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EXHIBIT 1.1
TRUETIME, INC.
3,000,000 SHARES*/
COMMON STOCK
($.01 PAR VALUE)
UNDERWRITING AGREEMENT
December ___, 0000
Xxx Xxxx, Xxx Xxxx
December ___, 1999
X.X. Xxxxxxxxx, Towbin
Cruttenden Xxxx Incorporated
Pennsylvania Merchant Group
As Representatives of the several Underwriters
c/o X.X. Xxxxxxxxx, Towbin
Swiss Bank Tower
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Subject to the terms and conditions contained in this Agreement,
TrueTime, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell 1,500,000 shares of common stock, par value $.01 per share (the "Common
Stock") of the Company (the "Company Securities") and OYO Corporation U.S.A., a
Texas corporation and sole stockholder of the Company (the "Selling
Stockholder"), proposes to sell 1,500,000 shares of Common Stock of the Company
(the "Stockholder Securities" and, together with the Company Securities, the
"Underwritten Securities") to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives. The Company also proposes to grant to the Underwriters an
option to purchase up to 450,000 additional shares of Common Stock to cover
over-allotments (the "Option Securities" and the Option Securities, together
with the Underwritten Securities, the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires.
The terms which follow, when used in this Agreement, shall have the
meanings indicated.
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*/ Plus an option to purchase from TrueTime, Inc. up to 450,000 additional
shares to cover over-allotments.
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"Act" means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Business Day" means any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.
"Commission" means the United States Securities and Exchange Commission
(or any successor regulatory agency thereto).
"Effective Date" means each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" means the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" means any preliminary prospectus referred to
in Section 1(a)(1) hereof and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information.
"Prospectus" means the prospectus relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, means the form of final prospectus relating
to the Securities included in the Registration Statement at the Effective Date.
"Registration Statement" means the registration statement referred to
in Section 1(a)(1) hereof, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, also means such registration
statement as so amended or any Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462(b)" refer to such rules under the
Act.
"Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" means a registration statement and
any amendments hereto filed pursuant to Rule 462(b) relating to the offering
covered by the registration statement referred to in Section 1(a)(1) hereof.
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"Warrant Agreement" means that certain Warrant Agreement dated as of
even date, between the Company and X.X. Xxxxxxxxx, Towbin.
"Warrants" mean the 200,000 warrants to purchase 200,000 shares of the
Company's Common Stock issued pursuant to the Warrant Agreement.
1. REPRESENTATIONS AND WARRANTIES.
(a) The Company and the Selling Stockholder jointly and
severally represent and warrant to, and agree with, each Underwriter as
set forth below in this Section 1(a).
(1) The Company has filed with the Commission a
Registration Statement (file number 333-90269) on Form S-1,
including a related preliminary prospectus, for the
registration under the Act, of the offering and sale of the
Securities. The Company may have filed one or more amendments
thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will
next file with the Commission either (A) prior to the
Effective Date of such Registration Statement, a further
amendment to such Registration Statement (including the form
of final prospectus) or (B) after the Effective Date of such
Registration Statement, (x) a final prospectus in accordance
with Rules 430A and 424(b) and (y) if required to do so, a
Registration Statement filed pursuant to Rule 462(b). In the
case of clause (B), the Company has included in such
Registration Statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in such
Registration Statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information, together
with all other such required information, and, except to the
extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company
has advised you, prior to the Execution Time, will be included
or made therein.
(2) On the Effective Date, the Registration Statement
did or will, when the Prospectus is first filed (if required)
in accordance with Rule 424(b), and on the Closing Date (as
defined in Section 3 hereof) and on any date on which Option
Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Prospectus (and any supplements
thereto) will comply in all material respects with the
applicable requirements of the Act and the rules thereunder.
On the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the
Effective Date, the
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Prospectus, if not filed pursuant to Rule 424(b), will not,
and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not include any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company
and the Selling Stockholder make no representations or
warranties as to the information contained in or omitted from
the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on
behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or
the Prospectus (or any supplement thereto).
(3) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware and has full corporate power and
authority to own or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification.
(4) The Company's authorized equity capitalization is
as set forth in the Prospectus; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Prospectus; the outstanding shares of
Common Stock have been duly and validly authorized and issued
and are fully paid and nonassessable; the Securities being
sold hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities have been duly
authorized for listing and trading, subject to official notice
of issuance, on the Nasdaq National Market; the certificates
for the Securities and the Warrants are in valid and
sufficient form; the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities and, except as set
forth in the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(5) The Company does not have any subsidiaries, does
not directly or indirectly own any capital stock or other
equity interests in any corporation, partnership or other
entity and is not a member of or a participant in any
partnership, joint venture or similar entity.
(6) There is no franchise, contract or other document
of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required.
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(7) This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and
binding obligation of the Company enforceable in accordance
with its terms.
(8) The Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as defined in the Investment
Company Act of 1940, as amended (the "Investment Company
Act").
(9) No consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(10) Neither the issuance and sale of the Securities
nor the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, or result in a breach or violation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, (A) the charter
or by-laws of the Company, (B) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
or instrument to which the Company is a party or bound or to
which its property is subject, or (C) any statute, law, rule,
regulation, judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties.
(11) Except for the Selling Stockholder and X.X.
Xxxxxxxxx, Towbin, no holder of securities of the Company has
any right to the registration of such securities under the
Registration Statement.
(12) The consolidated financial statements and
schedules of the Company included in the Prospectus and the
Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows
of the Company as of the dates and for the periods indicated,
comply as to form with the applicable accounting requirements
of the Act and the rules and regulations thereunder and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption "Selected
Financial Data" in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the
Registration Statement, the information included therein.
(13) No action, suit or proceeding by or before any
court or
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governmental agency, authority or body or any arbitrator
involving the Company or its property is pending or, to the
best knowledge of the Company, threatened that (A) could
reasonably be expected to have a material adverse effect on
the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (B) could
reasonably be expected to have a material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising
from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(14) The Company owns or leases all such properties
as are necessary to the conduct of its operations as presently
conducted.
(15) The Company is not in violation or default of
any provision of its charter or by-laws, and is not in
violation or default of (A) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
or instrument to which it is a party or bound or to which its
property is subject, or (B) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of
its properties; that could have a material adverse effect on,
in the case of any violation or default covered by clauses (A)
and (B) above, (i) the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or
(ii) the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(16) PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and delivered
their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus,
are independent public accountants with respect to the Company
within the meaning of the Act and the applicable published
rules and regulations thereunder.
(17) There are no transfer taxes or other similar
fees under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement
or the issuance by the Company or sale by the Company of the
Securities.
(18) The Company has filed all foreign, Federal,
state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which
the failure so to file would not have a material adverse
effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto)) and has paid
all taxes required to be paid by it and any
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other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(19) No labor problem or dispute with the employees
of the Company exists or is threatened or, to the knowledge of
the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any
of its principal suppliers or contractors that could have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(20) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in
which it is engaged; all policies of insurance and fidelity or
surety bonds insuring the Company or its business, assets,
employees, or officers and directors are in full force and
effect; the Company is in compliance with the terms of such
policies and instruments in all material respects; and there
are no claims by the Company under any such policy or
instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause;
the Company has not been refused any insurance coverage sought
or applied for; and the Company does not have any reason to
believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not
have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(21) The Company possesses all licenses,
certificates, permits and other authorizations issued by the
appropriate Federal, state or foreign regulatory authorities
necessary for the ownership or lease of its properties and the
conduct of its business the failure of which to possess could
have a material adverse effect on (i) the performance of this
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto). The Company
has not received any notice of proceedings relating to the
revocation or modification of any such license, certificate,
permit or authorization which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding,
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would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(22) The Company is not in violation of any Federal
or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of
hazardous or toxic materials, which violation could have a
material adverse effect on (i) the performance of this
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto). The Company
has received all permits, licenses or other approvals required
of it under applicable Federal and state occupational safety
and health and environmental laws and regulations to conduct
its business, and the Company is in compliance with all terms
and conditions of any such permit, license or approval, except
any such violation of law or regulation, failure to receive
required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses
or approvals which would not, singly or in the aggregate, have
a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(23) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with
management's general or specific authorizations, (B)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability,
(C) access to assets is permitted only in accordance with
management's general or specific authorization, and (D) the
recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(24) The Company has not taken, directly or
indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(25) The Company owns or has obtained licenses for
the patents, patent applications, trade and service marks,
trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and
other intellectual property referenced or described in the
Prospectus as being owned by or licensed to it (collectively,
the "Intellectual Property") the failure of
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which to own or to have obtained could have a material adverse
effect on (i) the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or
(ii) the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). There is no (A) third party with rights
to any such Intellectual Property, whose rights could have a
material adverse effect on (i) the performance of this
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto), (B) material
infringement by third parties of any such Intellectual
Property, which could have a material adverse effect on (i)
the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto), (C) pending or threatened action, suit, proceeding
or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such
claim, (D) pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim, (E)
pending or threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of
any other fact which would form a reasonable basis for any
such claim, (F) U.S. patent or published U.S. patent
application which contains claims that dominate or may
dominate any Intellectual Property described in the Prospectus
as being owned by or licensed to the Company or that
interferes with the issued or pending claims of any such
Intellectual Property, which could have a material adverse
effect on (i) the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or
(ii) the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) and (G) prior art of which the Company is
aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office. The Company owns, possesses, licenses or
has other rights to use, on reasonable terms, all Intellectual
Property necessary for the conduct of the Company's business
as now conducted or as proposed in the Prospectus to be
conducted the failure of which to own, possess, license or
have other rights could have a material adverse effect on (i)
the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) the condition
(financial or otherwise), prospects, earnings, business or
properties of the Company, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
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(26) The Company has implemented a comprehensive,
detailed program to analyze and address the risk that the
computer hardware and software used by it may be unable to
recognize and properly execute date-sensitive functions
involving certain dates prior to and any dates after December
31, 1999 (the "Year 2000 Problem"), and has determined that
such risk will be remedied on a timely basis without material
expense and will not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company; and the Company
believes, after due inquiry, that each supplier, vendor,
contractor or financial service organization used or served by
the Company has remedied or will remedy on a timely basis the
Year 2000 Problem, except to the extent that a failure to
remedy by any such supplier, vendor, contractor, or financial
service organization would not have a material adverse effect
on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company. The Company
has complied with the disclosure guidelines of Release No.
33-7558 under the Act, dated July 29, 1998, related to Year
2000 compliance where the failure to be in such compliance
could have a material adverse effect on (i) the performance of
this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(27) Except as described in the Prospectus, the
Company does not maintain any plan or arrangement, other than
the Company's medical and dental insurance and reimbursement
plans, that is subject to the provisions of, or that provides
any benefits described in, the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and
published interpretations thereunder.
(28) The Warrant Agreement has been duly authorized
by the Company and, when duly executed and delivered by the
Company, will constitute a valid and binding obligation of the
Company enforceable in accordance with its terms; the Warrants
will conform in all material respects to the description of
the Warrants in the Prospectus and in the Warrant Agreement;
the Warrants to be issued by the Company to the Representative
pursuant to the Warrant Agreement have been duly and validly
authorized and, when duly executed, issued and delivered as
contemplated by the Warrant Agreement will be duly and validly
issued and will constitute the valid and binding obligations
of the Company, entitled to the benefits of the Warrant
Agreement and enforceable in accordance with their terms.
(29) When the Securities are delivered and paid for
pursuant to this Agreement on the Closing Date, the Warrants
will be exercisable for shares of Common Stock of the Company
("Warrant Shares") in accordance with their terms at any time
or from time to time after [DECEMBER ____, 2000]; the Warrant
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Shares initially issuable upon the exercise of such Warrants
have been duly authorized and reserved for issuance upon such
exercise in accordance with the terms of the Warrants and,
when issued upon such exercise, will be validly issued, fully
paid and nonassessable; and the stockholders of the Company
have no preemptive rights with respect to the Warrant Shares.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(b) The Selling Stockholder represents and warrants to, and
agrees with, each Underwriter as set forth below in this Section 1(b).
(1) The Selling Stockholder is the lawful owner of
the Stockholder Securities to be sold to the several
Underwriters and the Selling Stockholder will convey to the
Underwriters good and marketable title to such Stockholder
Securities, free and clear of all liens, encumbrances,
equities and claims whatsoever.
(2) The Selling Stockholder has not taken, directly
or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(3) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Selling Stockholder of the transactions
contemplated herein, except such as may have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such
other approvals as have been obtained.
(4) None of the sale of the Stockholder Securities or
the consummation of any other of the transactions herein
contemplated by the Selling Stockholder or the fulfillment of
the terms hereof by the Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of the Selling
Stockholder or the terms of any indenture or other agreement
or instrument to which the Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgment, order or
decree applicable to the Selling Stockholder or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Selling Stockholder or any of its subsidiaries.
Any certificate signed by the Selling Stockholder, or any officer of
the Selling Stockholder, and delivered to the Representative or counsel for the
Underwriters in connection
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with the offering of the Securities shall be deemed a representation and
warranty by the Selling Stockholder, as to matters covered thereby, to each
Underwriter.
(2) PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and
the Selling Stockholder agree, severally and not jointly, to sell to
each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholder, at a
purchase price of [$_____] per share, the amount of the Underwritten
Securities set forth opposite such Underwriter's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally and
not jointly, up to 450,000 shares of Option Securities at the same
purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any
time on or before the 30th day after the date of the Prospectus upon
written or telegraphic notice by the Representative to the Company
setting forth the number of shares of Option Securities as to which the
several Underwriters are exercising the option and the settlement date.
Delivery of certificates for the shares of Option Securities, and
payment therefor, shall be made as provided in Section 3 hereof. The
number of shares of the Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares
of the Option Securities to be purchased by the several Underwriters as
such Underwriter is purchasing of the Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate
any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 A.M., New York City time, on [DECEMBER
___, 1999], or at such time on such later date not more than three Business Days
after the foregoing date as the Representative shall designate, which date and
time may be postponed by agreement between the Representative and the Company or
as provided in Section 9 hereof (such date and time of delivery and payment for
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representative for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representative of the respective aggregate purchase prices of the Securities
being sold by the Company and the Selling Stockholder to or upon the order of
the Company or the Selling Stockholder by wire transfer payable in same day
funds to the accounts specified by the Company and the Selling Stockholder.
Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
The Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the
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transfer to the several Underwriters of the Stockholder Securities to be
purchased by them from the Selling Stockholder and the respective Underwriters
will pay any additional stock transfer taxes involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives on the
date specified by the Representative (which shall be within three Business Days
after exercise of said option), against payment by the several Underwriters
through the Representatives thereof to or upon the order of the Company by wire
transfer payable in same day funds to the accounts specified by the Company.
Delivery of the Option Securities shall be made through facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct. If
settlement for the Option Securities occurs after the Closing Date, the Company
will deliver to the Representatives on the settlement date for the Option
Securities, and the obligation of the Underwriters to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS.
(a) The Company agrees with the several Underwriters that:
(1) The Company will use its best efforts to cause
the Registration Statement, if not effective at the Execution
Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company
will not file any amendment of the Registration Statement or
supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration
Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus is otherwise required under
Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution
Time, shall have become effective, (ii) when the Prospectus,
and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when
any Rule 462(b) Registration Statement shall have been filed
with the Commission, (iii) when, prior to termination of the
offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iv) of
any request by the Commission or its staff for any amendment
of the Registration
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Statement, or any Rule 462(b) Registration Statement, or for
any supplement to the Prospectus or of any additional
information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding
for that purpose and (vi) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible
the withdrawal thereof.
(2) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any
event occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the rules thereunder,
the Company promptly will (A) notify the Representatives of
any such event, (B) prepare and file with the Commission,
subject to the second sentence of Section 5(a)(1), an
amendment or supplement which will correct such statement or
omission or effect such compliance and (C) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(3) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives an earnings statement or statements of the
Company which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(4) The Company will furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including exhibits
thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as
the Representatives may reasonably request.
(5) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of
such jurisdictions as the Representatives may designate and
will maintain such qualifications in effect so long as
required for the distribution of the Securities.
(6) The Company will not, for a period of one year
following the Execution Time, without the prior written
consent of X.X. Xxxxxxxxx, Towbin, offer, sell, contract to
sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or could be expected to,
result in the disposition
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(whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company)
directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Commission
in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position
within the meaning of the rules promulgated under Section 16
of the Exchange Act with respect to, any other shares of
Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock, or publicly announce
an intention to effect any such transaction; provided,
however, that the Company may issue and sell Common Stock
pursuant to any employee or director stock option plan, stock
ownership plan or dividend reinvestment plan of the Company
described in the Prospectus, the Company may issue Common
Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the Execution Time and,
after 180 days following the Execution Time, the Company may
issue Common Stock in connection with (A) any acquisition of
any business or property and (B) any underwritten offering of
Common Stock.
(7) The Company will not take, directly or
indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the company to
facilitate the sale or resale of the Securities.
(8) The Company and the Selling Stockholder jointly
and severally agree to pay the costs and expenses relating to
the following matters: (A) the preparation, printing or
reproduction and filing with the Commission of the
Registration Statement (including financial statements and
exhibits thereto), each Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them;
(B) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering
and sale of the Securities; (C) the preparation, printing,
authentication, issuance and delivery of certificates for the
Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the
Securities; (D) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered
in connection with the offering of the Securities; (E) the
registration of the Securities under the Exchange Act and the
listing of the Securities on the Nasdaq National Market; (F)
any registration or qualification of the Securities for offer
and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and
expenses of counsel for the Underwriters relating to such
registration and qualification); (G) any filings required to
be made with the National Association of Securities Dealers,
Inc. (including filing fees and the
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reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (H) the transportation and other
expenses incurred by or on behalf of Company representatives
in connection with presentations to prospective purchasers of
the Securities; (I) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including
local and special counsel) for the Company and the Selling
Stockholder; and (J) all other costs and expenses incident to
the performance by the Company and the Selling Stockholder of
their obligations hereunder. The Company and the Selling
Stockholder may agree, as among themselves and without
limiting the rights of the Underwriters under this Section
5(a)(8), as to the respective amounts of such costs and
expenses for which they each shall be responsible.
(b) The Selling Stockholder agrees with the several
Underwriters that:
(1) The Selling Stockholder will not, for a period of
one year following the Execution Time, without the prior
written consent of X.X. Xxxxxxxxx, Towbin, offer, sell,
contract to sell, pledge or otherwise dispose of (or enter
into any transaction which is designed to, or could be
expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash
settlement or otherwise) by the Selling Stockholder or by the
Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company)
directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Commission
in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position
within the meaning of the rules promulgated under Section 16
of the Exchange Act with respect to, any shares of capital
stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction,
other than shares of Common Stock disposed of as bona fide
gifts approved by X.X. Xxxxxxxxx, Towbin.
(2) The Selling Stockholder will not take any action
designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Securities.
(3) The Selling Stockholder will advise you promptly,
and if requested by you, will confirm such advice in writing,
so long as delivery of a prospectus relating to the Securities
by an underwriter or dealer may be required under the Act, of
(A) any material change in the Company's condition (financial
or otherwise), prospects, earnings, business or properties,
(B) any change in information in the Registration Statement or
the Prospectus relating to the Selling Stockholder or (C) any
new material information relating to the Company or relating
to any matter stated in the Prospectus which comes to the
attention of the Selling Stockholder.
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(4) The Selling Stockholder will comply with the
agreement contained in Section 5(a)(8).
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Underwritten Securities and the Allotment
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholder made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of Fulbright & Xxxxxxxx, L.L.P., counsel for the Company,
dated the Closing Date and addressed to the Representatives, to the
effect that: (1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its
business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification; (2) the
Company's authorized equity capitalization is as set forth in the
Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly
authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly and
validly authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Company has been notified by the Nasdaq National
Market that the Securities are duly approved for quotation, subject to
official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities are in valid and sufficient form; and
the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, to the
knowledge of such counsel, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
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convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding;
(3) to the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or
its property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; (4) the Registration Statement has
become effective under the Act; any required filing of the Prospectus,
and any supplements thereto pursuant to Rule 424(b), has been made in
the manner and within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial information contained therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules thereunder;
(5) this Agreement has been duly authorized, executed and delivered by
the Company; (6) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act; (7) no consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated in this
Agreement and in the Prospectus and such other approvals (specified in
such opinion) as have been obtained; (8) to the knowledge of such
counsel, the Company is not in violation of its charter or by-laws; (9)
none of the issuance and sale of the Securities, the issuance of the
Warrants, the consummation of any other of the transactions herein
contemplated or the fulfillment of the terms hereof will conflict with,
result in a breach or violation of, or imposition of any lien, charge
or encumbrance upon any property or assets of the Company pursuant to,
(A) the charter or by-laws of the Company, (B) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition or covenant or
instrument to which the Company is a party or bound or to which its
property is subject, which is included as an exhibit to the
Registration Statement or of which such counsel has knowledge, or (C)
any statute, law, rule, or regulation, or (D) to the knowledge of such
counsel, any judgment, order or decree applicable to the Company of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its properties; and (10) to the knowledge of such counsel,
except the Selling Stockholder and X.X. Xxxxxxxxx, Towbin, no holders
of securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
Texas, California and New York,
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the General Corporation Law of the State of Delaware or the Federal laws of the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on the representations and
warranties of the Company contained in this Agreement, certificates of
responsible officers of the Company contemplated by this Agreement and
certificates of responsible officers of the Company and the Selling Stockholder
and public officials. References to the Prospectus in this paragraph (b) include
any supplements thereto at the Closing Date.
In addition to the foregoing opinion, the Company shall have furnished
to the Representatives a letter from Fulbright & Xxxxxxxx L.L.P., counsel to the
Company, which may be a separate part of the letter in which such opinion is
incorporated (but which shall not be regarded as an opinion of such counsel) to
the following effects. Such counsel may state they are not passing upon and do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, and they
have not independently verified the accuracy, completeness or fairness of such
statements. Without limiting the foregoing, such counsel may state that they
assume no responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements or any financial or
statistical data included in the Registration Statement and the Prospectus, and
they have not examined the accounting, financial or other records or sources
from which such statements and data are derived. Such counsel may state that
although certain portions of the Registration Statement and the Prospectus have
been included therein on the authority of "experts" within the meaning of the
Securities Act, they are not experts with respect to any portion of the
Registration Statement or the Prospectus. However, such counsel shall state that
they have participated in conferences with officers, legal counsel and other
representatives of the Company, representatives of the independent accountants
of the Company and with representatives of, and legal counsel for, the
Underwriters, at which the contents of the Registration Statement and Prospectus
and related matters were discussed. Such counsel shall state that they have also
reviewed certain corporate documents furnished to them by the Company or
obtained from public officials. Based on such participation and review (relying
as to materiality to a certain extent upon the officers and the other
representatives of the Company), and subject to the limitation described above,
such counsel shall advise the Underwriters that no facts have come to their
attention that cause them to believe that the Registration Statement at the time
it 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 not misleading, or that the Prospectus, as of its date or as
of the date of such letter, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(c) The Selling Stockholder shall have furnished to the
Representatives the opinion of Fulbright & Xxxxxxxx, L.L.P., counsel
for the Selling Stockholder, dated the Closing Date and addressed to
the Representatives, to the effect that:
(1) this Agreement has been duly authorized, executed
and delivered by the Selling Stockholder, and the Selling
Stockholder has full legal right and
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authority to sell, transfer and deliver in the manner provided
in this Agreement the Stockholder Securities;
(2) assuming that the Underwriters are "protected
purchasers" written the meaning of Sections 8-303 and 8-302 of
the New York Uniform Commercial Code ("NYUCC"), upon delivery
of the Stockholder Securities in certificated form registered
in the Selling Stockholder's name to the Underwriters in the
State of New York so that they have control of such
securities, the Underwriters will acquire all of the Selling
Stockholder's rights in the Stockholder Securities free of any
adverse claims (within the meaning of Sections 8-303 and
8-102(a)(12) of the NYUCC);
(3) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by the Selling Stockholder of the transactions
contemplated herein, except such as may be have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such
other approvals (specified in such option) as have been
obtained; and
(4) none of the sale of the Stockholder Securities or
the consummation of any other of the transactions herein
contemplated by the Selling Stockholder or the fulfillment of
the terms hereof by the Selling Stockholder will conflict
with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of the Selling
Stockholder or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Selling
Stockholder or any of its subsidiaries is a party or bound, or
any judgment, order or decree known to such counsel to be
applicable to the Selling Stockholder or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Selling Stockholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the States of Texas, California and New York, the General
Corporation Law of the State of Delaware or the Federal laws of the
United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem
proper, on the representations and warranties of the Selling
Stockholder contained in this Agreement, certificates of responsible
officers of the Selling Stockholder contemplated by this Agreement and
certificates of responsible officers of the Selling Stockholder and
public officials.
(d) The Representatives shall have received from Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P, counsel for the Underwriters, such
opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
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Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and the Selling
Stockholder shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(1) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(2) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threatened; and
(3) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(f) The Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Chairman of the Board or
the President and the principal financial or accounting officer of the
Selling Stockholder, dated the Closing Date, to the effect that the
signer or signers of such certificate have carefully examined the
Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that the representations and
warranties of the Selling Stockholder in this Agreement are true and
correct in all material respects on and as of the Closing Date to the
same effect as if made on the Closing Date.
(g) At the Execution Time and at the Closing Date,
PricewaterhouseCoopers LLP shall have furnished to the Representatives
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants of
the Company within the meaning of the Act and the applicable published
rules and regulations adopted by the Commission thereunder and stating
in effect that:
(1) in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Prospectus
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and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published rules and regulations adopted by
the Commission;
(2) on the basis of a reading of the latest unaudited
financial statements made available by the Company; carrying
out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
the audit and compensation committees of the Company; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company as to transactions and events subsequent to September
30, 1999, nothing came to their attention which caused them to
believe that:
(i) with respect to the period subsequent to
September 30, 1999, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the total liabilities of the
Company or capital stock of the Company or increases
in the stockholders' deficit of the Company or
decreases in working capital (or increases in working
capital deficit, as the case may be) of the Company
as compared with the amounts shown on the September
30, 1999, consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the
period from October 1, 1999 to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in
revenues or gross profit, or for the period from
October 1, 1999 to such specified date there were any
increases, as compared with the corresponding period
in the preceding year, in loss from operations or net
loss or in per share amounts of net loss of the
Company, except in all instances for changes or
increases or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Representatives; or
(ii) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information) and
Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other
specified procedures as a result of which they
determined that certain information of an accounting,
financial or statistical nature (which is limited to
accounting, financial or statistical information
derived from the general accounting records of the
Company) set forth in the Registration Statement and
the Prospectus, including the information set forth
under the captions "Summary Financial
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Information", "Dilution", "Capitalization", "Selected
Financial Data", "Management's Discussion and
Analysis of Financial Condition and Results of
Operations", "Business", "Management", and "Certain
Transactions" in the Prospectus, agrees with the
accounting records of the Company, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph
(h) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(i) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer, director stockholder and option holder of the
Company addressed to the Representatives.
(j) The Company shall have caused the Securities to be
eligible for trading on the Nasdaq National Market upon issuance, and
satisfactory evidence thereof shall have been provided to the
Representatives.
(k) At the time of Closing, the Company shall have executed
and delivered the Warrant Agreement to the Representatives.
(l) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
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The documents required to be delivered by this Section 6 shall be
delivered at the office of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P, counsel for
the Underwriters, at 1900 Pennzoil Place, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx,
xx the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If, for any reason, the
Company or the Selling Stockholder elects not to complete the offering of the
Securities, the Company will reimburse the Underwriters severally through X.X.
Xxxxxxxxx, Towbin up to $150,000 for expenses incurred in such offering.
However, if the reasons for not completing the offering of the Securities cannot
reasonably be attributed to the Company or the Selling Stockholder, then the
Company will not be required to reimburse expenses of the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company and the Selling Stockholder jointly and
severally agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement for the registration of the Securities as originally filed or
in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof 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, or arise out of or are
based upon any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner
to, the Common Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon matters covered above,
and agrees to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability
or action; provided, however, that (i) the Company and the Selling
Stockholder will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion
therein and (ii) such indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or any
director, officer, employee or agent of such Underwriter or any person
controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities that are the
subject thereof if such person did not receive a copy of the Prospectus
(or the Prospectus as supplemented) excluding documents incorporated
therein by reference at or prior to the confirmation of the sale of
such Securities to such person in any case where such delivery is
required under the Act and any untrue
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statement or omission of a material fact contained in any Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as
supplemented). This indemnity agreement will be in addition to any
liability which the Company or the Selling Stockholder may otherwise
have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each
person who is named in the Registration Statement as about to become a
director, each of its officers who signs the Registration Statement,
and each person who controls the Company within the meaning of either
the Act or the Exchange Act and the Selling Stockholder, to the same
extent as the foregoing indemnity from the Company and the Selling
Stockholder to each Underwriter, but only with reference to written
information relating to such Underwriter or the "Underwriting" section
of the Prospectus furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity
agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company and the Selling Stockholder acknowledge
that the statements set forth under the heading "Underwriting" (and as
they are repeated or summarized elsewhere in the Prospectus) constitute
the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, Gin any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded 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, (iii)
the indemnifying party shall not have
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26
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Selling Stockholder, jointly and severally, and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively
"Losses") to which the Company, the Selling Stockholder and one or more
of the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in
no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the
Selling Stockholder, jointly and severally, and the Underwriters
severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of
the Company and the Selling Stockholder on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before
deducting expenses) as set forth on the cover page of the Prospectus,
benefits received by each Selling Stockholder shall be deemed to be
equal to the aggregate purchase price of the Stockholder Securities
sold by the Selling Stockholder and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions as set forth on the cover page of the
Prospectus. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information provided by the Company or the Selling
Stockholder on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the
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27
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
(e) The liability of the Selling Stockholder under the Selling
Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in
this Section 8 shall be limited to an amount equal to the aggregate
purchase price of the Stockholder Securities sold by the Selling
Stockholder to the Underwriters. The Company and the Selling
Stockholder may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which they each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholder or the Company. In the event of a default by any Underwriter
as set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Registration Statement and the
Prospectus or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company, the Selling Stockholder and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limiting of minimum prices shall have been established on either of
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28
such Exchange or the Nasdaq National Market, (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities, (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto), (iv) there shall have occurred any
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in the sole judgment of the Representatives adversely affects, or will
adversely affect, the business, prospects, financial condition or results of
operations of the Company, or (v) any federal, state or local government or
agency takes any action in respect of its monetary or fiscal affairs which in
the sole judgment of the Representatives has a material adverse effect on the
financial markets in the United States.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of the Selling Stockholder 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 any Underwriter,
the Selling Stockholder or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and will be mailed, delivered or telefaxed and
confirmed as follows:
If to the Representatives: X.X. Xxxxxxxxx, Towbin
Swiss Bank Tower
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: A. Xxxxxx Xxxxxx
(fax no.: (000) 000-0000)
With a copy to: J. Xxxxxxx Xxxxxx, Xx., P.C.,
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
(fax no.: (000) 000-0000)
If to the Company: TrueTime, Inc.
0000 Xxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxx
(fax no.: (000) 000-0000)
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29
With a copy to: Xxxxxxx X. Still
Fulbright & Xxxxxxxx, L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
(fax no.: (000) 000-0000)
If to the Selling Stockholder: OYO Corporation U.S.A.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
(fax no.: (000) 000-0000)
With a copy to: Xxxxxxx X. Still
Fulbright & Xxxxxxxx, L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
(fax no.: (000) 000-0000)
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
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30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
TrueTime, Inc.
By: _______________________________________
Name: Xxxxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
OYO Corporation U.S.A.
By: _______________________________________
Name: Xxxxxx X. Xxxx
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
X.X. XXXXXXXXX, TOWBIN
Cruttenden Xxxx Incorporated
Pennsylvania Merchant Group
By: X.X. Xxxxxxxxx, Towbin
By: __________________________________
Name: A. Xxxxxx Xxxxxx
Title: Managing Director
For themselves and the other several
Underwriters named in Schedule I
to the foregoing Agreement
31
SCHEDULE I
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
X.X. Xxxxxxxxx, Towbin........................................
Cruttenden Xxxx Incorporated..................................
Pennsylvania Merchant Group...................................
-----------------
TOTAL
=================
32
EXHIBIT A
[Name of Director, Officer or Selling Stockholder]
TrueTime, Inc.
Public Offering of Common Stock
________, 1999
X.X. Xxxxxxxxx, Towbin
Cruttenden Xxxx Incorporated
Pennsylvania Merchant Group
As Representative of the several Underwriters,
c/o X.X. Xxxxxxxxx, Towbin
Swiss Bank Tower
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), among TrueTime, Inc., a
Delaware corporation (the "Company"), OYO Corporation U.S.A. (the "Selling
Stockholder") and each of you as representatives of a group of Underwriters
named therein (the "Underwriters"), relating to an underwritten initial public
offering of Common Stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of X.X. Xxxxxxxxx, Towbin, offer, sell, contract to sell, pledge or
otherwise dispose of or file a registration statement with the Securities and
Exchange Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, with respect
to, any shares of capital stock of the Company or any securities convertible
into or exercisable or exchangeable for such capital stock, or publicly announce
an intention to effect any such transaction, for a period of one year after the
date of the final prospectus filed in connection with the initial public
offering, other than shares of Common Stock disposed of as bona fide gifts
approved by X.X. Xxxxxxxxx, Towbin.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[signature of Director, Officer or
Selling Stockholder]
[Name and address of Director, Officer or
Selling Stockholder]
