1
Exhibit 1.1
2,000,000 Shares
ICARUS International, Inc.
Common Stock
UNDERWRITING AGREEMENT
, 0000
XXXX XXXXXXXXX XXXXXXXX & XX.
XXXXXXX GLOBAL SECURITIES, INC.
As Representatives of the several Underwriters
c/x XXXX XXXXXXXXX XXXXXXXX & CO.
One Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Dear Sirs:
SECTION 1. Introductory. ICARUS International, Inc., a Maryland
corporation (the "Company"), proposes to issue and sell to the several
underwriters named in Schedule A annexed hereto (the "Underwriters") an
aggregate of 2,000,000 shares of its authorized but unissued Common Stock, $.01
par value per share (the "Common Stock"). Said shares are herein referred to as
the "Firm Common Shares." In addition, the Company proposes to grant to the
Underwriters an option to purchase up to 300,000 additional shares of Common
Stock (such 300,000 shares being referred to as the "Optional Common Shares"),
as provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares, are hereinafter collectively
referred to as the "Common Shares." Xxxx Xxxxxxxxx Xxxxxxxx & Co. and Xxxxxxx
Global Securities, Inc. have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with the
offering and sale of the Common Shares.
You have advised the Company that the Underwriters propose to make a
public offering of the Common Shares on the effective date of the registration
statement hereinafter referred to, or as soon thereafter as in their judgment is
advisable.
The Company hereby confirms its agreement with respect to the purchase
of the Common Shares by the Underwriters as follows:
SECTION 2. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Underwriters that:
(a) A registration statement on Form SB-2 (File No. 333-45957)
with respect to the Common Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
Company has met all of the eligibility requirements for the use of a
registration statement on Form SB-2. There have been delivered to each
of the Representatives two signed copies of such registration statement
and amendments, together with two copies of each exhibit filed
therewith. Conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary
prospectus have been delivered to each of the Representatives in such
reasonable quantities as each of them has requested. The Company will
next file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment or
amendments thereto, including the form of final prospectus, or (ii) a
final prospectus in accordance with Rules 430A and 424(b) of the Rules
and Regulations. As filed, such amendment and form of final prospectus,
or such final prospectus, shall include all Rule 430A Information (as
hereinafter defined) and, except to the extent that the Representatives
shall agree to a modification, shall be in all substantive respects in
the form furnished to the Representatives prior to the date and time
that this Agreement was executed and delivered by the parties hereto,
or, to the extent not completed at such date and time, shall contain
only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company
shall have previously advised the Representatives would be included or
made therein.
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The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration
statement becomes effective and, in the event any post-effective
amendment thereto becomes effective prior to the First Closing Date (as
hereinafter defined), shall also mean such registration statement as so
amended; provided, however, that such term shall also include all Rule
430A Information deemed to be included in such registration statement
at the time such registration statement becomes effective as provided
by Rule 430A of the Rules and Regulations. Any registration statement
filed by the Company pursuant to Rule 462(b) under the Securities Act
is called the "Rule 462(b) Registration Statement," and from and after
the date and time of filing of the Rule 462(b) Registration Statement,
the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The term "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in the preceding paragraph and
any preliminary prospectus included in the Registration Statement at
the time it becomes effective that omits Rule 430A Information. The
term "Prospectus" as used in this Agreement shall mean the prospectus
relating to the Common Shares in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations or, if no filing pursuant to Rule 424(b) of the Rules and
Regulations is required, shall mean the form of final prospectus
included in the Registration Statement at the time such registration
statement becomes effective. The term "Rule 430A Information" means
information with respect to the Common Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations. All
references in this Agreement to the Registration Statement, the Rule
462(b) Registration Statement, a Preliminary Prospectus, or the
Prospectus, or any amendments or supplements to any of the foregoing,
shall refer to the copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System.
(b) To the knowledge of the Company, the Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus, and each Preliminary Prospectus has conformed in all
material respects to the requirements of the Act and the Rules and
Regulations and, as of its date, has not included any untrue statement
of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to
and including each Closing Date hereinafter mentioned, the Registration
Statement and the Prospectus, and any amendments or supplements
thereto, will contain all material statements and information required
to be included therein by the Act and the Rules and Regulations and
will in all material respects conform to the requirements of the Act
and the Rules and Regulations, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement thereto, will
include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of circumstances under which
they were made; provided, however, no representation or warranty
contained in this subsection 2(b) shall be applicable to information
contained in any Preliminary Prospectus, the Registration Statement,
the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by or
on behalf of the Representatives specifically for use in the
preparation thereof.
(c) Except for the "business alliances" disclosed in the
Prospectus, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Registration Statement, and
any reference herein to the Company's "subsidiaries" shall mean the
subsidiaries listed in such Exhibit 21. The Company and each of the
subsidiaries have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, with full corporate power and authority
(corporate and other) to own and lease their properties and conduct
their respective businesses as described in the Prospectus; on the
First Closing Date, the Company will own all of the outstanding capital
stock of its subsidiaries; the Company and its subsidiaries are in
possession of and are operating in compliance with all authorizations,
licenses, permits, consents, certificates and orders material to the
conduct of their respective businesses, except where noncompliance
would not have a material adverse effect on the business or financial
condition of the Company and its subsidiaries, taken as a whole; the
Company and each of its subsidiaries are duly qualified to do business
and are in good standing as foreign corporations in each jurisdiction
in which the ownership or leasing of properties or the conduct of their
respective businesses requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect upon the Company and its subsidiaries, taken as
a whole; and no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
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(d) On the First Closing Date, the Company will have an
authorized and outstanding capital stock as set forth under the heading
"Capitalization" in the Prospectus; the issued and outstanding shares
of Common Stock have been duly authorized and validly issued, will be
fully paid and nonassessable, will have been issued in compliance with
all federal and state securities laws, will have not been issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and will conform to the
description thereof contained under the heading "Description of Capital
Stock" in the Prospectus. As of each of the Closing Dates (as
hereinafter defined), the Company will have no more than 100
outstanding shares of preferred stock. All issued and outstanding
shares of capital stock of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable and,
on each Closing Date, will be owned by the Company free and clear of
any lien, claim, equity or other encumbrance of any kind or character.
Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company and its subsidiaries, and the
related notes thereto, included in the Prospectus, neither the Company
nor any of its subsidiaries has outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase,
any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description
of the Company's outstanding stock options, and other stock plans or
arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus, accurately and fairly presents
in all material respects the information required to be shown with
respect to such options, plans, arrangements, and rights.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set
forth in this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable, and will conform to the description thereof
contained in the Prospectus; and when duly countersigned by the
Company's transfer agent and registrar, and delivered to the
Underwriters in accordance with the provisions of this Agreement, good
and valid title thereto will pass to the Underwriters free and clear of
any liens, claims, equities or other encumbrances of any kind or
character (other than any liens, claims, equities or other encumbrances
that arise out of any actions or omissions of the Underwriters). No
preemptive rights or other rights to subscribe for or purchase exist
with respect to the issuance and sale of the Common Shares by the
Company pursuant to this Agreement. There are no persons with
registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement with respect to
the Common Shares included in the Registration Statement.
(f) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that (i) the validity and binding effect and
enforcement of this Agreement may be limited by any applicable
bankruptcy, reorganization, moratorium, or similar laws of general
application, (ii) the availability of equitable remedies may be limited
by principles of equity, whether considered in a proceeding at law or
in equity, and (iii) the terms thereof may be limited by applicable
securities laws and the policies embodied therein. The making and
performance of this Agreement by the Company and the consummation of
the transactions herein contemplated by the Company or the performance
by the Company of the transactions contemplated hereby does not:
require any consent, approval, authorization or order of or
registration or filing with any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as
may be required for the registration of the Common Shares under the Act
and compliance with the securities or Blue Sky laws and the clearance
of the public offering of the Common Shares by the National Association
of Securities Dealers, Inc. (the "NASD")); or conflict with, or
constitute a breach of, or a default under, the Articles of
Incorporation or Bylaws of the Company or the Certificate or Articles
of Incorporation or Bylaws or other organizational documents of any of
its subsidiaries; or conflict with or constitute a breach of or a
default under any material agreement, indenture, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which any of them or any of their respective properties may be
bound where such conflict or breach could have a material adverse
effect on the Company's financial condition or results of operations
taken as a whole (except for such conflicts, breaches or defaults for
which waivers or consents have been obtained); or violate any statute,
law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of its subsidiaries or any of the
their respective properties; or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to the terms of any
agreement
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or instrument to which any of them is a party or by which any of the
them may be bound or to which any of the property or assets of any of
them is subject, except, in each case for such conflicts, breaches,
defaults, violations, or encumbrances that would not singly or in the
aggregate have a material adverse effect on the ability of the Company
to fulfill its obligations hereunder.
(g) Xxxxx Xxxxxxxx LLP ("Xxxxx Xxxxxxxx"), who have expressed
their opinion with respect to certain financial statements filed with
the Commission as a part of the Registration Statement and included in
the Prospectus, are independent accountants as required by the Act and
the Rules and Regulations.
(h) Financial Statements; Financial Data and Statistical Data.
(i) The Consolidated Financial Statements and the
related notes thereto of the Company as of April 30, 1998 and 1997 and
for the years ended April 30, 1998 and 1997 and 1996 included in the
Registration Statement and the Prospectus (such Financial Statement
being herein referred to as the "Financial Statements") present fairly
the financial condition of the corporations covered by such Financial
Statements as of the respective dates of such Financial Statements, and
present fairly the results of operations and changes in financial
position of the corporations (and, where applicable, also on a
consolidated basis) covered by such financial statements, respectively,
for the respective periods covered thereby. Such Financial Statements
and the related notes thereto have been prepared in accordance with the
generally accepted accounting principles applied on a consistent basis
and have been audited by Xxxxx Xxxxxxxx, the Company's independent
accountants.
(ii) The selected consolidated financial data
presented in the Registration Statement for the years ended April 30,
1995, 1996, 1997 and 1998 are derived from the Company's audited
consolidated financial statements which have been audited by Xxxxx
Xxxxxxxx.
(iii) All financial statements, schedules and
financial data have been included in the Registration Statement in
material compliance with the rules and regulations of the Commission.
It is understood that all financial statements, schedules and financial
data for all periods are subject to the review by the Commission and to
their interpretation of the applicable rules and regulations.
(iv) The financial and statistical data set forth in
the Prospectus under the captions "Prospectus Summary," "Risk Factors,"
"Use of Proceeds," "Dividend Policy," "Capitalization," "Selected
Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business,"
"Management," "Certain Transactions," "Principal Stockholders" and
"Shares Eligible for Future Sale" fairly present the information set
forth therein on the basis stated in the Registration Statement.
(v) The Company's financial results have been
prepared in compliance with, and its Financial Statements have been
prepared on a basis consistent with, the revenue recognition rules of
Certified Public Accountants Statement of Position No. 91-1. The
Company has no reasonable basis to believe that Certified Public
Accountants Statement of Position No. 97-2 would have had a material
impact on the Company's results of operations if it had been applied to
the Company results of operations for the years ended April 30, 1996,
1997 and 1998.
(i) The Company is not in violation or default of any
provision of its Articles of Incorporation; none of the Company's
subsidiaries is in violation or default of its Certificate or Articles
of Incorporation or other organizational documents; neither the Company
nor any of its subsidiaries is in violation or default of any provision
of its Bylaws or is in breach of or default with respect to any
provision of any judgment, decree or order, or is in breach of or
default with respect to any provision of any material agreement,
mortgage, deed of trust, lease, loan agreement, security agreement,
material license, indenture, permit or other material instrument to
which it is a party or by which it or any of its properties are bound;
and there does not exist any state of facts which constitutes an event
of default on the part of the Company or any of its subsidiaries as
defined in such documents or which, with notice or lapse of time or
both, would constitute such an event of default, except for conflicts,
breaches, defaults, violation or encumbrances that would not have a
material adverse effect on the Company's financial condition or results
of operation taken as a whole.
(j) There are no contracts or other documents required to be
described in the Registration Statement, or to be filed as exhibits to
the Registration Statement, by the Act or by the Rules and
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Regulations which have not been described or filed as required. The
contracts so described in the Prospectus are in full force and effect
on the date hereof; and neither the Company nor any of its
subsidiaries, nor to the best of the Company's or any subsidiaries's
knowledge any other party, is in breach of or default under any
material provision of any such contract which would have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(k) Except as set forth in the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best
of the Company's knowledge, threatened to which the Company or any of
its subsidiaries is or may be a party or with respect to which property
owned or leased by the Company or any of its subsidiaries is or may be
the subject, or related to environmental, employment of aliens or
discrimination matters, which actions, suits or proceedings might,
individually or in the aggregate, prevent or adversely affect the
transactions contemplated by this Agreement or result in a material
adverse change in the condition (financial or otherwise), properties,
business or results of operations of the Company and its subsidiaries,
taken as a whole, and no labor disturbance by the employees of the
Company or its subsidiaries exists or, to the knowledge of the Company
or any of its subsidiaries is imminent which might be expected to
result in a material adverse change in the condition (financial or
otherwise), properties, business or results of operations of the
Company or any of its subsidiaries, taken as a whole. Neither the
Company nor any of its subsidiaries is a party to, or subject to the
provisions of, any material injunction, judgment, decree or order of
any court, regulatory body, administrative agency or other governmental
body.
(l) The Company and each of its subsidiaries have good and
marketable title to all the properties and assets reflected as owned by
them, respectively, in the financial statements hereinabove described
(or as reflected or described elsewhere in the Prospectus), subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except (i)
those, if any, reflected in such financial statements (or elsewhere in
the Prospectus), or (ii) those which do not materially adversely affect
the use made and proposed to be made of such property by the Company or
any of its subsidiaries. To the knowledge of the Company, the Company
and each of its subsidiaries hold their respective leased properties
under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company or
its subsidiaries. Except as disclosed in the Prospectus, the Company
and each of its subsidiaries own or lease all such properties as are
necessary to their respective operations as now conducted.
(m) Since the respective dates as of which information is
given in the Registration Statement and Prospectus and as of the date
hereof and as of the First Closing Date or Second Closing Date (as
applicable), and except as described in or specifically contemplated
by the Prospectus, (i) neither the Company nor any of its subsidiaries
has incurred any liabilities or obligations, direct, indirect or
contingent, or entered into any verbal or written agreement or other
transaction which is not in the ordinary course of business and which
reasonably could be expected to result in a material reduction in the
future earnings of the Company or its subsidiaries, taken as a whole;
(ii) the Company and its subsidiaries, taken as a whole, have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, windstorm, accident or other
calamity, whether or not covered by insurance; (iii) the Company has
not paid or declared any dividends or other distributions with respect
to its capital stock, and the Company and its subsidiaries are not in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) except for the Recapitalization described in the
Prospectus, there has not been any change in the capital stock of the
Company (other than upon the sale of the Common Shares hereunder) or
indebtedness material to the Company; and (v) there has not been any
material adverse change in the condition (financial or otherwise),
business, properties or results of operations of the Company and its
subsidiaries, taken as a whole.
(n) The Company and its subsidiaries have sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals
and governmental authorizations to conduct their respective businesses
as now conducted; the Company has no knowledge of any infringement by
it or its subsidiaries of trademarks, trade name rights, trade dress,
patent rights, copyrights, licenses, trade secret or other similar
rights of others; and except as disclosed in the Prospectus and except
for the possible infringement discussed with the Representatives now
under investigation by the Company, the Company has no knowledge of any
infringement by others of the Company's or its subsidiaries'
trademarks, trade name rights, trade dress, patent rights, copyrights,
licenses, trade secrets or other similar rights that would be material
to the business or financial condition of the Company and its
subsidiaries, taken as a whole; and there is no claim being made
against the Company or any of its subsidiaries regarding trademark,
trade name, trade dress, patent right, copyright, license, trade secret
or other infringement which could have a material adverse effect on the
condition (financial or otherwise), business or results of operations
of the Company
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and its subsidiaries, taken as a whole.
(o) The Company has not been advised, and has no reason to
believe, that either it or any of its subsidiaries is not conducting
business in material compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and federal
employment, truth-in-advertising, franchising, immigration and
environmental laws and regulations, except where failure to be so in
compliance would not materially adversely affect the condition
(financial or otherwise), business or results of operations of the
Company and its subsidiaries, taken as a whole.
(p) The Company and each of its subsidiaries have filed all
federal, resident state and foreign income and franchise tax returns or
extensions therefor required to be filed and have paid all taxes shown
as due thereon; and the Company has no knowledge of any tax deficiency
which has been or might be asserted or threatened against the Company
or any of its subsidiaries which could materially and adversely affect
the business, operations or properties of the Company and its
subsidiaries, taken as a whole; however, due to the complex nature of
interstate taxation, there can be no assurance that other states could
not assert additional filing or payment requirements.
(q) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) sales and other business transactions are executed
in accordance with management's general or specific authorizations;
(ii) sales and other business transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; and (iii) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(r) The Company is not required to make, and following receipt
of the proceeds from the sale of the Common Shares will not be required
to make, any filing or to register under the Investment Company Act of
1940, as amended.
(s) There is no proceeding pending or, to the knowledge of the
Company, threatened (or, to the knowledge of the Company or any of its
subsidiaries or any officer of the Company or its subsidiaries, any
basis therefor) which may lead to the revocation, suspension,
termination or nonrenewal of any certificate, order, license, permit,
easement, consent, waiver, approval, franchise, grant, authorization or
concession required to conduct the business of the Company or its
subsidiaries as now conducted and as proposed to be conducted and which
are material to the Company and its subsidiaries, taken as a whole.
(t) As of the date of this Agreement and each of the First
Closing Date (as hereinafter defined) and the Second Closing Date (as
hereinafter defined), there is no proceeding pending or, to the
knowledge of the Company, threatened which may lead to the
disqualification, delisting or suspension from trading of the Common
Stock on the Nasdaq National Market.
(u) Neither the Company nor any subsidiary of the Company
conducts business with the Government of Cuba, or in Cuba, or to the
knowledge of the Company, with any Cuban business entity or enterprise.
(v) No transfer taxes are required to be paid under the laws
of the States of Texas or Maryland in connection with the sale and
delivery of the Common Shares to the Underwriters hereunder.
SECTION 3. Representations and Warranties of the Underwriters.
(a) The Underwriters represent and warrant to the Company that
the information set forth (i) on the cover page of the Prospectus with
respect to price, underwriting discount and terms of the offering; and
(ii) under "Underwriting" in the Prospectus furnished to the Company by
the Representatives for use in connection with the preparation of the
Registration Statement and the Prospectus is true, accurate and correct
in all material respects and contains all information required to be
included therein by applicable laws, rules and regulations. The Company
acknowledges that this information is the sole information furnished to
the Company by the Representatives for inclusion in the Registration
Statement, any Preliminary Prospectus, any Prospectus, or any amendment
or supplement thereto.
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(b) The Underwriters are registered as broker/dealers with the
Commission and the NASD. Each of the Representatives is a corporation
validly existing and in good standing in its jurisdiction of
incorporation and has the full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by the Representatives and constitutes a valid and binding obligation
of the Representatives, enforceable against the Representatives in
accordance with its terms, except to the extent that (i) the validity
and binding effect and enforcement of this Agreement may be limited by
any applicable bankruptcy, reorganization, moratorium, or similar laws
of general application, (ii) the availability of equitable remedies may
be limited by principles of equity, whether considered in a proceeding
at law or in equity, and (iii) the terms thereof may be limited by
applicable securities laws and the policies embodied therein. The
Representatives have obtained clearance of their compensation by the
NASD and have taken all action deemed necessary in their judgment to
register or qualify the sale of the Firm Common Shares and the Optional
Common Shares in each state in which such Firm and/or Optional Common
Shares are to be offered and sold and each Underwriter is registered
and qualified to offer and sell the Common Shares in each state in
which such Common Shares will be offered and sold by such Underwriters.
There is not now pending nor, to the knowledge of the Representatives,
threatened against any Underwriter any material action or proceeding
before the Commission, the NASD, any state securities commission, the
Commodities Futures Trading Commission or any state or federal court
prohibiting or attempting to prohibit, or penalizing it from or for
acting as an underwriter, broker, dealer, salesman or agent for the
sale of securities.
SECTION 4. Purchase, Sale and Delivery of Common Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell to the Underwriters 2,000,000 Firm Common Shares, and the Underwriters
agree, severally and not jointly, to purchase from the Company the number of
Firm Common Shares set forth opposite their respective names in Schedule A
hereto. The purchase price per share to be paid by the Underwriters to the
Company shall be $ per share.
Delivery of certificate(s) for the Firm Common Shares to be purchased
by the Underwriters shall be made by or on behalf of the Company to the
Underwriters or to the account of Xxxx Xxxxxxxxx Xxxxxxxx & Co. at the
Depositary Trust Corporation, New York, New York ("DTC"), or otherwise as the
Representatives may direct, for the respective accounts of Underwriters. In the
event certificates are delivered to the Underwriters other than through DTC,
such delivery shall be made on the First Closing Date (as hereinafter defined)
or the Second Closing Date (as hereinafter defined), as applicable, at the
offices of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P., 000 00xx Xxxxxx, X.X., 00xx
Xxxxx, Xxxxxxxxxx, X.X. 00000 (or such other place as may be agreed upon by the
Company and the Representatives). Delivery of certificates, whether through DTC
or otherwise, shall be made at such time and date, not later than the third (or,
if the Firm Common Shares are priced, as contemplated by Rule 15c6-1(c)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after 4:30 p.m., Washington, D.C. time, the fourth) full business day
following the first day that any of Common Shares are released by the
Underwriters for sale to the public, as the Representatives shall designate (the
"First Closing Date"); provided, however, that if the Prospectus is at any time
prior to the First Closing Date recirculated to the public, the First Closing
Date shall occur upon the later of the third or fourth, as the case may be, full
business day following the first date that any of the Common Shares are released
by the Underwriters for sale to public or the date that is 48 hours after the
date that the Prospectus has been so recirculated. The certificates for the Firm
Common Shares shall be registered in such names and denominations as the
Representatives shall have requested in writing at least two full business days
prior to the First Closing Date and shall be made available for checking and
packaging on the business day preceding the First Closing Date at a location in
New York, New York, as may be designated by the Representatives. Time shall be
of the essence, and delivery at the time and place specified in this Agreement
is a further condition to the obligations of the Underwriters. Payment by the
Underwriters for the purchase price for the Firm Common Shares shall be made by
wire transfer or check in immediately available funds at the option of the
Company, which shall be communicated to the Representatives at least three
Business Days prior to the First and/or Second Closing Date.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters to purchase up to
300,000 Optional Common Shares at the purchase price per share to be paid for
the Firm Common Shares, for use solely in covering any over-allotments made by
the Underwriters in the sale and distribution of the Firm Common Shares. The
option granted hereunder may be exercised at any time within 30 days after the
first date that any of the Firm Common Shares are released by the Underwriters
for sale to the public upon written notice by the Underwriters to the Company
setting forth the aggregate number of Optional Common Shares as to which the
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Underwriters are exercising the option, the names and denominations in which the
certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may not
be earlier than but may coincide with the First Closing Date), being herein
referred to as the "Second Closing Date," shall be determined by the
Underwriters, but if at any time other than the First Closing Date shall not be
earlier than three nor later than five full business days after delivery of such
notice of exercise. The number of Optional Common Shares to be purchased by each
Underwriter shall be determined by multiplying the aggregate number of Optional
Common Shares with respect to which such option is exercised pursuant to such
notice of exercise by a fraction, the numerator of which is the number of Firm
Common Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Common
Shares (subject to such adjustments to eliminate any fractional share purchases
as the Underwriters in their discretion may make). Certificates for the Optional
Common Shares will be made available for checking and packaging on the business
day preceding the Second Closing Date at a location in New York, New York
designated by you. The manner of payment for and delivery of the Optional Common
Shares shall be the same as for the Firm Common Shares purchased, as specified
in this Section 4. At any time before lapse of the option, the Underwriters may
cancel such option by giving written notice of such cancellation to the Company.
If the option is canceled or expires unexercised in whole or in part, the
Company will deregister under the Act the number of Optional Common Shares as to
which the option has not been exercised.
Subject to the terms and conditions hereof, the Underwriters propose to
make a public offering of their respective portions of the Firm Common Shares,
and of the Optional Common Shares if and to the extent that the Underwriters
exercise their option to purchase Optional Common Shares, as soon after the
effective date of the Registration Statement as in the judgment of the
Underwriters is advisable and at the public offering price set forth on the
cover page of and on the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date
the Common Shares are released by the Underwriters for sale to the public, the
Company shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
SECTION 5. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the
parties hereto, to become effective. If the Registration Statement has
become or becomes effective pursuant to Rule 430A of the Rules and
Regulations, or the filing of the Prospectus is otherwise required
under Rule 424(b) of the Rules and Regulations, the Company will file
the Prospectus, properly completed, pursuant to the applicable
paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives in writing (i) of the receipt of any comments of
the Commission; (ii) of any request of the Commission for amendment of
or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information; (iii) when the Registration Statement shall
have become effective; and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of the institution of any proceedings for that purpose. If
the Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or
supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of
which the Representatives have not been furnished with a copy a
reasonable time prior to such filing or to which the Representatives
reasonably object in writing or which is not in material compliance
with the Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the Representatives' request, any amendments or
supplements to the Registration Statement or the Prospectus which in
the Company's and the Representatives' reasonable judgment may be
necessary or advisable to enable the Underwriters to continue the
distribution of the Common Shares and will use its best efforts to
cause the same to become effective as promptly as possible. The Company
will fully and completely comply with the provisions of Rule 430A of
the Rules and Regulations with respect to information omitted from the
Registration Statement in reliance upon such Rule.
(c) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the
Common Shares is required to be delivered under the Act any event
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occurs as a result of which the Prospectus, including any amendments or
supplements, would include an untrue statement of a material fact, or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, or if it is
necessary at any time to amend the Prospectus, including any amendments
or supplements, to comply with the Act or the Rules and Regulations,
the Company will promptly advise the Representatives thereof and will
promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission
or an amendment or supplement which will effect such compliance and
will use its best efforts to cause the same to become effective as soon
as possible; and, in case any Underwriter is required to deliver a
prospectus after such nine-month period, the Company, upon request, but
at the expense of such Underwriter, will promptly prepare such
amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Act.
(d) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the
"effective date of the Registration Statement" (as defined in Rule
158(c) of the Rules and Regulations), the Company will make generally
available to its security holders an earnings statement (which need not
be audited) covering a period of 12 consecutive months beginning after
the effective date of the Registration Statement which will satisfy the
provisions of the last paragraph of Section 11(a) of the Act.
(e) During such period as a prospectus is required by law to
be delivered in connection with sales by an Underwriter or dealer, the
Company, at its expense, but only for the nine-month period referred to
in Section 10(a)(3) of the Act, will furnish to the Underwriters or
mail copies of the Registration Statement, the Prospectus, the
Preliminary Prospectus and all amendments and supplements to any such
documents, in each case as soon as available and in such quantities as
the Representatives may request, for the purposes contemplated by the
Act.
(f) The Company shall cooperate with the Representatives and
their counsel in order to qualify or register the Common Shares for
sale under (or obtain exemptions from the application of) the Blue Sky
laws of such jurisdictions as the Representatives designate, will
comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required
for the distribution of the Common Shares. The Company shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction where it is not
presently qualified or where it would be subject to taxation as a
foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or overt threat of any
proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company, with the Representatives' cooperation, will use its best
efforts to obtain the withdrawal thereof.
(g) During the period of five years hereafter, the Company
will furnish to the Representatives: (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report to
Stockholders of the Company containing the balance sheet of the Company
as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii)
as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-KSB, Quarterly Report on Form
10-QSB, Report on Form 8-K or other report filed by the Company with
the Commission, the NASD or any securities exchange; and (iii) as soon
as available, copies of any report or communication of the Company
mailed generally to holders of its Common Stock.
(h) During the period of 180 days from the date of the
Prospectus, without the prior written consent of Xxxx Xxxxxxxxx
Xxxxxxxx & Co. (the giving or withholding of such written consent being
in the sole discretion of Xxxx Xxxxxxxxx Xxxxxxxx & Co.), the Company
will not issue, offer, sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other
securities convertible into or exchangeable with its Common Stock or
other equity security, except for equity securities used as
consideration in acquisitions of the assets, stock, intellectual
property or business of another person or entity, or the grant of
options in the ordinary course of business pursuant to the Company's
1997 Stock Option Plan or the issuance of shares of Common Stock in the
ordinary course of business pursuant to the Company's Recognition and
Retention Plan and Trust or in accordance with the Company's 401(k)
plan, as described in the Prospectus.
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(i) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its
statements under the caption "Use of Proceeds" in the Prospectus.
(j) The Company will use its best efforts to qualify or
register its Common Stock for sale in non-issuer transactions under (or
obtain exemptions from the application of) the Blue Sky laws of the
State of California (and thereby permit market making transactions and
secondary trading in the Company's Common Stock in California), will
comply with such Blue Sky laws and will use its best efforts to
maintain such qualifications, registrations and exemptions in effect
for a period of three years after the date hereof.
SECTION 6. Payment of Expenses.
(a) Whether or not the transactions contemplated hereunder are
consummated or this Agreement becomes effective or is terminated, the
Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder, including
without limiting the generality of the foregoing, (i) all expenses
incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees and expenses of the
registrar and transfer agent of the Common Stock, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent
accountants, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution to the
Underwriters and dealers of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for
herein, this Agreement, the Agreement Among Underwriters, the Selected
Dealers Agreement, the Underwriters' Questionnaire, the Underwriters'
Power of Attorney and the preliminary Blue Sky memorandum and final
Blue Sky memorandum, (vi) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares
for offer and sale under the Blue Sky laws, not to exceed $10,000 plus
reasonable and documented out-of-pocket expenses and (vii) all other
fees, costs and expenses referred to in Item 13 of the Registration
Statement. Except as provided in this Section 6 and in Section 8 and
Section 10 hereof, the Underwriters shall pay all of their own
expenses, including the fees and disbursements of their counsel
(excluding those relating to qualification, registration or exemption
under the Blue Sky laws and the Blue Sky memoranda).
(b) If the Firm Common Shares are purchased and sold on the
First Closing Date, then on the First Closing Date the Company shall
pay to the Representatives an aggregate amount equal to 2.0% of the
aggregate "Price to Public" set forth on the cover page of the
Prospectus for all Firm Shares sold hereunder, which amount shall
represent a non-accountable allowance for the expenses incurred by the
Representatives in connection with their duties and activities under
this Agreement. If any Optional Common Shares are purchased and sold on
the Second Closing Date, then on the Second Closing Date, for each
Optional Common Share purchased and sold, the Company shall pay to the
Representatives an additional amount equal to 2.0% of the "Price to
Public" per share set forth on the cover page of the Prospectus, which
amount shall represent an additional non-accountable allowance for the
expenses incurred by the Representatives as aforesaid.
SECTION 7. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Firm Common Shares
on the First Closing Date and the Optional Common Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties on
the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the
accuracy of the statements of Company officers made herein pursuant to the
provisions of this Agreement, to the performance by the Company of its
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective; if
the filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b) of the Rules and Regulations, the Prospectus
shall have been filed in the manner and within the time period required
by Rule 424(b) of the Rules and Regulations; and prior to such Closing
Date, no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment to the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending or, to the knowledge of the Company or the Representatives,
shall be
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contemplated by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement, or
otherwise, shall have been complied with to the Representatives'
satisfaction.
(b) The Representatives shall be satisfied that since the
respective dates as of which information is given in the Registration
Statement and Prospectus, (i) there shall not have been any change in
the capital stock of the Company or its subsidiaries or any material
change in the indebtedness of the Company or its subsidiaries, except
as contemplated by the Prospectus; (ii) except as set forth in or
contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have
been entered into by the Company or its subsidiaries which is not in
the ordinary course of business and which reasonably could be expected
to result in a material reduction in the future earnings of the Company
or its subsidiaries, taken as a whole; (iii) no loss or damage (whether
or not insured) to the property of the Company or its subsidiaries
shall have been sustained which materially and adversely affects the
condition (financial or otherwise), business or results of operations
of the Company or its subsidiaries, taken as a whole; (iv) no legal or
governmental action, suit or proceeding affecting the Company or its
subsidiaries which could have a material adverse effect upon the
Company and its subsidiaries, taken as a whole, or which affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened; and (v) there shall not have been any
material change in the condition (financial or otherwise), business,
management or results of operations the Company and its subsidiaries
taken as a whole which makes it impractical or inadvisable in the
judgment of the Representatives to proceed with the public offering or
purchase of the Common Shares as contemplated hereby.
(c) There shall have been furnished to the Representatives on
each Closing Date, in form and substance satisfactory to the
Representatives, such documents and certificates as the Representatives
shall reasonably request, including the following:
(i) An opinion of Elias, Matz, Xxxxxxx & Xxxxxxx
L.L.P., special counsel for the Company, addressed to the
Representatives and dated the First Closing Date, or the
Second Closing Date, as the case may be, to the effect that:
(1) The Company has been duly incorporated
and is validly existing as a corporation and, based
solely upon a certificate issued by the proper
governmental authorities of the State of Maryland, is
in good standing under the laws of its jurisdiction
of incorporation, and has full corporate power and
authority to own its properties and conduct its
business as described in the Registration Statement;
the Company is not qualified to do business as a
foreign corporation in any jurisdiction;
(2) The authorized capital stock of the
Company is as set forth under the caption
"Capitalization" in the Prospectus, and the number of
shares of Common Stock that will be issued and
outstanding after consummation of the transactions
contemplated hereby is as set forth under the caption
"Prospectus Summary - The Offering" (assuming the
Underwriters do not elect to purchase any of the
Optional Common Shares) based solely on certificates
of officers of the Company; all necessary and proper
corporate proceedings have been taken in order to
validly authorize such authorized Common Stock and to
validly issue such issued and outstanding Common
Stock; all outstanding shares of Common Stock (and,
upon payment therefor as described herein, including
the Firm Common Shares and Optional Common Shares, if
any) have and will have been duly and validly
authorized and issued, are nonassessable and, to such
counsel's actual knowledge, fully paid, were not and
will not be issued in violation of any preemptive
rights or other rights to subscribe for or purchase
any securities, respectively, and conform to the
description thereof contained in the Prospectus;
without limiting the foregoing, there are no
preemptive or, except as described in the Prospectus,
other rights to subscribe for or purchase any of the
Common Shares to be sold by the Company hereunder;
neither the Articles of Incorporation nor Bylaws of
the Company, nor does any contract set forth in the
Exhibits to the Registration Statement, contain any
restriction upon the voting or transfer of any of the
shares of capital stock of the Company (including the
Firm Common Shares and the Optional Common Shares),
except such restrictions as may be imposed by federal
and state securities laws or as may be expressly
described in the Prospectus;
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(3) The recapitalization of the Company, as
described in the Prospectus (the "Recapitalization"),
was consummated prior to the First Closing Date;
(4) The terms of the Recapitalization
conform in all material respects to the description
thereof contained in the Prospectus; the
Recapitalization and the transactions contemplated
thereby have been duly authorized and consummated in
accordance with applicable law; the consummation of
the Recapitalization and the transactions
contemplated thereby did not result in a breach or
violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument of the Company set forth in the Exhibits
to the Registration Statement, nor did such
consummation result in any violation of the
provisions of the Articles of Incorporation or Bylaws
of the Company, or any statute, order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company;
(5) The certificate(s) evidencing the Common
Shares to be delivered hereunder are in due and
proper form under Maryland law, and when duly
countersigned by the Company's transfer agent and
registrar, and delivered to the Underwriters, or to
the order of the Underwriters, against payment of the
agreed consideration therefor in accordance with the
provisions of this Agreement, the Firm Common Shares
to be sold by the Company and the Optional Common
Shares to be sold by the Company to the extent that
the over-allotment option is exercised will pass to
the Underwriters free and clear of any liens, claims,
equities or other encumbrances of any kind or
character (other than any liens, claims, equities or
other encumbrances that arise out of any actions or
omissions of the Underwriters);
(6) Except as disclosed in the Prospectus,
there are no outstanding options, warrants or other
rights calling for the issuance of, and no
commitments or obligations to issue, any shares of
capital stock of the Company or any security
convertible into or exchangeable for capital stock of
the Company;
(7) (a) To such counsel's actual knowledge,
the Registration Statement has become effective under
the Act, and no stop order suspending the
effectiveness of the Registration Statement or
preventing the use of the Prospectus has been issued
and no proceedings for that purpose have been
instituted or are pending or overtly threatened by
the Commission; any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) of
the Rules and Regulations has been made in the manner
and within the time period required by such Rule
424(b);
(b) The Registration Statement, the
Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules
and other statistical financial data and schedules
included therein and the information relating to the
Underwriters as described in Section 3(a) hereof, as
to which such counsel need express no opinion) comply
as to form in all material respects with the
requirements of the Act and the Rules and Regulations
as of their respective dates of effectiveness; and
(c) To such counsel's actual
knowledge, there are no franchises, leases,
contracts, agreements or documents of a character
required by the Act and the Rules and Regulations to
be disclosed in the Registration Statement or
Prospectus or to be filed as exhibits to the
Registration Statement which are not disclosed or
filed, as required;
(8) The Company has full right, corporate
power and authority to enter into this Agreement and
to sell and deliver the Common Shares to be sold by
it to the Underwriters; this Agreement has been duly
and validly authorized by all necessary corporate
action by the Company, has been duly and validly
executed and delivered by and on behalf of the
Company, and is a valid and binding agreement of the
Company enforceable against the Company in accordance
with its terms, except to the extent that (i) the
validity and binding effect and enforcement of this
Agreement may be limited by any applicable
bankruptcy, reorganization, moratorium, or similar
laws of general application, (ii) the availability of
equitable remedies may be limited by principles of
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equity, whether considered in a proceeding at law or
in equity, and (iii) the terms hereof may be limited
by applicable securities laws and the policies
embodied therein; and no approval, authorization,
order, consent, registration, filing, qualification,
license or permit of or with any court, regulatory,
administrative or other governmental body is required
for the execution and delivery of this Agreement by
the Company or the consummation of the transactions
contemplated by this Agreement, except such as have
been obtained and are in full force and effect under
the Act and under the Exchange Act and except as may
be required under applicable Blue Sky laws in
connection with the purchase and distribution of the
Common Shares by the Underwriters and the obtaining
of a letter of no objection from the NASD with
respect to such offering as to which no opinion need
be expressed by such counsel;
(9) The execution and performance of this
Agreement, the issuance, sale and delivery of the
Common Shares and the consummation of the
transactions herein contemplated will not violate any
of the provisions of the Articles of Incorporation or
Bylaws of the Company, conflict with, result in the
breach of, or constitute, either by itself or upon
notice or the passage of time or both, a default
under any agreement, mortgage, deed of trust, lease,
franchise, material license, indenture, permit or
other instrument to which the Company is a party or
by which the Company or any of its property may be
bound or affected that is set forth in the Exhibits
to the Registration Statement, or violate any
statute, judgment, decree, order, rule or regulation
of any court or government body having jurisdiction
over the Company or any of its property (other than
state securities or Blue Sky laws and regulations and
underwriter compensation under the Rules of the NASD
as to which counsel need not express any opinion);
(10) To such counsel's actual knowledge, the
Company is not in violation of its Articles of
Incorporation or Bylaws and, to such counsel's actual
knowledge the Company is not in breach of or default
with respect to any provision of any agreement,
mortgage, deed of trust, lease, loan agreement,
security agreement, license, indenture, permit or
other instrument to which the Company is a party or
by which the Company or any of its properties may be
bound or affected that is set forth in the Exhibits
to the Registration Statement, except where such
default would not materially adversely affect the
Company, and, to such counsel's actual knowledge, the
Company is in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes
of any court or jurisdiction to which they are
subject, except where noncompliance would not
materially adversely affect the Company;
(11) Except as disclosed in the Prospectus,
to such counsel's actual knowledge, there are no
legal actions, suits or governmental proceedings
pending or threatened before any court or
governmental agency, authority or body which, if
determined adversely to the Company or its
subsidiaries, would individually or in the aggregate
have a material adverse effect on the financial
position, stockholders' equity or results of
operations of the Company;
(12) To such counsel's actual knowledge no
holders of securities of the Company have rights to
the registration of shares of Common Stock or other
securities which would be required to be included in
the Registration Statement filed by the Company or
included in the offering contemplated thereby which
have not been duly waived in writing; and
(13) No transfer taxes are required to be
paid under the laws of the State of Maryland in
connection with the sale and delivery of the Common
Shares to the Underwriters hereunder.
In rendering such opinion, such counsel may rely, as
to matters of fact, on certificates of officers of the Company
and of governmental officials, in which case their opinion
shall state that they are so doing and that the Underwriters
are justified in relying on such certificates and copies of
such certificates are to be attached to the opinion. The
opinion shall be furnished to the Representatives and shall
expressly state that the Underwriters may rely on such opinion
as if it were addressed to them. Such counsel's opinion shall
be limited to matters governed by federal
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securities laws and by Maryland law. The opinion shall be
governed by, and whenever any opinion expressed herein with
respect to any matter is qualified by the phrase "to such
counsel's actual knowledge," to the knowledge of such counsel"
or "known by such counsel" or any similar phrase, such
language shall be interpreted according to, the Legal Opinion
Accord of the Section of Business Law of the American Bar
Association (1991). For purposes of such opinions, no
proceedings shall be deemed to be pending, no order or stop
order shall be deemed to be issued, and no action shall be
deemed to be instituted unless, in each case, a director or
executive officer of the Company shall have received a copy of
such proceedings, order, stop order or action. For purposes of
such opinions, no proceedings shall be deemed to be threatened
unless the potential litigant or government authority has
manifested in writing to the directors or management of the
Company or to counsel thereof a present intention to initiate
such litigation or proceedings. In addition, such opinion may
be limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist as of the
date of such opinions; in rendering such opinions, such
counsel need assume no obligation to revise or supplement it
should the present laws be changed by legislative or
regulatory action, judicial action or otherwise. Such counsel
may assume that any agreement is the valid and binding
obligation of any parties to such agreement other than the
Company.
In addition, such counsel shall confirm that in
connection with the preparation of the Registration Statement,
they have participated in conferences with officers, employees
and other representatives of the Company, counsel for the
Underwriters, representatives of the independent public
accountants for the Company and representatives of the
Underwriters at which the contents of the Registration
Statement and Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not
assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration
Statement and Prospectus and has not made any independent
check or verification thereof, on the basis of the foregoing
(relying as to materiality to a large extent upon the
statements of officers, employees and other representatives of
the Company), no facts have come to such counsel's attention
that lead them to believe that either the Registration
Statement (except for the financial statements, notes to the
financial statements, financial tables, and other tabular
financial and statistical data included therein or omitted
therefrom and the information from the Underwriters referred
to in Section 3(a) hereof, as to which counsel need express no
view) at the time such Registration Statement became effective
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 in light of the
circumstances in which they were made, not misleading, or the
Prospectus (except for the financial statements, notes to the
financial statements, financial tables, and other tabular
financial and statistical data included therein or omitted
therefrom and the information from the Underwriters referred
to in Section 3(a) hereof, as to which counsel need express no
view) as of its date contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
(ii) An opinion of (x) Xxxxxxxxxx, Xxxxx & Xxxxxxx, Chartered,
rendered on behalf of ICARUS Corporation and ICARUS Development and
Marketing Corporation, (y) rendered on behalf of ICARUS Nippon
K.K. and (z) rendered on behalf of ICARUS Services Limited (each such
subsidiary of the Company, a "Subsidiary") shall be furnished to the
Representatives on each Closing Date, each such opinion addressing the
Subsidiary(s) that is the subject thereof and being in substantially
the following form:
(1) The Subsidiary has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction
of incorporation, and to such counsel's actual
knowledge after due inquiry and without researching
the requirements of each jurisdiction, is duly
qualified to do business as foreign corporation and
is in good standing in all other jurisdictions where
the ownership or leasing of properties or the conduct
of its business requires such qualification, except
for jurisdictions in which the failure to so qualify
would not have a material adverse effect on the
Subsidiary; and the Subsidiary has full corporate
power and authority to own its properties and conduct
its business as described in the Registration
Statement;
(2) All of the issued and outstanding shares
of capital stock of the Subsidiary
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has been duly authorized and, with respect to ICARUS
Corporation and ICARUS Services Limited, and based
upon the certification of Xxxxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxxxx, the books and records provided to
such counsel, and to such counsel's actual knowledge,
prior to the Recapitalization such shares of capital
stock were fully paid and nonassessable, and good and
valid title thereto was held by Xxxxxxx X. Xxxxxxx
and Xxxxxx X. Xxxxxxx, and free and clear of all
liens, claims, equities or other encumbrances of any
kind or character;
(3) The consummation of the Recapitalization
and the execution and performance of this Agreement,
the issuance, sale and delivery of the Common Shares
and the consummation of the transactions herein
contemplated will not violate any of the provisions
of the charter, bylaws or other governing documents
of the Subsidiary, or, to such counsel's actual
knowledge, conflict with, result in the breach of, or
constitute, either by itself or upon notice or the
passage of time or both, a default under any material
agreement, mortgage, deed of trust, lease, franchise,
material license, indenture, permit or other material
instrument to which any Subsidiary is a party or by
which any Subsidiary or any of its property may be
bound or affected (which may be specified in a
schedule attached to such opinion), or violate any
statute, judgment, decree, order, rule or regulation
of any court or government body having jurisdiction
over any Subsidiary or any of its property (other
than state securities or Blue Sky laws and
regulations as to which counsel need not express any
opinion); and
(4) To such counsel's actual knowledge: the
Subsidiary is not in violation of its charter, bylaws
or other governing documents of the Subsidiary and,
to such counsel's actual knowledge the Subsidiary is
not in material breach of or default with respect to
any provision of any material agreement, mortgage,
deed of trust, lease, loan agreement, security
agreement, license, indenture, permit or other
material instrument to which the Subsidiary is a
party or by which the Subsidiary or any of its
properties may be bound or affected (which may be
specified in a schedule attached to such opinion),
except where such default would not materially
adversely affect the Subsidiary and/or its business
operations, and, to such counsel's actual knowledge,
the Subsidiary is in compliance with all laws, rules,
regulations, judgments, decrees, orders and statutes
of any court or jurisdiction to which they are
subject, except where noncompliance would not
materially adversely affect the Subsidiary and/or its
business operations.
In rendering such opinion, such counsel may rely, as
to matters of fact, on certificates of officers of the
Subsidiary and of governmental officials, in which case their
opinion shall state that they are so doing and that the
Underwriters are justified in relying on such certificates and
copies of such certificates are to be attached to the opinion.
The opinion shall be furnished to the Representatives and
shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them. Such counsel's
opinion shall be limited to matters governed by the laws
applicable to the jurisdiction in which the Subsidiary is
incorporated. The opinion of Xxxxxxxxxx, Ogens & Xxxxxxx,
Chartered, shall be governed by, and whenever any opinion
expressed therein with respect to any matter is qualified by
the phrase "to such counsel's actual knowledge," to the
knowledge of such counsel" or "known by such counsel" or any
similar phrase, such language shall be interpreted according
to, the Legal Opinion Accord of the Section of Business Law of
the American Bar Association (1991). For purposes of such
opinions, no proceedings shall be deemed to be pending, no
order or stop order shall be deemed to be issued, and no
action shall be deemed to be instituted unless, in each case,
a director or executive officer of the applicable Subsidiary
shall have received a copy of such proceedings, order, stop
order or action. For purposes of such opinions, no proceedings
shall be deemed to be threatened unless the potential
litigants or governmental authority has manifested in writing
to the directors or management of the applicable Subsidiary or
to counsel thereof a present intention to initiate such
litigation or proceedings. In addition, such opinions may be
limited to present statutes, regulations and judicial
interpretations and to facts as they presently exist as of the
date of such opinions, and such counsel need not survey or
research the laws of any other jurisdiction and/or survey or
research all laws of jurisdictions applicable to such opinions
in rendering such opinions, such counsel need assume no
obligation to revise or supplement it should the present laws
be changed by legislative or regulatory action, judicial
action or otherwise. Such counsel may
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assume that any agreement is the valid and binding obligation
of any parties to such agreement other than the applicable
Subsidiary.
In addition, the opinion of Xxxxxxxxxx, Ogens &
Xxxxxxx, Chartered, shall include language similar to that
found in the final paragraph of Section 7(c)(i) above and,
shall also indicate in writing to the Representatives that
they know of no reason why the Representatives would not be
justified in relying upon each of the other opinions referred
to in this Section 7(c)(ii).
(iii) An opinion of Xxxxx Xxxxxxxx, independent accountants
for the Company, addressed to the Representatives and dated the First
Closing Date, or the Second Closing Date, as the case may be, to the
effect that the Recapitalization was consummated and effected as a tax
free reorganization in accordance with all applicable laws and
regulations of the United States and the United Kingdom.
(iv) Such opinion or opinions of Xxxxx Xxxxxxx Rain Xxxxxxx (A
Professional Corporation), counsel for the Underwriters, dated the
First Closing Date or the Second Closing Date, as the case may be, with
respect to such matters as the Representatives may reasonably require,
and the Company shall have furnished to such counsel such documents and
shall have exhibited to them such papers and records as they reasonably
may request for the purpose of enabling them to pass upon such matters.
In connection with such opinions, such counsel may rely on
representations or certificates of officers of the Company and
governmental officials.
(v) A certificate of the Company executed by the President and
Chief Executive Officer, the Executive Vice President or the Chief
Financial Officer of the Company, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that as of such
date:
(1) The representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied on or prior to such Dates, respectively;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the
Registration Statement or any amendment thereto; no
stop order suspending the effectiveness of the
Registration Statement has been issued; and to the
best of the knowledge of the respective signers, no
proceedings for that purpose have been instituted or
are pending or overtly threatened under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration
Statement and the Prospectus; in his opinion and to
the best of his knowledge, the Registration Statement
and the Prospectus and any amendments or supplements
thereto contain all statements required to be stated
therein regarding the Company and its subsidiaries,
and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or
omits to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed and as of the date
hereof, no agreement, written or oral, transaction or
event has occurred which should have been set forth
in an amendment to the Registration Statement or in a
supplement to or amendment of any Prospectus which
has not been disclosed in such a supplement or
amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus and as of the date hereof, and
except as disclosed in or contemplated by the
Prospectus, there has not been any material adverse
change or a development involving a material adverse
change in the condition (financial or otherwise),
business, properties, results of operations or
management of the Company and its subsidiaries, taken
as a whole; and no legal or governmental action,
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suit or proceeding is pending or, to the best
knowledge of the Company, threatened against the
Company or its subsidiaries which is material to the
Company or its subsidiaries, whether or not arising
from transactions in the ordinary course of business,
or which may adversely affect the transactions
contemplated by this Agreement; neither the Company
nor its subsidiaries has entered into any verbal or
written agreement or other transaction which is not
in the ordinary course of business or which
reasonably could be expected to result in a material
reduction in the future earnings of the Company or
its subsidiaries, or incurred any material liability
or obligation, direct, contingent or indirect not in
the ordinary course of business, made any change in
its capital stock, made any material change in its
short-term debt or long-term debt or repurchased or
otherwise acquired any of the Company's capital
stock; and the Company has not declared or paid any
dividend, or declared or made any other distribution,
with respect to its outstanding capital stock payable
to stockholders of record, except as disclosed in the
Prospectus, on a date prior to the First Closing Date
or Second Closing Date, as the case may be; and
(6) Since the respective dates as of which
information is given in the Registration Statement
and the Prospectus, and as of the date hereof, and
except as disclosed in or contemplated by the
Prospectus, neither the Company nor any of its
subsidiaries has sustained a material loss or damage
by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(vi) On the date before this Agreement is executed and also on
the First Closing Date and the Second Closing Date, a letter addressed
to the Representatives from Xxxxx Xxxxxxxx LLP, independent
accountants, the first letter to be dated the day before the date of
this Agreement, the second letter to be dated the First Closing Date
and the third letter (in the event of a Second Closing) to be dated the
Second Closing Date, in form and substance satisfactory to the
Representatives.
(vii) On the date before this Agreement is executed, a letter
from Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx, in form and substance
satisfactory to you, confirming that for a period of 180 days from the
date of the Prospectus such persons will not directly or indirectly
sell or offer to sell or otherwise dispose of any shares of Common
Stock or any right to acquire such shares without the prior written
consent of Xxxx Xxxxxxxxx Xxxxxxxx & Co., which consent may be withheld
at the sole discretion of Xxxx Xxxxxxxxx Xxxxxxxx & Co.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to the Representatives and to Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional
Corporation), counsel for the Underwriters. The Company shall furnish the
Representatives with such manually signed or conformed copies of such opinions,
certificates, letters and documents as the Representatives request. Any
certificate signed by any officer of the Company and delivered to the
Representatives shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied or waived by
the Representatives, this Agreement at the election of the Representatives will
terminate upon written notification by the Representatives to the Company
without liability on the part of any Underwriter or the Company, except for the
expenses to be paid or reimbursed by the Company pursuant to Sections 6 and 8
hereof and except to the extent provided in Section 11 hereof.
SECTION 8. Reimbursement of Underwriters' Expenses. If this Agreement
shall be terminated by the Representatives pursuant to Section 7, or if the sale
to the Underwriters of the Common Shares at the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Representatives and the other Underwriters
(or such Underwriters as have terminated this Agreement with respect to
themselves), severally, upon demand for all reasonable and documented
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the sale of the Common Shares, including but not limited to fees and
disbursements of Underwriters' counsel, printing expenses, travel expenses,
postage, telecopy charges and telephone charges relating directly to the
offering contemplated by the Prospectus. Any such termination shall be without
liability of any party to any other party, except that the provisions of this
Section, Section 6 and Section 10 shall at all times be effective and shall
apply.
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SECTION 9. Effectiveness of Registration Statement. The Representatives
and the Company will use their respective best efforts to cause the Registration
Statement to become effective, to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if such stop
order be issued, to obtain as soon as possible the lifting thereof.
SECTION 10. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Underwriter or
such controlling person may become subject, under the Act, the Exchange
Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if
such settlement is effected with the written consent of the Company,
insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to
state in any of them a material fact required to be stated therein or
necessary to make the statements in any of them not misleading, or
arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder or under
law; and will reimburse each Underwriter and each such controlling
person for any legal and other expenses as such expenses are documented
and reasonably incurred by such Underwriter or such controlling person
in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action;
provided, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with the information
furnished to the Company by the Representatives pursuant to Section 3
hereof; and provided further, that with respect to any untrue statement
or omission or alleged untrue statement or omission made in any
Preliminary Prospectus, the indemnity agreement contained in this
paragraph shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Common Shares concerned (or to the benefit of
any person controlling such Underwriter) to the extent that any such
loss, claim, damage, liability or expense of such Underwriter or
controlling person results from the fact that a copy of the Prospectus
was not sent or given to such person at or prior to the written
confirmation of sale of such Common Shares to such person as required
by the Act, and if the untrue statement or omission has been corrected
in the Prospectus, unless such failure to deliver the Prospectus was a
result of noncompliance by the Company with its obligations under
Section 5(e) hereof.
(b) In addition to its other obligations under this Section
10, the Company agrees that, as an interim measure during the pendency
of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform the respective
obligations of the Company hereunder, all as described in Section
10(a), the Company will reimburse each Underwriter on a quarterly basis
for all reasonable and documented legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of
the Company's obligations to reimburse each Underwriter, upon receipt
of a written request therefor, for such expenses and the possibility
that such payments might later be held to have been improper in an
arbitration proceeding. To the extent that any such interim
reimbursement payment is so held to have been improper, each
Underwriter shall promptly return such payment to the Company together
with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by The Chase Manhattan
Bank (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(c) Each Underwriter will severally indemnify and hold
harmless the Company, each of its
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directors, each of its officers, each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims,
damages, liabilities or expenses, joint or several, to which the
Company, or any such director, officer, or controlling person may
become subject under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof as contemplated below) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 3 hereof
(which information is the sole information furnished to the Company by
the Underwriters for inclusion in the Registration Statement, any
Preliminary Prospectus, any Prospectus, or any amendment or supplement
thereto); and will reimburse the Company, or any such director,
officer, or controlling person for any legal and other expense as such
expenses are documented and reasonably incurred by the Company, or any
such director, officer, or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. In addition to its
other obligations under this Section 10(c), each Underwriter severally
agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or
omission, described in this Section 10(c) which relates to information
furnished to the Company pursuant to Section 3 hereof or failure to
perform their several obligations hereunder, it will reimburse the
Company (and, to the extent applicable, each officer, director, or
controlling person) on a quarterly basis for all reasonable and
documented legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a
determination as to the propriety and enforceability of the
Underwriter's obligation to reimburse the Company (and, to the extent
applicable, each officer, director, or controlling person), upon
receipt of a written request therefor, for such expenses and the
possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper,
the Company (and, to the extent applicable, each officer, director, or
controlling person) shall promptly return such payment to the
Underwriters, together with interest, compounded daily, determined on
the basis of the Prime Rate. Any such interim reimbursement payments
which are not made within 30 days of a request for reimbursement, shall
bear interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise hereunder
to the extent it is not materially prejudiced as a proximate result of
such failure. In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish,
jointly with all other indemnifying parties similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party
and counsel to the indemnified party shall have opined in writing that
there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action
or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section for any legal expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the next preceding sentence (it being
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understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Underwriters in the case of Section 10(a), representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of
which cases the fees and expenses of counsel shall be at the expense of
the indemnifying party.
(e) If the indemnification provided for in this Section 10 is
required by its terms, but for any reason is held to be unavailable to
or otherwise insufficient to hold harmless any indemnified party under
paragraphs (a), (b) or (c) in respect of any losses, claims, damages,
liabilities or expenses as referred to herein, then each applicable
indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any losses, claims, damages,
liabilities or expenses referred to herein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Underwriters from the offering of the Common Shares or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, then such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Underwriters in connection with
the statements or omissions or inaccuracies in their representations
and warranties herein which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same
proportion, in the case of the Company, as the total price paid to the
Company for the Common Shares sold by it to the Underwriters (before
deducting expenses), and in the case of Underwriters as the
underwriting commissions received by them, bears to the total of such
amounts paid to the Company and the amounts received by the
Underwriters as underwriting commissions. The relative fault of the
Company and the Underwriters 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 stating material
fact or the inaccurate or the alleged inaccurate representations and/or
warranty relates to the information supplied by the Company or the
Underwriters and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set forth in
subsection (d) of this Section 10, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in subsection
(d) of this Section 10 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this
subsection (e); provided, however, that no additional notice shall be
required with respect to any action for which notice has been given
under subsection (d) for the purposes of indemnification. The Company
and the Underwriters agree that it would not be just inequitable if
contribution pursuant to this Section 10 were determined solely by pro
rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to in this
subsection (e). Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the
amount of the total underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. No person guilty of fraudulent
misrepresentation (within a meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 10 are several in proportion to
their respective underwriting commitments and not joint.
(f) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in this
Section 10, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled
by arbitration conducted under the provisions of the Code of
Arbitration Procedure of the NASD. Any such arbitration must be
commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration
tribunal. In the event the party demanding arbitration does not make
such designation of an arbitration tribunal in such demand or notice,
then the party responding to said demand or notice is authorized to do
so. Such an arbitration would be limited to the operation of the
interim reimbursement provisions contained in this Section 10 and would
not resolve the ultimate propriety or enforceability of the obligation
to reimburse expenses which is created by the provisions of this
Section 10.
SECTION 11. Default of One or More of the Several Underwriters. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Underwriters shall fail or refuse to purchase Common
Shares that it or they have agreed to purchase hereunder on such date, and the
aggregate
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number of Common Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase does not exceed 10% of the aggregate number of
the Common Shares to be purchased on such date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm Common Shares
set forth opposite their respective names on Schedule A bears to the aggregate
number of Firm Common Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as may be specified by
the Representatives with the consent of the nondefaulting Underwriters, to
purchase the Common Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date. If, on the First Closing
Date or the Second Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Common Shares and the aggregate
number of Common Shares with respect to which such default occurs exceeds 10% of
the aggregate number of Common Shares to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company with respect to
the First Closing Date or the Second Closing Date for the purchase of such
Common Shares are not made within 48 hours, the Agreement shall terminate
without liability of any party to any other party except that the provisions of
Section 6 and Section 10 shall at all times be effective and survive such
termination. In any such case either the Representatives or the Company, acting
jointly, shall have the right to postpone the First Closing Date and the Second
Closing Date, as the case may be, for a period of time as agreed to by the
parties in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
11. Any action taken under this Section 11 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 12. Effective Date. This Agreement shall become effective at
such time as the Registration Statement has become effective and you shall have
released the Firm Common Shares for sale to the public; provided, however, that
the provisions of Sections 6, 8, 10 and 13 hereof shall at all times be
effective. For the purposes of this Section 12, the Firm Common Shares shall be
deemed to have been so released upon the release by the Underwriters for
publication, at any time after the Registration Statement has become effective,
of any newspaper advertisement relating to any of the Common Shares, or upon the
release by the Underwriters of any of the Common Shares for sale to the public,
whichever may occur first.
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to the Representatives or by the Representatives by notice to the
Company at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be
without liability on the part of the Company to the Underwriters
(except for the expenses to be paid or reimbursed by the Company
pursuant to Sections 6 and 8 hereof and except to the extent provided
in Section 10 hereof) or of any Underwriter to the Company (except to
the extent provided in Sections 6 and 10 hereof).
(b) This Agreement may also be terminated by the
Representatives prior to the First Closing Date or prior to the Second
Closing Date, as the case may be, by notice to the Company (i) if
additional material governmental restrictions not in force and effect
on the date hereof shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock
Exchange or in the NASDAQ National Market or in the over the counter
market by the NASD, or trading in securities generally shall have been
suspended on either such Exchange or in the NASDAQ National Market or
in the over the counter market by the NASD or the Commission, or a
general banking moratorium shall have been established by federal, New
York or Maryland authorities, (ii) if an outbreak of hostilities or
other national or international calamity or any material change in
political, financial or economic conditions shall have occurred or
shall have accelerated to such an extent that the effect on the
financial markets shall, in the judgment of the Representatives, affect
adversely the marketability of the Common Shares, (iii) if any adverse
event shall have occurred or shall exist which makes untrue or
incorrect in any material respect any statement or information
contained in the Registration Statement or Prospectus or which is not
reflected in the Registration Statement or Prospectus but should be
reflected therein in order to make the statements or information
contained therein not misleading in any material respect, or (iv) if
there shall be any action, suit or proceeding pending or threatened, or
there shall have been any development or prospective development
involving particularly the business or properties or securities of the
Company or its subsidiaries taken as a whole or the transactions
contemplated by this Agreement, which, in the judgment of the
Representatives, may materially and adversely affect the business or
earnings of the Company and its
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subsidiaries taken as a whole or makes it impracticable to offer or
sell the Common Shares. Any termination pursuant to this subsection (b)
shall be without liability on the part of the Underwriters to the
Company or on the part of the Company to the Underwriters (except for
expenses to be paid or reimbursed by the Company pursuant to Sections 6
or 10 hereof and except to the extent provided in Section 10).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or the
Company or any of its partners, officers or directors or any controlling person,
as the case may be, and will survive delivery of and payment for the Common
Shares sold hereunder and any termination of this Agreement.
SECTION 15. Notices. All communications hereunder shall be in writing
and, if sent to the Underwriters, shall be mailed, delivered or telecopied or
telegraphed and confirmed to the Underwriters at Xxxx Xxxxxxxxx Xxxxxxxx & Co.,
One Galleria Tower, 00000 Xxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention:
Xxxxxxxx X. Xxxxxxxx, with a copy to Xxxxx Xxxxxxx Rain Xxxxxxx (A Professional
Corporation), 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxx
X. XxXxxxxx; and if sent to the Company shall be mailed, delivered or telecopied
or telegraphed and confirmed to the Company at 000 Xxxxxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, President, with a copy
to Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P, 000 00xx Xxxxxx, X.X., 00xx Xxxxx,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx X. Xxxxxxx. The Company or the
Underwriters may change the address for receipt of communications hereunder by
giving notice to the others.
SECTION 16. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 11 hereof, and to the benefit of the officers and directors
and controlling persons referred to in Section 10, and in each case their
respective successors, heirs, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Common Shares as such from any of the Underwriters
merely by reason of such purchase.
SECTION 17. Partial Unenforceability. The invalidity or
unenforceability of any Section, subsection, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, subsection, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 18. Directed Share Program. The Underwriters agree with the
Company that not less than 10% of the Firm Shares shall be reserved for sales to
such persons and entities as the Company shall direct.
SECTION 19. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the laws pertaining to
conflicts of laws) of the State of Maryland.
SECTION 20. General. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may be executed in several
counterparts, each one of which shall be an original, and all of which shall
constitute one and the same document.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Underwriters.
If the foregoing is in accordance with the Underwriters' understanding
of our agreement, kindly sign and return to us the enclosed copies hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters, all in accordance with its terms.
Very truly yours,
ICARUS International, Inc.
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By:
Name:
Title:
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The foregoing Underwriting Agreement
is hereby confirmed and accepted by
the Representatives as of the date
first above written. Acting as
Representatives of the several
Underwriters named in the attached
Schedule X.
XXXX XXXXXXXXX XXXXXXXX & CO.
XXXXXXX GLOBAL SECURITIES, INC.
By: XXXX XXXXXXXXX XXXXXXXX & CO.
By:
Name:
Title:
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SCHEDULE A
Number of Firm Common
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Xxxx Xxxxxxxxx Xxxxxxxx & Co.
Xxxxxxx Global Securities, Inc.
Total 2,000,000
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