NOBLE INTERNATIONAL, LTD.
3,300,000 Shares of Common Stock
(No par value per share)
UNDERWRITING AGREEMENT
New York, New York
_______ __, 1997
BlueStone Capital Partners, X.X.
Xxxxxx & Xxxxxxx, Inc.
as Representatives of the
Several Underwriters named
in Schedule A hereto
c/o BlueStone Capital Partners, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Noble International, Ltd., a Michigan corporation (the
"Company"), proposes to issue and sell to the underwriters (the "Underwriters")
named in Schedule A to this Underwriting Agreement (the "Agreement"), for whom
BlueStone Capital Partners, L.P. ("BlueStone") and Xxxxxx & Xxxxxxx, Inc. are
acting as representatives (hereinafter sometimes referred to together as the
"Representatives") three million three hundred thousand (3,300,000) shares of
common stock, no par value per share (the "Offered Shares"), which Offered
Shares are presently authorized but unissued shares of the common stock, no par
value per share (individually a "Common Share" and collectively the "Common
Shares"), of the Company. In addition, the Representatives, in order to cover
over-allotments in the sale of the Offered Shares, may purchase from the
Company, for their own accounts, up to an aggregate of four hundred ninety-five
thousand (495,000) Common Shares (the "Optional Shares"; the Offered Shares and
the Optional Shares are hereinafter sometimes collectively referred to as the
"Shares"). The Shares are described in the Registration Statement, as defined
below. The Company also proposes to issue and sell to the Representatives for
their own accounts and/or the accounts of their designees, warrants to purchase
an aggregate of three hundred thirty thousand (330,000) Common Shares (the
"Warrant Shares") at an exercise price of $____ per Warrant Share [120% of the
initial
public offering price per Share] (the "Representatives' Warrants"), which sale
will be consummated in accordance with the terms and conditions of the form of
Representatives' Warrant Agreement filed as an exhibit to the Registration
Statement.
The Representatives hereby warrant to the Company that they
have been authorized by each of the Underwriters to enter into this Underwriting
Agreement on their behalf and to act for them in the manner herein provided. The
Company hereby confirms its respective agreements with the Representatives and
each of the Underwriters, on whose behalf the Representatives are signing this
Agreement, as follows:
1. Purchase and Sale of Offered Shares. On the basis of
the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company hereby agrees to sell the Offered
Shares to the Underwriters, severally, and each Underwriter agrees severally and
not jointly, to purchase from the Company, at a purchase price of $____ per
share, the number of Offered Shares set forth opposite the name of such
Underwriter in Schedule A attached hereto, plus any additional Offered Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof. The Underwriters plan to offer the Offered
Shares to the public at a public offering price of $____ per share.
2. Payment and Delivery.
(a) Payment for the Offered Shares will be made
to the Company by wire transfer against delivery of the Offered Shares to the
Representatives. Such payment and delivery will be made at 10:00 A.M. New York
City time, on the third business day following the Effective Date (the fourth
business day following the Effective Date in the event that trading of the
Offered Shares commences on the day following the Effective Date), the date and
time of such payment and delivery being herein called the "Closing Date." The
certificates representing the Offered Shares to be delivered will be in such
denominations and registered in such names as the Representatives may request
not less than two full business days prior to the Closing Date, and will be made
available to the Representatives for inspection, checking and packaging at the
office of , the Company's transfer agent, at not less than one full business day
prior to the Closing Date.
(b) On the Closing Date, the Company will sell
the Representatives' Warrants to the Representatives or to their designees
(limited to officers, directors and partners of the Representatives and
Underwriters). The Representatives' Warrants will be in the form of, and in
accordance with, the provisions of
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the Representatives' Warrant Agreement attached as an exhibit to the
Registration Statement. The aggregate purchase price for the Representatives'
Warrants is $330. The Representatives' Warrants will be restricted from sale,
transfer, assignment or hypothecation for a period of one year from the
Effective Date, except to officers, directors or partners of the Representatives
and Underwriters and members of the selling group and/or their officers,
directors or partners. Payment for the Representatives' Warrants will be made to
the Company by check or checks payable to its order on the Closing Date against
delivery of the certificates representing the Representatives' Warrants. The
certificates representing the Representatives' Warrants will be in such
denominations and such names as the Representatives may request prior to the
Closing Date.
3. Option to Purchase Optional Shares.
(a) For the purposes of covering any
overallotments in connection with the distribution and sale of the Offered
Shares as contemplated by the Prospectus as defined below, the Representatives
are hereby granted an option to purchase for their own accounts, and not as
representatives of the Underwriters, all or any part of the Optional Shares from
the Company. The purchase price to be paid for the Optional Shares will be the
same price per Optional Share as the price per Offered Share set forth in
Section 1 hereof. The option granted hereby may be exercised by the
Representatives as to all or any part of the Optional Shares at any time within
45 days after the Effective Date. The Representatives will not be under any
obligation to purchase any Optional Shares prior to the exercise of such option.
(b) The option granted hereby may be exercised
by the Representatives by giving oral notice to the Company, which must be
confirmed by a letter, telex or telegraph setting forth the number of Optional
Shares to be purchased, the date and time for delivery of and payment for the
Optional Shares to be purchased and stating that the Optional Shares referred to
therein are to be used for the purpose of covering over-allotments in connection
with the distribution and sale of the Offered Shares. If such notice is given
prior to the Closing Date, the date set forth therein for such delivery and
payment will not be earlier than either two full business days thereafter or the
Closing Date, whichever occurs later. If such notice is given on or after the
Closing Date, the date set forth therein for such delivery and payment will not
be earlier than two (2) full business days thereafter. In either event, the date
so set forth will not be more than 15 full business days after the date of such
notice. The date and time set forth in such notice is herein called the "Option
Closing Date." Upon exercise of such option, the Company will become obligated
to convey to the Representatives, and, subject to the terms and
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conditions set forth in Section 3(d) hereof, the Representatives will become
obligated to purchase, the number of Optional Shares specified in such notice.
(c) Payment for any Optional Shares purchased
will be made to the Company by wire transfer against delivery of the Optional
Shares purchased to the Representatives. The certificates representing the
Optional Shares to be delivered will be in such denominations and registered in
such names as the Representatives request not less than two full business days
prior to the Option Closing Date, and will be made available to the
Representatives for inspection, checking and packaging at the aforesaid office
of the Company's transfer agent or correspondent not less than one full business
day prior to the Option Closing Date.
(d) The obligation of the Representatives to
purchase and pay for any of the Optional Shares is subject to the accuracy and
completeness (as of the date hereof and as of the Option Closing Date) of and
compliance in all material respects with the representations and warranties of
the Company herein, to the accuracy and completeness of the statements of the
Company or its officers made in any certificate or other document to be
delivered by the Company pursuant to this Agreement, to the performance in all
material respects by the Company of its obligations hereunder, to the
satisfaction by the Company of the conditions, as of the date hereof and as of
the Option Closing Date, set forth in Section 3(b) hereof, and to the delivery
to the Representatives of opinions, certificates and letters dated the Option
Closing Date substantially similar in scope to those specified in Sections 5 and
6(b), (c), (d) and (e) hereof, but with each reference to "Offered Shares" and
"Closing Date" to be, respectively, to the Optional Shares and the Option
Closing Date.
4. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan,
with full power and authority, corporate and other, to own or lease, as the case
may be, and operate, its properties, whether tangible or intangible, and to
conduct its business as described in the Registration Statement and to execute,
deliver and perform this Agreement and the Representatives' Warrant Agreement
and to consummate the transactions contemplated hereby and thereby. The Company
has no subsidiaries other than Prestolock International, Ltd., a corporation
duly organized and validly existing under the laws of the State of Michigan
("Prestolock"), Monroe Engineering Products, Inc., a corporation duly organized
and validly existing under the laws of the State of Michigan ("Monroe"),
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Cass River Coating, Inc. (dba Vassar Industries), a corporation duly organized
and validly existing under the laws of the State of Michigan ("Vassar"), Skandy
Corp., a corporation duly organized and validly existing under the laws of the
State of Michigan ("Skandy"), Utilase Production Process, Inc., a corporation
duly organized and validly existing under the laws of the State of Michigan
("UPP"), and DCT Component Systems, Inc., a corporation duly organized and
validly existing under the laws of the State of Michigan ("DCT"), as well as two
subsidiaries to be acquired on the Closing Date, Utilase, Inc., a corporation
duly organized and validly existing under the laws of the State of Michigan
("Utilase"), and Competitive Technologies Investment Company, a co-partnership
duly organized and validly existing under the laws of the State of Michigan
("CTIC") (collectively, the "Subsidiaries"). Unless the context otherwise
requires, all references to the "Company" in this Agreement shall include the
Subsidiaries, provided that it is understood and agreed that the Company is
relying on the representation and warranties of the sellers of the Common Stock
of Utilase and CTIC to the Company (the "Utilase and CTIC Sellers") with respect
to the representations and warranties contained herein as they relate to DCT and
Utilase. Each of the Company and the Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
wherein such qualification is necessary and failure so to qualify could have a
material adverse effect on the financial condition, results of operations,
business or properties of the Company or any Subsidiary. Each of the
Subsidiaries has full power and authority to own or lease, as the case may be,
and operate its properties and to conduct its business as described in the
Prospectus. The Company owns 45% of the issued and outstanding shares of capital
stock of DCT and all of the issued and outstanding shares of capital stock of
each of the Subsidiaries other than DCT, Utilase and CTIC, in each case free and
clear of any security interests, liens, encumbrances, claims and charges, and
all of such shares have been duly authorized and validly issued and are fully
paid and nonassessable. On the Closing Date, the Company will own all of the
issued and outstanding shares of capital stock of all of its Subsidiaries, free
and clear of any security interests, liens, encumbrances, claims and charges
and all of such shares have been duly authorized and validly issued and are
fully paid and nonassessable. There are no options or warrants for the purchase
of, or other rights to purchase, or outstanding securities convertible into or
exchangeable for, any capital stock or other securities of any Subsidiary.
(b) This Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding obligation of the
Company, and the Representatives' Warrant Agreement, when executed and delivered
by the Company on the Closing Date, will be the valid and binding obligation of
the Company, enforceable against the Company in accordance with their respective
terms. The execution, delivery and performance of this Agreement and the
Representatives' Warrant Agreement by the Company, the consummation by the
Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms of this Agreement and the Representatives' Warrant
Agreement have been duly authorized by all necessary corporate action and do not
and will not, with or without the giving of notice or the lapse of time, or
both, (i) result in any violation of the Company's or of any Subsidiary's
Certificate of Incorporation or By-laws, each
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as amended; (ii) result in a breach of or conflict with any of the terms or
provisions of, or constitute a default under, or result in the modification or
termination of, or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any Subsidiary pursuant to any indenture, mortgage, note, contract,
commitment or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company, any Subsidiary or any of their
respective properties or assets is or may be bound or affected; (iii) violate
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of their respective properties or business; or
(iv) have any effect on any permit, certification, registration, approval,
consent, order, license, franchise or other authorization (collectively, the
"Permits") necessary for the Company or any Subsidiary to own or lease and
operate their respective businesses or the ability of the Company to make use
thereof.
(c) No Permits of any court or governmental
agency or body, other than under the Securities Act of 1933, as amended (the
"Act"), the Regulations (as hereinafter defined) and applicable state securities
or Blue Sky laws, are required (i) for the valid authorization, issuance, sale
and delivery of the Shares to the Underwriters, and (ii) the consummation by the
Company of the transactions contemplated by this Agreement and the
Representatives' Warrant Agreement or, if so required, all such Permits, have
been duly obtained and are in full force and effect.
(d) The Company has prepared in conformity with
the requirements of the Act and the rules and regulations (the "Regulations") of
the Securities and Exchange Commission (the "Commission") and filed with the
Commission a registration statement (File No. 333-27149) on Form S-1 and has
filed one or more amendments thereto, covering the registration of the Shares
under the Act, including the related preliminary prospectus or preliminary
prospectuses (each thereof being herein called a "Preliminary Prospectus") and a
proposed final prospectus. Each Preliminary Prospectus was endorsed with the
legend required by Item 501(b)(8) of Regulation S-K of the Regulations and, if
applicable, Rule 430A of the Regulations. Such registration statement including
any documents incorporated by reference therein and all financial schedules and
exhibits thereto, as amended at the time it becomes effective, and the final
prospectus included therein are herein, respectively, called the "Registration
Statement" and the "Prospectus," except that, (i) if the prospectus filed by the
Company pursuant to Rule 424(b) of the Regulations differs from the Prospectus,
the term "Prospectus" shall mean the prospectus filed pursuant to Rule 424(b),
and (ii) if the Registration Statement is amended or such Prospectus is
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supplemented after the date the Registration Statement is declared effective by
the Commission (the "Effective Date") and prior to the Option Closing Date, the
terms "Registration Statement" and "Prospectus" shall include the Registration
Statement as amended or supplemented.
(e) Neither the Commission nor, to the best of
the Company's knowledge, any state regulatory authority has issued any order
preventing or suspending the use of any Preliminary Prospectus or has instituted
or, to the best of the Company's knowledge, threatened to institute any
proceedings with respect to such an order.
(f) The Registration Statement when it becomes
effective, the Prospectus (and any amendment or supplement thereto) when it is
filed with the Commission pursuant to Rule 424(b), and both documents as of the
Closing Date and the Option Closing Date referred to below, will contain all
statements which are required to be stated therein in accordance with the Act
and the Regulations and will in all material respects conform to the
requirements of the Act and the Regulations, and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, on such
dates, will contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company in connection with the Registration
Statement or Prospectus or any amendment or supplement thereto by the
Representatives, or by any Underwriter through the Representatives, expressly
for use therein.
(g) The Company had at the date or dates
indicated in the Prospectus a duly authorized and outstanding capitalization as
set forth in the Registration Statement and the Prospectus. Based on the
assumptions stated in the Registration Statement and the Prospectus, the Company
will have on the Closing Date the adjusted stock capitalization set forth
therein. Except as set forth in the Registration Statement or the Prospectus, on
the Effective Date and on the Closing Date, there will be no options to
purchase, warrants or other rights to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell
shares of the Company's capital stock or any such warrants, convertible
securities or obligations. Except as set forth in the Prospectus, no holder of
any of the Company's securities has any rights, "demand," "piggyback" or
otherwise, to have such securities registered under the Act.
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(h) The descriptions in the Registration
Statement and the Prospectus of contracts and other documents are accurate and
present fairly the information required to be disclosed, and there are no
contracts or other documents required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration Statement
under the Act or the Regulations which have not been so described or filed as
required.
(i) Xxxxx Xxxxxxxx LLP, the accountants who have
certified certain of the consolidated financial statements of Noble
International, Ltd. and the Subsidiaries, and the financial statements of each
of Monroe, DCT and Utilase [and CTIC] (collectively, the "Financial Statements")
filed and to be filed with the Commission as part of the Registration Statement
and the Prospectus, are independent public accountants within the meaning of the
Act and Regulations. The Financial Statements and schedules and the notes
thereto filed as part of the Registration Statement and included in the
Prospectus are complete, correct and present fairly the financial position of
the Company, Monroe, DCT and Utilase [and CTIC] as of the dates thereof, and the
results of operations and changes in financial position of the Company, Monroe,
DCT and Utilase [and CTIC] for the periods indicated therein, all in conformity
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved except as otherwise stated in the Registration
Statement and the Prospectus. The selected financial data set forth in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
and unaudited financial statements included in the Registration Statement and
the Prospectus.
(j) Each of the Company and the Subsidiaries has
filed with the appropriate federal, state and local governmental agencies, and
all appropriate foreign countries and political subdivisions thereof, all tax
returns, including franchise tax returns, which are required to be filed or has
duly obtained extensions of time for the filing thereof and has paid all taxes
shown on such returns and all assessments received by it to the extent that the
same have become due; and the provisions for income taxes payable, if any, shown
on the Financial Statements filed with or as part of the Registration Statement
are sufficient for all accrued and unpaid foreign and domestic taxes, whether or
not disputed, and for all periods to and including the dates of such Financial
Statements. Except as disclosed in writing to the Representatives, neither the
Company nor any Subsidiary has executed or filed with any taxing authority,
foreign or domestic, any agreement extending the period for assessment or
collection of any income taxes and is not a party to any pending action or
proceeding by any foreign or domestic governmental agency for assessment or
collection of taxes; and no claims for assessment or
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collection of taxes have been asserted against the Company or any Subsidiary.
(k) The outstanding Common Shares and
outstanding options and warrants to purchase Common Shares have been duly
authorized and validly issued. The outstanding Common Shares are fully paid and
nonassessable. The outstanding options and warrants to purchase Common Shares
constitute the valid and binding obligations of the Company, enforceable in
accordance with their terms. None of the outstanding Common Shares or options or
warrants to purchase Common Shares has been issued in violation of the
preemptive rights of any shareholder of the Company. None of the holders of the
outstanding Common Shares is subject to personal liability solely by reason of
being such a holder. The offers and sales of the outstanding Common Shares and
outstanding options and warrants to purchase Common Shares were at all relevant
times either registered under the Act and the applicable state securities or
Blue Sky laws or exempt from such registration requirements. The authorized
Common Shares and outstanding options and warrants to purchase Common Shares
conform to the descriptions thereof contained in the Registration Statement and
Prospectus. Except as set forth in the Registration Statement and the
Prospectus, on the Effective Date and the Closing Date, there will be no
outstanding options or warrants for the purchase of, or other outstanding rights
to purchase, Common Shares or securities convertible into Common Shares.
(l) No securities of the Company have been sold
by the Company or by or on behalf of, or for the benefit of, any person or
persons controlling, controlled by, or under common control with the Company
within the three years prior to the date hereof, except as disclosed in the
Registration Statement.
(m) The issuance and sale of the Shares and the
Warrant Shares have been duly authorized and, when the Shares and the Warrant
Shares have been issued and duly delivered against payment therefor as
contemplated by this Agreement and the Representatives' Warrant Agreement,
respectively, the Shares and the Warrant Shares will be validly issued, fully
paid and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. Neither the Shares nor the
Warrant Shares will be subject to preemptive rights of any shareholder of the
Company.
(n) The issuance and sale of the
Representatives' Warrants have been duly authorized and, when issued, paid for
and delivered as contemplated by the Representatives' Warrant Agreement, the
Representatives' Warrants will constitute valid and binding obligations of the
Company, enforceable as to the Company in accordance with their terms. The
Representatives' Warrants will
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not be subject to preemptive rights of any shareholder of the Company. The
Warrant Shares have been duly reserved for issuance upon exercise of the
Representatives' Warrants in accordance with the provisions of the
Representatives' Warrant Agreement. The Representatives' Warrants conform to the
description thereof contained in the Registration Statement and the Prospectus.
(o) Neither the Company nor any Subsidiary is in
violation of, or in default under, (i) any term or provision of its certificate
of incorporation or by-laws, each as amended; (ii) any material term or
provision or any financial covenants of any indenture, mortgage, contract,
commitment or other agreement or instrument to which it is a party or by which
it or any of its property or business is or may be bound or affected; or (iii)
any existing applicable law, rule, regulation, judgment, order or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over the
Company, any Subsidiary or any of the their respective properties or business.
The Company owns, possesses or has obtained all governmental and other
(including those obtainable from third parties) Permits necessary to own or
lease, as the case may be, and to operate its properties, whether tangible or
intangible, and to conduct the business and operations of the Company as
presently conducted, and all such Permits are outstanding and in good standing,
and there are no proceedings pending or to the best of the Company's knowledge,
threatened (nor, to the best of the Company's knowledge, is there any basis
therefor), which seek to cancel, terminate or limit such Permits.
(p) Except as set forth in the Prospectus, there
are no claims, actions, suits, proceedings, arbitrations, investigations or
inquiries before any governmental agency, court or tribunal, domestic or
foreign, or before any private arbitration tribunal, pending, or, to the best of
the Company's knowledge, threatened against the Company or any Subsidiary or
involving the Company's or any Subsidiary's properties or business which, if
determined adversely to the Company or any Subsidiary would, individually or in
the aggregate, result in any material adverse change in the financial position,
shareholders' equity, results of operations, properties, business, management or
affairs or business prospects of the Company or any Subsidiary or which question
the validity of the capital stock of the Company or this Agreement or of any
action taken or to be taken by the Company pursuant to, or in connection with,
this Agreement; nor, to the best of the Company's knowledge, is there any basis
for any such claim, action, suit, proceeding, arbitration, investigation or
inquiry. There are no outstanding orders, judgments or decrees of any court,
governmental agency or other tribunal naming the Company or any Subsidiary and
enjoining the Company or any Subsidiary from taking, or requiring the Company or
any Subsidiary to take, any action, or
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to which the Company or any Subsidiary or the Company's or any Subsidiary's
properties or business is bound or subject.
(q) Neither the Company nor any of its affiliates
has incurred any liability for any finder's fees or similar payments in
connection with the transactions herein contemplated.
(r) Each of the Company and the Subsidiaries
owns or possesses adequate and enforceable rights to use all patents, patent
applications, trademarks, service marks, copyrights, rights, trade secrets,
confidential information, processes and formulations used or proposed to be used
in the conduct of its business as described in the Prospectus (collectively the
"Intangibles"); to the best of the Company's knowledge, neither the Company nor
any Subsidiary has infringed or is infringing upon the rights of others with
respect to the Intangibles; and, except as set forth in the Prospectus, neither
the Company nor any Subsidiary has received any notice of conflict with the
asserted rights of others with respect to the Intangibles which could, singly or
in the aggregate, materially adversely affect its business as presently
conducted or the prospects, financial condition or results of operations of the
Company or any Subsidiary and the Company knows of no basis therefor; and, to
the best of the Company's knowledge, no others have infringed upon the
Intangibles of the Company or any Subsidiary.
(s) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus and the
latest Financial Statements, neither the Company nor any Subsidiary has incurred
any material liability or obligation, direct or contingent, or entered into any
material transaction, whether or not incurred in the ordinary course of
business, or any material loss or interference with its business from fire,
storm, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree; and
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there have not been, and prior to the Closing Date
referred to below there will not be, any changes in the capital stock or any
material increases in the long-term debt of the Company or any Subsidiary or any
material adverse change in or affecting the general affairs, management,
financial condition, shareholders' equity, results of operations or prospects of
the Company or any Subsidiary, other than as set forth or contemplated in the
Prospectus.
(t) Each of the Company and the Subsidiaries has
good and marketable title in fee simple to all real property and good title to
all personal property (tangible and intangible) owned by it, free and clear of
all security interests, charges, mortgages, liens, encumbrances and defects,
except such as are
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described in the Registration Statement and Prospectus or such as do not
materially affect the value or transferability of such property and do not
interfere with the use of such property made, or proposed to be made, by the
Company or any Subsidiary. The leases, licenses or other contracts or
instruments under which the Company and the Subsidiaries lease, hold or are
entitled to use any property, real or personal, are valid, subsisting and
enforceable only with such exceptions as are not material and do not interfere
with the use of such property made, or proposed to be made, by the Company or
any Subsidiary, and all rentals, royalties or other payments, if any, accruing
thereunder which became due prior to the date of this Agreement have been duly
paid, and neither the Company nor, to the best of the Company's knowledge, any
other party is in default thereunder and, to the best of the Company's
knowledge, no event has occurred which, with the passage of time or the giving
of notice, or both, would constitute a default thereunder. Neither the Company
nor any Subsidiary has received notice of any violation of any applicable law,
ordinance, regulation, order or requirement relating to its owned or leased
properties. Each of the Company and the Subsidiaries has adequately insured its
properties against loss or damage by fire or other casualty and maintains, in
adequate amounts, such other insurance as is usually maintained by companies
engaged in the same or similar businesses located in its geographic area.
(u) Each contract or other instrument (however
characterized or described) to which the Company or a Subsidiary is a party or
by which their respective properties or businesses is or may be bound or
affected and to which reference is made in the Prospectus has been duly and
validly executed, is in full force and effect in all material respects and is
enforceable against the parties thereto in accordance with its terms, and none
of such contracts or instruments has been assigned by the Company or any
Subsidiary, and neither the Company nor, to the best of the Company's knowledge,
any other party is in default thereunder and, to the best of the Company's
knowledge, no event has occurred which, with the lapse of time or the giving of
notice, or both, would constitute a default thereunder.
None of the material provisions of such contracts or
instruments violates any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court having jurisdiction over the
Company or any Subsidiary or any of their respective assets or businesses.
(v) The employment, consulting, confidentiality
and non-competition agreements between the Company and its officers, employees
and consultants and between the Subsidiaries and their respective officers,
employees and consultants, described in the Registration Statement, are binding
and enforceable obligations
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upon the respective parties thereto in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws or arrangements affecting
creditors' rights generally and subject to principles of equity.
(w) Except as set forth in the Prospectus, the
Company has no employee benefit plans (including, without limitation, profit
sharing and welfare benefit plans) or deferred compensation arrangements that
are subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended.
(x) Except as set forth in the Prospectus, to
the best of the Company's knowledge, no labor problem exists with any of the
Company's employees or any of the Subsidiaries' employees or is imminent which
could adversely affect the Company or any Subsidiary.
(y) Neither the Company nor any Subsidiary has,
directly or indirectly, at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such contribution in
violation of law or (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than, in each case, payments or contributions
required or allowed by applicable law. The Company's internal accounting
controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.
(z) The Shares have been approved for listing on
the American Stock Exchange ("AMEX").
(aa) The Company has provided to Xxxxxx
Xxxxxxxxxx LLP, counsel to the several Underwriters ("Underwriters' Counsel"),
all material agreements, certificates, correspondence and other items, documents
and information requested by such counsel's Corporate Review Memorandum dated
August 26, 1997.
Any certificate signed by an officer of the Company
or by an officer of a Subsidiary and delivered to the Representatives or to
Underwriters' Counsel shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the matters covered thereby.
5. Certain Covenants of the Company. The Company
covenants with the several Underwriters as follows:
(a) The Company will not at any time, whether
before the Effective Date or thereafter during such period as the Prospectus is
required by law to be delivered in connection with
-13-
the sales of the Shares by the Representatives or a dealer, file or publish any
amendment or supplement to the Registration Statement or Prospectus of which the
Representatives have not been previously advised and furnished a copy, or to
which the Representatives shall object in writing.
(b) The Company will use its best efforts to
cause the Registration Statement to become effective and will advise the
Representatives promptly, and, if requested by the Representatives, confirm such
advice in writing, (i) when the Registration Statement, or any post-effective
amendment to the Registration Statement or any supplemented Prospectus is filed
with the Commission; (ii) of the receipt of any comments from the Commission;
(iii) of any request of the Commission for amendment or supplementation of the
Registration Statement or Prospectus or for additional information; and (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any Preliminary Prospectus, or of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation of any
proceedings for any of such purposes. The Company will use its best efforts to
prevent the issuance of any such stop order or of any order preventing or
suspending such use and to obtain as soon as possible the lifting thereof, if
any such order is issued.
(c) The Company will deliver to each
Underwriter, without charge, from time to time until the Effective Date, as many
copies of each Preliminary Prospectus as each Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the Act. The Company will deliver to each Underwriter, without
charge, as soon as the Registration Statement becomes effective, and thereafter
from time to time as requested, such number of copies of the Prospectus (as
supplemented, if the Company makes any supplements to the Prospectus) as each
Underwriter may reasonably request. The Company has furnished or will furnish to
each of the Representatives a signed copy of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or after
the Registration Statement becomes effective, a copy of all exhibits filed
therewith and a signed copy of all consents and certificates of experts.
(d) The Company will comply with the Act, the
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder so as to permit the continuance
of sales of and dealings in the Offered Shares and in any Optional Shares which
may be issued and sold. If, at any time when a prospectus relating to the Shares
is required to be delivered under the Act, any event occurs as a result of which
the Registration Statement and Prospectus as then
-14-
amended or supplemented would include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Registration Statement and Prospectus to
comply with the Act or the regulations thereunder, the Company will promptly
file with the Commission, subject to Section 5(a) hereof, an amendment or
supplement which will correct such statement or omission or which will effect
such compliance.
(e) The Company will furnish such proper
information as may be required and otherwise cooperate in qualifying the Shares
for offering and sale under the securities or Blue Sky laws relating to the
offering in such jurisdictions as the Representatives may reasonably designate,
provided that no such qualification will be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to service of general
process or to taxation or qualification as a foreign corporation doing business
in such jurisdiction.
(f) The Company will make generally available to
its security holders, in the manner specified in Rule 158(b) under the Act, and
deliver to the Representatives and Underwriters' Counsel as soon as practicable
and in any event not later than 45 days after the end of its fiscal quarter in
which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement meeting the requirements of Rule 158(a)
under the Act covering a period of at least 12 consecutive months beginning
after the effective date of the Registration Statement.
(g) For a period of three years from the
Effective Date, the Company will deliver to the Representatives, on a timely
basis (i) a copy of each report or document, including, without limitation,
reports on Forms 8-K, 10-C, 10-K and 10-Q and exhibits thereto, filed or
furnished to the Commission, any securities exchange or the National Association
of Securities Dealers, Inc. (the "NASD") on the date each such report or
document is so filed or furnished; (ii) as soon as practicable, copies of any
reports or communications (financial or other) of the Company mailed to its
security holders; (iii) as soon as practicable, a copy of any Schedule 13D, 13G,
14D-1 or 13E-3 received or prepared by the Company from time to time; (iv)
quarterly statements setting forth such information regarding the Company's
results of operations and financial position (including balance sheet, profit
and loss statements and data regarding backlog) as is regularly prepared by
management of the Company; and (v) such additional information concerning the
business and financial condition of the Company as the Representatives may from
time to time reasonably request and which can be prepared or obtained by the
Company without
-15-
unreasonable effort or expense. The Company will furnish to its shareholders
annual reports containing audited financial statements and such other periodic
reports as it may determine to be appropriate or as may be required by law.
(h) Neither the Company nor any person that con-
trols, is controlled by or is under common control with the Company will take
any action designed to or which might be reasonably expected to cause or result
in the stabilization or manipulation of the price of the Common Stock.
(i) If the transactions contemplated by this
Agreement are consummated, BlueStone shall retain the $50,000 previously paid to
it, and the Company will pay or cause to be paid the following: all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to, the fees and expenses of
accountants and counsel for the Company; the preparation, printing, mailing and
filing of the Registration Statement (including financial statements and
exhibits), Preliminary Prospectuses and the Prospectus, and any amendments or
supplements thereto; the printing and mailing of the Selected Dealer Agreement;
the issuance and delivery of the Shares to the Representatives; all taxes, if
any, on the issuance of the Shares; the fees, expenses and other costs of
qualifying the Shares for sale under the "Blue Sky" or securities laws of those
states in which the Shares are to be offered or sold including the fees and
disbursements of Underwriters' Counsel incurred in connection therewith, and the
cost of printing and mailing the "Blue Sky Survey"; the filing fees incident to
securing any required review by the NASD; the cost of furnishing to the several
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
the Prospectus as herein provided; the costs of placing "tombstone
advertisements" in any publications which may be selected by the
Representatives, and all other costs and expenses incident to the performance of
the Company's obligations hereunder which are not otherwise specifically
provided for in this Section 5(i).
In addition, at the Closing Date or the Option
Closing Date, as the case may be, the Representatives will deduct from the
payment for the Offered Shares $_______________ (less the sum of $50,000
previously paid to BlueStone), as payment for the Representatives' accountable
expense allowance relating to the transactions contemplated hereby, which amount
will include the fees and expenses of Underwriters' Counsel (other than those
payable by the Company in connection with "Blue Sky" qualifications referred to
in the preceding paragraph).
(j) If the transactions contemplated by this
Agreement or related hereto are not consummated because the Company
-16-
decides not to proceed with the offering for any reason or if the
Representatives decide not to proceed with the offering because of a breach by
the Company of its representations, warranties or covenants in this Agreement or
as a result of adverse changes in the affairs of the Company, the Company will
reimburse the Representatives for all of their accountable expenses reasonably
incurred in connection with the offering. If the Representatives decide not to
proceed with the offering for any other reason the Company will reimburse the
Representatives for their accountable expenses up to the $50,000 previously paid
to BlueStone. In no event, however, will the Representatives, in the event the
offering is terminated, be entitled to retain or receive more than an amount
equal to their actual accountable out-of-pocket expenses.
(k) The Company intends to apply the net
proceeds from the sale of the Shares for the purposes set forth in the
Prospectus. The Company will file with the Commission all required reports on
Form SR in accordance with the provisions of Rule 463 promulgated under the Act
and will provide a copy of each such report to the Representatives and
Underwriters' Counsel.
(l) During the period of twelve (12) months
following the date hereof, neither the Company nor any of its officers,
directors or shareholders will offer for sale, sell, transfer, pledge or
otherwise dispose of (other than gifts or sales or other dispositions exempt
from registration pursuant to Section 4(2) of the Act where the transferees
thereof agree in writing to be bound by this Section 5(l)), directly or
indirectly, any securities of the Company, in any manner whatsoever, whether
pursuant to Rule 144 of the Regulations or otherwise, and no holder of
registration rights relating to securities of the Company will execute any such
registration rights, in either case, without the prior written consent of
BlueStone. The Company will deliver to the Representatives the undertakings as
of the date hereof of its officers, directors and shareholders to this effect.
(m) The Company will not file any registration
statement relating to the offer or sale of any of the Company's securities,
including any registration statement on Form S-8, during the twelve (12) months
following the date hereof without BlueStone's prior written consent.
(n) The Company maintains and will continue to
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with
-17-
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(o) The Company will use its best efforts to
maintain the listing of the Shares on the AMEX for so long as the
Shares are qualified for such listing.
(p) The Company will, concurrently with the
Effective Date, register the class of equity securities of which the Shares are
a part under Section 12(g) of the Exchange Act and the Company will maintain
such registration for a minimum of five (5) years after the Effective Date.
(q) Subject to the sale of the Offered Shares,
BlueStone and its successors will have the right to designate a nominee for
election, at its or their option, as a member of the Board of Directors of the
Company, and the Company will use its best efforts to cause such nominee to be
elected and continued in office as a director of the Company until the
expiration of two (2) years following the Closing Date. Each of the Company's
current officers, directors and shareholders agrees to vote all of the Common
Shares owned by such person or entity so as to elect and continue in office such
nominee of BlueStone. Following the election of such nominee as a director, such
person shall receive no more or less compensation than is paid to other
non-officer directors of the Company for attendance at meetings of the Board of
Directors of the Company and shall be entitled to receive reimbursement for all
reasonable costs incurred in attending such meetings including, but not limited
to, food, lodging and transportation. The Company agrees to indemnify and hold
such director harmless, to the maximum extent permitted by law, against any and
all claims, actions, awards and judgments arising out of his service as director
and, in the event the Company maintains a liability insurance policy affording
coverage for the acts of its officers and directors, to include such director as
an insured under such policy. The rights and benefits of such indemnification
and the benefits of such insurance shall, to the extent possible, extend to
BlueStone insofar as it may be or may be alleged to be responsible for such
director or advisor.
If BlueStone does not exercise its option to
designate a member of the Company's Board of Directors, BlueStone shall
nonetheless have the right to send a representative (who need not be the same
person from meeting to meeting) to observe each meeting of the Board of
Directors. The Company agrees to give BlueStone notice of each such meeting and
to provide BlueStone with an agenda and minutes of the meeting no later than it
gives such notice and provides such items to the directors. So long as
-18-
BlueStone shall have the right to nominate a director to the Company's Board,
the Company's Board of Directors shall be comprised of five (5) members, unless
otherwise agreed in writing by BlueStone.
(r) The Company shall retain a transfer agent
for the Common Shares, reasonably acceptable to BlueStone, for a period of one
(1) year following the Effective Date. In addition, for a period of three (3)
years following the Effective Date, the Company, at its own expense, shall cause
its transfer agent to provide BlueStone, if so requested in writing, with copies
of the Company's daily transfer sheets and when requested by BlueStone, a
current list of the Company's security holders, including a list of the
beneficial owners of securities held by a depository trust company and other
nominees.
(s) The Company hereby agrees, at its sole cost
and expense, to supply and deliver to Underwriters' Counsel, within a reasonable
period from the date hereof, five bound volumes, including the Registration
Statement, as amended or supplemented, all exhibits to the Registration
Statement, the Prospectus and all other underwriting documents.
(t) The Company shall, within 10 days of the
date hereof, have applied for listing in Standard & Poor's Corporation Records
Service (including annual report information) or Xxxxx'x Industrial Manual
(Xxxxx'x OTC Industrial Manual not being sufficient for these purposes) and
shall use its best efforts to have the Company listed in such manual and shall
maintain such listing for a period of three (3) years following the Effective
Date.
(u) For a period of three (3) years from the
Effective Date, the Company shall provide BlueStone, on a not less than annual
basis, with internal forecasts setting forth projected results of operations for
each quarterly and annual period in the two (2) fiscal years following the
respective dates of such forecasts. Such forecasts shall be provided to
BlueStone more frequently than annually if prepared more frequently by
management, and revised forecasts shall be prepared and provided to BlueStone
when required to reflect more current information, revised assumptions or actual
results that differ materially from those set forth in the forecasts.
(v) For a period of three (3) years following
the Effective Date, the Company shall continue to retain Xxxxx Xxxxxxxx LLP (or
such other nationally recognized accounting firm as is acceptable to BlueStone)
as the Company's independent public accountants.
-19-
(w) For a period of three (3) years following
the Effective Date, the Company, at its expense, shall cause its independent
certified public accountants, as described in Section 5(v) above, to review (but
not audit) the Company's financial statements for each of the first three fiscal
quarters prior to the announcement of quarterly financial information, the
filing of the Company's 10-Q quarterly report and the mailing of quarterly
financial information to shareholders.
(x) For a period of two (2) years following the
Effective Date, the Company will not offer or sell any of its securities
pursuant to Regulation S of the Act without the prior written consent of
BlueStone.
(y) For a period of twenty-five (25) days
following the Effective Date, the Company will not issue press releases or
engage in any other publicity without BlueStone's prior written consent, other
than normal and customary releases issued in the ordinary course of the
Company's business or those releases required by law.
(z) For a period of three (3) years following
the Effective Date, the Company will cause its Board of Directors to meet,
either in person or telephonically, a minimum of four (4) times per year and
will hold a shareholder's meeting at least once per annum.
6. Conditions of the Underwriters' Obligation to Purchase
Shares from the Company. The obligation of the several Underwriters to purchase
and pay for the Offered Shares which they have agreed to purchase from the
Company is subject (as of the date hereof and the Closing Date) to the accuracy
of and compliance in all material respects with the representations and
warranties of the Company herein, to the accuracy of the statements of the
Company or its officers made pursuant hereto, to the performance in all material
respects by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement will have become
effective not later than 9:30 A.M., New York City time, on the day following the
date of this Agreement, or at such later time or on such later date as the
Representatives may agree to in writing; prior to the Closing Date, no stop
order suspending the effectiveness of the Registration Statement will have been
issued and no proceedings for that purpose will have been initiated or will be
pending or, to the best of the Representatives' or the Company's knowledge, will
be contemplated by the Commission; and any request on the part of the Commission
for additional information will have been complied with to the satisfaction of
Underwriters' Counsel.
-20-
(b) At the time that this Agreement is executed
and at the Closing Date, there will have been delivered to the Representatives a
signed opinion of Xxxxx & Xxxxx, A Professional Corporation, counsel for the
Company ("Company Counsel"), dated as of the date hereof or the Closing Date, as
the case may be (and any other opinions of counsel referred to in such opinion
of Company Counsel or relied upon by Company Counsel in rendering their
opinion), reasonably satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Michigan, with full power and authority, corporate and other, and with
all Permits necessary to own or lease, as the case may be, and operate its
properties, whether tangible or intangible, and to conduct its business as
described in the Registration Statement. The Company has no subsidiaries other
than the Subsidiaries. Each of the Subsidiaries is a corporation duly organized
and validly existing under the laws of its state of incorporation. Unless the
context otherwise requires, all references to the "Company" in this opinion
shall include the Subsidiaries. Each of the Company and the Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions wherein such qualification is necessary and the failure to so
qualify could have a material adverse effect on the financial condition, results
of operations, business or properties of the Company or any of the Subsidiaries.
Each of the Subsidiaries has full power and authority, corporate and other, with
all Permits necessary to own or lease, as the case may be, and operate its
properties and to conduct its business as described in the Prospectus.
The Company owns all of the issued and outstanding
shares of capital stock of the Subsidiaries [for effective date opinion only --
carve out part of stock of DCT and all stock of Utilase and CTIC], free and
clear of any security interests, liens, encumbrances, claims and charges, and
all of such shares have been duly authorized and validly issued and are fully
paid and nonassessable.
(ii) The Company has full power
and authority, corporate and other, to execute, deliver and perform this
Agreement and the Representatives' Warrant Agreement and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Representatives' Warrant Agreement by the
Company, the consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms of this Agreement
and the Representatives' Warrant Agreement have been duly authorized by all
necessary corporate action, and this Agreement
-21-
[for Closing Date opinion add: and the Representatives' Warrant Agreement] has
been duly executed and delivered by the Company. This Agreement is (assuming for
the purposes of this opinion that it is valid and binding upon the other party
thereto), and the Representatives' Warrant Agreement, when executed and
delivered by the Company on the Closing Date, will be, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the rights of
creditors generally and the discretion of courts in granting equitable remedies
and except that enforceability of the indemnification provisions set forth in
Section 7 hereof and the contribution provisions set forth in Section 8 hereof
may be limited by the federal securities laws or public policy underlying such
laws.
(iii) The execution, delivery and
performance of this Agreement and the Representatives' Warrant Agreement by the
Company, the consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms of this Agreement
and the Representatives' Warrant Agreement do not, and will not, with or without
the giving of notice or the lapse of time, or both, (A) result in a violation of
the Articles of Incorporation or By-Laws, each as amended, of the Company or any
Subsidiary, (B) result in a breach of or conflict with any terms or provisions
of, or constitute a default under, or result in the modification or termination
of, or result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or any
the Subsidiary pursuant to any indenture, mortgage, note, contract, commitment
or other material agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any Subsidiary or any of the Company's or
any Subsidiary's properties or assets are or may be bound or affected; (C)
violate any existing applicable law, rule, regulation, judgment, order or decree
of any governmental agency or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of the Company's or any Subsidiary's
properties or business; or (D) have any effect on any Permit necessary for the
Company or any Subsidiary to own or lease and operate its properties or conduct
its business or the ability of the Company to make use thereof.
(iv) To the best of Company
Counsel's knowledge, no Permits of any court or governmental agency or body
(other than under the Act, the Regulations and applicable state securities or
Blue Sky laws) are required for the valid authorization, issuance, sale and
delivery of the Shares or the Representatives' Warrants, and the consummation by
the Company of
-22-
the transactions contemplated by this Agreement or the Representatives' Warrant
Agreement.
(v) The Registration Statement
has become effective under the Act; to the best of Company Counsel's knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been instituted or are
pending, threatened or contemplated under the Act or applicable state securities
laws.
(vi) The Registration Statement
and the Prospectus, as of the Effective Date, and each amendment or supplement
thereto as of its effective or issue date (except for the financial statements
and other financial data included therein or omitted therefrom, as to which
Company Counsel need not express an opinion) comply as to form in all material
respects with the requirements of the Act and Regulations.
(vii) The descriptions in the
Registration Statement and the Prospectus of statutes, regulations, government
classifications, contracts and other documents (including opinions of such
counsel); and the response to [Item 13 for Form SB-2] have been reviewed by
Company Counsel, and, based upon such review, are accurate in all material
respects and present fairly the information required to be disclosed, and there
are no material statutes, regulations or government classifications, or, to the
best of Company Counsel's knowledge, material contracts or documents, of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement, which are
not so described or filed as required.
None of the material provisions of the
contracts or instruments described above violates any existing applicable law,
rule, regulation, judgment, order or decree of any governmental agency or court
having jurisdiction over the Company or any Subsidiary or any of their assets or
businesses. To the best of Company Counsel's knowledge, the Company is not in
default under any contract or agreement material to its business or under any
promissory note or other evidence of indebtedness for borrowed funds.
(viii) The outstanding Common
Shares and outstanding options and warrants to purchase Common Shares have been
duly authorized and validly issued. The outstanding Common Shares are fully paid
and nonassessable. The outstanding options and warrants to purchase Common
Shares constitute the valid and binding obligations of the Company, enforceable
in accordance with their terms. None of the outstanding Common Shares or options
or warrants to purchase Common Shares has been issued in violation of
-23-
the preemptive rights of any shareholder of the Company. None of the holders of
the outstanding Common Shares is subject to personal liability solely by reason
of being such a holder. The offers and sales of the outstanding Common Shares
and outstanding options and warrants to purchase Common Shares were at all
relevant times either registered under the Act and the applicable state
securities or Blue Sky laws or exempt from such registration requirements. The
authorized Common Shares and outstanding options and warrants to purchase Common
Shares conform to the descriptions thereof contained in the Registration
Statement and Prospectus. To the best of Company Counsel's knowledge, except as
set forth in the Prospectus, no holders of any of the Company's securities has
any rights, "demand", "piggyback" or otherwise, to have such securities
registered under the Act.
(ix) The issuance and sale of
the Shares and the Warrant Shares have been duly authorized and, when the Shares
and the Warrant Shares have been issued and duly delivered against payment
therefor as contemplated by this Agreement and the Representatives' Warrant
Agreement, respectively, the Shares and the Warrant Shares will be validly
issued, fully paid and nonassessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. None of
the Offered Units, the Shares nor the Warrant Shares are subject to preemptive
rights of any shareholder of the Company. The certificates representing the
Shares are in proper legal form.
(x) The issuance and sale of the
Representatives' Warrants have been duly authorized and, when paid for, issued
and delivered pursuant to the terms of the Representatives' Warrant Agreement,
they will constitute the valid and binding obligations of the Company,
enforceable as to the Company in accordance with their terms, to issue and sell
the Warrant Shares. The Representatives' Warrants will not be subject to
preemptive rights of any shareholder of the Company. The Warrant Shares have
been duly reserved for issuance upon exercise of the Representatives' Warrants
in accordance with the provisions of the Representatives' Warrant Agreement. The
Representatives' Warrants conform to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(xi) Upon delivery of the
Offered Shares to the Underwriters against payment therefor as provided in this
Agreement, the Underwriters (assuming they are bona fide purchasers within the
meaning of the Uniform Commercial Code) will acquire good title to the Offered
Shares, free and clear of all liens, encumbrances, equities, security interests
and claims.
(xii) Assuming that the
Representatives exercise the over-allotment option to purchase any of the
Optional Shares and make payment therefor in accordance with the terms of this
Agreement, upon delivery of the Optional Shares so purchased to the
Representatives hereunder, the Representatives (assuming
-24-
they are bona fide purchasers within the meaning of the Uniform Commercial Code)
will acquire good title to such Optional Shares, free and clear of any liens,
encumbrances, equities, security interests and claims.
(xiii) To the best of Company
Counsel's knowledge, there are no claims, actions, suits, proceedings,
arbitrations, investigations or inquiries before any governmental agency, court
or tribunal, foreign or domestic, or before any private arbitration tribunal,
pending or threatened against the Company or any Subsidiary, or involving the
Company's or any Subsidiary's properties or business, other than as described in
the Prospectus, such description being accurate, and other than litigation
incident to the kind of business conducted by the Company which, individually
and in the aggregate, is not material.
(xiv) Each of the Company and the
Subsidiaries owns or possesses adequate and enforceable rights to use all
patents, patent applications, trademarks, service marks, copyrights, rights,
trade secrets, confidential information, processes and formulations used or
proposed to be used in the conduct of its business as described in the
Prospectus (collectively the "Intangibles"); to the best of Company Counsel's
knowledge, neither the Company nor any Subsidiary has infringed nor is
infringing upon the rights of others with respect to the Intangibles; and, to
the best of Company Counsel's knowledge, neither the Company nor any Subsidiary
has received any notice that it has or may have infringed, is infringing upon or
is conflicting with the asserted rights of others with respect to the
Intangibles which might, singly or in the aggregate, materially adversely affect
its business, results of operations or financial condition and such counsel is
not aware of any licenses with respect to the Intangibles which are required to
be obtained by the Company or any Subsidiary.
Company Counsel has participated in reviews and
discussions in connection with the preparation of the Registration Statement and
the Prospectus, and in the course of such reviews and discussions and such other
investigation as Company Counsel deemed necessary, no facts came to its
attention which lead it to believe that (A) the Registration Statement (except
as to the financial statements and other financial data contained therein, as to
which Company Counsel need not express an opinion), on the Effective Date,
contained any untrue statement of a material fact required to be stated therein
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, or that (B) the Prospectus contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
-25-
In rendering its opinion pursuant to this Section
6(b), Company Counsel may rely upon the opinion of counsel of DCT, Utilase and
CTIC with respect to opinions that relate to such entities, and may rely upon
the certificates of government officials and officers of the Company as to
matters of fact, provided that Company Counsel shall state that they have no
reason to believe, and do not believe, that they are not justified in relying
upon such opinions or such certificates of government officials and officers of
the Company as to matters of fact, as the case may be.
The opinion letters delivered pursuant to this
Section 6(b) shall state that any opinion given therein qualified by the phrase
"to the best of our knowledge" is being given by Company Counsel after due
investigation of the matters therein discussed.
(c) At the Closing Date, there will have been
delivered to the Representatives a signed opinion of Underwriters' Counsel,
dated as of the Closing Date, to the effect that the opinions delivered pursuant
to Section 6(b) hereof appear on their face to be appropriately responsive to
the requirements of this Agreement, except to the extent waived by the
Representatives, specifying the same, and with respect to such other related
matters as the Representatives may require.
(d) At the Closing Date (i) the Registration
Statement and the Prospectus and any amendments or supplements thereto will
contain all material statements which are required to be stated therein in
accordance with the Act and the Regulations and will conform in all material
respects to the requirements of the Act and the Regulations, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; (ii) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there will not have been any
material adverse change in the financial condition, results of operations or
general affairs of the Company from that set forth or contemplated in the
Registration Statement and the Prospectus, except changes which the Registration
Statement and the Prospectus indicate might occur after the Effective Date;
(iii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no material
transaction, contract or agreement entered into by the Company, other than in
the ordinary course of business, which would be required to be set forth in the
Registration Statement and the Prospectus, other than as set forth therein; and
(iv) no action, suit or proceeding at law or in equity will be pending or, to
the best of the Company's knowledge, threatened against the Company which is
required to be set forth in the Registration Statement and the Prospectus, other
than as set forth therein, and no proceedings will be pending or, to the
-26-
best of the Company's knowledge, threatened against the Company before or by any
federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially adversely affect the
business, property, financial condition or results of operations of the Company,
other than as set forth in the Registration Statement and the Prospectus. At the
Closing Date, there will be delivered to the Representatives a certificate
signed by the Chairman of the Board or the President or a Vice President of the
Company, dated the Closing Date, evidencing compliance with the provisions of
this Section 6(d) and stating that the representations and warranties of the
Company set forth in Section 4 hereof were accurate and complete in all material
respects when made on the date hereof and are accurate and complete in all
material respects on the Closing Date as if then made; that the Company has
performed all covenants and complied with all conditions required by this
Agreement to be performed or complied with by the Company prior to or as of the
Closing Date; and that, as of the Closing Date, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or, to the best of his knowledge, are
contemplated or threatened. In addition, the Representatives will have received
such other and further certificates of officers of the Company as the
Representatives or Underwriters' Counsel may reasonably request.
(e) At the time that this Agreement is executed
and at the Closing Date, the Representatives will have received a signed letter
from Xxxxx Xxxxxxxx LLP, dated the date such letter is to be received by the
Representatives and addressed to them, confirming that it is a firm of
independent public accountants within the meaning of the Act and Regulations and
stating that: (i) insofar as reported on by it, in its opinion, the financial
statements of the Company included in the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable Regulations; (ii) on the basis of procedures and inquiries (not
constituting an examination in accordance with generally accepted auditing
standards) consisting of a reading of the unaudited interim financial statements
of the Company, if any, appearing in the Registration Statement and the
Prospectus and the latest available unaudited interim financial statements of
the Company, if more recent than that appearing in the Registration Statement
and Prospectus, inquiries of officers of the Company responsible for financial
and accounting matters as to the transactions and events subsequent to the date
of the latest audited financial statements of the Company, and a reading of the
minutes of meetings of the shareholders, the Board of Directors of the Company
and any committees of the Board of Directors, as set forth in the minute books
of the Company, nothing has come to its attention which, in its judgment, would
indicate that (A) during the period from the date of the latest financial
statements of the Company appearing in the Registration Statement and Prospectus
to a specified date not more than three business days prior to the date of such
letter, there have been any
-27-
decreases in net current assets or net assets as compared with amounts shown in
such financial statements or decreases in net sales or decreases in total or per
share net income compared with the corresponding period in the preceding year or
any change in the capitalization or long-term debt of the Company, except in all
cases as set forth in or contemplated by the Registration Statement and the
Prospectus, and (B) the unaudited interim financial statements of the Company,
if any, appearing in the Registration Statement and the Prospectus, do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Regulations or are not fairly presented in
conformity with generally accepted accounting principles and practices on a
basis substantially consistent with the audited financial statements included in
the Registration Statement or the Prospectus; and (iii) it has compared specific
dollar amounts, numbers of shares, numerical data, percentages of revenues and
earnings, and other financial information pertaining to the Company set forth in
the Prospectus (with respect to all dollar amounts, numbers of shares,
percentages and other financial information contained in the Prospectus, to the
extent that such amounts, numbers, percentages and information may be derived
from the general accounting records of the Company, and excluding any questions
requiring an interpretation by legal counsel) with the results obtained from the
application of specified readings, inquiries and other appropriate procedures
(which procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found them to be in
agreement.
(f) There shall have been duly tendered to the
Representatives certificates representing the Offered Shares to be sold on the
Closing Date.
(g) The NASD shall have indicated that it has no
objection to the underwriting arrangements pertaining to the sale of the Offered
Shares by the Underwriters or the sale of the Shares by the Representatives.
(h) No action shall have been taken by the
Commission or the NASD the effect of which would make it improper, at any time
prior to the Closing Date or the Option Closing Date, as the case may be, for
any member firm of the NASD to execute transactions (as principal or as agent)
in the Shares, and no proceedings for the purpose of taking such action shall
have been instituted or shall be pending, or, to the best of the
Representatives' or the Company's knowledge, shall be contemplated by the
Commission or the NASD. The Company represents at the date hereof, and shall
represent as of the Closing Date or Option Closing Date, as the case may be,
that it has no knowledge that any such action is in fact contemplated by the
Commission or the NASD.
(i) The Common Shares have been approved for
listing on AMEX.
-28-
(j) All proceedings taken at or prior to the
Closing Date or the Option Closing Date, as the case may be, in connection with
the authorization, issuance and sale of the Shares shall be reasonably
satisfactory in form and substance to the Representatives and to Underwriters'
Counsel, and such counsel shall have been furnished with all such documents,
certificates and opinions as they may request for the purpose of enabling them
to pass upon the matters referred to in Section 7(c) hereof and in order to
evidence the accuracy and completeness of any of the representations, warranties
or statements of the Company, the performance of any covenants of the Company,
or the compliance by the Company with any of the conditions herein contained.
(k) As of the date hereof, the Company will have
delivered to the Underwriters the written undertakings of its officers,
directors and security holders and/or registration rights holders, as the case
may be, to the effect of the matters set forth in Sections 5(l) and (q).
(l) As of the date hereof and as of the Closing
Date, the Company will have delivered to the Underwriters (i) an agreement of
the [DCT and] Utilase and CTIC Sellers, in favor of the Underwriters,
containing any and all representations and warranties with respect to [DCT and]
Utilase and CTIC as to which the Company is relying pursuant to Section 4
hereof and (ii) an opinion of counsel to [DCT and] Utilase and CTIC, addressed
to the Underwriters, containing any and all opinions with respect to [DCT and]
Utilase and CTIC as to which Company counsel is relying pursuant to Section 6(b)
hereof.
If any of the conditions specified in this Section
6 have not been fulfilled, this Agreement may be terminated by the
Representatives on notice to the Company.
7. Indemnification.
(a) The Company agrees to indemnify and hold
harmless each Underwriter, including specifically each person that may be
substituted for an Underwriter as provided in Section 10 hereof, each officer,
director, partner, employee and agent of any Underwriter, and each person, if
any, who controls any of the Underwriters within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several (and actions
in respect thereof), to which they or any of them may become subject under the
Act or under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse each of the Underwriters and each such
person, if any, for any legal or other expenses reasonably incurred by them or
any of them in connection with investigating or defending any actions, whether
or not resulting in any liability, insofar as such losses, claims, damages,
expenses, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of
-29-
a material fact contained (i) in the Registration Statement, in any Preliminary
Prospectus or in the Prospectus (or the Registration Statement or Prospectus as
from time to time amended or supplemented) or (ii) in any application or other
document executed by the Company, or based upon written information furnished by
or on behalf of the Company, filed in any jurisdiction in order to qualify the
Shares under the securities laws thereof (hereinafter "application"), 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 in order to make the
statements therein not misleading, in light of the circumstances under which
they were made, unless such untrue statement or omission was made in such
Registration Statement, Preliminary Prospectus, Prospectus or application in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by the Underwriter or any such person through
the Underwriter expressly for use therein; provided, however, that the indemnity
agreement contained in this Section 7(a) with respect to any Preliminary
Prospectus will not inure to the benefit of the Underwriter (or to the benefit
of any other person that may be indemnified pursuant to this Section 7(a)) if
(A) the person asserting any such losses, claims, damages, expenses or
liabilities purchased the Shares which are the subject thereof from such
Underwriter or other indemnified person; (B) such Underwriter or other
indemnified person failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such Shares to
such person; and (C) the Prospectus did not contain any untrue statement or
alleged untrue statement or omission or alleged omission giving rise to such
cause, claim, damage, expense or liability.
(b) Each Underwriter (including specifically
each person that may be substituted for an Underwriter as provided in Section 11
hereof) agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several (and actions
in respect thereof), to which they or any of them may become subject under the
Act or under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Company and each such director, officer
or controlling person for any legal or other expenses reasonably incurred by
them or any of them in connection with investigating or defending any actions,
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained (i) in
the Registration Statement, in any Preliminary Prospectus or in the Prospectus
(or the Registration Statement or Prospectus as from time to time amended or
supplemented) or (ii) in any application (including any application for
registration of the Shares under state securities or Blue Sky laws), or arise
out of or are based
-30-
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, in light of the circumstances under which they were made, but only
insofar as any such statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by such Underwriter, or by the Representatives on behalf of such
Underwriter, expressly for use therein.
(c) Promptly after receipt of notice of the
commencement of any action in respect of which indemnity may be sought against
any indemnifying party under this Section 7, the indemnified party will notify
the indemnifying party in writing of the commencement thereof, and the
indemnifying party will, subject to the provisions hereinafter stated, assume
the defense of such action (including the employment of counsel satisfactory to
the indemnified party and the payment of expenses) insofar as such action
relates to an alleged liability in respect of which indemnity may be sought
against the indemnifying party. After notice from the indemnifying party of its
election to assume the defense of such claim or action, the indemnifying party
shall no longer be liable to the indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the reasonable judgment of the
indemnified party or parties, it is advisable for the indemnified party or
parties to be represented by separate counsel, the indemnified party or parties
shall have the right to employ a single counsel to represent the indemnified
parties who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the indemnified parties thereof against the
indemnifying party, in which event the fees and expenses of such separate
counsel shall be borne by the indemnifying party. Any party against whom
indemnification may be sought under this Section 7 shall not be liable to
indemnify any person that might otherwise be indemnified pursuant hereto for any
settlement of any action effected without such indemnifying party's consent.
8. Contribution. To provide for just and equitable
contribution, if (i) an indemnified party makes a claim for indemnification
pursuant to Section 8 hereof (subject to the limitations thereof) and it is
finally determined, by a judgment, order or decree not subject to further
appeal, that such claim for indemnification may not be enforced, even though
this Agreement expressly provides for indemnification in such case; or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the Exchange
Act, or otherwise, then the Company (including, for this purpose, any
contribution made by or on behalf of any director of the Company, any officer of
the Company who signed the Registration Statement and any controlling person of
the Company) as one entity and the Underwriters (including, for this purpose,
any contribution by or on behalf of each person, if any, who
-31-
controls any Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act and each officer, director, partner, employee and
agent of any of the Underwriters) as a second entity, shall contribute to the
losses, liabilities, claims, damages and expenses whatsoever to which any of
them may be subject, so that the Underwriters are responsible for the proportion
thereof equal to the percentage which the underwriting discount per Share set
forth on the cover page of the Prospectus represents of the initial public
offering price per Share set forth on the cover page of the Prospectus and the
Company is responsible for the remaining portion; provided, however, that if
applicable law does not permit such allocation, then, if applicable law permits,
other relevant equitable considerations such as the relative fault of the
Company and the Underwriters in connection with the facts which resulted in such
losses, liabilities, claims, damages and expenses shall also be considered. The
relative fault, in the case of an untrue statement, alleged untrue statement,
omission or alleged omission, shall be determined by, among other things,
whether such statement, alleged statement, omission or alleged omission relates
to information supplied by the Company or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, alleged statement, omission or alleged omission. The
Company, on one hand, and the Underwriters, on the other hand, agree that it
would be unjust and inequitable if the respective obligations of the Company and
the Underwriters for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages and expenses or
by any other method of allocation that does not reflect the equitable
considerations referred to in this Section 8. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls any of the Underwriters within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and each officer, director, partner, employee
and agent of any of the Underwriters will have the same rights to contribution
as the Underwriters, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who has signed the Registration Statement and each
director of the Company will have the same rights to contribution as the
Company, subject in each case to the provisions of this Section 8. Anything in
this Section 8 to the contrary notwithstanding, no party will be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 8 is intended to supersede, to the
extent permitted by law, any right to contribution under the Act or the Exchange
Act or otherwise available.
9. Survival of Indemnities, Contribution, Warranties
and Representations. The respective indemnity and contribution
agreements of the Company and the Underwriters contained in
-32-
Sections 7 and 8 hereof, and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of the Underwriters, the Company or any of
its directors and officers or any controlling person referred to in said
Sections, and shall survive the delivery of, and payment for, the Shares.
10. Substitution of Underwriters.
(a) If one or more Underwriters should default
in its or their obligation to purchase and pay for any Offered Shares hereunder
and if the aggregate number of such Offered Shares which all Underwriters so
defaulting have agreed to purchase does not exceed 10% of the total number of
the Offered Shares, the non-defaulting Underwriters will be obligated severally
to purchase and pay for (in addition to the number of Offered Shares set forth
opposite their names in Schedule A attached hereto) the full number of Offered
Shares agreed to be purchased by all defaulting Underwriters, and not so
purchased, in proportion to their respective commitments hereunder. In such
event the Representatives, for the accounts of the several nondefaulting
Underwriters, may take up and pay for all or any part of such additional Offered
Shares to be purchased by each such Underwriter under this Section 10(a), and
may postpone the Closing Date to a time not exceeding three full business days
after the Closing Date determined as provided in Section 2 hereof.
(b) If one or more Underwriters should default
in its or their obligation to purchase and pay for any Offered Shares hereunder
and if the aggregate number of such Offered Shares which all Underwriters so
defaulting have agreed to purchase exceeds 10% of the total number of Offered
Shares, or if one or more Underwriters for any reason permitted hereunder should
cancel its or their obligation to purchase and pay for Offered Shares hereunder,
the non-cancelling and non-defaulting Underwriters (hereinafter called the
"remaining Underwriters") will have the right to purchase such Offered Shares in
such proportion as may be agreed among them at the Closing Date determined as
provided in Section 2 hereof. If the remaining Underwriters do not purchase and
pay for such Offered Shares at such Closing Date, the Closing Date will be
postponed for 24 hours and the remaining Underwriters will have the right to
purchase such Offered Shares, or to substitute another person or persons to
purchase the same, or both, at such postponed Closing Date. If purchasers have
not been found for such Offered Shares by such postponed Closing Date, the
Closing Date will be postponed for a further 24 hours, and the Company will have
the right to substitute another person or persons, reasonably satisfactory to
the Representatives to purchase such Offered Shares at such second postponed
Closing Date. If it shall be arranged for the remaining Underwriters or
substituted underwriters to take up the Firm Shares of the defaulting
Underwriter or Underwriters as provided in this Section, (A) the Company shall
have the right to
-33-
postpone the time of delivery for a period of not more than three (3) full
Business Days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents or
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary. If the Company has not found such purchasers for such Offered
Shares by such second postponed Closing Date, then this Agreement will
automatically terminate, and neither the Company nor the remaining Underwriters
will be under any obligation under this Agreement (except that the Company and
the Underwriters will remain liable to the extent provided in Sections 7 and 8
hereof and the Company will also remain liable to the extent provided in Section
5(j) hereof). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10(b). Nothing in
Section 11 hereof will relieve a defaulting Underwriter from the liability for
its default and nothing in this Section 10(b) will obligate any Underwriter to
purchase or find purchasers for any Offered Shares in excess of those agreed to
be purchased by such Underwriter under the terms of Section 2 hereof.
11. Termination of Agreement.
(a) The Company, by written or telegraphic
notice to the Representatives, or the Representatives, by written or telegraphic
notice to the Company, may terminate this Agreement prior to the earlier of (i)
11:00 A.M., New York City time, on the first full business day after the
Effective Date; or (ii) the time when the Underwriters, after the Registration
Statement becomes effective, release the Offered Shares for public offering. The
time when the Underwriters "release the Offered Shares for public offering" for
the purposes of this Section 11 means the time when the Underwriters release for
publication the first newspaper advertisement, which is subsequently published,
relating to the Offered Shares, or the time when the Underwriters release for
delivery to members of a selling group copies of the Prospectus and an offering
letter or an offering telegram relating to the Offered Shares, whichever will
first occur.
(b) This Agreement, including without
limitation, the obligation to purchase the Shares and the obligation to purchase
the Optional Shares after exercise of the option referred to in Section 3
hereof, are subject to termination in the absolute discretion of the
Underwriters, by notice given to the Company prior to delivery of and payment
for all the Offered Shares or the Optional Shares, as the case may be, if, prior
to such time, any of the following shall have occurred: (i) the Company
withdraws the Registration Statement from the Commission or the Company does not
or cannot expeditiously proceed with the public offering; (ii) the
representations and warranties in Section 4 hereof are not materially correct or
cannot be complied with; (iii) trading in securities generally on the New York
Stock Exchange or AMEX will
-34-
have been suspended; (iv) limited or minimum prices will have been established
on either such Exchange; (v) a banking moratorium will have been declared either
by federal or New York State authorities; (vi) any other restrictions on
transactions in securities materially affecting the free market for securities
or the payment for such securities, including the Offered Shares or the Optional
Shares, will be established by either of such Exchanges, by the Commission, by
any other federal or state agency, by action of the Congress or by Executive
Order; (vii) trading in any securities of the Company shall have been suspended
or halted by any national securities exchange, the NASD or the Commission;
(viii) there has been a materially adverse change in the condition (financial or
otherwise), prospects or obligations of the Company; (ix) the Company will have
sustained a material loss, whether or not insured, by reason of fire, flood,
accident or other calamity; (x) any action has been taken by the government of
the United States or any department or agency thereof which, in the judgment of
the Representatives, has had a material adverse effect upon the market or
potential market for securities in general; or (xi) the market for securities in
general or political, financial or economic conditions will have so materially
adversely changed that, in the judgment of the Representatives, it will be
impracticable to offer for sale, or to enforce contracts made by the
Underwriters for the resale of, the Offered Shares or the Optional Shares, as
the case may be.
(c) If this Agreement is terminated pursuant to
not consummated because any condition of the Underwriters' obligations hereunder
is not satisfied or because of any refusal, inability or failure on the part of
the Company to comply with any of the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable to or does
not perform all of its obligations under this Agreement, the Company will not be
liable to any of the Underwriters for damages on account of loss of anticipated
profits arising out of the transactions covered by this Agreement, but the
Company will remain liable to the extent provided in Sections 5(j), 7, 8 and 9
of this Agreement.
12. Information Furnished by the Underwriter to the Company.
It is hereby acknowledged and agreed by the parties hereto that for the purposes
of this Agreement, including, without limitation, Sections 4(f), 7(a), 7(b) and
8 hereof, the only information given by the Underwriters to the Company for use
in the Prospectus are the statements set forth in the last sentence of the last
paragraph on the cover page, the statement appearing in the last paragraph on
page 2 with respect to stabilizing the market price of Shares, the information
in the _____ paragraph on page __ with respect to concessions and reallowances,
the table on page ___ regarding the offering syndicate, and the information in
the _____, _____, _____ and _____ full paragraphs on page ___ with respect to
discretionary accounts, the determination of the public offering
-35-
price, stabilizing the market price of the Shares and BlueStone, respectively,
as such information appears in any Preliminary Prospectus and in the Prospectus.
13. Notices and Governing Law. All communications
hereunder will be in writing and, except as otherwise provided, will be
delivered at, or mailed by certified mail, return receipt requested, or
telecopied to, the following addresses: if to BlueStone, the Representatives, or
the Underwriters, to BlueStone Capital Partners, L.P., 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Facsimile No. (000) 000-0000, with a copy to Xxxxxx
Xxxxxxxxxx LLP, Attention: Xxxxxx X. Xxxxxxx, Esq., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Facsimile No. (000) 000-0000; if to the Company at 00
Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000,
Attention: President, Facsimile No. (000) 000-0000 with a copy to Xxxxx & Xxxxx,
A Professional Corporation, Attention: Xxxxxx Xxxxxx Xxxxxxx, Esq., 000 Xxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Facsimile No. (714)
719-6020.
This Agreement shall be deemed to have been made and delivered
in New York City and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal laws of the State
of New York. The Company (1) agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement shall be instituted exclusively in
New York State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York, (2) waives any objection
which the Company may have now or hereafter to the venue of any such suit,
action or proceeding, and (3) irrevocably consents to the jurisdiction of the
New York State Supreme Court, County of New York, and the United States District
Court for the Southern District of New York in any such suit, action or
proceeding. The Company further agrees to accept and acknowledge service of any
and all process which may be served in any such suit, action or proceeding in
the New York State Supreme Court, County of New York, or in the United States
District Court for the Southern District of New York and agrees that service of
process upon the Company mailed by certified mail to the Company's address shall
be deemed in every respect effective service of process upon the Company in any
such suit, action or proceeding.
14. Parties in Interest. This Agreement is made solely for the
benefit of the several Underwriters, the Company and, to the extent expressed,
any person controlling the Company or the Underwriters, each officer, director,
partner, employee and agent of the Underwriters, the directors of the Company,
its officers who have signed the Registration Statement, and their respective
executors, administrators, successors and assigns, and, no other person will
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" will not include any purchaser of the Shares from any
of the Underwriters, as such purchaser.
-36-
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Very truly yours,
NOBLE INTERNATIONAL, LTD.
By:___________________
Name:
Title:
Confirmed and accepted in
New York, N.Y., as of the
date first above written:
BLUESTONE CAPITAL PARTNERS, L.P.
By:___________________________
Name: Xxxxx X. Xxxxx
Title: President
XXXXXX & XXXXXXX, INC.
By:___________________________
Name:
Title:
Acting on behalf of themselves
as the Representatives of the
several Underwriters named in
Schedule A hereto.
-37-
2
SCHEDULE A
TO THE UNDERWRITING AGREEMENT
Underwriter Number of Shares
----------- ----------------
BlueStone Capital Partners, L.P...........................................
Xxxxxx & Xxxxxxx, Inc. ...................................................
Total............................................................ 3,300,000
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