EXHIBIT NO. 1.1
SELLING AGREEMENT
This SELLING AGREEMENT is made as of this 27th day of January, 1998,
between QUALMARK CORPORATION, a Colorado corporation ("Company"), with principal
offices at 0000 X. 000xx Xxxxxx, Xxxxxx, XX 00000, and those persons whose names
appear on the signature pages hereof ("Selling Shareholders").
RECITALS:
WHEREAS, the Company has issued to Selling Shareholders shares of the
Company's common stock ("Shares");
WHEREAS, the Company intends to file a registration statement on Form
S-3 ("Registration Statement") with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933 (the "Act"), registering the
Shares for sale;
WHEREAS, this Agreement is entered into between the Company and the
Selling Shareholders to facilitate a legal and orderly distribution of the
Shares pursuant to the Registration Statement.
NOW, THEREFORE, in consideration of the promises made herein and for
other good and valuable consideration, the parties agree as follows:
1. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company shall use its best efforts to keep the Registration
Statement effective so as to permit the public sale of the Shares for a period
of one (1) year after the effective date of the Registration Statement.
(b) The Company will provide the Selling Shareholders with sufficient
copies of the Registration Statement (and prospectus contained therein) as shall
be required to satisfy prospectus delivery requirements under federal and state
securities laws.
(c) The Company will pay all expenses of the public offering of the
Shares which exceed $10,000 except for fees of attorneys, accountants and other
advisors retained by the Selling Shareholders and brokerage and other selling
commissions associated with the distribution of the Shares.
(d)
(i) In the case of the happening, at any time after the
commencement of the offering of the Shares, and prior to its termination,
of any event which materially affects the Company or the Shares which
should be set forth in an amendment of or supplement to
the Registration Statement in order to make the statements therein not
misleading, the Company agrees, upon receiving knowledge of such event,
to notify the Selling Shareholders as promptly as possible of the
happening of such an event.
(ii) In such event, the Company agrees to prepare and
furnish to the Selling Shareholders copies of an amended Registration
Statement or a supplement to the Registration Statement (including the
prospectus contained therein) in such quantities as the Selling
Shareholders may reasonably request, in order that the Registration
Statement as so amended or supplemented will not contain any untrue
statement of material fact, or omit to state any material fact necessary
in order to make the statements therein not misleading in light of the
circumstances under which they were made. The Selling Shareholders agree
temporarily to terminate the offering of the Shares during the period
between the notification by the Company to the Selling Shareholders of
the need for such amendment or supplement to the Registration Statement
and the time such amendment or supplement has been completed. The
duration of this time period shall be at the sole discretion of the
Company.
(e) The Company agrees to obtain the necessary state securities
and blue sky registrations or clearances in only those states in which it elects
to do so.
(f) No order preventing or suspending the use of any
preliminary prospectus contained in the Registration Statement has been issued
by the Commission, and such preliminary prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty does not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by and with respect to the Selling Shareholders expressly
for use therein.
(g) The Company meets the requirements for the use of Form S-3
under the Act and the rules and regulations of the Commission.
(h) The Registration Statement and the final prospectus
contained therein and any further amendments or supplements thereto (including
any document incorporated by reference therein filed after the effective date of
the Registration Statement) will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects to the
requirements of the Act, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the Commission thereunder; all
documents incorporated by reference into the Registration Statement will conform
in all material respects to the requirements of the Commission thereunder; and
no part of the Registration Statement, the prospectus or any such amendment or
supplement (including documents incorporated by reference therein) will contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions in the Registration Statement or
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prospectus made in reliance upon and in conformity with substantive information
furnished in writing to the Company by and with respect to the Selling
Shareholders expressly for use therein.
2. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
(a) In the case of the happening, at any time after the commencement
of the offering of the Shares, and prior to its termination, of any event which
materially affects the plan of distribution of the Shares, which event should be
set forth in an amendment of or supplement to the Registration Statement in
order to make the statements therein not misleading, the Selling Shareholders,
upon receiving knowledge of such event, agrees to notify the Company, as
promptly as possible, of the happening of such an event, whereupon the
provisions of Section l(d) (ii) above shall then apply.
(b) Each Selling Shareholder agrees to deliver copies of the final
prospectus contained in the Registration Statement, as it may be amended and
supplemented from time to time, to purchasers of the Shares as required by
applicable federal and state securities laws. Each Selling Shareholder agrees
that it will offer and sell the Shares in only those states as to which counsel
for the Company has advised each Selling Shareholder in writing that the
necessary state securities or blue sky clearances have been obtained. The
Selling Shareholders will notify the Company in writing at the time the
distribution of the Shares has been completed.
(c) Statements contained in the Registration Statement, the
prospectus or any amendments or supplements thereto (including any document
incorporated by reference therein) made in reliance upon and in conformity with
substantive information furnished in writing to the Company by and with respect
to the Selling Shareholders expressly for use therein do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such statements therein not misleading.
(d) If during the effectiveness of the Registration Statement, the
Company notifies the Selling Shareholders of the occurrence of any intervening
event that, in the opinion of the Company's legal counsel, causes the prospectus
included in the Registration Statement not to comply with the Act, each Selling
Shareholder, promptly after receipt of the Company's notice, shall cease making
any offers, sales, or other dispositions of the Shares included in the
Registration Statement until the Selling Shareholders receive from the Company
copies of a new, amended, or supplemented prospectus complying with the Act.
(e) The Selling Shareholders will pay pro-rata all expenses of the
public offering of the Shares up to $10,000 and, in addition, will pay fees of
attorneys, accountants and other advisors retained by them and brokerage and
other selling commissions associated with the distribution of the Shares.
3. SUSPENSION OF OFFERING. It is understood that the Company and the
Selling Shareholders will advise each other immediately, in writing, of the
receipt of any threat or the initiation of any steps or procedures by any
federal or state instrumentality or any individual which would impair or
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prevent the offer of the Shares or the issuance of any suspension orders or
other prohibitions preventing or impairing the proposed offering. In the case
of the happening of any such event, neither the Company nor the Selling
Shareholders will acquiesce in such steps, procedures or suspension orders, and
the Company agrees actively to defend against any such actions or orders unless
all parties agree in writing to the acquiescence in such actions or orders.
4. INDEMNIFICATION.
(a) COMPANY'S INDEMNIFICATION. The Company hereby agrees to
indemnify and hold harmless each Selling Shareholder, its officers and
directors, and each other person, if any, who controls the Selling Shareholders
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which the Selling Shareholders or any such
person controlling the Selling Shareholders may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in the Registration Statement, or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, and will reimburse the Selling Shareholders or such
person controlling the Selling Shareholders for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or proceeding; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by the Selling Shareholders.
(b) SELLING SHAREHOLDER'S INDEMNIFICATION. Each Selling Shareholder
hereby agrees to indemnify and hold harmless the Company, its officers and
directors, and each other person, if any, who controls the Company within the
meaning of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or such other person controlling the Company may
become subject under the Act or otherwise, but only to the extent that such
losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in the Registration
Statement or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, which, in each such
case, has been made in or omitted from the Registration Statement, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by the Selling Shareholders and will reimburse the Company or
such person controlling the Company for any legal or other expenses reasonably
incurred in connection with investigating or defending any such loss, claim,
damage, liability or proceeding.
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5. MISCELLANEOUS:
(a) This Agreement is made pursuant to and governed by the laws of
the State of Colorado.
(b) Any notices by the Company to Selling Shareholders shall be
deemed delivered if in writing and delivered personally, or sent by certified
mail, to the Selling Shareholders addressed to them at their addresses as set
forth in the Company's books and records. Any notice by Selling Shareholders to
the Company shall be deemed delivered if in writing and delivered personally, or
sent by certified mail, addressed to the Company at its address as set forth at
the beginning hereof.
IN WITNESS WHEREOF, the parties have executed this Selling Agreement as of
the date first above written.
COMPANY: QUALMARK CORPORATION
SELLING SHAREHOLDERS By: /s/ W. Xxxxxxx Xxxxxx
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W. Xxxxxxx Xxxxxx, President
OKABENA PARTNERSHIP K
By: Kohler Capiutal Management, Inc.
Attorney in Fact for Okabena
Investment Services Managing
Okabena Parnership K
COMPASS MANAGEMENT PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
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General Partner
COMPASS TECHNOLOGY PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
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General Partner
COMPASS CHICAGO PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
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