Company or any
of its subsidiaries (or, to the Company's knowledge, any circumstance that may
give rise to the same), any action, suit, proceeding, investigation, litigation
or governmental proceeding (including those having jurisdiction over
environmental or similar matters), domestic or foreign, that (i) is required to
be disclosed in the Registration Statement and is not so disclosed, (ii)
questions the validity of the capital stock of the Company or the validity or
enforceability of this Standby Agreement for the Securities, (iii) questions the
validity of any action taken or to be taken by the Company pursuant to or in
connection with this Standby Agreement, or (iv) could materially adversely
affect the present or prospective ability of the Company to perform its
obligations under this Standby Agreement or result in a Material Adverse Effect.
Any such proceedings summarized in the Prospectus are accurately summarized in
all material respects;
(m) There are no claims, payments, issuances, arrangements or
understandings for services in the nature of a finder's, advisory or origination
fee or otherwise, either with respect to the sale of the Standby Units upon
exercise of the Rights, the sale of Standby Units hereunder or with respect to
the proceeds received by the Company from such sales. Other than as reflected in
this Standby Agreement, there are no other arrangements, agreements,
understandings, payments or issuances with respect to the Company or, to the
Company's knowledge, any of its officers, directors, or affiliates that may
constitute "underwriter's compensation," as determined by the NASD.
(n) All agreements filed as exhibits to or referred to in the Registration
Statement to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries may be bound or to which any of their
respective assets, properties or businesses may be subject have been duly and
validly authorized, executed and delivered by the Company or such subsidiary, as
appropriate, and constitute the legal, valid and binding agreements of the
Company or such subsidiary, as appropriate, enforceable in accordance with their
respective terms, subject in each case to the effect of general principles of
equity (including standards of materiality, good faith, fair dealing and
reasonableness) whether applied by a court of law or equity and except as rights
to indemnity and contribution under this Standby Agreement may be limited by
applicable law, statutory duties or public policy. The descriptions in the
Registration Statement, the Prospectus and any amendment or supplement thereto
of agreements, whether
9
written or oral, and of other documents are accurate and fairly present the
information required to be shown with respect thereto under the Act. There are
no agreements, whether written or oral, or other documents that are required by
the Act or the Regulations to be described in the Registration Statement or
filed as exhibits to the Registration Statement that are not described or filed
as required.
(o) The Company and each of its subsidiaries have filed all federal,
state, local and foreign tax returns that are required to be filed by them or
have duly requested extensions thereof, except in any case in which the failure
so to file, individually or in the aggregate, would not have a Material Adverse
Effect. The Company and each of its subsidiaries have paid all taxes required to
be paid by them and all other assessments, fines or penalties, if any, levied
against them, to the extent that any of the foregoing are due and payable,
except for (i) any such assessment, fine or penalty that is currently being
contested in good faith or (ii) any case in which the failure so to pay,
individually or in the aggregate, would not have a Material Adverse Effect.
(p) No transfer tax, stamp duty or other similar tax is payable by or on
behalf of Noble in connection with the issuance by the Company, or the purchase
by Noble, of the Unsubscribed Units to be sold by the Company or any resales of
such Unsubscribed Units by Noble, or on the issuance or sale of any of the
Securities.
(q) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which they are engaged,
and the Company has no reason to believe that it or any of its subsidiaries will
not be able to renew their respective existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue their respective business at a cost that would not
result in a Material Adverse Effect.
(r) The Company has good and marketable title to, or valid and enforceable
leasehold estates in, all items of real and personal property stated in the
Prospectus to be owned or leased by it, free and clear of all liens, charges,
claims, encumbrances, pledges, security interests, defects or other like
restrictions or like equities of any kind whatsoever, other than (i) liens for
taxes not yet due and payable, (ii) liens as described or referred to in the
Prospectus, and (iii) liens that are not material in amount in relation to the
business of the Company and which do not interfere with the offering.
(s) The Company's Common Stock is currently listed for trading on the
Nasdaq Small-Cap Market under the symbol RELM.
(t) Neither the Company nor any of its officers, directors, or affiliates
(within the meaning of the Regulations) has taken or will take, directly or
indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock, in violation of Regulation M under the Exchange
Act.
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(u) Subsequent to the respective dates as of which information is set
forth in the Registration Statement and Prospectus, and except as may otherwise
be indicated or contemplated herein or therein, neither the Company nor any of
its subsidiaries has (i) issued any securities other than the Rights, the
Standby Units and shares of Common Stock issuable upon the exercise of stock
options disclosed in the Prospectus as outstanding as of the date hereof, (ii)
incurred any liability or obligation, direct or contingent, for borrowed money,
(iii) entered into any transaction other than in the ordinary course of
business, (iv) declared or paid any dividend or made any other distribution on
or in respect of its capital stock, or (v) entered into any transactions with
any affiliate.
(v) All of the Securities have been duly authorized, and, when issued and
distributed as set forth in the Prospectus, will be legally issued and valid and
binding obligations of the Company having the rights summarized in the
Prospectus; and none of such Rights will have been issued in violation of the
preemptive rights of any security holders of the Company arising as a matter of
law or under or pursuant to the Company's Articles of Incorporation, as amended,
the Company's bylaws, as amended, or any agreement or instrument to which the
Company is a party or by which it is bound.
(w) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there has not been any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of operations of
the Company otherwise than as set forth or contemplated in the Prospectus.
(x) The Company is not and, after giving effect to the offering, will not
be an "investment company" or entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act.
(y) The Company and each of its subsidiaries has satisfactory employer-
employee relationships with their respective employees. No labor or other
dispute with the employees of the Company exists, or, to the best knowledge of
the Company, is imminent.
(z) The Company has complied with all provisions of Section 517.075,
Florida Statutes, relating to doing business with the government of Cuba or with
any person or affiliate located in Cuba.
4. The Closing.
-----------
The Closing will take place on the Closing Date at a place to be designated
by Noble in _____________, Florida. At such Closing, Noble will make payment to
the Company by a certified or a bank check for all Standby Units which are
Unsubscribed Units and the Company will deliver the Unsubscribed Units to Noble
in such names and denominations as may be requested by Noble, as set forth in a
written notice delivered to the Company at least 48 hours prior to Closing. At
Closing, the Company will pay to Noble the Standby Fee, and all amounts payable
pursuant to Section 2 hereof.
11
5. Covenants of the Company.
------------------------
The Company covenants and agrees with Noble as follows:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Standby Agreement,
and any amendments thereto, to become effective as promptly as possible. Unless
required by law, the Company will not file with the Commission any amendment or
supplement to such prospectus, any amendment to the Registration Statement, or
any document under the Exchange Act before termination of the offering of Units
by Noble of which Noble shall not previously have been advised and furnished
with a copy, or to which Noble shall have reasonably objected by notice to the
Company in writing after having been provided a copy thereof, or which is not in
compliance with the Act, the Exchange Act or the Regulations. During the time
when a prospectus relating to the Units is required to be delivered under the
Act, the Company will comply with all requirements imposed upon it by the Act
and the Regulations to the extent necessary to permit the continuance of sales
of or dealings in the Units in accordance with the provisions hereof and of the
Prospectus, as amended or supplemented. The Company will prepare and file with
the Commission, promptly upon the reasonable request by Noble or Noble's
counsel, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of Unsubscribed Units by Noble, and will use its best
efforts to cause the same to be filed with the Commission as promptly as
possible.
(b) As soon as the Company is advised or obtains knowledge thereof, the
Company will advise Noble, with a confirmation in writing, of (i) the time when
the Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed, (ii) the issuance by the Commission of any stop order, or of the
initiation or threatening of any proceeding, suspending the effectiveness of the
Registration Statement or any amendment thereto or any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or any
amendment or supplement thereto, (iii) the issuance by any state securities
commission of any notice of any proceedings for the suspension of the
qualification of the Units for offering or sale in any jurisdiction or of the
initiation, or the threatening, of any proceeding for that purpose, (iv) the
receipt of any comments from the Commission, and (v) any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such order or the imposition
of any such suspension and, if any such order is issued or suspension is
imposed, to obtain the withdrawal thereof as promptly as possible.
(c) If required, the Company will file the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time period
required by Rule 424(b) and Rule 430A(a)(3) of the Regulations.
(d) The Company will arrange with Noble's counsel for the qualification of
the Standby Units for offering and sale under the securities or "Blue Sky" laws
of such jurisdictions in which recipients of Rights are resident and such
jurisdictions as Noble may reasonably designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Standby Units, provided, however, that in connection
therewith
12
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(e) If, at any time when a prospectus relating to the Units is required to
be delivered under the Act, any event occurs as a result of which, in the
opinion of the Company or counsel for the Company, the Prospectus, as then
amended or supplemented, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is otherwise necessary at any
time to amend or supplement the Prospectus to comply with the Act or the
Regulations, the Company will promptly notify Noble thereof and, subject to
Section 6(a)(i) hereof, prepare and file with the Commission, at the Company's
expense, an amendment to the Registration Statement or an amendment or
supplement to the Prospectus that corrects such statement or omission or effects
such compliance. If, at any time when a prospectus relating to the Units is
required to be delivered under the Act, any event occurs as a result of which,
in the opinion of Noble or Noble's Counsel, the Prospectus, as then amended or
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, Noble will promptly notify the Company thereof and the
Company will, subject to Section 6(a)(i) hereof, prepare and file with the
Commission, at the Company's expense, an amendment to the Registration Statement
or an amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance. The Company will furnish to Noble and
dealers (whose names and addresses shall be furnished to the Company by Noble)
to which Units may have been sold on behalf of Noble and to any other dealers
upon request, a reasonable number of copies of any amendment or supplement
prepared pursuant to this Section 6(e).
(f) The Company will furnish to each of Noble and to Noble's counsel,
without charge, a signed copy of the Registration Statement originally filed
with respect to the Standby Units and each amendment thereto. So long as Noble
or any dealer is required by the Act or the Regulations to deliver a prospectus,
the Company will also furnish as many copies of each preliminary prospectus or
the Prospectus or any amendment or supplement thereto as Noble may reasonably
request.
(g) As soon as practicable after the Effective Date, the Company will make
generally available to its security holders, in the manner specified in Rule
158(b) of the Regulations, and to Noble an earnings statement that will be in
the detail required by, and will otherwise comply with, the provisions of
Section 11(a) of the Act and Rule 158(a) of the Regulations.
(h) For a period of five years following the date hereof, the Company will
furnish to its stockholders, as soon as practicable, annual reports (including
financial statements audited by independent public accountants) and will deliver
to Noble unaudited quarterly reports of earnings (through delivery of the
Company's quarterly reports filed with the Commission on Form 10-Q or Form 10-
QSB) and the following:
13
(i) concurrently with furnishing quarterly reports, if any, to the
stockholders, statements of income of the Company for each quarter in the form
furnished to the Company's stockholders;
(ii) concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the preceding
fiscal year, together with statements of operations, stockholders equity, and
cash flows of the Company for such fiscal year, accompanied by a copy of the
certificate thereon of independent public accountants;
(iii) as soon as they are available, copies of all reports (financial
or other) mailed to its stockholders;
(iv) as soon as they are available, copies of all reports (other
than preliminary proxy materials) and financial statements furnished to or filed
with the Commission, the NASD or Nasdaq which are available to the public;
(v) as soon as they are available every press release and every
material news item or article of interest to the financial community in respect
of the Company or its affairs that is released or prepared by the Company and is
known to the Company; and
(vi) any additional information of a public nature concerning the
Company that Noble may reasonably request from time to time.
(i) During the period commencing on the date the Registration Statement is
declared effective by the Commission and ending one year after the Expiration
Date, the Company, will not, without the prior written consent of Noble, (i)
directly or indirectly, transfer, sell, offer for sale, contract for sale, grant
any option for the sale of, or otherwise dispose of (or announce any transfer,
sale, offer for sale, contract for sale, grant of any option for sale of, or
other disposition of) any shares of Common Stock, or other securities
convertible into, or exercisable or exchangeable for, shares of Common Stock
(except as contemplated by this Standby Agreement) or (ii) file any registration
statement relating to any such Securities with the Commission or any other
authority except as contemplated herein, provided, however, that (1) the Company
may grant or issue Securities pursuant to any employee stock option plan or
stock purchase plan or outstanding stock options described in the Prospectus
and, commencing after the Closing Date, may file a registration statement on
Form S-8 with respect to such plans and (2) the Company may issue shares of
Common Stock, or other securities convertible into, or exercisable or
exchangeable for shares of Common Stock, as consideration for any acquisition by
the Company so long as the party being issued such securities signs an
agreement, acceptable in form and substance to Noble (such consent not to be
unreasonably withheld), that such party will not transfer, sell, offer for sale,
contract to sell or otherwise dispose of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for shares of Common
Stock owned by such party or with respect to which such party has the power of
disposition during a period commencing on the date of issuance of such
securities and ending one year following the Expiration Date.
(j) The Company will apply the net proceeds from the sale of the Standby
Units sold by it in the manner set forth under "USE OF PROCEEDS" in the
Prospectus and will comply
14
with all reporting requirements under the Act and the Exchange Act with respect
to the use of proceeds. Except as described in the Prospectus, no portion of the
net proceeds will be used directly or indirectly to acquire any securities
issued by the Company.
(k) The Company will furnish to Noble as early as practicable prior to
each of the date hereof and the Closing Date but no later than two full business
days prior thereto, a copy of the latest available unaudited interim financial
statements of the Company (which in each case shall not be earlier than the last
day of the preceding month, unless such month-end shall be less than three
business days prior to the date such statements are to be delivered) that have
been read by the Company's independent public accountants, as stated in their
letters to be furnished pursuant to Section 6 hereof;
(l) The Company will deliver to Noble true and correct copies of its
Articles of Incorporation and all amendments thereto, such copies to be
certified by the Secretary of the Company; true and correct copies of the Bylaws
of the Company and of the minutes of all meetings of the directors and
stockholders of the Company held during the twenty-four (24) month period
immediately prior to the Closing Date; and true and correct copies of all
material contracts to which the Company is a party.
(m) The Company shall bear all costs and expenses incident to the
issuance, sale and delivery of the Standby Units, including but not limited to
all NASD and Nasdaq fees, and transfer agent fees, engraving of stock and
warrant certificates, the fees and costs of qualification of the offering and
the sale of Securities covered by the Registration Statement under various state
securities laws and disbursements of its accountants, cost for mailing and
tombstone advertising, (although, with respect to the tombstone expense, in an
amount not to exceed $5,000), costs of "road shows", if any (with respect to
such road shows, each party shall pay its own travel expenses and the Company
will pay all other costs associated with holding such shows including expenses
in connection with any meetings or presentations), the cost of printing and
preparing the Registration Statement, related exhibits, amendments and
supplements thereto, underwriting documents, selected dealer agreements and such
number of preliminary and final Prospectuses as Noble shall deem reasonably
necessary. The Registration Statement and the exhibits thereto shall be prepared
by counsel for the Company, and the various state securities and Blue Sky laws
applications and the survey to be distributed by Noble in connection therewith
shall be prepared by Noble's counsel, whose costs and expenses shall be paid for
by the Company within required budgets and Company approval prior to being
incurred, at the time such services are rendered, except that one-half of the
Blue Sky fee (including fees for additional states) shall be paid to Noble's
counsel at the time the Registration Statement is filed with the Commission,
with the balance payable at the time all Blue Sky filings have been made.
Additionally, the Company shall have a right to approve counsel and Noble's
approval shall be reasonable as the work done by Noble's counsel in connection
with the Blue Sky fees is a liability of the Company. With the exception of the
legal fees payable to Noble's counsel in connection with Blue Sky filings, the
Company will not be obligated to pay Noble any additional legal fees.
(n) The Company will cause the Securities (except the Rights) to be listed
on Nasdaq Small-Cap Market and it shall use its reasonable best efforts at its
cost and expense to maintain
15
such listings for at least ten years from the date of this Standby Agreement, or
with respect to the Warrants, the Company agrees to maintain such listing for
the life of the Warrants.
(o) All officers and directors and their affiliates who own Securities of
the Company (including but not limited to Shares, options and warrants to
purchase Shares, and securities convertible into Shares), shall agree not to
sell, transfer or convey any of such Securities by registration or otherwise for
a period of twelve (12) months from the Effective Date and thereafter for an
additional six months without the prior written consent of Noble or any greater
period required by any state in which the offering of the Standby Units is to be
registered. An appropriate legend shall be marked on the face of certificates
representing all of such Securities.
(p) Prior to the Effective Date, the Company shall apply for listing in
Standard & Poor's Corporation Reports and shall use its best efforts to have the
Company listed in such reports for a period of not less than ten (10) years
thereafter.
(q) The Company has appointed or shall promptly hereafter appoint
__________________________ as Transfer Agent for the Securities, which entity
shall agree to the provisions of Noble's Warrant. The Company will not change
or terminate any such appointment without the written consent of Noble, which
consent shall not be unreasonably withheld.
(r) The Company will deliver to Noble and Noble's counsel, without charge,
two (2) bound volumes of copies of all documents and appropriate correspondence
filed or received from the Commission and the NASD and all closing documents.
(s) For a period of five (5) years commencing from the Closing Date, the
Company shall continue to employ the services of a firm of independent certified
public accountants reasonably acceptable to Noble.
(t) The Company will maintain a current Registration Statement for Noble
to offer and sell the Unsubscribed Units and the components thereof purchased by
it for a period of at least nine months from the Effective Date and such
additional further period as Noble may reasonably request. Nevertheless, Noble
agrees to notify the Company when its distribution has been completed.
(u) Neither the Company nor any officer or director thereof shall for a
period of five years from the Effective Date offer to sell any Securities of the
Company in a Regulation S offering without the prior written consent of Noble.
(v) Until such time as the Securities of the Company are listed on the New
York Stock Exchange, the American Stock Exchange, or the Nasdaq National Market;
the Company shall cause its legal counsel or an independent firm acceptable to
Noble to provide Noble with a survey, to be updated at least semi-annually, of
those states in which the Securities (except the Rights), of the Company may be
traded in non-issuer transactions under the Blue Sky laws of the states and the
basis for such authority. The Company shall cause Noble's counsel to prepare and
deliver the first such survey at Closing and, thereafter, the Company's counsel
shall prepare and deliver such survey on a semi-annual basis of each year.
16
(w) The Company shall engage Noble for a period of three years to act as
its solicitation agent for the Warrants. The Company shall pay Noble a 5%
exercise fee upon exercise of the Warrants, subject to Noble's compliance with
NASD rules.
6. Conditions of Noble's Obligations.
---------------------------------
Noble's obligations to perform pursuant to this Standby Agreement and to
the purchase the Unsubscribed Units required hereunder on the Closing Date is
subject to the accuracy of and compliance with the representations and
warranties on the part of the Company herein as of the date hereof and as of the
Closing Date, to the performance by the Company of its obligations and covenants
hereunder, to the accuracy of certificates of the Company and officers of the
Company to be delivered pursuant to this Standby Agreement, all as of the
Closing Date, and to the following further conditions:
(a) All corporate action taken and all legal opinions and proceedings
relating to the transaction and Noble's Warrant, the Registration Statement and
Prospectus and all other matters incident thereto and to the transaction to
which this Standby Agreement relates shall be satisfactory in all respects to
Broad and Xxxxxx, counsel for Noble, and they shall have been furnished with
such certificates, documents and information as they may request in this
connection.
(b) If the Registration Statement or any amendment thereto filed prior to
the Closing Date has not been declared effective as of the time of execution
hereof, the Registration Statement or such amendment shall have been declared
effective not later than the first full business day next following the date
hereof or such later date and time as shall have been consented to in writing by
Noble. If required, the Prospectus shall have been timely filed with the
Commission in accordance with Rule 424(b) of the Regulations. If required, any
amendment or supplement to the Prospectus shall have been filed in accordance
with Rule 424(c) under the Act. No stop order suspending the effectiveness of
the Registration Statement or any amendment thereto shall have been issued and
no proceedings for that purpose shall have been instituted or, to the knowledge
of the Company, or Noble, shall be contemplated by the Commission. The Company
shall have complied, to the reasonable satisfaction of Noble and Noble's
counsel, with any request of the Commission for additional information (to be
included in the Registration Statement, the Prospectus or otherwise).
(c) Noble shall not have advised the Company that, in the opinion of Noble
or Noble's Counsel, (i) the Registration Statement, or any amendment thereto,
includes 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
under which they were made, not misleading or (ii) the Prospectus, or any
amendment or supplement thereto, includes an untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) Noble shall have received from Noble's counsel an opinion dated the
Closing Date, with respect to the issuance and sale of the Unsubscribed Units,
the Registration Statement, the Prospectus and such other related matters as
Noble reasonably may request. Noble's counsel shall have received from the
Company such papers and information as they may reasonably
17
request to enable them to review or pass upon such matters or in order to
evidence the accuracy, completeness or satisfaction of any of the
representations, warranties, or covenants of the Company contained herein.
(e) Noble shall have received from Xxxx Xxxxxxxxx, P,A., counsel to the
Company, an opinion, on or prior to the date Rights certificates and
Prospectuses are first mailed to Company's Equity Holders and on the Closing
Date, dated the respective dates thereof and in form and substance satisfactory
to Noble's counsel, to the effect that:
(i) The Company and each of its subsidiaries are duly incorporated,
validly existing and in good standing under the laws of their respective
jurisdictions of organization and are duly qualified to transact business as
foreign corporations and are in good standing in each jurisdiction in which the
Company has represented to such counsel that they conduct business;
(ii) The Company and each its subsidiaries have all requisite
corporate power and authority necessary or required to own or lease their
respective properties and conduct its businesses as described in the
Registration Statement and the Prospectus;
(iii) The Company has all requisite power and authority (corporate
and other) to enter into this Standby Agreement, Noble's Warrant Agreement, the
Financial Advisory Agreement, and the Subscription Agency Agreement and to
consummate the transactions provided for herein and therein; and this Standby
Agreement, Noble's Warrant Agreement, the Financial Advisory Agreement and the
Subscription Agency Agreement have each been duly authorized, executed and
delivered by the Company. This Standby Agreement, Noble's Warrant Agreement, the
Financial Advisory Agreement, Subscription Agency Agreement and the Warrant
Agency Agreement, assuming due authorization, execution and delivery by the
parties thereto other than the Company, each constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, arrangement or similar laws affecting
creditors' rights generally or by general principles of equity (including
standards of materiality, good faith, fair dealing and reasonableness) whether
applied by a court of law or equity, and except as rights to indemnity and
contribution hereunder may be limited by applicable law, statutory duties or
public policy. The Company's execution and delivery of this Standby Agreement,
Noble's Warrant Agreement, the Financial Advisory Agreement, Subscription Agency
Agreement and the Warrant Agency Agreement, its performance of its obligations
hereunder and thereunder and the consummation of the transactions contemplated
hereby and thereby do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any liens, charges, claims,
encumbrances, pledges, security interests, defects or other like restrictions or
equities of any kind whatsoever upon, any right, property or asset (tangible or
intangible) of the Company or any of its subsidiaries pursuant to the terms of
(A) the charter or bylaws, each as amended through the date of the opinion, of
the Company and each of its subsidiaries, (B) any material lease, permit,
license, contract, indenture, mortgage, deed of trust, voting trust agreement,
stockholders agreement, note, loan or credit agreement or any other agreement or
instrument known to such counsel to which the Company or any of its subsidiaries
is a party or by which any of them is or may be bound or to which any of their
respective properties or assets (tangible or intangible) is or may be subject,
or any
18
indebtedness, or (C) to the knowledge of Company counsel, any statute, rule,
regulation, judgment, decree or order applicable to the Company or any of its
subsidiaries or any of their respective activities or properties adopted or
issued by an arbitrator, court, regulatory body or administrative agency or
other governmental agency or body (including those having jurisdiction over
environmental or similar matters), domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their respective activities or
properties (other than such as may be required under state securities or "Blue
Sky" laws and such as may be required by the bylaws and rules of the NASD in
connection with the purchase and distribution of the Units by Noble or Noble's
provision of services under the Financial Advisory Agreement);
(iv) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or, to such counsel's knowledge, any court
is required in connection with the issuance of the Securities to be sold by the
Company, the Company's performance of its obligations hereunder, the offering,
or the consummation by the Company of the other transactions contemplated
hereby, except such as may be required under the state securities or "Blue Sky"
laws of any jurisdiction or as may be required by the bylaws and rules of the
NASD in connection with the purchase and distribution of the Unsubscribed Units
by Noble and except such other approvals as have been obtained and remain in
full force and effect. Upon the effectiveness of the Registration Statement, the
Securities (other than the Rights) will be registered pursuant to Section 12(g)
of the Exchange Act, and will, upon notice of issuance, be listed on the Nasdaq
Small-Cap Market;
(v) At the date or dates indicated in the Prospectus, the
authorized, issued and outstanding capital stock of the Company was as set forth
therein, and conformed to the description thereof contained therein under the
captions "CAPITALIZATION" and "DESCRIPTION OF CAPITAL STOCK." All of the issued
shares of Common Stock of the Company have been duly authorized and validly
issued, and are fully paid and non-assessable; the holders thereof are not
subject to personal liabilities solely by reason of holding such shares; and
none of such shares have been issued in violation of the preemptive rights of
any security holders of the Company known to Company counsel. The Units to be
sold by the Company have been duly authorized and, when paid for in accordance
herewith, will be validly issued, fully paid and non-assessable, and with no
personal liability resulting solely from the ownership thereof. Upon the
issuance and delivery pursuant to this Standby Agreement of the Unsubscribed
Units to be sold by the Company to Noble, Noble will acquire good and marketable
title to such Unsubscribed Units free and clear of any liens, charges, claims,
encumbrances, pledges, security interests, defects or other like restrictions or
like equities of any kind whatsoever. Except as described in the Prospectus,
there are no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company's Articles of Incorporation or bylaws, each as amended to date,
or pursuant to any agreement among stockholders to which the Company is a party
or of which it has knowledge, and the Units to be sold by the Company are not
subject to any preemptive or other similar rights of any security holder. To
such counsel's knowledge, the Company is not a party to or bound by any
instrument, agreement or, to such counsel's knowledge, other arrangement
providing for it to issue any capital stock, rights, warrants, options or other
securities, except for this Standby Agreement. To such counsel's knowledge, no
holder of any Common Stock of the Company or of any options, warrants or other
convertible or exchangeable securities of the Company which are exercisable for
or convertible or
19
exchangeable for Common Stock of the Company has any right (which has not been
waived) to include any such securities issued by the Company in the Registration
Statement or any registration statement to be filed by the Company within the
period commencing on the date the Registration Statement is declared effective
by the Commission and ending one year after the Expiration Date or to require
the Company to file a registration statement under the Act during such period.
Based on the form of specimen certificate provided to such counsel, the
certificates representing each of the Securities are in due and proper form;
(vi) The Registration Statement has become effective under the Act.
Any required filing of the Prospectus pursuant to Rule 424(b) and 430A(a)(3) of
the Regulations has been made in accordance with the time period required
thereby. To such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued, and no proceedings for that
purpose have been instituted or are pending or threatened, by the Commission;
(vii) At the time the Registration Statement was declared effective
by the Commission, the Registration Statement and the Prospectus and any
amendment or supplement thereto (other than the financial statements, and notes
thereto, the financial schedules, and the other financial and statistical data
included in the Registration Statement or the Prospectus or omitted therefrom,
as to which such counsel need express no opinion) complied as to form in all
material respects with the requirements of the Act and the Regulations;
(viii) Such counsel has reviewed all contracts and other documents
referred to in the Registration Statement and the Prospectus, and the summaries
of and other disclosures regarding such contracts and other documents included
in the Registration Statement, and the Registration Statement and Prospectus
fairly present the information required to be shown with respect thereto. To
such counsel's knowledge, there are no contracts or other documents of a
character required to be filed as exhibits to the Registration Statement or
required to be described in the Registration Statement or the Prospectus that
were not filed or disclosed as required;
(ix) Except as disclosed in the Registration Statement, to such
counsel's knowledge, there is not pending or threatened or contemplated against
the Company, or involving the properties or business of the Company, any action,
suit, proceeding, inquiry, investigation, litigation or governmental proceeding
(including those having jurisdiction over environmental or similar matters),
domestic or foreign, that (A) is required to be disclosed in the Registration
Statement and is not so disclosed, (B) questions the validity of the capital
stock of the Company or the validity or enforceability of this Standby
Agreement, (C) questions the validity of any action taken or to be taken by the
Company pursuant to or in connection with this Standby Agreement, or (D) could
materially adversely effect the present or prospective ability of the Company to
perform its obligations under this Standby Agreement or result in a Material
Adverse Effect;
(x) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act, nor, by receipt of the proceeds from its sale by it of the Standby
Units pursuant to this Standby Agreement, will the Company become or be deemed
to be an "investment company" under such Investment Company Act;
20
(xi) No transfer taxes are required to be paid in connection with
the sale and delivery of the Unsubscribed Units by the Company to Noble
hereunder;
(xii) All of the Securities have been duly authorized and validly
issued, and, when issued and distributed as set forth in the Prospectus, will be
legally issued and valid and binding obligations of the Company having the
rights summarized in the Prospectus; and none of such Securities will have been
issued in violation of the preemptive rights of any security holders of the
Company arising as a matter of law or under or pursuant to the Company's
Articles of Incorporation, as amended, the Company's bylaws, as amended, or any
agreement or instrument to which the Company is a party or by which it is bound.
In addition, such opinion shall contain statements substantially to the
following effect:
In the course of the preparation by the Company and its counsel of the
Registration Statement and the Prospectus, such counsel attended conferences, in
person and telephonically, with certain of the officers of, and the independent
public accountants for, the Company, at which the Registration Statement and the
Prospectus were discussed. Between the date of effectiveness of the Registration
Statement and the Closing Date, such counsel attended (if applicable) additional
conferences, in person and telephonically, with certain of the officers of, and
the independent public accountants for, the Company, at which the contents of
the Registration Statement and the Prospectus were discussed. Subject to the
foregoing and on the basis of the information such counsel gained in the
performance of the services referred to above, including information obtained
from officers and other representatives of the Company, no facts have come to
such counsel's attention that cause such counsel to believe (except that such
counsel need not express any opinion or belief with respect to the financial
statements, schedule and the notes thereto and other financial and statistical
data included therein) that (A) the Registration Statement, at the time it was
declared effective by the Commission, 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 (B) the
Prospectus, as of its date or the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinions, such counsel may rely as to matters of fact, to
the extent they deem proper, on the representations and warranties of the
Company contained in this Standby Agreement and on certificates and written
statements of the Company or responsible officers of the Company, provided that
copies of any such statements or certificates shall be delivered to Noble's
counsel if requested.
Noble is entitled to rely on the opinion of such firm, filed as an exhibit
to the Registration Statement, as to the matters discussed in the Prospectus
under the heading "FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus.
References to the Prospectus and Registration Statement in this Section
6(e) shall include any amendment or supplement thereto at the date of such
opinion.
21
(f) Noble shall have received a certificate, dated the Closing Date and in
form and substance satisfactory to Noble, of the Company signed by each of the
Chief Executive Officer and Chief Financial Officer of the Company to the effect
that each of such officers has carefully examined the Registration Statement,
the Prospectus and this Standby Agreement and, to his best knowledge, that:
(i) The representations and warranties of the Company in this
Standby Agreement are true and correct, as if made on and as of the Closing
Date, and the Company has complied in all material respects with all agreements
and covenants and satisfied all conditions contained in this Standby Agreement
on its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that purpose have been
instituted or are pending or, to the best of such officers' knowledge, are
contemplated or threatened by the Commission; and
(iii) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) there has been no
material adverse change, or development involving a prospective material adverse
change (including a change in management or control of the Company), in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, on a consolidated basis, except
in each case as described in or contemplated by the Prospectus; (B) neither the
Company nor any of its subsidiaries has entered into any transactions not in the
ordinary course of business; (C) neither the Company nor any of its subsidiaries
has incurred any material liabilities or obligations, direct or contingent,
other than as disclosed in the Registration Statement and the Prospectus; (D)
neither the Company nor any of its subsidiaries has sustained a loss material to
the Company and its subsidiaries, on a consolidated basis, by fire, flood,
accident, hurricane, earthquake, theft, sabotage or other calamity or malicious
act, whether or not such loss shall have been insured, or from any labor dispute
or from any legal or governmental proceeding; (E) no action, suit or proceeding,
at law or in equity, has been filed or, to the knowledge of such officer, is
threatened against the Company or any of its subsidiaries or affecting any of
their respective properties or businesses before or by any court or federal,
state or foreign commission, board or other administrative agency that (1)
alleges that the conduct of such business as currently conducted or as proposed
to be conducted infringes on any trademarks, service marks, copyrights, service
names, trade names, patents, patent applications or trade secrets currently held
by any third party and (2) has had as of the date of such certificate or, if
pending and if decided unfavorably, is likely to have a Material Adverse Effect;
and (F) there has not occurred any other event required to be set forth in the
Prospectus that has not been so set forth.
(iv) They do not know of any contracts which are required to be
summarized in the Prospectus which are not so summarized; and they do not know
of any material contracts required to be filed as exhibits to the Registration
Statement which are not so filed;
22
(v) They have each carefully examined the Registration
Statement and the Prospectus and, to the best of their knowledge, neither the
Registration Statement nor the Prospectus nor any amendment or supplement to
either of the foregoing contains an untrue statement of any material fact or
omits to state any material fact required to be so stated therein or necessary
to make the statement therein not misleading; and since the Effective Date, to
the best of their knowledge, there has occurred no event required to be set
forth in an amended or supplemented Prospectus which has not been so set forth;
(vi) The Company is not delinquent in the filing of any
federal, state and municipal taxes return or the payment of any federal, state
or municipal taxes; they known of no proposed redetermination or re-assessment
of taxes, adverse to the Company, and the Company has paid or provided by
adequate reserves for all known tax liabilities; and
(vii) The financial statements and schedules filed with and as
part of the Registration Statement present fairly the financial position of the
Company as of the dates thereof all in conformity with generally accepted
principles of accounting applied on a consistent basis throughout the periods
involved. Since the respective dates of such financial statements, there has
been no material adverse change in the condition or general affairs of the
Company, financial or otherwise, other than as referred to in the Prospectus.
Except as otherwise provided in clause (iii)(A) above, references to the
Prospectus and Registration Statement in this Section 6 shall include any
amendment or supplement thereto at the date of such opinion.
(g) Noble shall have received from Ernst & Young LLP letters dated,
respectively, the date hereof and the Closing Date, in form and substance
satisfactory to Noble and Noble's counsel, with respect to matters set forth
below:
(i) confirming that they are and were independent public
accountants with respect to the Company within the meaning of the Act and the
Regulations;
(ii) stating that it is their opinion that the audited
financial statements and schedules examined by them and included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Regulations;
(iii) stating that, on the basis of certain procedures which
included a reading of the latest available unaudited interim consolidated
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
latest available minutes of meetings and actions of the stockholders and board
of directors and the various committees of the board of directors of the
Company, inquiries of officers and other employees of the Company responsible
for financial and accounting matters and other specified procedures and
inquiries, nothing came to their attention that caused them to believe that (A)
the unaudited consolidated financial statements, if any, and schedules of the
Company included in the Registration Statement and the Prospectus do not comply
as to form in all material respects with the applicable accounting requirements
of the Act and the Regulations or are not fairly presented in conformity with
generally accepted accounting
23
principles applied on a basis substantially consistent with that of the audited
consolidated financial statements of the Company included in the Registration
Statement and the Prospectus, (B) at a specified date not more than five days
prior to the date of such letter, there was any change in the capital stock or
long-term debt of the Company, or any decrease in the stockholders' equity, or
net current assets of the Company, in each case, as compared with amounts shown
in the December 31, 2000 consolidated balance sheet included in the Registration
Statement and the Prospectus, except for changes set forth in such letter, and
(C) during the period from December 31, 2000 to such specified date, there was
any decrease in consolidated revenues, income before income taxes, or net
income, or any decrease in net income per common share of the Company, in each
case as compared with the corresponding period beginning January 1, 2001 except
for changes set forth in such letter;
(iv) stating that they have compared specific dollar amounts,
numbers of shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the Prospectus in
each case to the extent that such amounts, numbers, percentages, statements and
information may be derived from the general accounting records, including work
sheets, of the Company with the results obtained from the application of
specified readings, inquiries and other appropriate procedures (which procedures
do not constitute an examination in accordance with generally accepted auditing
standards) set forth in the letter and found them to be in agreement; and
(v) statements as to such other matters incident to the
transaction contemplated hereby as Noble may reasonably request.
In the event that either of the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition of the
obligations of Noble that (A) such letter shall be accompanied by a written
explanation of the Company as to the significance thereof, unless Noble deems
such explanation unnecessary, and (B) such changes, decreases or increases do
not, in the sole judgment of Noble, make it impractical or inadvisable to
proceed with the purchase and delivery of the Units as contemplated by the
registration statement originally filed with respect to the Units, as amended as
of the date hereof.
References to the Registration Statement and the Prospectus in this Section
with respect to either letter referred to above shall include any amendment or
supplement thereto at the date of such letter.
(h) The Securities (including the additional shares included in the
Units) shall have been approved for quotation on the Nasdaq Small-Cap Market
(upon notice of issuance in the case of the Units and Warrants).
(i) No order suspending the sale of the Units in any jurisdiction
designated by Noble shall be in effect on the Closing Date and no proceedings
for that purpose shall have been instituted or, to the knowledge of the Company
Noble, shall be contemplated.
(j) The transaction herein shall be qualified under the State Blue
Sky laws of such states as Noble may reasonably request and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Effective Date, and Closing Date.
24
(k) The Company shall have furnished to Noble such other and further
certificates, documents, and opinions as Noble may reasonably request or its
counsel may request (including certificates of officers) as to the accuracy, at
and as of the Closing Date, of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder as to
other conditions concurrent and precedent to its obligations hereunder.
(l) On or prior to the date that Rights certificates are first mailed
to Equity Holders and on the Closing Date, dated the respective dates thereof
and in form and substance satisfactory to Noble's counsel, the Company shall
furnish to Noble such information, certificates and documents as Noble may
reasonably request.
If any condition of Noble's obligations hereunder to be fulfilled prior to
or at the Closing Date is not so fulfilled, Noble may terminate this Standby
Agreement or, if Noble so elects, it may waive any such conditions that have not
been fulfilled or extend the time for their fulfillment. In the event Noble so
elects to terminate this Standby Agreement, all Rights shall become immediately
null and void and the Company shall cause the Subscription Agent under the
Subscription Agreement to promptly return to the subscribers any payments
received by the Subscription Agent in respect of the exercise price relating
thereto. All opinions, certificates, letters and documents delivered pursuant
to this Standby Agreement will comply with the provisions hereof only if they
are reasonably satisfactory in all material respects Noble and Noble's counsel.
The Company shall furnish to Noble such conformed copies of such opinions,
certificates, letters and documents in such quantities as Noble and Noble's
counsel shall reasonably request.
The obligations of Noble to purchase and pay for any Units after having
exercised an option set forth in Section 2(h) hereof shall be subject, in its
discretion, to each of the foregoing conditions of this Section 6 to purchase
the Unsubscribed Units, with all references to the Unsubscribed Units and the
Closing Date being deemed to refer to such Units and the related Closing Date,
respectively.
7. Termination.
-----------
(a) This Standby Agreement may be terminated at any time prior to the
Closing Date, by Noble by written notice to the Company if in the reasonable
judgment of Noble it is impracticable to consummate this transaction, by reason
of (i) the Company having sustained a material loss of whatsoever nature, which,
in the sole and absolute opinion of Noble, substantially affects the value of
the property of the Company or materially interferes with the operation of the
business of the Company, (ii) any material adverse change in the business,
property or financial condition of the Company; (iii) trading in securities on
the New York Stock Exchange, the American Stock Exchange or Nasdaq Stock Market
having been suspended or limited or minimum prices having been established on
any such Market, (iv) a banking moratorium having been declared by either
federal or state authorities, (v) an outbreak of major hostilities or other
national or international calamity having occurred between the date hereof and
the Closing Date, (vi) any action having been taken by any government in respect
of its monetary affairs which, in the reasonable opinion of Noble, has a
material adverse effect on the United States securities markets; (vii) any
action, suit or proceeding at law or in equity against
25
the Company, or by any Federal, State or other commission, board or agency
wherein any unfavorable decision would materially adversely affect the business,
property, financial condition or income of the Company; or (viii) due to
conditions arising subsequent to the execution hereof, Noble reasonably believes
that, as a result of material and adverse events affecting the market for the
Company's Common Stock (other than for the effect of the offering on the price
of the Company's Common Stock) or the securities markets in general, it is
impracticable or inadvisable to proceed with the offering. Notwithstanding the
foregoing, if the closing bid price of the Company's Common Stock on the
expiration date is less than the Minimum Exercise Price Noble on the Expiration
Date shall have the right to terminate this Agreement in its sole discretion.
(b) If this Standby Agreement expires or is terminated pursuant to this
Section 7 or otherwise, the Company agrees to reimburse and indemnify Noble for
all of its expenses, as provided for under Section 2(c) and 5(m) hereof.
(c) Sections 2(c), 5(m) and 9 hereof shall survive the expiration or
termination of this Standby Agreement whether this under Section 7 or otherwise.
(d) In addition to the termination provision provided in this Section 7,
Noble shall retain its right to all remedies provided by law.
(e) Any notice under this Section 7 may be given by telephone, or
facsimile, but shall be subsequently confirmed by letter within three (3) days
of such notification.
8. Registration of Units to be Purchased by Noble.
----------------------------------------------
The Registration Statement will include registration of all Unsubscribed
Units that may be purchased by Noble pursuant to this Standby Agreement and
provide for the distribution of such Unsubscribed Units and the components
therein by Noble from time to time.
9. Indemnification.
---------------
(a) The Company will indemnify and hold harmless Noble and each person who
controls Noble within the meaning of Section 15 of the Act from and against any
and all losses, claims, damages, expenses or liabilities, joint or several to
which they or any of them may become subject under the Act or under any other
statute or at common law or otherwise and will reimburse Noble and each such
person specified as above for any reasonable legal or other expenses (including
the cost of any investigation and preparation) reasonably incurred by them or
any one them in connection with investigating or defending any litigation or
claim whether or not resulting in any liability, arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereto or in any Blue Sky
application or arising out of or based upon an omission or alleged omission to
state therein a material fact required to be stated therein necessary to make
the statements therein not misleading, all as of the date when the Registration
Statement or any amendment thereto, the filing of any such Blue Sky application,
as the case may be, becomes effective or any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
Prospectus (as amended or as supplemented thereto), or arise out of or are based
upon an omission or alleged omission to state therein a material fact required
to be stated therein or
26
necessary in order to make the statements therein, not misleading; provided,
however, that the indemnity agreement contained in this Section 9(a) shall not
apply to amounts paid in settlement of any such litigation if such settlement is
effected without the consent of the Company, nor shall it extend to Noble or any
person controlling Noble in respect of any such losses, claims, damages,
expenses, liabilities, or actions arising out of, or based upon any such untrue
statement or alleged untrue statement, or any such omission, if such statement
or omission was made in reliance upon and in conformity with, written
information furnished to the Company by Noble on its behalf specifically for use
in the Registration Statement, the Prospectus, or any such amendment thereof or
supplement thereto or Blue Sky application.
In case any such action shall be brought against Noble or any controlling
person, Noble or such controlling person shall promptly notify the Company of
the commencement thereof and the Company shall be entitled to participate in
(and, to the extent it shall wish, to direct) the defense thereof at its own
expense but such defense shall be conducted by counsel of recognized standing
(which shall include Xxxx Xxxxxxxxx, P.A.) and reasonably satisfactory to Noble
and to such controlling person or persons who are defendant or defendants in
such litigation. Noble or any such controlling person shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof subject to the Company's reasonable right to approve such counsel which
will not be unreasonably withheld, but the fees and expenses of such counsel
shall not be at the expense of the Company unless (i) the employment of such
counsel has been specifically authorized by the Company, or (ii) the Company
shall not have employed counsel to have charge of the defense of such action, or
(iii) there is a conflict of interest which would prevent counsel for the
Company from representing both the Company and Noble or such controlling person,
in any of which cases the Company shall not have the right to direct the defense
of such action on behalf of Noble or such controlling person. It is understood
that, regardless of whether such counsel is representing all of the parties
entitled to indemnification under this Section 9(a), the Company shall not be
liable, under clause (iii) above, for the fees and expenses of more than one
separate counsel who shall be approved by Noble. The Company agrees to notify
Noble promptly of the commencement of any litigation or proceeding against it or
against any of the officers or directors of the Company of which it may be
advised, in connection with the issue and sale of any of its Securities, and to
furnish Noble, at the Noble's request, with copies of all pleadings therein and
to permit Noble to be an observer therein and to apprise it of all of the
developments therein, all at the Company's expense. The provisions of this
Section 9(a) shall also apply to the subsequent registration of Noble's Warrants
and/or the securities underlying Noble's Warrants.
(b) Noble will indemnify and hold harmless the Company, the directors of
the Company, the officers of the Company who shall have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act, from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them may
become subject under the Act or under any other statute or at common law or
otherwise and, except as hereinafter provided, will reimburse the Company and
such officers or controlling person indemnified for as above for any legal or
other expenses (including the cost of any investigation and preparation)
reasonably incurred by them or any of them in connection with investigating or
defending any litigation or claims whether or not resulting in any liability,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment thereto
or
27
in any Blue Sky application or arising out of or based upon an omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, all as of the date
when the Registration Statement or such amendment thereto, or the date the
filing of any such Blue Sky application, as the case may be, becomes effective,
or any untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the prospectus (as amended or as supplemented
if the Company shall have filed with the Commission any amendments thereof or
supplements thereto), or an omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, but only if such
statement or omission was made in reliance upon information furnished in writing
to the Company by Noble specifically for use in the Registration Statement, the
Prospectus, or any such amendment thereof or supplement thereto or Blue Sky
application. Noble shall not be liable for amounts paid in settlement of any
such litigation, if such settlement was effected without its consent. In case of
the commencement of any action, respect of which indemnity may be sought from
Noble on account of its indemnity agreement contained in this subsection (b),
the Company and each person agreed to be indemnified by Noble shall have the
same obligation to notify Noble and Noble shall have the same right to
participate in (and, to the extent that it shall wish, to direct), as set forth
in Section 9(a) above, the defense of such action at its own expense but such
defense shall be conducted by counsel of recognized standing and reasonably
satisfactory to the Company or such other person agreed to be indemnified by
Noble. Noble agrees to notify the Company promptly of the commencement of any
litigation or proceeding against it or against any such controlling person of
which it may be advised in connection with the issue or sale of any of the
Securities of the Company. The provisions of this subparagraph shall also apply
to the subsequent registration of Noble's Warrants and/or securities underlying
Noble's Warrants.
(c) The respective indemnity agreements of the Company and Noble contained
in Section 9(a) and 9(b) above, and the representations and warranties of the
Company set forth in this Standby Agreement, shall remain operative and in full
force and effect, regardless of any investigation made by Noble or on its behalf
or by or on behalf of any person who controls Noble or the Company or any
controlling person of the Company or any director or any officer of the Company,
and shall survive the delivery of the Units, and any successor of Noble, or the
Company or of any controlling person of Noble or the Company, as the case may
be, shall be entitled to the benefit of these respective indemnity agreements.
10. Contribution.
------------
In order to provide for just and equitable contribution in any case in
which (i) an indemnified party makes claim for indemnification pursuant to
Section 9, but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that the express provisions of
Section 9 provide for indemnification in such case, or (ii) contribution under
the Act may be required on the part of any indemnified party, then each
indemnifying party shall contribute to the amount paid as a result of such
losses, claims, damages, expenses or liabilities (or action in respect thereof)
(A) in such proportion as is appropriate to reflect the relative benefits
received by each of the contributing parties, on the one hand, and the party to
be indemnified on the other hand, from the offering of the Units or (B) if the
allocation provided by clause (A) above is not
28
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (A) above but also the relative
fault of each of the contributing parties, on the one hand, and the party to be
indemnified on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages, expenses or liabilities, as well
as any other relevant equitable considerations. In any case where the Company is
the contributing party and Noble is the indemnified party, the relative benefits
received by the Company, on the one hand, and Noble, on the other, shall be
deemed to be in the same proportion as the total proceeds from the offering of
the Rights and Units and the Units sold upon exercise of the Rights (net of
underwriting discounts and other cash and non-cash compensation paid to Noble
but before deducting the other expenses incurred by the Company in connection
with the sale of the Units) bear to the total underwriting discounts and other
cash and non-cash compensation received by Noble pursuant to all agreements
referenced hereunder. Relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact related to
information supplied by the Company or by Noble, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, expenses or liabilities (or
actions in respect thereof) referred to above in this Section 10 shall be deemed
to include any legal or other expense reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10, Noble shall not be required
to contribute any amount in excess of the underwriting discount and other
commissions applicable to the Units purchased by Noble hereunder. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of Section 10, each person, if
any, who controls the Company within the meaning of the Act, each officer of the
Company who has signed the Registration Statement, and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to this Section 10. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect to which a claim for contribution may be made
against another party or parties under this Section 10, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have hereunder or otherwise
than under this Section 10, but only to the extent that such party or parties
were not adversely affected by such omission. The contribution agreement set
forth above shall be in addition to any liabilities which any indemnifying party
may have at common law or otherwise.
11. Finders.
-------
(a) The Company knows of no claims for services in the nature of a
finder's fee or origination fee with respect to this transaction resulting from
the respective acts of its officers, directors or employees, for which Noble or
the Company may be responsible, and the Company agrees to indemnify and hold
Noble free and harmless from any claims for any services of such nature arising
from any act of the Company or its employees, officers or directors and will
reimburse Noble for any counsel fees, legal or other expense reasonably incurred
by Noble in investigating or defending against any such claim.
29
(b) Noble knows of no claims for services in the nature of a finder's fee
or origination fee with respect to this transaction resulting from the
respective acts of its officers, directors or employees, for which the Company
may be responsible, and Noble agrees to indemnify and hold the Company free and
harmless from any claims for any services of such nature arising from any act of
Noble or its employees, officers or directors and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in investigating
or defending against any such claim.
12. Noble's Covenant.
----------------
Noble covenants and agrees with the Company as follows:
(a) Noble is registered as a broker-dealer with the Commission and is a
member in good standing with NASD.
(b) There is not now pending or threatened or to the best knowledge of
Noble or its counsel, contemplated against Noble any action or proceeding,
either in any court of competent jurisdiction or before the Commission or any
state securities commission, or administrative body or tribunal, that is
required to be disclosed in the Prospectus, except as fully disclosed in the
Prospectus.
(c) If any action or proceeding of the type referred to in Section 12(b)
above shall be instituted or threatened against Noble at any time prior to the
Effective Date, or if Noble shall cease to be a member in good standing of the
NASD at any time prior to the Effective Date, or there shall be filed by or
against Noble in any court pursuant to any federal, state, local or municipal
statute, a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of Noble's assets or if Noble makes an
assignment for the benefit of creditors at any time prior to the Effective Date,
Noble shall give written notice of the occurrence of such event or events to the
Company, and the Company shall have the right, on three (3) days written notice
to Noble, to terminate this Standby Agreement without any liability to Noble of
any kind.
(d) Noble hereby represents and warrants that it is properly licensed by
applicable authorities in jurisdictions in which it conducts business and in
which it will offer and sell Units.
13. Survival of Representations, Warranties and Agreements.
------------------------------------------------------
The respective indemnities, agreements, representations, warranties and
other statements of the Company or its officers as set forth in or made pursuant
to this Standby Agreement and the respective indemnities, agreements,
representations, warranties, covenants and other statements of Noble or its
officers as set forth in or made pursuant to this Standby Agreement shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of the Company or Noble or any controlling person, and will survive
termination of this Standby Agreement and the delivery of any payment for the
consummation of this transaction, on the Closing Date.
14. Benefits and Assignment.
-----------------------
30
This Standby Agreement has been made solely for the benefit of the Company
and its legal representatives and may not be assigned by the Company to any
other entity and no other person shall qualify or have any right in or by virtue
of this Standby Agreement.
15. Florida Law.
-----------
This Standby Agreement shall be construed in accordance with the laws of
the State of Florida, without giving effect to choice of law principles.
16. Notices.
-------
All notices and communications hereunder may be mailed or transmitted by
any standard form of telecommunication and, except as herein otherwise
specifically provided, shall be in writing and shall be deemed to have been duly
given when delivered to a notice party hereto at the address specified herein or
at the address subsequently communicated in writing by the notice parties.
Notices to Noble shall be directed to Noble International Investments, Inc.,
0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000, Attention: Nico X.
Xxxxx, with a copy to Broad and Xxxxxx, 000 X. Xxxxxxxx Xxxx., Xxxxx 0000,
Xxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, Esq. Notices to the Company
shall be directed to the address of the Company as set forth on the facing page
to the Registration Statement with a copy to Xxxx Xxxxxxxxx, P.A., 000 XX 0/xx/
Xxxxxx, Xxxxx 0000, Xxxxx, XX 00000, Attention: Xxxx X. Xxxxx, Esq. In each
case a party may change its address for notice hereunder by a written
communication to the other parties.
17. Counterparts.
------------
This Standby Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which taken together shall
be deemed to be one and the same instrument.
18. Entire Agreement.
----------------
This Standby Agreement contains the entire agreement between the parties
hereto in connection the subject matter hereof.
19. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL
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RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS STANDBY
AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
20. Consent to Jurisdiction. Each of the Parties hereby irrevocably submits to
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the exclusive jurisdiction of the courts of Palm Beach County, Florida and the
United States District Court for the Southern District of Florida, for the
purpose of any action or proceeding arising out of or relating to this Standby
Agreement and each of the Parties hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined exclusively in
Palm Beach County, Florida or the United States District Court for the Southern
District of Florida.
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Each of the Parties agrees that a final judgment in any action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment in any other matter provided by law.
If the foregoing correctly states and sets forth in full the Standby
Agreement between us, please indicate by signing this letter in the space
provided below for that purpose. The within Standby Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed the
original, but all of which together shall constitute one and the same instrument
and shall be valid and binding between us.
Very truly yours,
NOBLE INTERNATIONAL
INVESTMENTS, INC.
By:___________________________________
Nico X. Xxxxx, President
Dated: ________________________, 2001
Accepted and Agreed:
RELM WIRELESS CORPORATION
By:___________________________________
Xxxxx X. Xxxxxx, President
Dated: _________________________, 2001
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