2,616,250 Shares
INTEST CORPORATION
Common Stock
UNDERWRITING AGREEMENT
Philadelphia, Pennsylvania
May __, 1997
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXX & COMPANY, INC.
As Representatives of the Several
Underwriters Named in Schedule I
Hereto
c/o Janney Xxxxxxxxxx Xxxxx Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Ladies and Gentlemen:
inTEST Corporation, a Delaware corporation (the "Company"),
proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx Inc. and Xxxxxxx & Company, Inc.
(the "Representatives") and the several other underwriters named in Schedule I
hereto (collectively with the Representatives, the "Underwriters") 1,820,000
shares of the Company's common stock ("Common Shares"), and the selling
stockholders of the Company named in Schedule II hereto (collectively, the
"Selling Stockholders") propose to sell severally to the Underwriters an
aggregate of 455,000 Common Shares. The Common Shares to be sold to the
Underwriters by the Company and the Selling Stockholders are hereinafter
referred to as the "Firm Shares." The respective amounts of the Firm Shares to
be so purchased by the several Underwriters are set forth opposite their names
in Schedule I hereto. The Firm Shares shall be offered to the public at an
initial public offering price of $ per Firm Share (the "Offering Price").
In addition, in order to cover over-allotments in the sale of
the Firm Shares, the Underwriters may purchase for the Underwriters' own
accounts, ratably in proportion to the amounts set forth opposite their
respective names in Schedule I hereto, up to 341,250
1
additional Common Shares from the Selling Stockholders named in Schedule II
hereto (such additional Common Shares are referred to herein as the "Optional
Shares"). If any Optional Shares are purchased, the Optional Shares shall be
purchased for offering to the public at the Offering Price and in accordance
with the terms and conditions set forth herein. The Firm Shares and the Optional
Shares are referred to collectively herein as the "Shares."
The Company and the Selling Stockholders, intending to be
legally bound, hereby confirm their agreement with the Underwriters as follows:
1. Representations and Warranties.
(a) Representations and Warranties of the Company.
The Company, and each of the subsidiaries of the Company listed in Exhibit A
hereto (each a "Subsidiary", all of the foreign subsidiaries collectively
referred to as the "Foreign Subsidiaries", all of the domestic subsidiaries
referred to as the "Domestic Subsidiaries" and all of the Foreign Subsidiaries
and Domestic Subsidiaries collectively referred to as the "Subsidiaries")
jointly and severally represent and warrant to, and agree with, the several
Underwriters that:
(i) The Company has prepared, in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (the "Regulations"), of the Securities and Exchange
Commission (the "SEC") under the Act in effect until applicable times, and has
filed with the SEC a registration statement on Form S-1 (File No. 333-_____) and
one or more amendments thereto for the primary purpose of registering the Shares
under the Act. Copies of such registration statement and any amendments thereto,
and all forms of the related prospectus contained therein, have been delivered
to the Representatives; any preliminary prospectus included in such registration
statement or filed with the SEC pursuant to Rule 424(a) of the Regulations is
hereinafter called a "Preliminary Prospectus." The various parts of such
registration statement, including all exhibits thereto and the information (if
any) contained in the form of final prospectus filed with the SEC pursuant to
Rule 424(b) of the Regulations in accordance with Section 5(a) of this Agreement
and deemed by virtue of Rule 424 of the Regulations to be part of the
registration statement at the time it was declared effective, each as amended at
the time the registration statement became effective, are hereinafter
collectively called the "Registration Statement." The final prospectus in the
form included in the Registration Statement or first filed with the SEC pursuant
to Rule 424(b) of the Regulations and any amendments or supplements thereto are
hereinafter called the "Prospectus."
(ii) The Registration Statement has become
effective under the Act and the SEC has not issued any stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Preliminary Prospectus, nor has the SEC instituted or threatened to
institute proceedings with respect to such an order. No stop order suspending
the sale of the Shares in any jurisdiction designated by the Representatives as
provided for in Section 5(f) hereof has been issued, and no proceedings for that
purpose have been instituted or threatened. The Company has complied in all
material
2
respects with all requests of the SEC, or requests of which the Company has been
advised of any state securities commission in a state designated by the
Representatives as provided for in Section 5(f) hereof, for additional
information to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus unless such request has been waived. Each
Preliminary Prospectus conformed to all the requirements of the Act and the
Regulations as of its date in all material respects and did not as of its date
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
the foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon and in conformity with information supplied to the
Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein. The Registration Statement, on the
date on which it is declared effective by the SEC (the "Effective Date") and
when any post-effective amendment thereof shall become effective, and the
Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) and on
the Closing Date (as defined in Section 3 hereof) and any Option Closing Date
(as defined in Section 4(b) hereof), will conform in all material respects to
all the requirements of the Act and the Regulations, and will not, on any of
such dates, include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein.
(iii) The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, with all necessary corporate power and authority, and all required
licenses, permits, clearances, certifications, registrations, approvals,
consents and franchises, to own or lease and operate its properties and to
conduct its business as described in the Prospectus, and to execute, deliver and
perform this Agreement. Each of the Subsidiaries has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with all necessary corporate power and
authority, and all required licenses, permits, clearances, certifications,
registrations, approvals, consents and franchises, to own or lease and operate
its properties and to conduct its business as described in the Prospectus.
(iv) The outstanding shares of capital stock
or other evidence of ownership of the Subsidiaries have been duly authorized and
validly issued and are owned by the Company (A) 100% with respect to the
Domestic Subsidiaries, (B) 79% with respect to the Foreign Subsidiaries and (C)
upon the consummation of the transactions contemplated in the Exchange
Agreements (the "Exchange") each dated , 1997 (each an "Exchange
Agreement" and collectively, the "Exchange Agreements") by and between the
Company and each of those persons named in Schedule III hereto (collectively,
the "Subsidiary Stockholders"), 100% with respect to the Foreign Subsidiaries,
in all cases free and clear of all liens, encumbrances and security interests.
There are no options, obligations
3
to issue or other rights to convert or exchange any obligations into shares of
capital stock or ownership interests in the Subsidiaries are outstanding. Except
as provided in the corporation law of the respective jurisdictions of
incorporation of the Subsidiaries or as set forth in the Prospectus, there are
no restrictions of any kind which prevent the payment of dividends by any of the
Subsidiaries.
(v) This Agreement has been duly authorized,
executed and delivered by the Company and each of the Subsidiaries and
constitutes, with respect to each, its legal, valid and binding obligation,
enforceable against the Company and each of the Subsidiaries in accordance with
its terms, except as such enforceability may be limited by equitable principles
or by the application of bankruptcy, insolvency or other similar laws relating
to or affecting creditors' rights generally, and except as rights to indemnity
and contribution hereunder may be limited by applicable securities laws.
(vi) The Exchange Agreements have been duly
authorized, executed and delivered by the Company and constitute the Company's
legal, valid and binding obligation, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
equitable principles or by the application of bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights generally.
(vii) The execution, delivery and
performance of this Agreement by the Company and the Subsidiaries does not and
will not, with or without the giving of notice or the lapse of time, or both,
(a) conflict with any term or provision of the Company's and each of the
Subsidiaries' Articles of Incorporation or Bylaws, or similar governing
instruments, (b) result in a breach of, constitute a default under, result in
the termination or modification of, result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the assets of the
Company or any of the Subsidiaries, or require any payment by the Company or any
of the Subsidiaries, or impose any liability on the Company or any of the
Subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
commitment or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of the Company's or any of the
Subsidiaries' assets are bound or affected, (c) assuming compliance with Blue
Sky laws and regulations applicable to the offer and sale of the Shares, violate
any law, rule, regulation, judgment, order or decree of any government or
governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its Subsidiaries or any of the Company's
or any of its Subsidiaries' properties or business or (d) result in a breach,
termination or lapse of the Company's or any of its Subsidiaries' corporate
power and authority to own or lease and operate its assets and properties and
conduct its business as described in the Prospectus.
(viii) At the date or dates indicated in the
Prospectus, the Company had the duly authorized and outstanding capital stock
set forth in the Prospectus; and on the Effective Date, the Closing Date and any
Option Closing Date, there were and will be no options or warrants for the
purchase of, other outstanding rights to purchase,
4
agreements or obligations to issue or agreements or other rights to convert or
exchange any obligation or security into, capital stock of the Company or
securities convertible into or exchangeable for capital stock of the Company,
except as described in the Prospectus.
(ix) The authorized capital stock of the
Company conforms in all respects with the description thereof in the Prospectus.
(x) The currently outstanding shares of the
Company's and the Subsidiaries' capital stock, including the Shares to be
purchased by the Underwriters from the Selling Stockholders, have been duly
authorized and are validly issued, fully paid and non-assessable, and none of
such outstanding shares of the Company's or Subsidiaries' capital stock has been
issued in violation of any preemptive rights of any security holder of the
Company or the Subsidiaries. The Common Shares to be issued to the Selling
Stockholders upon the consummation of the Exchange will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable, and none of such
outstanding shares of the Company's capital stock will be issued in violation of
any preemptive rights of any security holder of the Company. The holders of the
outstanding shares of the Company's and the Subsidiaries' capital stock are not
subject to personal liability solely by reason of being such holders. The offers
and sales of the outstanding shares of the Company's and the Subsidiaries'
capital stock, whether described in the Registration Statement or otherwise,
were and, as to the Common Shares to be issued on consummation of the Exchange,
will be made in conformity with applicable federal, state and foreign securities
laws.
(xi) When the Shares have been duly
delivered against payment therefor as contemplated by this Agreement, the Shares
will be validly issued, fully paid and non-assessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The certificates representing the Shares are in proper legal form
under, and conform in all respects to the requirements of, the Delaware General
Corporation Law, as amended. Neither the filing of the Registration Statement
nor the offering or sale of Shares as contemplated by this Agreement gives any
security holder of the Company any rights for or relating to the registration of
any Common Shares or any other capital stock of the Company, except such as have
been satisfied or waived.
(xii) No consent, approval, authorization,
order, registration, license or permit of, or filing or registration with, any
court, government, governmental agency, instrumentality or other regulatory body
or official is required for the valid and legal execution, delivery and
performance by the Company and the Subsidiaries of this Agreement and the
consummation of the transactions contemplated hereby and described in the
Prospectus, except such as may be required for the registration of the Shares
under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and for compliance with the applicable state securities or Blue Sky laws.
5
(xiii) The Common Shares (including the
Shares) have been approved for inclusion, subject only to official notice of
issuance, in the Nasdaq National Market.
(xiv) The statements in the Registration
Statement and Prospectus, insofar as they are descriptions of or references to
contracts, agreements or other documents, are accurate in all material respects
and present or summarize fairly, in all material respects, the information
required to be disclosed under the Act and/or the Regulations, and there are no
contracts, agreements or other documents required to be described or referred to
in the Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement under the Act or the Regulations that have not been so
described, referred to or filed, as required.
(xv) The consolidated financial statements
of the Company (including the notes thereto) filed as part of any Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly, in all
material respects, the financial position of the Company and the Subsidiaries as
of the respective dates thereof, and the results of operations, stockholders'
equity and cash flows of the Company and the Subsidiaries for the periods
indicated therein, all in conformity with generally accepted accounting
principles consistently applied. The supporting notes and schedules included in
the Registration Statement fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The financial information included in the Prospectus under the caption
"Prospectus Summary" and "Selected Consolidated Financial Data" presents fairly
the information shown therein and has been compiled on a basis consistent with
that of the audited financial statements included in the Registration Statement.
The unaudited pro forma financial information included in the Registration
Statement complies as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts in
the compilation of this information.
(xvi) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, there has not been (a) any material adverse change
(including, whether or not insured against, any material loss or damage to any
material assets), or development involving a prospective material adverse
change, in the general affairs, properties, assets, management, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects of either the Company or the Subsidiaries taken as a whole, (b) any
material adverse change, loss, reduction, termination or non-renewal of any
contract to which the Company or any Subsidiary is a party, (c) any transaction
entered into by the Company or any Subsidiary not in the ordinary course of its
business that is material to the Company and the Subsidiaries taken as a whole,
(d) any dividend or distribution of any kind declared, paid or made by the
Company or any Subsidiary on its capital stock, (e) any liabilities or
obligations, direct or indirect, incurred by the Company or any Subsidiary that
are material to the Company and the Subsidiaries taken as a whole, (f) any
change in the capitalization or stock ownership of the
6
Company or any Subsidiary or (g) any change in the indebtedness of the Company
or any Subsidiary that is material to the Company and the Subsidiaries taken as
a whole. Neither the Company nor any Subsidiary has any contingent liabilities
or obligations that are material to the Company and the Subsidiaries taken as a
whole and that are not disclosed in the Prospectus.
(xvii) The Company has not distributed and
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, a Preliminary
Prospectus, the Prospectus and other material, if any, permitted by the Act and
the Regulations. Neither the Company nor any of its officers, directors or
affiliates has taken nor shall the Company take any action designed to, or that
might be reasonably expected to cause or result in, stabilization or
manipulation of the price of the Shares.
(xviii) The Company and each Subsidiary have
filed with the appropriate federal, state and local governmental agencies, and
all foreign countries and political subdivisions thereof, all tax returns that
are required to be filed or have duly obtained extensions of time for the filing
thereof and have paid all taxes shown on such returns or otherwise due and all
material assessments received by it to the extent that the same have become due.
Neither the Company nor any Subsidiary has executed or filed with any taxing
authority, foreign or domestic, any agreement extending the period for
assessment or collection of any income or other tax or is a party to any pending
action or proceeding by any foreign or domestic governmental agencies for the
assessment or collection of taxes, and no claims for assessment or collection of
taxes have been asserted against the Company or any Subsidiary that might
materially adversely affect the general affairs, assets, properties, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects of the Company and the Subsidiaries, taken as a whole.
(xix) To the knowledge of the Company, KPMG
Peat Marwick LLP, which has given its reports on certain financial statements
included as part of the Registration Statement, is a firm of independent
certified public accountants as required by the Act and the Regulations.
(xx) Neither the Company nor any Subsidiary
is in violation of or in default under any of the terms or provisions of (a) its
Articles or Certificate of Incorporation or Bylaws or similar governing
instruments, or (b) any indenture, mortgage, deed of trust, contract, commitment
or other agreement or instrument to which it is a party or by which it or any of
its properties is bound or affected, (c) any law, rule, regulation, judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over it or any of its properties
or business or (d) any license, permit, certification, registration, approval,
consent or franchise referred to in Section 1(a)(iii) hereof.
7
(xxi) There are no claims, actions, suits,
protests, proceedings, arbitrations, investigations or inquiries pending before,
or threatened or contemplated by, any governmental agency, instrumentality,
court or tribunal, domestic or foreign, or before any private arbitration
tribunal, including, without limitation, the current reexamination by the U.S.
Patent and Trademark Office of the Company's U.S. Patent 4,589,815 issued on May
20, 1986, to which the Company or any Subsidiary is a party, that could
reasonably be expected to affect the validity of any of the outstanding Common
Shares, or that, if determined adversely to the Company or any Subsidiary,
would, in any case or in the aggregate, result in any material adverse change in
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company or any of
the Subsidiaries taken as a whole; nor, to the Company's knowledge, is there any
reasonable basis for any such claim, action, suit, protest, proceeding,
arbitration, investigation or inquiry. There are no outstanding orders,
judgments or decrees of any court, governmental agency, instrumentality or other
tribunal, enjoining the Company or any Subsidiary from, or requiring the Company
or any Subsidiary to take or refrain from taking, any action, or to which the
Company or any Subsidiary, their properties, assets or business are bound or
subject.
(xxii) The Company and the Subsidiaries own,
or possess adequate rights to use, all patents, patent applications, trademarks,
trade names, service marks, licenses, inventions, copyrights, know-how, trade
secrets, confidential information, processes and formulations and other
proprietary information necessary for, used in or proposed to be used in the
conduct of their business as described in the Prospectus (collectively, the
"Intellectual Property"). The Company and the Subsidiaries have not infringed
upon, are not infringing upon and have not received any notice of conflict with,
the asserted intellectual property or other rights of others and the Company
knows of no reasonable basis for any notice or claim of such infringement or
conflict.
(xxiii) The Company and each Subsidiary have
good and marketable title to all property described in the Prospectus as being
owned by them, free and clear of all liens, security interests, charges or
encumbrances, except such as are described or referred to in the Prospectus or
such as do not materially affect the value of such property and do not interfere
in any material respect with the use made, or proposed to be made, of such
property by the Company or the Subsidiary. The Company and each Subsidiary have
adequately insured their property against loss or damage by fire or other
casualty and maintain, in amounts reasonably believed by them to be adequate,
insurance against such other risks as they deem appropriate. All real and
personal property leased by the Company or any Subsidiary, as described or
referred to in the Prospectus, is held by the Company or such Subsidiary under
valid leases. All of the facilities of the Company and each Subsidiary (the
"Premises"), and all operations conducted thereon, are now and, since the
Company or any Subsidiary began to use such Premises, always have been and, to
the knowledge of the Company, prior to when the Company or any Subsidiary began
to use such Premises, always had been, in compliance with all, foreign or
domestic, federal, state and local statutes or ordinances, regulations and rules
concerning or relating to industrial hygiene and the protection of health and
the environment (collectively, "the Governmental Laws"), except to
8
the extent that any failure to be in such compliance would not materially
adversely affect the general affairs, properties, condition (financial or
otherwise), results of operations, stockholders' equity, business or prospects
of the Company and the Subsidiaries taken as a whole. There are no conditions
on, about, beneath or arising from the Premises that might give rise to
liability, the imposition of a statutory lien or require a "Response," "Removal"
or "Remedial Action," as defined herein, under any of the Governmental Laws, and
that would materially adversely affect the general affairs, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company and the Subsidiaries taken as a whole.
Neither the Company nor any Subsidiary has received notice, and the Company does
not have knowledge, of any claim, demand, investigation, regulatory action, suit
or other action instituted or threatened against the Company or any Subsidiary
or any portion of the Premises relating to any of the Governmental Laws. Neither
the Company nor any Subsidiary has received any notice of material violation,
citation, complaint, order, directive, request for information or response
thereto, notice letter, demand letter or compliance schedule to or from any
governmental or regulatory agency, foreign or domestic, arising out of or in
connection with "hazardous substances" (as defined by applicable Governmental
Laws) on, about, beneath, arising from or generated at the Premises. As used in
this subsection, the terms "Response," "Removal" and "Remedial Action" shall
have the respective meanings assigned to such terms under Sections
101(23)-101(25) of the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act,
42 U.S.C. 9601(23)-9601(25).
(xxiv) The Company and each Subsidiary
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are recorded as
necessary in order to permit preparation of financial statements in accordance
with generally accepted accounting principles and statutory accounting practices
and to maintain accountability for assets; (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxv) Each contract or other instrument
(however characterized or described) to which the Company or any Subsidiary is a
party or by which any of their properties or business is bound or affected and
which is material to the conduct of the Company's business as described in the
Prospectus has been duly and validly executed by the Company or such Subsidiary,
and, to the knowledge of the Company, by the other parties thereto. Each such
contract or other instrument is in full force and effect and is enforceable
against the parties thereto in accordance with its terms, and the Company and
the Subsidiaries are not, and to the knowledge of the Company, no other party
is, in default thereunder, and no event has occurred that, with the lapse of
time or the giving of notice, or both, would constitute a default under any such
contract or other instrument. All necessary consents under such contracts or
other instruments to disclosure in the Prospectus with respect thereto have been
obtained.
9
(xxvi) Except for such plans that are
expressly disclosed in the Prospectus, the Company and the Subsidiaries do not
have any employee benefit plan, profit sharing plan, employee pension benefit
plan or employee welfare benefit plan or deferred compensation arrangements
("Plans") that are subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations thereunder
("ERISA"). All Plans that are subject to ERISA are in compliance with ERISA, in
all material respects, and, to the extent required by the Internal Revenue Code
of 1986, as amended (the "Code"), in compliance with the Code in all material
respects. Neither the Company nor any Subsidiary has or ever had any employee
pension benefit plan that is subject to Part 3 of Subtitle B of Title I of ERISA
or any defined benefit plan or multi-employer plan. The Company has not
maintained retired life and retired health insurance plans that are employee
welfare benefit plans providing for continuing benefit or coverage for any
employee or any beneficiary of any employee after such employee's termination of
employment, except as required by Section 4980B of the Code. No fiduciary or
other party in interest with respect to any of the Plans has caused any of such
Plans to engage in a prohibited transaction as defined in Section 406 of ERISA.
As used in this subsection, the terms "defined benefit plan," "employee benefit
plan," "employee pension benefit plan," "employee welfare benefit plan,"
"fiduciary" and "multi-employer plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
(xxvii) No labor dispute exists with the
employees of the Company or any Subsidiary, and no such labor dispute is
threatened. The Company has no knowledge of any existing or threatened labor
disturbance by the employees of any of the principal suppliers, contractors or
customers of the Company or its Subsidiaries that would materially adversely
affect the general affairs, properties, condition (financial or otherwise),
results of operations, stockholders' equity, business or prospects of the
Company and the Subsidiaries taken as a whole.
(xxviii) Neither the Company nor any
Subsidiary has incurred any liability for any finder's fees or similar payments
in connection with the transactions contemplated herein.
(xxix) Each of the Company and the
Subsidiaries currently intends to conduct its affairs in such a manner as to
ensure that it will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), and the rules and
regulations thereunder.
(xxx) There is no document or contract of a
character required to be described in the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required; no statement, representation, warranty or covenant made by the Company
or any Subsidiary in this Agreement or in any certificate or document required
by this Agreement to be delivered to the Representatives is, was when made, or
as of the Closing Date or any Option Closing Date will be, inaccurate, untrue or
incorrect in any material respect. No transaction has occurred or is proposed
between or among the Company
10
and any of its officers, directors or stockholders or any affiliate of any such
officer, director or stockholder that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(xxxi) None of the Company, any Subsidiary
or any officer, director, employee, agent or other person acting on behalf of
the Company or such Subsidiary has, directly or indirectly, given or agreed to
give any money, property or similar benefit or consideration to any customer or
supplier (including any employee or agent of any customer or supplier) or
official or employee of any agency or instrumentality of any government (foreign
or domestic) or political party or candidate for office (foreign or domestic) or
any other person who was, is or in the future may be in a position to affect the
general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole or any actual or proposed business transaction of
the Company or the Subsidiaries that (a) could subject the Company or such
Subsidiary to any liability (including, but not limited to, the payment of
monetary damages) or penalty in any civil, criminal or governmental action or
proceeding, foreign or domestic, which would have a material adverse effect on
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company or the
Subsidiaries taken as a whole or (b) violates any law, rule or regulation,
foreign or domestic, to which the Company or the Subsidiaries are subject, which
violation if proven would have a material adverse effect on the general affairs,
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
(xxxii) The Company has not declared, paid
or accrued any dividends or distributions to stockholders since its inception
except as described in the Prospectus and will not hereafter declare, pay or
accrue any such dividends or distributions prior to the Closing Date.
(xxxiii) Except as described on Schedule IV
attached hereto, none of the stockholders of the Company, including those who
will become such upon consummation of the Exchange, is affiliated with any
member of the National Association of Securities Dealers, Inc. (the "NASD").
Any certificate signed by any officer of the Company or any
Subsidiary in such capacity and delivered to the Representatives or to counsel
for the Underwriters pursuant to this Agreement shall be deemed a representation
and warranty by the Company or such Subsidiary to the several Underwriters as to
the matters covered thereby.
(b) Representations and Warranties of the Selling
Stockholders. Each of the Selling Stockholders represents and warrants to, and
agrees with, the several Underwriters that:
11
(i) The Exchange Agreements have been duly
authorized, executed and delivered by the Subsidiary Stockholders, except for
the Company (the "Minority Subsidiary Stockholders"), and constitute the
Minority Subsidiary Stockholders' legal, valid and binding obligation,
enforceable against the Minority Subsidiary Stockholders in accordance with
their terms, except as such enforceability may be limited by equitable
principles or by the application of bankruptcy, insolvency or other similar laws
relating to or affecting creditors' rights generally, and except as rights to
indemnity and contribution hereunder may be limited by applicable securities
laws.
(ii) Such Selling Stockholder has duly
executed and delivered a power of attorney in the form contained in the Custody
Agreement (as defined below) appointing each of Xxxx X. Xxxx and Xxxx X. Xxxxx,
Xx. as such Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact"). The
Attorney-in-Fact is authorized to execute, deliver and perform this Agreement on
behalf of such Selling Stockholder, including, without limitation, the authority
to determine the purchase price to be paid to each such Selling Stockholder by
the Underwriters as set forth in Section 2 of this Agreement, and in connection
therewith such Selling Stockholder has duly executed and delivered a Power of
Attorney and Custody Agreement (the "Custody Agreement"), in the form heretofore
delivered to the Representatives, with as custodian (the "Custodian").
Certificates in negotiable form representing the Shares to be sold by such
Selling Stockholder hereunder have been deposited with the Custodian, except for
those Shares to be issued in the Exchange in which case the certificates
representing the shares of the Foreign Subsidiaries to be exchanged have been
deposited, pursuant to the Custody Agreement for the purpose of delivery
pursuant to this Agreement. Those Shares to be issued in the Exchange shall be
issued by the Company's transfer agent upon the consummation thereof and
delivered pursuant to this Agreement. Such Selling Stockholder agrees that the
Shares represented by the certificates which are on deposit or which will be
issued by the Company's transfer agent upon the consummation of the Exchange are
subject to the interests of the Underwriters hereunder, that the arrangements
made for such custody and the appointment of the Attorney-in-Fact are to that
extent irrevocable, and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as expressly provided in this
Agreement or the Custody Agreement, by any act of such Selling Stockholder, by
operation of law or otherwise, by the death or incapacity of such Selling
Stockholder, or by the occurrence of any other event. If any individual Selling
Stockholder should die or become incapacitated, or if any other event should
occur, before the delivery of the Shares to be sold by such Selling Stockholder
hereunder, the certificates for such Shares shall be delivered by the Custodian
and issued by the Company's transfer agent in accordance with the terms and
conditions of this Agreement and Custody Agreement as if such death, incapacity,
or other event had not occurred, regardless of whether or not the Custodian or
Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Stockholder has the full
right, power and authority to enter into this Agreement, the Custody Agreement
and the Exchange Agreements, and has or, in the case of Shares to be issued
pursuant to the Exchange Agreements, will have
12
the full right, power and authority to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder hereunder, and this Agreement, the Custody
Agreement and the Exchange Agreements have been duly authorized, executed and
delivered by such Selling Stockholder and constitute the legal, valid and
binding obligations of such Selling Stockholder enforceable in accordance with
their respective terms. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and by the Custody
Agreement and the Exchange Agreements will not result in a violation or breach
by such Selling Stockholder of, or constitute a default by such Selling
Stockholder under, any indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound, any
organizational document relating to such Selling Stockholder (including, without
limitation, any partnership agreement, articles of incorporation, bylaws or
other governing instruments), or any statute, judgment, decree, order, rule or
regulation of any court or governmental agency or body, foreign or domestic,
applicable to such Selling Stockholder.
(iv) All authorizations, approvals and
consents necessary for the execution and delivery by such Selling Stockholder of
the Custody Agreement and such Selling Stockholder's Exchange Agreement, if any,
the execution and delivery by or on behalf of such Selling Stockholder of this
Agreement, the consummation of the Exchange and the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder (other than such
authorizations, approvals or consents as may be necessary under the state
securities or Blue Sky laws), have been obtained and are in full force and
effect.
(v) Such Selling Stockholder now is (except
for the Shares to be issued upon the Exchange), and on the Closing Date will be,
the lawful owner of the Shares to be sold by such Selling Stockholder pursuant
to this Agreement. On the Closing Date, such Selling Stockholder will have valid
and marketable title to such Shares, free and clear of all liens, encumbrances,
security interests or other restrictions (other than those created under the
Custody Agreement). Upon proper delivery of and payment for such Shares as
provided herein, the Underwriters will acquire valid and marketable title
thereto, free and clear of all liens, encumbrances, security interests and other
restrictions.
(vi) To the knowledge of such Selling
Stockholder after due inquiry, the representations and warranties of the Company
contained in Section 1(a) hereof are true and correct. Such Selling Stockholder
has examined the Registration Statement and the Prospectus and has no knowledge
of any fact, condition or information not disclosed therein which has adversely
affected or could adversely affect the general affairs, assets, properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or prospects of the Company and the Subsidiaries, taken as a whole. To
the knowledge of such Selling Stockholder after due inquiry and review of the
Registration Statement and Prospectus, neither the Registration Statement nor
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such Selling Stockholder is not prompted to sell the
13
Shares to be sold by such Selling Stockholder hereunder by any information
concerning the Company or any Subsidiary which is not set forth in the
Prospectus.
(vii) Such Selling Stockholder has examined
the Registration Statement and the Prospectus and the information relating to
such Selling Stockholder set forth therein and, as to such information, neither
the Registration Statement nor the Prospectus contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(viii) Such Selling Stockholder will comply
in all respects with the lock-up agreement set forth in Section 3(m) of the
Custody Agreement.
(ix) Such Selling Stockholder has not
incurred any liability for any finder's fee or similar payments in connection
with the sale of such Selling Stockholder's Shares hereunder.
(x) Such Selling Stockholder (A) has not
distributed and will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, a
Preliminary Prospectus, the Prospectus and other material, if any, permitted by
the Act and the Regulations, and (B) has not taken and will not take any action
designed to, or that might be reasonably expected to cause or result in,
stabilization or manipulation of the price of the Shares.
2. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein, (a) the Company shall sell
to the several Underwriters at the Offering Price, less the Underwriting
Discounts and Commissions in the amount of $_______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto,
and the Underwriters, severally and not jointly, shall purchase from the Company
on a firm commitment basis, at the Offering Price, less the Underwriting
Discounts and Commissions in the amount of $______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto;
and (b) the Selling Stockholders shall sell to the several Underwriters at the
Offering Price, less the Underwriting Discounts and Commissions in the amount of
$_______ per Share, the respective amounts of the Firm Shares set forth opposite
their names on Schedule II hereto, and the Underwriters, severally and not
jointly, shall purchase from the Selling Stockholders on a firm commitment
basis, at the Offering Price, less the Underwriting Discounts and Commissions in
the amount of $_______ per Share, the respective amounts of the Firm Shares set
forth opposite their names on Schedule I hereto. In making this Agreement, each
Underwriter is contracting severally, and not jointly, and except as provided in
Sections 4 and 11 hereof, the agreement of each Underwriter is to purchase only
that number of shares specified with respect to that Underwriter in Schedule I
hereto. The Underwriters shall offer the Shares to the public as set forth in
the Prospectus.
14
3. Payment and Delivery. Payment for the Firm Shares shall be
made by certified or official bank check payable to the order of (i) the Company
with respect to the Firm Shares sold by it and (ii) the Custodian with respect
to the Firm Shares sold by the Selling Stockholders, in New York Clearing House
funds at the offices of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be agreed upon by the
Company, the Attorney-in-Fact and the Representatives, or in immediately
available funds wired to such accounts as the Company or the Custodian may
specify (with all costs and expenses incurred by the Underwriters in connection
with such settlement in immediately available funds, including, but not limited
to, interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Firm Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. Such payment
and delivery will be made at 10:00 AM., Philadelphia, Pennsylvania time, on
_________, 1997. Such time and date are referred to herein as the "Closing
Date." The certificates representing the Firm Shares to be sold and delivered
will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the New York correspondent office of the Company's
transfer agent not less than one full business day prior to the Closing Date.
4. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments
in connection with the distribution and sale of the Firm Shares as contemplated
by the Prospectus, subject to the terms and conditions herein set forth, the
several Underwriters are hereby granted an option by the Selling Stockholders to
purchase all or any part of the Optional Shares, pro rata as among the Optional
Shares from each Selling Stockholder (the "Over-allotment Option"). The purchase
price to be paid for the Optional Shares shall be the Offering Price less the
Underwriting Discounts and Commissions shown on the cover page of the
Prospectus. The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters as to all or any part of
the Optional Shares at any time and from time to time within 30 days after the
date of the Prospectus. No Underwriter shall be under any obligation to purchase
any Optional Shares prior to an exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be
exercised by the Representatives on behalf of the several Underwriters by giving
notice to the Custodian by a letter sent by registered or certified mail,
postage prepaid, telex, telegraph, telegram or facsimile (such notice to be
effective when received), addressed as provided in Section 13 hereof, setting
forth the number of Optional Shares to be purchased, the date and time for
delivery of and payment for the Optional Shares and stating that the Optional
Shares referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares.
If such notice is given prior to the Closing Date, the
15
date set forth therein for such delivery and payment shall be the Closing Date.
If such notice is given on or after the Closing Date, the date set forth therein
for such delivery and payment shall be a date selected by the Representatives
that is within three full business days after the exercise of the Over-allotment
Option. The date and time set forth in such a notice is referred to herein as an
"Option Closing Date," and a closing held pursuant to such a notice is referred
to herein as an "Option Closing." Upon each exercise of the Over-allotment
Option, and on the basis of the representations, warranties, covenants and
agreements herein contained, and subject to the terms and conditions herein set
forth, the several Underwriters shall become severally, but not jointly,
obligated to purchase from the Selling Stockholders the number of Optional
Shares specified in each notice of exercise of the Over-allotment Option.
(c) The number of Optional Shares to be sold to each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule I hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters"). The
number of Optional Shares to be sold by each Selling Stockholder shall be the
respective number of Optional Shares obtained by multiplying the number of
Optional Shares specified in the notice to the Custodian referred to in Section
4(b) hereof by a fraction the numerator of which is the maximum number of
Optional Shares to be sold by such Selling Stockholders, as specified opposite
such Selling Stockholders name in Schedule II hereto, and the denominator of
which is the maximum number of all Optional Shares that may be sold pursuant to
this Agreement; subject, however, to such adjustment as the Representatives may
approve to eliminate fractional shares.
(d) Payment for the Optional Shares shall be made to
the Custodian by certified or official bank check payable to the order of the
Custodian in New York Clearing House funds, at the offices of Xxxxxx Xxxxxxxxxx
Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place
as shall be agreed upon by the Attorney-in-Fact and the Representatives, or in
immediately available funds wired to such account as the Custodian may specify
(with all costs and expenses incurred by the Underwriters in connection with
such settlement in immediately available funds, including, but not limited to,
interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Optional Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. The
certificates representing the Optional Shares to be issued and delivered will be
in such denominations and registered in such names as the Representatives
request not
16
less than two full business days prior to the Option Closing Date, and will be
made available to the Representatives for inspection, checking and packaging at
the New York correspondent office of the Company's transfer agent not less than
one full business day prior to the Option Closing Date.
5. Certain Covenants and Agreements of the Company. The
Company covenants and agrees with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, the
Company will timely file the Prospectus pursuant to and in compliance with Rule
424(b) of the Regulations and will advise the Representatives of the time and
manner of such filing.
(b) The Company will not file or publish any
amendment or supplement to the Registration Statement, Preliminary Prospectus or
Prospectus at any time before the completion of the distribution of the Shares
by the Underwriters that is not (i) in compliance with the Regulations and (ii)
approved by the Representatives (such approval not to be unreasonably withheld
or delayed).
(c) The Company will advise the Representatives
immediately, and confirm such advice in writing, (i) when any post-effective
amendment to the Registration Statement is filed with the SEC, (ii) of the
receipt of any comments from the SEC concerning the Registration Statement,
(iii) when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (iv) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (v)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vi) during the period noted in (v) above, of the need
to amend the Registration Statement or supplement the Prospectus to comply with
the Act, (vii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, and (viii)
of the suspension of the qualification of any of the Shares for offering or sale
in any jurisdiction in which the Underwriters intend to make such offers or
sales, or of the initiation or threatening of any proceedings for any of such
purposes known to the Company. The Company will use its best efforts to prevent
the issuance of any such stop order or of any order preventing or suspending
such use and, if any such order is issued, to obtain as soon as possible the
lifting thereof.
(d) The Company has delivered to the Representatives,
without charge, copies of each Preliminary Prospectus. The Company will deliver
to the Representatives, without charge, from time to time during the period when
delivery of the Prospectus is required under the Act, such number of copies of
the Prospectus (as supplemented or amended) as the Representatives may
reasonably request. The Company
17
hereby consents to the use of such copies of the Preliminary Prospectus and the
Prospectus for purposes permitted by the Act, the Regulations and the securities
or Blue Sky laws of the states in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by any Underwriter or dealer. The Company has furnished or will furnish to
the Representatives three original signed copies of the Registration Statement
as originally filed and of all amendments and supplements thereto, whether filed
before or after the Effective Date, three copies of all exhibits filed therewith
and three signed copies of all consents and certificates of experts, and will
deliver to the Representatives such number of conformed copies of the
Registration Statement, including financial statements and exhibits, and all
amendments thereto, as the Representatives may reasonably request.
(e) The Company will comply with the Act, the
Regulations, the Exchange Act and the rules and regulations thereunder so as to
permit the continuance of sales of and dealings in the Shares for as long as may
be necessary to complete the distribution of the Shares as contemplated hereby.
(f) The Company will furnish such information as may
be required and otherwise cooperate in the registration or qualification of the
Shares, or exemption therefrom, for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of such
jurisdictions in which the Representatives determine to offer the Shares, after
consultation with the Company, and will file such consents to service of process
or other documents necessary or appropriate in order to effect such registration
or qualification; provided, however, that no such qualification shall be
required in any jurisdiction where, solely as a result thereof, the Company
would be subject to taxation or qualification as a foreign corporation doing
business in such jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject. The Company will, from time to time, prepare and file
such statements and reports as are or may be required to continue such
qualification in effect for so long a period as is required under the laws of
such jurisdictions for such offering and sale.
(g) Subject to subsection 5(b) hereof, in case of any
event, at any time within the period during which, in the opinion of counsel for
the Underwriters, a prospectus is required to be delivered under the Act and
Regulations, as a result of which any Preliminary Prospectus or the Prospectus,
as then amended or supplemented, would contain an untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act and Regulations or any
applicable securities or Blue Sky laws, the Company promptly will prepare and
file with the SEC, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters
18
such number of copies of such amendment(s), supplement(s) or document(s) (in
form and substance satisfactory to the Representatives and counsel for the
Underwriters) as the Representatives may reasonably request. For purposes of
this subsection (g), the Company will provide such information to the
Representatives, the Underwriters' counsel and counsel to the Company as shall
be necessary to enable such persons to consult with the Company with respect to
the need to amend or supplement the Registration Statement, Preliminary
Prospectus or Prospectus or file any document, and shall furnish to the
Representatives and the Underwriters' counsel such further information as each
may from time to time reasonably request.
(h) The Company will make generally available to its
security holders not later than 45 days after the end of the period covered
thereby, an earnings statement of the Company (which need not be audited unless
required by the Act or the Regulations) that shall comply with Section 11(a) of
the Act and cover a period of at least 12 consecutive months beginning not later
than the first day of the Company's fiscal quarter next following the Effective
Date.
(i) For a period of five years following the
Effective Date, the Company will furnish to the Representatives copies of all
materials furnished by the Company to its Stockholders and all public reports
and all reports and financial statements furnished by the Company to the SEC
pursuant to the Exchange Act or any rule or regulation of the SEC thereunder.
(j) During the course of the distribution of the
Shares, the Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Shares.
(k) The Company has caused each person listed on
Schedule V hereto to execute an agreement (a "Lock-up Agreement"), which Lock-up
Agreement shall be in form and substance satisfactory to the Representatives and
the Underwriters' counsel providing that through the 180th day after the
Effective Date, they will not, other than as provided for in the Underwriting
Agreement, without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx Inc.,
directly or indirectly offer to sell, sell, contract to sell or otherwise
transfer or dispose of any Common Shares, any options or warrants to purchase
Common Shares, or any securities convertible into or exercisable for any Common
Shares owned by them or with respect to which they have the power of disposition
(otherwise than in private transactions to their spouse, children, descendants,
parents or grandparents or to a trust for the benefit of one or more of such
persons, provided that each transferee and other person acquiring an interest in
any Common Shares during such 180-day period agrees in writing to be bound by
the provisions of the Lock-up Agreement). The Company has delivered such
agreements to Xxxxxx Xxxxxxxxxx Xxxxx Inc. prior to the date of this Agreement.
Appropriate stop transfer instructions will be issued by the Company to the
Company's transfer agent for the Common Shares.
19
(l) The Company will not engage in any transaction
with affiliates (as defined in the Regulations) without the prior approval of a
majority of the members of its Board of Directors who do not have an interest in
such transaction other than in their capacity as directors of the Company.
(m) Except pursuant to the Exchange Agreements, for a
period of 180 days after the Effective Date, the Company will not, without the
prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx Inc. offer, sell, contract to
sell or otherwise dispose of any Common Shares or any securities convertible
into or exercisable for any Common Shares or, except up to shares pursuant
to the Company's [1997 Stock Option Plan,] grant options to purchase any Common
Shares.
(n) The Company will use all reasonable efforts to
maintain the qualification or listing of the Common Shares (including, without
limitation, the Shares) on the Nasdaq National Market.
6. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by
this Agreement are consummated and regardless of the reason this Agreement is
terminated, the Company will pay or cause to be paid, and bear or cause to be
borne, all costs and expenses incident to the performance of the obligations of
the Company and the Selling Stockholders under this Agreement, including: (i)
the fees and expenses of the accountants and counsel for the Company incurred in
the preparation of the Registration Statement and any post-effective amendments
thereto (including financial statements and exhibits), Preliminary Prospectuses
and the Prospectus and any amendments or supplements thereto, (ii) printing and
mailing expenses associated with the Registration Statement and any
post-effective amendments thereto, Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Underwriters' Questionnaire
submitted to each of the Underwriters by Xxxxxx Xxxxxxxxxx Xxxxx Inc. in
connection herewith, the power of attorney executed by each of the Underwriters
in favor of Xxxxxx Xxxxxxxxxx Xxxxx Inc. in connection herewith, the Selected
Dealer Agreement and related documents and the preliminary Blue Sky memorandum
relating to the offering prepared by Pepper, Xxxxxxxx & Xxxxxxx LLP, counsel to
the Underwriters (collectively with any supplement thereto, the "Preliminary
Blue Sky Memorandum"), (iii) the costs incident to the authentication, issuance,
sale and delivery of the Shares to the Underwriters, (iv) the fees, expenses and
all other costs of qualifying the Shares for sale under the securities or Blue
Sky laws of those states in which the Shares are to be offered or sold,
including, without limitation, the reasonable fees (not in excess of $10,000)
and expenses of Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose, (v) the fees, expenses and
other costs of, or incident to, securing any review or approvals by or from the
NASD, including the reasonable fees and expenses of the Underwriters' counsel,
(vi) the filing fees of the SEC, (vii) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided, (viii) the Company's travel expenses in
connection with
20
meetings with the brokerage community and institutional investors, (ix) the
costs and expenses associated with settlement in same day funds (including, but
not limited to, interest or cost of funds expenses), if desired by the Company,
(x) any fees or costs payable to the Nasdaq Stock Market, Inc. as a result of
the offering, (xi) the cost of printing certificates for the Shares; (xii) the
cost and charges of any of the Company's transfer agent, (xiii) the costs (not
in excess of $25,000) of advertising the offering, including, without
limitation, with respect to the placement of "tombstone" advertisements in
publications selected by the Representatives, (xiv) the costs incident to the
consummation of the Exchange Agreements and (xv) all other costs and expenses
reasonably incident to the performance of the Company's and the Selling
Stockholders' obligations hereunder that are not otherwise specifically provided
for in this Section 6(a); provided, however, that, except as specifically set
forth in Section 6(c) hereof, (A) the Underwriters shall be responsible for
their out-of-pocket expenses, including those associated with meetings with the
brokerage community and institutional investors, other than the Company's travel
expenses, and the fees and expenses of their counsel for other than Blue Sky and
NASD representation, and (B) the Selling Stockholders shall be responsible for
any transfer or income taxes assessed with respect to the Shares sold by the
Selling Stockholders and any fees and expenses of the Selling Stockholders'
counsel and such other expenses as are agreed to by the Company and the Selling
Stockholders or as may be required by law or regulation, foreign or domestic.
(b) The Company shall pay as due any state
registration, qualification and filing fees and any accountable out-of-pocket
disbursements in connection with such registration, qualification or filing in
the states in which the Representatives determine to offer or sell the Shares.
7. Conditions of Underwriters' Obligations. The obligation of
each Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Stockholders, to
the performance by the Company of its covenants and obligations hereunder, and
to the following additional conditions:
(a) If required by the Regulations, the Prospectus
shall have been filed with the SEC pursuant to Rule 424(b) of the Regulations
within the applicable time period prescribed for such filing by the Regulations;
on or prior to the Closing Date or any Option Closing Date, as the case may be,
no stop order or other order preventing or suspending the effectiveness of the
Registration Statement or the sale of any of the Shares shall have been issued
under the Act or any state securities law and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of the Company, shall be contemplated by the SEC or
by any authority in any jurisdiction designated by the Representatives pursuant
to Section 5(f) hereof; and any request
21
on the part of the SEC for additional information shall have been complied with
to the reasonable satisfaction of counsel for the Underwriters.
(b) All corporate proceedings and other matters
incident to the authorization, form and validity of this Agreement, the Shares
and the form of the Registration Statement and the Prospectus, and all other
legal matters relating to this Agreement and the transactions contemplated
hereby, shall be satisfactory in all material respects to counsel to the
Underwriters. The Exchange shall have been consummated. The Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such
matters. The Representatives shall have received from the Underwriters' counsel,
Pepper, Xxxxxxxx & Xxxxxxx LLP, an opinion, dated as of the Closing Date and any
Option Closing Date, as the case may be, and addressed to the Representatives
individually and as the Representatives of the several Underwriters, which
opinion shall be satisfactory in all respects to the Representatives.
(c) The NASD shall have indicated that it has no
objection to the underwriting arrangements pertaining to the sale of any of the
Shares.
(d) The Representatives shall have received a copy of
an executed Lock-up Agreement from each person listed on Schedule V hereto.
(e) The Representatives shall have received at or
prior to the Closing Date from the Underwriters' counsel a memorandum or
summary, in form and substance satisfactory to the Representatives, with respect
to the qualification for offering and sale by the Underwriters of the Shares
under the securities or Blue Sky laws of such jurisdictions designated by the
Representatives pursuant to Section 5(f) hereof.
(f) On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of Saul,
Ewing, Xxxxxx & Xxxx, counsel for the Company and the Selling Stockholders dated
as of each such date and addressed to the Representatives individually and as
the Representatives of the several Underwriters to the effect set forth in
Exhibit B hereto or as is otherwise reasonably satisfactory to the
Representatives.
(g) On the Closing Date and any Option Closing Date,
there shall have been delivered to the Representatives signed opinions of Xxxxxx
& Xxxxxxx, patent counsel for the Company dated as of each such date and
addressed to the Representatives individually and as the Representatives of the
several Underwriters to the effect set forth in Exhibit C hereto or as is
otherwise reasonably satisfactory to the Representatives.
(h) At the Closing Date and any Option Closing Date:
(i) the Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated
22
therein in accordance with the Act and the Regulations and in all material
respects shall conform to the requirements of the Act and the Regulations, and
neither the Registration Statement nor any post-effective amendment thereto nor
the Prospectus and any amendments or supplements thereto shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) since the respective dates as of which information is given in the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto, except as otherwise stated
therein, there shall have been no material adverse change in the properties,
condition (financial or otherwise), results of operations, stockholders' equity,
business or management of the Company and the Subsidiaries, taken as a whole,
from that set forth therein, whether or not arising in the ordinary course of
business, other than as referred to in the Registration Statement or Prospectus
(iii) since the respective dates as of which information is given in the
Registration Statement and the Prospectus or any amendment or supplement
thereto, there shall have been no event or transaction, contract or agreement
entered into by the Company or any of the Subsidiaries, other than in the
ordinary course of business and as set forth in the Registration Statement or
Prospectus, that has not been, but would be required to be, set forth in the
Registration Statement or Prospectus, (iv) since the respective dates as of
which information is given in the Registration Statement and any post-effective
amendment thereto and the Prospectus and any amendments or supplements thereto,
there shall have been no material adverse change, loss, reduction, termination
or non-renewal of any contract to which the Company or any Subsidiary is a party
and (v) no action, suit or proceeding at law or in equity, domestic or foreign,
shall be pending or threatened against the Company or any Subsidiary that would
be required to be set forth in the Prospectus, other than as set forth therein,
and no proceedings shall be pending or threatened against or directly affecting
the Company or any Subsidiary before or by any federal, state or other
commission, board or administrative agency, domestic or foreign, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
properties, condition (financial or otherwise), results of operations,
stockholders' equity, or business of the Company or the Subsidiaries other than
as set forth in the Prospectus.
(i) The Representatives shall have received at the
Closing Date and any Option Closing Date certificates of the Chief Executive
Officer and the Chief Financial Officer of the Company dated as of the date of
the Closing Date or Option Closing Date, as the case may be, and addressed to
the Representatives, individually and as the Representatives of the several
Underwriters, to the effect that (i) the signers of the certificate have read
this Agreement and the representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made at and as of
the Closing Date or the Option Closing Date, as the case may be, and the Company
has complied in all material respects with all the agreements, fulfilled in all
material respects all the covenants and satisfied all the conditions on its part
to be performed, fulfilled or satisfied at or prior to the Closing Date or the
Option Closing Date, as the case may be, and (ii) the signers of the certificate
have examined the Registration Statement and the Prospectus and any amendments
or supplements thereto and that the conditions set forth in Section 7(h) of this
Agreement have been satisfied.
23
(j) The Representatives shall have received at the
Closing Date and any Option Closing Date certificates of or on behalf of the
Selling Stockholders dated as of the date of the Closing Date or Option Closing
Date, as the case may be, and addressed to the Representatives, individually and
as the Representatives of the several Underwriters, to the effect that (i) the
Selling Stockholders have read this Agreement and the representations and
warranties of the Selling Stockholders in this Agreement are true and correct in
all material respects, as if made at and as of the Closing Date or Option
Closing Date, as the case may be, and (ii) the Selling Stockholders have
examined the Registration Statement and the Prospectus and any amendments or
supplements thereto and that the conditions set forth in Section 7(h) of this
Agreement have been satisfied with respect to the Selling Stockholders.
(k) At the time this Agreement is executed and at the
Closing Date and any Option Closing Date the Representatives shall have received
a letter addressed to the Representatives individually and as the
Representatives of the several Underwriters, and in form and substance
satisfactory to the Representatives in all respects (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
from KPMG Peat Marwick LLP dated as of the date of this Agreement, the Closing
Date or the Option Closing Date, as the case may be:
(i) confirming that they are independent
certified public accountants within the meaning of the Act and the Regulations
and stating that the section of the Registration Statement under the caption
"Experts" is correct insofar as it relates to them;
(ii) stating that, in their opinion, the
consolidated financial statements, schedules and notes of the Company and the
Subsidiaries audited by them and included in the Registration Statement comply
in form in all material respects with the applicable accounting requirements of
the Act and the Regulations;
(iii) stating that, on the basis of
specified procedures, which included the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information, as described in SAS No. 71, Interim Financial Information (with
respect to the latest unaudited consolidated financial statements of the
Company), a reading of the latest available unaudited interim consolidated
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
minutes of the meetings of the stockholders and the Board of Directors of the
Company and the Subsidiaries, and audit and compensation committees of such
Boards, if any, and inquiries to certain officers and other employees of the
Company and the Subsidiaries responsible for operational, financial and
accounting matters and other specified procedures and inquiries, nothing has
come to their attention that would cause them to believe that (A) the unaudited
consolidated financial statements of the Company included in the Registration
Statement, (1) do not comply in form in all material respects with the
applicable accounting requirements of the Act and the Regulations, or (2) any
material modifications should be made to such unaudited financial statements for
them to be in conformity with generally accepted accounting principles; (B) at
the date of the latest
24
available unaudited interim consolidated financial statements of the Company and
a specified date not more than five business days prior to the date of such
letter, there was any change in the capital stock or debt of the Company or any
decrease in net current assets, total assets or stockholders' equity of the
Company as compared with the amounts shown in the March 31, 1997 balance sheet
of the Company included in the Registration Statement, or that for the periods
from April 1, 1997 to the date of the latest available unaudited financial
statements of the Company and to a specified date not more than five days prior
to the date of the letter, there were any decreases, as compared to the
corresponding periods in the prior year, in revenues, gross profit, operating
income or total or per share amounts of net earnings, except in all instances
for changes, decreases or increases which the Registration Statement discloses
have occurred or may occur and except for such other changes, decreases or
increases which the Representatives shall in their sole discretion accept; or
(C) the unaudited pro forma consolidated financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X under the
Act and that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements; and
(iv) stating that they have compared
specific dollar amounts, numbers of shares and other numerical data and
financial information set forth in the Registration Statement that have been
specified by the Representatives prior to the date of this Agreement, to the
extent that such information is derived from the accounting records subject to
the internal control structure, policies and procedures of the Company's or the
Subsidiaries' accounting systems, or has been derived directly from such
accounting records by analysis or comparison or has been derived from other
records and analysis maintained or prepared by the Company or the Subsidiaries
with the results obtained from the application of readings, inquiries and other
appropriate procedures (which procedures do not constitute an audit in
accordance with generally accepted auditing standards) set forth in the letter,
and found them to be in agreement.
(l) There shall have been duly tendered to the
Representatives for the respective accounts of the Underwriters certificates
representing all of the Shares to be purchased by the Underwriters on the
Closing Date or any Option Closing Date, as the case may be.
(m) At the Closing Date and any Option Closing Date,
the Representatives shall have been furnished such additional documents,
information and certificates as they shall have reasonably requested.
(n) The issuance and sale of the Shares shall be
legally permitted under applicable Blue Sky or state securities laws so long as
such sales are made in accordance with the Preliminary Blue Sky Memorandum.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the
25
Representatives and Underwriters' counsel. The Company and the Selling
Stockholders shall furnish the Representatives with such conformed copies of
such opinions, certificates, letters and other documents as they shall
reasonably request. If any condition to the Underwriters' obligations hereunder
to be fulfilled prior to or at the Closing Date or any Option Closing Date, as
the case may be, is not fulfilled, the Representatives may on behalf of the
several Underwriters, terminate this Agreement with respect to the Closing Date
or such Option Closing Date, as applicable, or, if it so elects, waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment. Any such termination shall be without liability of the Underwriters
to the Company or the Selling Stockholders.
8. Indemnification and Contribution.
(a) The Company and each Selling Stockholder,
severally and not jointly, shall indemnify and hold harmless each Underwriter,
and each person, if any, who controls each Underwriter within the meaning of the
Act, against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or in connection with any
investigation or inquiry of, or action or proceeding that may be brought
against, the respective indemnified parties, arising out of or based upon any
breach of its, his or her respective representations and warranties made in this
Agreement and any untrue statements or alleged untrue statements of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, any application or other document (in this Section 8 collectively
called "application") executed by the Company and based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify all or any part of the Shares under the securities laws thereof or filed
with the SEC or the NASD, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing indemnity:
(i) shall not apply to statements in or
omissions from any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any application or in any communication to the SEC, as the
case may be, made in reliance upon and in conformity with information supplied
to the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein; and
(ii) with respect to any Preliminary
Prospectus, shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares if, at or prior to the written confirmation of the sale of
such Shares, a copy of an amended Preliminary Prospectus or the Prospectus (or
the Prospectus as amended or supplemented) was delivered to such Underwriter but
was not sent, or delivered to such person and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in the
26
amended Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented).
This indemnity agreement will be in addition to any liability the Company and
the Selling Stockholders may otherwise have.
(b) Each Underwriter, severally and not jointly,
shall indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, each Selling Stockholder, and each other person, if any,
who controls the Company or a Selling Stockholder within the meaning of the Act
to the same extent as the foregoing indemnities from the Company and the Selling
Stockholders to the several Underwriters, but only with respect to any loss,
liability, claim, damage or expense resulting from statements or omissions, or
alleged statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any application or in any
communication to the SEC, as the case may be, made in reliance upon and in
conformity with information supplied to the Company in writing by or on behalf
of any Underwriter through the Representatives expressly for use therein. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) If any action, inquiry, investigation or
proceeding is brought against any person in respect of which indemnity may be
sought pursuant to any of the two preceding paragraphs, such person (hereinafter
called the "indemnified party") shall, promptly after notification of, or
receipt of service of process for, such action, inquiry, investigation or
proceeding, notify in writing the party or parties against whom indemnification
is to be sought (hereinafter called the "indemnifying party") of the institution
of such action, inquiry, investigation or proceeding and the indemnifying party,
upon the request of the indemnified party, shall assume the defense of such
action, inquiry, investigation or proceeding, including the employment of
counsel (reasonably satisfactory to such indemnified party) and payment of
expenses. No indemnification provided for in this Section 8 shall be available
to any indemnified party who shall fail to give such notice if the indemnifying
party does not have knowledge of such action, inquiry, investigation or
proceeding, to the extent that such indemnifying party has been materially
prejudiced by the failure to give such notice, but the omission to so notify the
indemnifying party shall not relieve the indemnifying party otherwise than under
this Section 8. Such indemnified party or controlling person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such action. If such
indemnified party or parties shall have been advised by counsel that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties or that there may be legal defenses available
to such indemnified party or parties different from or in addition to those
available to the indemnifying party or parties, the indemnified party or parties
shall be entitled to select counsel (such counsel, "Separate Counsel") to
conduct the defense to the extent determined by
27
such counsel to be necessary to protect the interests of the indemnified party
or parties and the reasonable fees and expenses of such Separate Counsel shall
be borne by the indemnifying party; provided, however, that if the indemnified
parties engage more than one Separate Counsel, then the indemnifying party's
liability with respect to such Separate Counsel shall be limited, in the
aggregate, to an amount equal to the highest amount of reasonable fees and
expenses charged or incurred by a single Separate Counsel, which amount shall be
divided among the indemnified parties on a pro rata basis in accordance with the
relative amounts of reasonable fees and expenses of their respective Separate
Counsel. Expenses covered by the indemnification in this Section 8 shall be paid
by the indemnifying party as they are incurred by the indemnified party.
Anything in this Section 8 to the contrary notwithstanding, the indemnifying
party shall not be liable for any settlement of any such claim effected without
its written consent.
(d) Each Selling Stockholder's aggregate liability
under this Section 8 shall be limited to an amount equal to the lesser of (i)
such Selling Stockholder's pro-rata portion of the total of all losses,
liabilities, claims, damages or expenses indemnified against (such pro-rata
portion being equal to the number of Shares sold by such Selling Stockholder,
divided by the total number of Shares sold by all of the Selling Stockholders)
or (ii) the net proceeds (before deducting expenses) received by such Selling
Stockholder from the sale of such Selling Stockholder's Shares pursuant to this
Agreement.
(e) If the indemnification provided for in this
Section 8 is unavailable to, or insufficient to hold harmless an indemnified
party under Sections 8(a) or (b) hereof in respect of any losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to therein, except by reason of the
provisos set forth in Section 8(a) hereof or the failure to give notice as
required in Section 8(c) hereof (provided that the indemnifying party does not
have knowledge of the action, inquiry, investigation or proceeding and to the
extent such party has been materially prejudiced by the failure to give such
notice), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company or the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company or each Selling Stockholder on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, liabilities, claims or reasonable expenses (or actions,
inquiries, investigations or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company or each Selling Stockholder 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 or each
Selling Stockholder bears to the total
28
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or a Selling Stockholder on the one hand or the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Selling
Stockholders or the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, liabilities, claims,
damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include 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 8(e), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' and the Selling Stockholders' obligations
in this Section 8(e) to contribute are several in proportion to their individual
underwriting obligations and number of Shares sold, respectively, and not joint.
9. Representations and Agreements to Survive Delivery. Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date and any Option Closing Date; and
such representations, warranties and agreements of the Underwriters, the Company
and the Selling Stockholders, including, without limitation, the indemnity and
contribution agreements contained in Section 8 hereof and the agreements
contained in Sections 6, 9, 10 and 13 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, and shall survive delivery of the Shares
and termination of this Agreement, whether before or after the Closing Date or
any Option Closing Date.
10. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at 10:00
a.m., Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except
29
that the provisions of Sections 6, 8, 9, 10 and 13 hereof shall be effective
upon execution hereof. The time of the public offering, for the purpose of this
Section 10, shall mean the time when any of the Shares are first released by the
Underwriters for offering by dealers. The Representatives may prevent the
provisions of this Agreement (other than those contained in Sections 6, 8, 9, 10
and 13) hereof from becoming effective without liability of any party to any
other party, except as noted below, by giving the notice indicated in Section
10(c) hereof before the time the other provisions of this Agreement become
effective.
(b) The Representatives shall have the right to
terminate this Agreement at any time prior to the Closing Date as provided in
Sections 7 and 11 hereof or if any of the following have occurred:
(i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company or its Subsidiaries, or the earnings, business affairs, management or
business prospects of the Company or its Subsidiaries, whether or not arising in
the ordinary course of business, that would, in the Representatives' reasonable
judgment, make the offering or delivery of the Shares impracticable;
(ii) any outbreak of hostilities or other
national or international calamity or crisis or change in economic, political or
financial market conditions if the effect on the financial markets of the United
States of such outbreak, calamity, crisis or change is material and adverse and
would, in the Representatives' reasonable judgment, make the offering or
delivery of the Shares impracticable;
(iii) suspension of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq Stock Market or the over-the-counter market or limitation on prices
(other than limitations on hours or numbers of days of trading) for securities
or the promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority that in the Representatives'
reasonable opinion materially and adversely affects trading on such exchange or
the over-the-counter market;
(iv) declaration of a banking moratorium by
either federal or Pennsylvania state authorities;
(v) the taking of any action by any federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representatives' reasonable opinion has a material adverse effect on
the securities markets in the United States; or
(vi) trading in any securities of the
Company shall have been suspended or halted by the Nasdaq Stock Market or the
SEC.
30
(c) If the Representatives elect to prevent this
Agreement from becoming effective or to terminate this Agreement as provided in
this Section 10, the Representatives shall notify the Company and the Selling
Stockholders thereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.
11. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default
in its or their obligation to purchase Firm Shares or Optional Shares hereunder,
and if the Firm Shares or Optional Shares with respect to which such default
relates do not exceed the aggregate of 10% of the number of Firm Shares or
Optional Shares, as the case may be, that all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Optional Shares to which the
default relates shall be purchased severally by the non-defaulting Underwriters
in proportion to their respective commitments hereunder.
(b) If such default relates to more than 10% of the
Firm Shares or Optional Shares, as the case may be, the Representatives may, in
their discretion, arrange for another party or parties (including a
non-defaulting Underwriter) to purchase such Firm Shares or Optional Shares to
which such default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 11, this Agreement
may be terminated by the Representatives or by the Company without liability on
the part of the several Underwriters (except as provided in Section 8 hereof) or
the Company (except as provided in Sections 6 and 8 hereof), but nothing herein
shall relieve a defaulting Underwriter of its liability, if any, to the other
several Underwriters and to the Company for damages occasioned by its default
hereunder.
(c) If the Firm Shares or Optional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters, or
are to be purchased by another party or parties as aforesaid, the
Representatives or the Company shall have the right to postpone the Closing Date
or any Option Closing Date, as the case may be, for a reasonable period but not
in any event exceeding seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements, and the Company agrees to file promptly
any amendment to the Registration Statement or supplement to the Prospectus that
in the opinion of counsel for the Underwriters may thereby be made necessary.
The terms "Underwriters" and "Underwriter" as used in this Agreement shall
include any party substituted under this Section 11 with like effect as if it
had originally been a party to this Agreement with respect to such Firm Shares
and/or Optional Shares.
12. Information Furnished by Underwriters. The statement set
forth on the inside cover page regarding stabilization and under the caption
"Underwriting" (except for the [fourth to last and second to last] paragraphs
thereunder) in any Preliminary Prospectus and the Prospectus constitute the
only written
31
information furnished by or on behalf of any Underwriter referred to in Sections
1(a)(ii) and 8 hereof.
13. Notice. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to such Underwriter, c/o Janney Xxxxxxxxxx Xxxxx Inc.,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X.
Xxxxxx, with a copy to Pepper, Xxxxxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esquire; if sent
to the Company shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to inTEST Corporation, 0 Xxx Xxx Xxxx, Xxxxxx Xxxx, Xxx
Xxxxxx 00000, Attention: Xxxx X. Xxxx, with a copy to Saul, Ewing, Xxxxxx &
Xxxx, 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxxx, Esquire; if sent to the Selling Stockholders shall be mailed,
delivered, telexed, telegrammed, telegraphed or telecopied and confirmed to Xxxx
X. Xxxx or Xxxx X. Xxxxx, Xx., as Attorney-in-Fact, c/o inTEST Corporation, (at
the address listed above), with a copy to Saul, Ewing, Xxxxxx & Xxxx Attention:
Xxxxx X. Xxxxxxxx, Esquire, (at the address listed above).
14. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the several Underwriters, the Company, the
Subsidiaries, the Selling Stockholders and the controlling persons, directors
and officers thereof, and their respective successors, assigns, heirs and legal
representatives, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of
this Agreement or any provision herein contained. The terms "successors" and
"assigns" shall not include any purchaser of the Shares merely because of such
purchase.
In all dealings with the Company and the Selling Stockholders
under this Agreement, the Representatives shall act on behalf of each of the
several Underwriters, and the Company and the Selling Stockholders shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by the Representatives jointly or by Xxxxxx Xxxxxxxxxx Xxxxx Inc. on
behalf of the Representatives.
15. Definition of Business Day. For purposes of this
Agreement, "business day" means any day on which the Nasdaq National Market is
opened for trading.
16. Counterparts. This Agreement may be executed in one or
more counterparts and by facsimile signatures and all such counterparts and
facsimile signatures will constitute one and the same instrument.
17. Construction. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and performed entirely within such Commonwealth.
All references herein to the knowledge of the Company shall be deemed to include
the knowledge of each of the Subsidiaries.
32
If the foregoing correctly sets forth your understanding of
our agreement, please sign and return to the Company the enclosed duplicate
hereof, whereupon it will become a binding agreement in accordance with its
terms.
Very truly yours,
INTEST CORPORATION
By:________________________________________________
Xxxx X. Xxxx
Chairman of the Board and Chief
Executive Officer
THE SELLING STOCKHOLDERS
By: _______________________________________________
Attorney-in-Fact, acting on behalf of each
of the Selling Stockholders named in
Schedule II hereto.
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXX & COMPANY, INC.
As Representatives of the Several Underwriters
named in Schedule I hereto
By: XXXXXX XXXXXXXXXX XXXXX INC.
By:_____________________________________
Authorized Representative
33
JOINDER
Each of the Subsidiaries, intending to be legally bound,
hereby joins this Agreement for purposes of Sections 1 and 9 hereof.
INTEST LIMITED
______________________________
By:
Title:
INTEST KABUSHIKI KAISHA
______________________________
By:
Title:
INTEST PTE, LIMITED
______________________________
By:
Title:
[DELAWARE SUB]
______________________________
By:
Title:
[DELAWARE SUB]
______________________________
By:
Title:
34
SCHEDULE I
Schedule of Underwriters
------------------------
Number of Firm Number of
Shares to be Optional Shares
Underwriter Purchased to be Purchased
----------- --------- ---------------
Xxxxxx Xxxxxxxxxx Xxxxx
Inc., Philadelphia, PA
Xxxxxxx & Company, Inc.
New York, NY
Total ============ ============
SCHEDULE II
Schedule of Selling Stockholders
--------------------------------
Number of Firm Number of
Shares to be Optional Shares
Selling Stockholder Sold to be Sold
------------------- --------- ---------------
Total =========== =============
SCHEDULE III
List of Subsidiary Stockholders
-------------------------------
SCHEDULE IV
Stockholder NASD Affiliations
-----------------------------
SCHEDULE V
List of Persons Who Are to Deliver Lock-Up
Agreements Called for Under Sections 5(k) and 7(d)
--------------------------------------------------
EXHIBIT A
Subsidiaries of the Company, Jurisdiction
of Incorporation and Percentage Ownership by the Company
--------------------------------------------------------
Subsidiary Jurisdiction % Ownership
---------- ------------ -----------
EXHIBIT B
Matters to be Covered in the Opinion of
Saul, Ewing, Xxxxxx & Xxxx
Counsel for the Company
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, with full power and
authority to conduct all of the activities conducted by it, own or lease all of
the assets owned or leased by it, and conduct its business all as described in
the Registration Statement and the Prospectus; and is duly licensed or qualified
to do business and in good standing as a foreign corporation in all
jurisdictions, domestic or foreign, in which the nature of the activities
conducted by it and/or the character of the assets owned and leased by it makes
such qualification or license necessary.
(2) Each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, domestic or foreign, with full power and authority to conduct all
of the activities conducted by it, own or lease all of the assets owned or
leased by it, and conduct its business all as described in the Registration
Statement and the Prospectus; and is duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions, domestic or
foreign, in which the nature of the activities conducted by it and/or the
character of the assets owned and leased by it makes such qualification or
license necessary;
(3) No authorization, approval, consent or license of any
governmental or regulatory body, domestic or foreign, except as may be required
under the Act or the blue sky laws of the various jurisdictions, is required in
connection with the (A) authorization, issuance, transfer, sale or delivery of
the Shares to be sold by the Company; (B) execution, delivery and performance of
the Agreement by the Company or (C) taking of any action contemplated herein or
in the Registration Statement or the Prospectus, including, without limitation,
the Exchange Agreements, or if so required, all such authorizations, approvals,
consents and licenses, specifying the same, have been obtained and are in full
force and effect and have been disclosed to the Representatives.
(4) The Company has authorized and outstanding capital stock,
stock options and other derivative securities as set forth in the Registration
Statement and the Prospectus. The outstanding shares of the Common Stock,
including the shares of the Common Stock issued pursuant to the Exchange
Agreements, have been, and all of the Shares will be, upon issuance and payment
therefor, duly authorized, validly issued, fully paid and nonassessable, are not
subject to preemptive rights and have not been issued in violation of any
statutory preemptive rights or similar contractual rights. The holders of shares
of the Common Stock are not and will not be subject to personal liability solely
by reason of being such holders. The issue and sale of the Shares by the Company
have been duly and validly authorized. The Common Stock has been duly authorized
for quotation or listing on the Nasdaq National Market. All issuances, including
the shares of Common Stock issued
pursuant to the Exchange Agreement, and repurchases of securities of the Company
and the Subsidiaries by the Company and the Subsidiaries were exempt from, or
complied in all material respects with, the provisions of all applicable
federal, state and foreign securities and corporate laws.
(5) No holder of any securities of the Company has the right
to require registration of shares of the Common Stock or other securities of the
Company. The description of the Common Stock and the Shares contained in the
Registration Statement and the Prospectus conforms to the rights set forth in
the instruments or certificates defining the same and is in conformity with the
requirements of the Act and the Regulations.
(6) The Company is not an "investment company" as defined in
Section 3(a) of the Investment Company Act and, if the Company conducts its
business as set forth in the Registration Statement and the Prospectus, will not
become an "investment company" and will not be required to register under the
Investment Company Act; the Company has not, prior to the date of the
Prospectus, been required to make any filings pursuant to the Exchange Act.
(7) The Company has full power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except insofar as rights to indemnity
or contribution may be limited by applicable law or equitable principles, and
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principles.
(8) Nothing has come to such counsel's attention to give such
counsel reason to believe that any of the representations and warranties of the
Company or the Selling Stockholders contained in the Agreement or in any
certificate or document contemplated under the Agreement to be delivered is not
true or correct or that any of the covenants and agreements contained in the
Agreement or in any such certificate or document to be performed on the part of
the Company or any of the respective conditions contained in the Agreement or in
any such certificate or document, or set forth in the Registration Statement or
the Prospectus, to be fulfilled or complied with by the Company has not been or
will not be duly and timely performed, fulfilled or complied with in any
material respect.
(9) The Registration Statement and the Prospectus, and each
amendment thereof or supplement thereto, comply as to form and substance with,
and are responsive in all material respects to, the requirements of the Act and
the Rules and Regulations (except that no opinion need be expressed as to
matters concerning financial statements and other financial data and related
notes, schedules and financial or statistical data contained in the Registration
Statement or the Prospectus).
(10) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to the attention
of such counsel to lead it to believe that, both as of the Effective Date and as
of the Closing Date and any Option
Closing Date, either the Registration Statement or the Prospectus, or any
amendment or supplement thereto, 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, in light of the
circumstances under which they were made, not misleading (except that no opinion
need be expressed as to matters concerning financial statements and other
financial data and related notes, schedules and financial or statistical data
contained in the Registration Statement or the Prospectus).
(11) Such counsel has read all contracts specifically
enumerated in the Registration Statement and the Prospectus, and such contracts
are fairly summarized or described therein, conform in all material respects to
the descriptions thereof contained therein, and are filed as exhibits thereto,
if required, and there are no contracts or documents required to be so
summarized or disclosed or so filed which have not been so summarized or
disclosed or so filed.
(12) The Registration Statement has become effective under the
Act, and (A) no stop order suspending the effectiveness of the Registration
Statement has been issued and (B) to the best of such counsel's knowledge, no
proceedings for that purpose have been instituted or are threatened, pending or
contemplated. The opinion delivered at the Closing Date shall state that all
filings required by Rule 424 and Rule 430A of the Rules and Regulations have
been made, to the extent that such rules are utilized.
(13) The Exchange has been consummated and the Shares to be
issued pursuant thereto have been duly issued in accordance therewith. The
outstanding shares of capital stock or other evidence of ownership of the
Subsidiaries are duly authorized, validly issued, fully paid and non-assessable,
are not subject to preemptive rights and have not been issued in violation of
any statutory preemptive rights or similar contractual rights. The Company, to
the knowledge of such counsel, owns 100% of the capital stock of the
Subsidiaries, in all cases, free and clear of all liens, encumbrances and
security interests.
(14) The execution and delivery of the Agreement by the
Company and the Subsidiaries, the consummation by the Company and the
Subsidiaries of the transactions herein contemplated, including, without
limitation, the Exchange Agreements, and the compliance with the terms of this
Agreement do not and will not conflict with or result in a breach of any of the
terms or provisions of or violate or constitute a default under, the Certificate
of Incorporation or Bylaws or other constituent documents, domestic or foreign,
of the Company or the Subsidiaries, or any indenture, mortgage or other
agreement or instrument to which the Company or the Subsidiaries is a party or
by which the Company or the Subsidiaries or any material portion of its
properties is bound of which counsel has knowledge, or any existing statute,
rule or regulation, or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Company or the Subsidiaries or any material portion of its properties.
(15) All real and personal property described in the
Registration Statement and Prospectus as being leased by the Company or the
Subsidiaries is held by the Company under valid leases.
(16) There are no legal proceedings pending or, to the
knowledge of such counsel, threatened against the Company or the Subsidiaries
which are required to be disclosed in the Registration Statement, except as
described therein.
(17) Except as described in the Prospectus, the Company or the
Subsidiaries does not own any interest in any corporation, partnership, joint
venture, trust or other business entity.
(18) Each Selling Stockholder has full power and authority to
enter into the Agreement and the Power of Attorney and Custody Agreement (the
"Custody Agreement"). All authorizations and consents necessary for the
execution and delivery of the Agreement and the Custody Agreement on behalf of
each Selling Stockholder have been given. The delivery of the Shares on behalf
of each Selling Stockholder pursuant to the terms of the Agreement and payment
therefor by the Underwriters will pass marketable title to the Shares to the
Underwriters, free and clear of all liens, encumbrances and claims.
(19) Each of the Agreement and the Custody Agreement has been
duly authorized, executed and delivered by each Selling Stockholder, is a valid
and binding agreement of each Selling Stockholder and the Agreement and the
Custody Agreement are enforceable against each Selling Stockholder in accordance
with the terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principals.
(20) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body, domestic
or foreign, is required in connection with the authorization, issuance,
transfer, sale or delivery of the Shares by or on behalf of each Selling
Stockholder, in connection with the execution, delivery and performance of the
Agreement and the Custody Agreement by each Selling Stockholder or in connection
with the taking by or on behalf of each Selling Stockholder of any action
contemplated thereby or, if so required, all such consents, approvals,
authorizations and orders, specifying the same, have been obtained and are in
full force and effect, except such as have been obtained under the Act or the
Regulations.
(21) The execution and delivery of the Agreement and the
Custody Agreement by each Selling Stockholder, the consummation by each Selling
Stockholder of the transactions herein contemplated and the compliance by each
Selling Stockholder with the terms thereof do not and will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of any Selling Stockholder 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 result in the acceleration of any obligation under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which any Selling Stockholder is a
party or by which it or any of its properties is bound or affected which is
known to such counsel, or any, domestic or foreign, statute, judgment, ruling,
decree, order, rule or regulation of any, domestic or foreign, court or other
governmental agency or body applicable to each Selling Stockholder.
(22) There are no transfer or similar taxes payable in
connection with the sale and delivery of the Shares by each Selling Stockholder
to the Underwriters, except as specified in such opinion.
In rendering such opinions, counsel for the Company may set
forth that as to certain matters of fact, such counsel is relying on one or more
certificates of public officials, governmental agencies or officers of the
Company. In addition, as to matters of law, counsel for the Company may rely as
to matters involving the application of laws other than the laws of the United
States, the laws of New Jersey, the laws of Pennsylvania, the laws of Delaware
and jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to the Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws.
Unless the context clearly indicates otherwise, the term
"Company" as used in this Exhibit, shall include the Subsidiaries. The opinion
of counsel for the Company shall include a statement to the effect that it may
be relied upon by counsel for the Underwriters in their opinion delivered to the
Underwriters.
EXHIBIT C
Matters to be Covered in the Opinion of
Xxxxxx & Xxxxxxx
Patent Counsel for the Company
(1) The statements in the Prospectus under the headings "Risk
Factors -- Uncertainty of Patents and Proprietary Rights; Risk of Litigation";
"Business -- Patents and Other Proprietary Rights"; "Business - Competition" and
"Experts" insofar as such statements constitute summary descriptions of the
legal matters, documents, proceedings or descriptions referred to therein,
fairly present the information called for with respect to such legal matters,
documents, proceedings or descriptions. To our knowledge, except as described in
the Prospectus, neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with (and we know of no infringement of or
conflict with) asserted rights of others in any patents, trade secrets,
copyrights, trademarks, service marks or trade names. To our knowledge, except
as set forth in the Prospectus, there is no infringement or violation by others
of any of the Company's patents, trade secrets, copyrights, trademarks, service
marks or trade names. Except as set forth in the Prospectus, to our knowledge
there are no legal or governmental proceedings pending or threatened related to
patents, trade secrets, copyrights, trademarks, service marks or trade names of
others to which the Company or any of its subsidiaries is a party or, except for
ordinary proceedings initiated by the Company or any of its subsidiaries seeking
statutory rights, registrations or certifications from governmental authorities,
to which any intellectual property of the Company or any of its subsidiaries is
subject.
(2) To our knowledge there is no contract or other document
relating to patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks or
trade names of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Prospectus that is not
filed or described as required.
(3) Attached hereto as Schedule A is an accurate and complete
list describing all patents issued to, and all patent applications filed on
behalf of, the Company or any of its subsidiaries with the U.S. Patent and
Trademark Office or with patent authorities in other countries. It is our
opinion that, based on the declarations of the named inventor(s) in the
applications and our investigation of the facts concerning the inventions by
such inventor(s), the named inventor(s) are the original and first inventor(s)
of the subject matter which is claimed. We are not aware of any other patents
issued to, or patent applications filed by or on behalf of, the Company or any
of its subsidiaries. On the basis of our review of assignments executed by the
inventors, it is our opinion that all the inventors have assigned all their
right, title and interest in the applications and the patents listed on Schedule
A to the Company or its subsidiaries. It is our opinion that the patents listed
on Schedule A are valid and enforceable and we are not aware of any information
that would render the patents, or any of the claims therein, invalid or
unenforceable. Further, except as set forth in the Prospectus, we are not aware
of any actions brought or threatened by any party alleging the invalidity or
unenforceability of the patents listed
on Schedule A. It is our opinion that neither U.S. Patent 4,230,985, issued on
October 28, 1980 to Xxxxxxx et al., nor U.S. Patent 4,284,311, issued on August
8, 1981 to Xxxxxxx et al., whether such patents are taken alone, together or in
combination with any other prior art known to us, will result in the
invalidation of any of the claims of U.S. Patent 4,589,815, issued on May 20,
1986, which is currently undergoing reexamination in the U.S. Patent and
Trademark Office. It is our opinion that the Company has not or is not
infringing U.S. Patent 4,230,985, issued on October 28, 1980 to Xxxxxxx et al.,
nor U.S. Patent 4,284,311, issued on August 8, 1981 to Xxxxxxx et al.
(4) To our knowledge: (i) the Company and its subsidiaries
own, or are licensed or otherwise possess adequate rights to use, all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
(collectively "Intellectual Property") which are used in or necessary for the
conduct of their respective businesses as described in the Prospectus, except as
otherwise described in the Prospectus, no claims have been asserted by any
person to the use of any Intellectual Property or challenging or questioning the
validity or effectiveness of any Intellectual Property; and (ii) the use, in
connection with the business and operations of the Company and its subsidiaries,
of any Intellectual Property does not infringe on the rights of any person to
the extent that an unfavorable decision, ruling or finding as to such
infringement could materially adversely affect the business, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.
(5) We hereby consent to the reference to our firm under the
heading "Experts" in the Prospectus.
