______________Shares
GLOBECOMM SYSTEMS INC.
Common Stock
FORM OF
UNDERWRITING AGREEMENT
----------------------
________________, 1997
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Globecomm Systems Inc., a Delaware corporation (the "Company"),
proposes to sell an aggregate of _____ shares (the "Firm Shares") of the
Company's Common Stock, $0.001 par value per share (the "Common Stock"), to you
and to the other underwriters named in Schedule I (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional _____
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares."
The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company and the Representatives, acting on behalf of
the several Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed
by this Agreement, as supplemented by the Price Determination Agreement. From
and after the date of the
execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and, unless the context otherwise indicates,
all references contained herein to "this Agreement" and to the phrase
"herein" shall be deemed to include the Price Determination Agreement.
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to each Underwriter named below, and each
Underwriter, severally and not jointly, agrees to purchase from the Company at
the purchase price per share for the Firm Shares to be agreed upon by the
Representatives and the Company in accordance with Section 1(c) or 1(d) and set
forth in the Price Determination Agreement, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I, plus such additional number
of Firm Shares as such Underwriter may become obligated to purchase pursuant to
Section 8 hereof. Schedule I may be attached to the Price Determination
Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to ____ Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A (as defined in Section 3(a) below),
on or before the 30th day after the date of the Price Determination Agreement),
upon written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c) The initial public offering price per share for the Firm Shares
and the purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement. If the Company has elected
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to rely on Rule 430A, in the event such price has not been agreed upon and
the Price Determination Agreement has not been executed by the close of
business on the fourteenth business day following the date on which the
Registration Statement (as hereinafter defined) becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Section 6 shall remain in effect.
(d) If the Company has elected not to rely on Rule 430A, the initial
public offering price per share for the Firm Shares and the purchase price per
share for the Firm Shares to be paid by the several Underwriters shall be agreed
upon and set forth in the Price Determination Agreement, which shall be dated
the date hereof, and an amendment to the Registration Statement containing such
per share price information shall be filed before the Registration Statement
becomes effective
2. Delivery and Payment. Delivery of the Firm Shares shall be made
to the Representatives for the accounts of the Underwriters at the office of
PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
against payment of the purchase price by Federal Reserve Funds check payable in
immediately available funds to the order of the Company or by wire transfer of
Federal Funds or similar same day funds to an account designated in writing by
the Company to PaineWebber Incorporated at least one business day prior to the
Closing Date (as hereinafter defined). Such payment shall be made at 10:00
a.m., New York City time, on the third business day (or fourth business day, if
the Price Determination Agreement is executed after 4:30 p.m.) after the date on
which the first bona fide offering of the Shares to the public is made by the
Underwriters or at such time on such other date, not later than ten business
days after such date, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for payment of the purchase price for the
Firm Shares at the time and date (which may be the Closing Date) specified in
the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective
3
Underwriters shall be borne by the Company. The Company will pay and save
each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance
or sale to such Underwriter of the Firm Shares and Option Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No.333-22425) on Form S-1
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a
preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. The
term "Registration Statement" means the registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed to be included by Rule
430A or Rule 434 of the Rules and Regulations. If the Company files a
registration statement to register a portion of the Shares and relies on Rule
462(b) of the Rules and Regulations for such registration statement to become
effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to the "Registration Statement" shall be deemed
to include the Rule 462 Registration Statement, as amended from time to time.
The term "Prospectus" means the prospectus as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date.
(b) On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all applicable provisions of the Act and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective
4
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
At the Effective Date, the date the Prospectus or any amendment or supplement
to the Prospectus is filed with the Commission and at the Closing Date and,
if later, the Option Closing Date, the Prospectus did not or will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading. The foregoing representations
and warranties in this Section 3(b) do not apply to any statements or
omissions made in reliance on and in conformity with information relating to
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto. For all purposes of this Agreement, the
information set forth in the last paragraph on the front cover page of the
Prospectus (insofar as such information relates to the Underwriters), on the
inside front cover of the Prospectus concerning stabilization and
over-allotment by the Underwriters, and information concerning stabilization
and overallotment by the Underwriters, the list of Syndicate members and the
amounts of the selling concession and reallowance set forth under the caption
"Underwriting" in the Prospectus constitute the only information relating to
any Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. The Company has not distributed any offering
material in connection with the offering or sale of the Shares other than the
Registration Statement, the preliminary prospectus, the Prospectus or any
other materials, if any, permitted by the Act.
(c) The only majority-owned subsidiary of the Company is NetSat
Express, Inc. (the "Subsidiary"). The Company owns 81% of the Subsidiary. As
of the Closing Date, the Company has no wholly-owned subsidiaries. Each of the
Company and the Subsidiary is, and at the Closing Date will be, a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and the Subsidiary has, and
at the Closing Date will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. Each of the Company and the Subsidiary is, and at the Closing Date
will be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary. All of the outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable. Except as disclosed in the Registration Statement
and the Prospectus, 81% of the outstanding shares of capital stock of the
Subsidiary are owned by the Company free and clear of all liens, encumbrances
and claims whatsoever. Except for the stock of the Subsidiary, Euro
Broadcasting and as disclosed in the Registration Statement, the Company
5
does not own, and at the Closing Date will not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity. Complete and correct copies of the
certificate of incorporation and of the by-laws of each of the Company and
the Subsidiary and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(d) The outstanding shares of Common Stock have been, and the Shares
to be issued and sold by the Company upon such issuance will be, duly
authorized, validly issued, fully paid and nonassessable and except as disclosed
in the Registration Statement and the Prospectus will not be subject to any
preemptive or similar right. The description of the Common Stock in the
Registration Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all respects. Except as disclosed in the Registration
Statement and the Prospectus, the Company does not have outstanding, and at the
Closing Date will not have outstanding, any options to purchase, or any rights
or warrants to subscribe for, or any securities or obligations convertible into,
or any contracts or commitments to issue or sell, any shares of Common Stock,
any shares of capital stock of the Subsidiary or any such warrants, convertible
securities or obligations.
(e) The financial statements included in the Registration Statement
or the Prospectus present fairly the consolidated financial condition of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Registration Statement and the Prospectus. No other financial
statements of the Company are required by the Act or the Rules and Regulations
to be included in the Registration Statement or the Prospectus. Ernst & Young
LLP and Price Waterhouse LLP (the "Accountants") who have reported on such
financial statements, are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations. The statements included in
the Registration Statement with respect to the Accountants pursuant to Rule 509
of Regulation S-K of the Rules and Regulations are true and correct in all
material respects.
(f) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded
6
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(g) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus and prior to the Closing
Date, except as set forth in or contemplated by the Registration Statement and
the Prospectus, (i) there has not been and will not have been any material
adverse change in the capitalization of the Company, or in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, arising for any reason whatsoever,
(ii) neither the Company nor the Subsidiary has incurred nor will it incur any
material liabilities or obligations, direct or contingent, nor has it entered
into nor will it enter into any material transactions other than pursuant to
this Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock.
(h) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the best
knowledge of the Company after due inquiry, threatened against or affecting the
Company or the Subsidiary or any of their respective officers in their capacity
as such, before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
the Company or the Subsidiary or its business, properties, business prospects,
condition (financial or otherwise) or results of operations.
(j) Except as described in the Registration Statement and the
Prospectus, each of the Company and the Subsidiary has, and at the Closing Date
will have obtained all necessary orders, permits, licenses, authorizations,
consents and approvals of and from, and has made all necessary filings with, all
federal, state, local, foreign, national, regional and other governmental
authorities, all self-regulatory organizations, all courts and tribunals and
from other persons necessary to carry on its business as contemplated in the
Registration Statement and the Prospectus, except to the extent that the failure
to obtain such orders, permits, licenses, authorizations, consents and approvals
or to make such filings, singly or in the aggregate, would not have a material
adverse effect on the Company or the Subsidiary or its business, properties,
business prospects, condition (financial or otherwise) or results of operations;
except as described in the Registration Statement and the Prospectus, neither
the Company nor the Subsidiary has received any notice of proceedings relating
to revocation or modification of any such orders, permits, licenses,
authorizations, consents or approvals, nor
7
is the Company or the Subsidiary in violation of, or in default under, any
federal, state, local, foreign, national or regional law, regulation, rule,
decree, order or judgment applicable to the Company or the Subsidiary the
effect of which, singly or in the aggregate, would have a material adverse
effect on the Company or the Subsidiary or its business, properties, business
prospects, condition (financial or otherwise) or results of operations.
(k) Each of the Company and the Subsidiary has, and at the Closing
Date will have, (i) complied in all respects with all laws, regulations and
orders applicable to it or its business and (ii) performed all its obligations
required to be performed by it, and is not, and at the Closing Date will not be,
in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other agreement") to
which it is a party or by which its property is bound or affected, except for
such breaches or defaults that would not have a material adverse effect. To the
best knowledge of the Company and the Subsidiary, no other party under any
contract or other agreement to which it is a party is in default in any respect
thereunder, except for such defaults that would not have a material adverse
effect. Neither the Company nor the Subsidiary is, nor at the Closing Date will
any of them be, in violation of any provision of its certificate of
incorporation or by-laws.
(l) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of this Agreement by the Company or in connection with the taking by
the Company of any action contemplated hereby, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Shares.
(m) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company and
is enforceable against the Company in accordance with the terms hereof. The
performance of this Agreement and the consummation of the transactions
contemplated hereby and the application of the net proceeds from the offering
and sale of the Shares in the manner set forth in the Prospectus under "Use of
Proceeds" will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or the Subsidiary pursuant to
the terms or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the acceleration
of any obligation under, the certificate of incorporation or by-laws of the
Company or the Subsidiary, any contract or other agreement to which the
8
Company or the Subsidiary is a party or by which the Company or the
Subsidiary or any of its properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to
the business or properties of the Company or the Subsidiary.
(n) Each of the Company and the Subsidiary has good and marketable
title to all properties and assets described in the Registration Statement and
the Prospectus as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the Registration
Statement and the Prospectus or are not material to the business of the Company
or the Subsidiary. Each of the Company and the Subsidiary has valid, subsisting
and enforceable leases for the properties described in the Registration
Statement and the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company and such Subsidiary.
(o) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. All such contracts to which the Company or the Subsidiary is a party
have been duly authorized, executed and delivered by the Company or the
Subsidiary, constitute valid and binding agreements of the Company or the
Subsidiary and are enforceable against the Company or the Subsidiary in
accordance with the terms thereof, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(p) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(q) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(r) Except as disclosed in the Registration Statement and the
Prospectus, no holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
9
(s) The offer and sale of Class B Convertible Preferred Stock by the
Company in the private placement completed in December, 1996 did not require
registration under the Securities Act.
(t) Prior to the Closing Date, the Shares will be approved for
quotation on the Nasdaq National Market upon official notice of issuance.
(u) The Company and the Subsidiary are in compliance with all
federal, state and local employment and labor laws, including, but not limited
to, laws relating to non-discrimination in hiring, promotion and pay of
employee, except for such breaches and defaults that would not have a material
adverse effect; no labor dispute with the employees of the Company or the
Subsidiary exists or, to the knowledge of the Company, is imminent or
threatened; and the Company is not aware of any existing, imminent or threatened
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in a material adverse effect on
the condition (financial or otherwise) or on the earnings, business, properties,
business prospects or operations of the Company and the Subsidiary, taken as a
whole.
(v) The patent applications of the Company described in the
Registration Statement and the Prospectus are owned by the Company, and the
Company has not received written notice of any claims by a third party
suggesting that the Company's practice of the inventions covered by such patent
applications, infringes or would infringe the rights of any third party. Except
for normal patent office actions, the Company has not received any written
notice of any basis for rendering invalid any patent which may be issued on such
applications, and the Company has no actual knowledge of any specific factual
basis for rendering any such patent invalid. Except as stated in the
Registration Statement and the Prospectus, the know-how of the Company described
in the Registration Statement and the Prospectus is owned by or licensed to the
Company and the Company has not received written notice of any claims by a third
party suggesting that the Company's use of such know-how infringes the rights of
any third party. The Company is the owner of all pending applications for
registration of trademarks identified in the Registration Statement or the
Prospectus as trademarks of the Company and the Company has not received
written notice of any claims by a third party suggesting that the Company's use
of the trademarks covered thereby, or any other trademark (referred to in the
Registration Statement or the Prospectus) infringes or would infringe the rights
of any third party. Except with respect to the Company's former corporate name
Worldcomm Systems Inc., the Company has not received notice that its use of any
trade name infringes the rights of any third party.
(w) Neither the Company nor the Subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or the Subsidiary has made any
payment
10
of funds of the Company or the Subsidiary or received or retained any funds
in violation of any law, rule or regulation or of a character required to be
disclosed in the Prospectus.
(x) The Company and the Subsidiary (i) are in compliance with any and
all applicable foreign, federal, state, local, foreign, national or regional
laws and regulations relating to the protection of human health and safety, the
environment or imposing liability or standards of conduct concerning any
Hazardous Material (as hereinafter defined) ("Environmental Laws"), except for
such breaches that would not have a material adverse effect, (ii) have received
all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as conducted to date
and (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approval, or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, individually or in the aggregate result in a material adverse effect
on the condition (financial or otherwise) or on the earnings, business,
properties, business prospects or operations of the Company and the Subsidiary,
taken as a whole. The term "Hazardous Material" means (A) any "hazardous
substance" as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, (B) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous, or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental Law.
(y) The Company maintains insurance with respect to its properties
and business of the types and in amounts reasonably deemed by management to be
adequate for its business, all of which insurance is in full force and effect.
(aa) The Company has filed all material federal, state and foreign
income and franchise tax returns and has paid all taxes shown as due thereon,
other than taxes which are being contested in good faith and for which adequate
reserves have been established in accordance with generally accepted accounting
principles ("GAAP"); and the Company has no knowledge of any tax deficiency
which has been or might be asserted or threatened against the Company. There
are no tax returns of the Company or of the Subsidiary that are currently being
audited by state, local or federal taxing authorities or agencies (and with
respect to which the Company or the Subsidiary has received notice), where the
findings of such audit, if adversely determined, would result in a material
adverse effect on the condition (financial or otherwise) or on the earnings,
business, properties, business prospects or operations of the Company and the
Subsidiary, taken as a whole.
(bb) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the
11
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained or contributed to by the Company, or with respect to which the
Company could incur any liability antler ERISA (collectively, the "Benefit
Plans"), no event has occurred and, to the best knowledge of the Company,
there exists no condition or set of circumstances, in connection with which
the Company could be subject to any liability under the terms of such Benefit
Plan, applicable taw (including, without limitation, ERISA and the Internal
Revenue Code of 1986, as amended) or any applicable agreement that could
materially adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company
and the Subsidiary, taken as a whole.
4. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information,
(3) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (4) of the happening of any event during
the period mentioned in the second sentence of Section 4(e) that in the judgment
of the Company makes any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in the
light of the circumstances in which they are made, not misleading and (5) of
receipt by the Company or any representative or attorney of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus. If at any
time the Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
use its best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 430A and to notify the
Representatives promptly of all such filings.
12
(c) The Company will furnish to the Representatives, without charge,
two signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements, and all exhibits thereto and
will furnish to the Representatives, without charge, for transmittal to each of
the other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements but without
exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or
any amendment or supplement thereto by the several Underwriters and by all
dealers to whom the Shares may be sold, both in connection with the offering or
sale of the Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
thereof as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the Underwriters,
the Company will cooperate with the Representatives and counsel to the
Underwriters in connection with the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may request; provided that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general service of
process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
13
(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
but not limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement and exhibits to it, each
preliminary prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) the word processing, printing and
reproduction of this Agreement, the Agreement Among Underwriters, any Dealer
Agreements and any Underwriters' Questionnaire, (4) furnishing (including costs
of shipping, mailing and courier) such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and supplements
thereto, as may be requested for use in connection with the offering and sale of
the Shares by the Underwriters or by dealers to whom Shares may be sold, (5) the
listing of the Shares on the Nasdaq National Market, (6) any filings required to
be made by the Underwriters with the NASD, and the fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (7) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(f), including the reasonable fees, disbursements and other charges of counsel
to the Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (8) counsel to the
Company, (9) the transfer agent for the Shares and (10) the Accountants.
(j) If this Agreement shall be terminated by the Company pursuant to
any of the provisions hereof (otherwise than pursuant to Section 8) or if for
any reason the Company shall be unable to perform its obligations hereunder, the
Company will reimburse the several Underwriters for all out-of-pocket expenses
(including the reasonable fees, disbursements and other charges of counsel to
the Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take
any action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
14
(l) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and shall file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(m) During the period of 180 days from the date of the Prospectus,
the Company will not, without the prior written consent of PaineWebber
Incorporated, directly or indirectly, sell, offer to sell, grant any option for
the sale of, or otherwise dispose of, any Common Stock or securities convertible
into Common Stock, other than to the Underwriters pursuant to this Agreement, to
Thomson-CSF as described in the Registration Statement and the Prospectus and
other than pursuant to employee benefit plans, provided that the Company will
not grant options to purchase shares of Common Stock pursuant to such employee
benefit plans at a price less than the fair market value thereof as of the date
of grant.
(n) The Company will not, and will cause each of its executive
officers, directors and certain stockholders holding in the aggregate ____% of
the Company's outstanding Common Stock on the date hereof to enter into
agreements with the Representatives in the form set forth in Exhibit B-1 to the
effect that they will not, for a period of 180 days after the commencement of
the public offering of the Shares, without the prior written consent of
PaineWebber Incorporated, offer to sell, sell, contract to sell, grant any
option to sell, or otherwise dispose of, or require the Company to file with the
Commission a registration statement under the Act to register any shares of
Common Stock or warrants or other rights to acquire such shares (other than
pursuant to employee stock option plans or in connection with other employee
incentive compensation arrangements).
5. Conditions of the Obligations of the Underwriters. In addition
to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 of the Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceedings for such purpose shall be
pending
15
before or threatened or contemplated by the Commission or the authorities of
any such jurisdiction, (iii) any request for additional information on the
part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities and (iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives
did not object thereto in good faith, and the Representatives shall have
received certificates, dated the Closing Date and the Option Closing Date and
signed by the Chief Executive Officer or the President of the Company and the
Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the
effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been and
no development shall have occurred which could reasonably be expected to result
in, a material adverse change in the general affairs, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company and the Subsidiary, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor the Subsidiary shall have sustained
any material loss or interference with its business or properties from fire,
explosion, flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Representatives any such development makes
it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or the Subsidiary
or any of their respective officers or directors in their capacities as such,
before or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Subsidiary taken as a whole.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements
16
herein contained to be performed on the part of the Company and all
conditions herein contained to be fulfilled or complied with by the Company
at or prior to the Closing Date and, with respect to the Option Shares, at or
prior to the Option Closing Date, shall have been duly performed, fulfilled
or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters, from
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel to the Company, to the effect set forth
in Exhibit C.
(g) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters, from Xxxxx,
Xxxxxxxx & Tannenwald, P.C., special United States regulatory counsel for the
Company, to the effect set forth in Exhibit D.
(h) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
from Shearman & Sterling, counsel to the Underwriters, with respect to the
Registration Statement, the Prospectus and this Agreement, which opinion will be
satisfactory in all respects to the Representatives.
(i) On the date of the Prospectus, each of Ernst & Young LLP and
Price Waterhouse LLP shall have furnished to the Representatives a letter, dated
the date of its delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters, confirming
that they are independent accountants with respect to the Company as required by
the Act and the Rules and Regulations and containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial and other statistical and numerical
information contained in the Registration Statement. At the Closing Date and,
as to the Option Shares, the Option Closing Date, Ernst & Young LLP shall have
furnished to the Representatives a letter, dated the date of its delivery, which
shall confirm, on the basis of a review in accordance with procedures set forth
in the letter from such firm, that nothing has come to their attention during
the period from the date of the letter referred to in the preceding sentence to
the date (specified in the letter) not more than three business days prior to
the Closing Date and the Option Closing Date which would require any change in
the letter delivered on the date of Prospectus, if it were required to be dated
and delivered on the Closing Date and the Option Closing Date.
(j) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of
17
its delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus and (A) as of the date of such
certificate, such documents are true and correct in all material respects
and do not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not untrue or misleading
and (B) since the Effective Date, no event has occurred as a result of
which it is necessary to amend or supplement the Prospectus in order to
make the statements therein not untrue or misleading in any material
respect;
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects;
(iii) Each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been duly,
timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with; and
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) there has not been, and
no development has occurred which could reasonably be expected to result
in, a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or
results of operations of the Company and the Subsidiary, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (B) neither the Company nor
the Subsidiary has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree, which is not
set forth in the Registration Statement and the Prospectus, and such other
matters as the Representatives may reasonably request.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).
(l) The "lock-up" agreements in the form set forth in Exhibit B-2
between you and certain stockholders, officers and directors of the Company
relating to sales, directly or indirectly, of shares of Class B convertible
preferred stock (the "Preferred Stock") issued by the Company pursuant to a
private placement completed in December 1996, or any
18
securities convertible into or exchangeable for such Preferred Stock,
delivered to you on or before the date hereof, shall be in full force and
effect on the Closing Date.
(m) The Shares shall be qualified for sale in such states as the
Representatives may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(n) Prior to the Closing Date, the Shares shall have been approved
for quotation on the Nasdaq National Market upon official notice of issuance.
(o) The National Association of Securities Dealers, Inc. shall have
approved the underwriting terms and arrangements and such approval shall not
have been withdrawn or limited.
(p) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other expenses reasonably incurred in connection
with, and any and all amounts paid in settlement of, any action, suit or
proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or otherwise,
or any claim asserted) as and when incurred, to which any underwriter, or any
such person, may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of
or are based on (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or (ii) any amendment or supplement to the
Registration Statement or the Prospectus or the omission or alleged omission
to state in such document a material fact
19
required to be stated in it or necessary to make the statements in it not
misleading, provided that the Company will not be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on
an untrue statement or omission or alleged untrue statement or omission made
in reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf of any
Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity agreement will be
in addition to any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives on behalf
of such Underwriter expressly for use in the Registration Statement, the
Preliminary Prospectus or the Prospectus. This indemnity will be in addition to
any liability that each Underwriter might otherwise have; provided, however,
that in no case shall any Underwriter be liable or responsible for any amount in
excess of the underwriting discounts and commissions received by such
underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of Section 6 unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
20
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 6(c), if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt of such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any
21
action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which
the Company and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other,
with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering.
Such relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or
the Representatives on behalf of the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 6(d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
received by it and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided
in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d),
any person who controls a party to this Agreement within the meaning of the
Act will have the same rights to contribution as that party, and each officer
of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice
of commencement of any action against such party in respect of which a
22
claim for contribution may be made under this Section 6(d), will notify any such
party or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 6(d).
Except for a settlement entered into pursuant to the last sentence of
Section 6(c) hereof, no party will be liable for contribution with respect to
any action or claim settled without its written consent (which consent will
not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Shares and payment therefor or (iii) any termination of this Agreement.
7. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Shares, on or prior to the Option Closing Date),
by notice to the Company from the Representatives, without liability on the part
of any Underwriter to the Company, if, prior to delivery and payment for the
Shares (or the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) there has been, since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the Company's business, properties, business prospects, condition (financial
or otherwise) or results of operations, (ii) trading in any of the equity
securities of the Company shall have been suspended by the Commission, by the
NASD, by an exchange that lists the Shares or by the Nasdaq National Market,
(iii) trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange or over
the counter market, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or any court
or other governmental authority, (iv) a general banking moratorium shall have
been declared by either Federal or New York State authorities or (v) any
material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred the effect of any of which is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to market the Shares on the
terms and in the manner contemplated by the Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting
23
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so
agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares
which an Underwriter has become obligated to purchase pursuant to Section 1
be increased pursuant to this Section 8 by more than one-ninth of the number
of Firm Shares agreed to be purchased by such Underwriter without the prior
written consent of such Underwriter. If any Underwriter or Underwriters
shall fail or refuse to purchase any Firm Shares and the aggregate number of
Firm Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Company for the purchase or
sale of any Shares under this Agreement. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in
any other documents or arrangements may be effected. Any action taken
pursuant to this Section 8 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 00 Xxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, or (b) if to
the Underwriters, to the Representatives at the offices of PaineWebber
Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department. Any such notice shall be effective only upon
receipt. Any notice under Section 7 or 8 may be made by telex or telephone, but
if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters and the Company and of the controlling persons, directors
and officers referred to in Section 6, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from any of the
several Underwriters.
24
All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the Representatives
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive any
right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
25
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
GLOBECOMM SYSTEMS INC.
By:
-------------------------------------
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
Acting on behalf of themselves
and as the Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By:
--------------------------
Title:
UNTERBERG XXXXXX, X.X.
By:
--------------------------
Title:
26
SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
------------ ---------------
PaineWebber Incorporated
Unterberg Xxxxxx, X.X.
Total.................... ---------------
---------------
EXHIBIT A
GLOBECOMM SYSTEMS INC.
PRICE DETERMINATION AGREEMENT
-----------------------------
__________ ___, 1997
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated ______________,
1997 (the "Underwriting Agreement"), among Globecomm Systems Inc., a Delaware
corporation (the "Company") and the several Underwriters named in Schedule I
thereto or hereto (the "Underwriters"), for whom PaineWebber Incorporated and
Unterberg Xxxxxx, X.X. are acting as representatives (the "Representatives").
The Underwriting Agreement provides for the purchase by the Underwriters from
the Company, subject to the terms and conditions set forth therein, of an
aggregate of _____ shares (the "Firm Shares") of the Company's common stock, par
value $0.001 per share. This Agreement is the Price Determination Agreement
referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:
The initial public offering price per share for the Firm Shares shall
be $__________.
The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $__________representing an amount equal to the
initial public offering price set forth above, less $__________per share.
The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I
is a complete list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New York
without regard to the conflict of laws principles of such State.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
GLOBECOMM SYSTEMS INC.
By:
--------------------------------
Title:
A-2
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
Acting on behalf of themselves
and as the Representatives
of the other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By:
--------------------------
Title:
UNTERBERG XXXXXX, X.X.
By:
--------------------------
Title:
X-0
XXXXXXX X-0
[DATE]
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which PaineWebber Incorporated and Unterberg Xxxxxx, X.X. (the
"Representatives") intend to act as Representatives to underwrite a proposed
public offering (the "Offering") of shares of Common Stock, par value $0.001 per
share (the "Common Stock") of Globecomm Systems Inc., a Delaware corporation, as
contemplated by a registration statement with respect to such shares filed with
the Securities and Exchange Commission on Form S-1, the undersigned hereby
agrees that the undersigned will not, for a period of 180 days after the
commencement of the public offering of such shares, without the prior written
consent of PaineWebber Incorporated, offer to sell, sell, contract to sell,
grant any option to sell, or otherwise dispose of, or require the Company to
file with the Securities and Exchange Commission a registration statement under
the Securities Act of 1933 to register any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other rights to
acquire shares of Common Stock of which the undersigned is now, or may in the
future become, the beneficial owner within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) (other than pursuant to employee stock option
plans or in connection with other employee incentive compensation arrangements).
Very truly yours,
By:
--------------------------------------
--------------------------------------
(Print Name)
EXHIBIT B-2
[DATE]
PAINEWEBBER INCORPORATED
UNTERBERG XXXXXX, X.X.
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters, for
which PaineWebber Incorporated and Unterberg Xxxxxx, X.X. (the
"Representatives") intend to act as Representatives to underwrite a proposed
public offering (the "Offering") of shares of Common Stock, par value $0.01 per
share (the "Common Stock") of Worldcomm Systems Inc., a Delaware corporation, as
contemplated by a registration statement with respect to such shares filed with
the Securities and Exchange Commission on Form S-1, the undersigned hereby
agrees that the undersigned will not, without the prior written consent of
PaineWebber Incorporated, (i) for a period of one year after the commencement of
the public offering of such shares in the case of the Company's Class B
Preferred Stock, acquired in the private placement completed on December 31,
1996 or any shares of Common Stock into which any shares of such Class B
Preferred Stock are converted and (ii) otherwise for a period of 180 days after
the commencement of such public offering, offer to sell, sell, contract to sell,
grant any option to sell, or otherwise dispose of, or require the Company to
file with the Securities and Exchange Commission a registration statement under
the Securities Act of 1933 to register any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other rights to
acquire shares of Common Stock of which the undersigned is now, or may in the
future become, the beneficial owner within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) (other than pursuant to employee stock option
plans or in connection with other employee incentive compensation arrangements).
Very truly yours,
By:
----------------------------------
----------------------------------
(Print Name)
EXHIBIT C
Form of Opinion of
Counsel to the Company
Each of the Company and Net Sat Express, Inc., a majority-owned
subsidiary (the "Subsidiary") is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has full corporate power and authority to own or lease all the properties owned
or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. The Company owns 81% of the Subsidiary free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
Except as disclosed in the Registration Statement and Prospectus, all
of the outstanding shares of Common Stock have been, and the Shares, when paid
for by the Underwriters in accordance with the terms of the Agreement, will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right under (i) the statutes, judicial and
administrative decisions, and the rules and regulations of the governmental
agencies of the State of Delaware, (ii) the Company's certificate of
incorporation or by-laws or (iii) any instrument, document, contract or other
agreement referred to in or filed as an exhibit to the Registration Statement or
otherwise known to us. Except as described in the Registration Statement or the
Prospectus, to the best of our knowledge, there is no commitment or arrangement
to issue, and there are no outstanding options, warrants or other rights calling
for the issuance of, any share of capital stock of the Company or the Subsidiary
to any person or any security or other instrument that by its terms is
convertible into, exercisable for or exchangeable for capital stock of the
Company.
No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company pursuant to the Agreement, in connection with the
execution, delivery and performance of the Agreement by the Company or, if so
required, all such consents, approvals, authorizations and orders, have been
obtained and are in full force and effect, except such as have been obtained
under the Act and the Rules and Regulations and (as to which we express no
opinion) such as may be required under state securities or "Blue Sky" laws or by
the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by the Company.
The authorized, issued and outstanding capital stock of the Company is
as set forth in the Registration Statement and the Prospectus under the caption
"Capitalization." The form of certificate used to evidence the Common Stock is
in due and proper form and complies with Delaware law.
The issuance and sale of Class B Convertible Preferred Stock by the
Company in the private placement completed on or about December 31, 1996 were
exempt from the registration requirements of the Securities Act.
The Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement or
the Prospectus).
We do not know of any contract or other document (collectively,
"Documents") that is required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
is not described or filed as required; and no default exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any Document filed or required to be filed as an exhibit
to the Registration Statement.
To the best of our knowledge, except as described in the Registration
Statement, no person or entity has the right to require the registration under
the Act of shares of Common Stock or other securities of the Company by reason
of the filing or effectiveness of the Registration Statement.
To the best of our knowledge, the Company is not in violation of, or
in default with respect to, any law, rule, regulation, order, judgment or
decree, except as may be described in the Prospectus or such as in the aggregate
do not now have and will not in the future have a material adverse effect upon
the operations, business or assets of the Company and the Subsidiary, taken as a
whole.
The statements in the Registration Statement and the Prospectus under
the following captions: "Management - Limitations of Liability and
Indemnification Matters" and "Description of Capital Stock" insofar as they are
descriptions of laws, regulations and rules or of legal or governmental
proceedings, contracts and other documents or refer to statements of law or
legal conclusions have been reviewed by such counsel and are accurate and fairly
summarize the information required to be shown.
The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company.
The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Agreement do not and will not (i)
violate the certificate of incorporation or by-laws of the Company, (ii) breach
or result in a default under, cause the
C-2
time for performance of any obligation to be accelerated under, or result in
the creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or the Subsidiary pursuant to the terms of any Document
filed as an exhibit to the Registration Statement or listed on a schedule
attached to this opinion, (iii) breach or otherwise violate any existing
obligation of the Company under any court or administrative order, judgment
or decree of which we have knowledge or (iv) violate applicable provisions of
any statute or regulation in the States of Delaware, New York or of the
United States, except such as may pertain to the securities or blue sky laws
of the various states (on which we express no opinion).
The Shares sold by the Company pursuant to the provisions of the
Agreement have been duly authorized and validly issued and are fully paid and
non-assessable; no holder thereof is or will be subject to personal liability by
reason of being such a holder; such Shares are not subject to the preemptive
rights of any stockholder of the Company, and all corporate action required to
be taken for the authorization, issue and sale of such Shares has been validly
and sufficiently taken.
The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
We hereby confirm to you that we have been advised by the Commission
that the Registration Statement has become effective under the Act and that to
our knowledge no order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or is pending, threatened or contemplated.
To our knowledge, except as set forth in or contemplated by the
Registration Statement and the Prospectus, there are no actions, suits,
proceedings or investigations pending or, to our knowledge, overtly threatened
in writing against the Company or the Subsidiary, or any of their respective
officers or directors in their capacities as such, before or by any court,
governmental agency or arbitrator which (i) seek to challenge the legality or
enforceability of the Agreement, (ii) seek to challenge the legality or
enforceability of any of the Documents filed as exhibits to the Registration
Statement, (iii) seek damages or other remedies with respect to any of the
Documents filed as exhibits to the Registration Statement, (iv) except as set
forth in or contemplated by the Registration Statement and the Prospectus, seek
money damages or seek to impose criminal penalties upon the Company, the
Subsidiary or any of their respective officers or directors in their capacities
as such and of which we have knowledge or (v) seek to enjoin any of the business
activities of the Company or the Subsidiary or the transactions described in the
Prospectus.
C-3
In addition to rendering legal advice and assistance to the Company in
the course of the preparation of the Registration Statement and the Prospectus,
which involved, among other things, discussions and inquiries concerning various
legal matters and the review of certain corporate records, documents and
proceedings (in addition to those described in paragraphs (__) through (__)
above), we also participated in conferences with certain officers and other
representatives of the Company, including its independent public accountants,
special regulatory and intellectual property counsel of the Company, and with
you and your counsel at which the contents of the Registration Statement, the
Prospectus and related matters were discussed. We have not, however, except
with respect to matters expressly covered above by this opinion, independently
checked or verified the accuracy, completeness or fairness of the information
contained in the Registration Statement and the Prospectus.
Based upon our participation as described in the preceding paragraph
however, we confirm that we have no reason to believe that (except for financial
statements, schedules and other financial data as to which we express no belief)
the Registration Statement, as of the Effective date and as of the date hereof,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that (except for financial
statements, schedules and other financial data as to which we express no belief)
the Prospectus, at the time the Prospectus was issued, at the Closing Date and
at the Option Closing Date, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
The foregoing opinion is subject to the qualification that the
enforceability of the Agreement may be: (i) subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; and (ii) subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity)
including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 5(f) of the Agreement.
In rendering the foregoing opinion, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the States of Delaware and New
York, and as to matters of fact, upon certificates of officers of the
C-4
Company and of government officials; provided that such counsel shall state
that the opinion of any other counsel is in form satisfactory to such
counsel. Copies of all such opinions and certificates shall be furnished to
counsel to the Underwriters on the Closing Date.
C-5
