DRAFT
10/3/96
EXHIBIT 1
3,000,000/1/ Shares
Accent Color Sciences, Inc.
Common Stock
UNDERWRITING AGREEMENT
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______________ __, 1996
XXXXX & COMPANY
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representatives of the Several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Accent Color Sciences, Inc., a Connecticut
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corporation (the "Company"), proposes to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 3,000,000 shares of
Common Stock, no par value (the "Common Stock") of the Company. The aggregate
of 3,000,000 shares so proposed to be sold is hereinafter referred to as the
"Firm Stock". The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 3 hereof, up to an additional 450,000
shares of Common Stock (the "Optional Stock"). The Firm Stock and the Optional
Stock are hereinafter collectively referred to as the "Stock". Xxxxx & Company
("Cowen") and Xxxxxx Xxxxxxxxxx Xxxxx Inc. are acting as representatives of the
several Underwriters and in such capacity are hereinafter referred to as the
"Representatives".
2. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-___) in the
form in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become effective
with respect to the Stock, including any preeffective prospectuses included
as part of the registration statement as originally filed or as part of any
amendment or supplement thereto, or filed pursuant to Rule
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/1/ Plus an option to purchase up to 450,000 additional shares from the
Company to cover over-allotments.
424 under the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, copies of
which have heretofore been delivered to you, has been carefully prepared by
the Company in conformity with the requirements of the Securities Act and
has been filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have heretofore
been delivered to you, have been so prepared and filed. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term
"Registration Statement" as used in this Agreement shall also include any
registration statement relating to the Stock that is filed and declared
effective pursuant to Rule 462(b) under the Securities Act. All copies of
Registration Statements that have been delivered to you are identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to the Commission's Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-
T. The term "Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement, or, (A) if the prospectus
included in the Registration Statement omits information in reliance on
Rule 430A under the Securities Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectus filed with the Commission pursuant to Rule 424(b) and (B) if
prospectuses that meet the requirements of Section 10(a) of the Securities
Act are delivered pursuant to Rule 434 under the Securities Act, then (i)
the term "Prospectus" as used in this Agreement means the "prospectus
subject to completion" (as such term is defined in Rule 434(g) under the
Securities Act) as supplemented by (a) the addition of Rule 430A
information or other information contained in the form of prospectus
delivered pursuant to Rule 434(b)(2) under the Securities Act or (b) the
information contained in the term sheets described in Rule 434(b)(3) under
the Securities Act, and (ii) the date of such prospectuses shall be deemed
to be the date of the term sheets. The term "Preeffective Prospectus" as
used in this Agreement means the prospectus subject to completion in the
form included in the Registration Statement at the time of the initial
filing of the Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to the date of
the Prospectus. For purposes of this Agreement, all references to the
Registration Statement, any Preeffective Prospectus, the Prospectus, or any
amendment or supplement to any of the foregoing shall be deemed to include
the respective copies thereof filed with the Commission pursuant to XXXXX.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and, at
its date of issue, each Preeffective Prospectus conformed in all material
respects with the requirements of the Securities Act and did not include
any untrue statement of a material fact or omit to state a
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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; and, when the Registration Statement becomes
effective and at all times subsequent thereto up to and including the
Closing Date, the Registration Statement and the Prospectus and any
amendments or supplements thereto contained and will contain all material
statements and information required to be included therein by the
Securities Act and conformed and will conform in all material respects to
the requirements of the Securities Act and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
included or will 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, in light of the circumstances under which they were
made, not misleading; provided, however, that the foregoing
representations, warranties and agreements shall not apply to information
contained in or omitted from any Preeffective Prospectus or the
Registration Statement or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter,
directly or through you, specifically for use in the preparation thereof;
there is no franchise, lease, contract, agreement or document required to
be described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement which is not described or filed
therein as required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration Statement
are accurate and complete descriptions of such documents in all material
respects.
(c) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth
or contemplated in the Prospectus, the Company has not incurred any
liabilities or obligations, direct or contingent, nor entered into any
transactions not in the ordinary course of business, and there has not been
any material adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results of
operations of the Company or any change in the capital stock, short-term or
long-term debt of the Company.
(d) The financial statements, together with the related notes and
schedules, set forth in the Prospectus and elsewhere in the Registration
Statement fairly present, on the basis stated in the Registration
Statement, the financial position and the results of operations and changes
in financial position of the Company at the respective dates or for the
respective periods therein specified. Such statements and related notes
and schedules have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as may be set
forth in the Prospectus. The selected financial and statistical data set
forth in the Prospectus under the caption "Selected Financial Data" fairly
present, on the basis stated in the Registration Statement, the information
set forth therein.
(e) Price Waterhouse LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
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(f) The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of its jurisdiction of
organization, with power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the
Prospectus; the Company is in possession of and operating in compliance
with all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders required for the conduct of its business,
all of which are valid and in full force and effect; and the Company is
duly qualified to do business and in good standing as a foreign corporation
in all other jurisdictions where its ownership or leasing of properties or
the conduct of its business requires such qualification. The Company has
all requisite power and authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications, licenses and permits
of and from all public regulatory or governmental agencies and bodies to
own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus. The Company does not own or control,
directly or indirectly, any corporation, association or other entity.
(g) The Company's authorized and outstanding capital stock is on the
date hereof, and will be on the Closing Date, as set forth under the
heading "Capitalization" in the Prospectus; the outstanding shares of
common stock of the Company conform to the description thereof in the
Prospectus and have been duly authorized and validly issued and are fully
paid and nonassessable and have been issued in compliance with all federal
and state securities laws and were not issued in violation of or subject to
any preemptive rights or similar rights to subscribe for or purchase
securities and conform to the description thereof contained in the
Prospectus. Except as disclosed in and or contemplated by the Prospectus
and the financial statements of the Company and related notes thereto
included in the Prospectus, the Company does not have outstanding any
options or warrants to purchase, or any preemptive rights or other rights
to subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations, except for options granted subsequent to the date of
information provided in the Prospectus pursuant to the Company's employee
and stock option plans as disclosed in the Prospectus. The description of
the Company's stock option and other stock plans or arrangements, and the
options or other rights granted or exercised thereunder, as set forth in
the Prospectus, accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights.
(h) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof in the
Prospectus.
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(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any executive
officers or directors are a party or of which any property of the Company
or any executive officers or directors are subject, which, if determined
adversely to the Company or any executive officers or directors, might
individually or in the aggregate (i) prevent or adversely affect the
transactions contemplated by this Agreement, (ii) suspend the effectiveness
of the Registration Statement, (iii) prevent or suspend the use of the
Preeffective Prospectus in any jurisdiction or (iv) result in a material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of the
Company; and to the best of the Company's knowledge no such proceedings are
threatened or contemplated against the Company by governmental authorities
or others. The Company is not a party nor subject to the provisions of any
material injunction, judgment, decree or order of any court, regulatory
body or other governmental agency or body. The description of the
Company's litigation under the heading "Legal Proceedings" in the
Prospectus is true and correct and complies with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms or provisions of or constitute a
default under any indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which the Company is a party or by which
it or any of its properties is or may be bound, the Certificate of
Incorporation, By-laws or other organizational documents of the Company, or
any law, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties or will
result in the creation of a lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement, except such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Securities Act or the securities or "Blue Sky" laws of
any jurisdiction in connection with the purchase and distribution of the
Stock by the Underwriters.
(l) The Company has the full corporate power and authority to enter
into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnity
and contribution hereunder may be limited by federal or state securities
laws or the public policy underlying such laws.
(m) The Company is in all material respects in compliance with, and
conducts its business in conformity with, all applicable federal, state,
local and foreign laws, rules and regulations or any court or governmental
agency or body; to the knowledge of the Company, otherwise than as set
forth in the Registration Statement and the Prospectus, no prospective
change in any of such federal or state laws, rules or regulations has been
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adopted which, when made effective, would have a material adverse effect on
the operations of the Company.
(n) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and has paid all
taxes shown as due thereon or with respect to any of its properties, and
there is no tax deficiency that has been, or to the knowledge of the
Company is likely to be, asserted against the Company or any of its
properties or assets that would adversely affect the financial position,
business or operations of the Company.
(o) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statement or otherwise, except
for persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within the
time or times required under the terms and conditions of such right.
(p) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security
of the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) The Company has provided you with all financial statements since
inception to the date hereof that are available to the officers of the
Company, including financial statements for the nine months ended September
30, 1996.
(r) The Company owns or possesses all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, tradenames,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct of its
business, and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company with respect to
the foregoing. The Company's business as now conducted and as proposed to
be conducted does not and will not infringe or conflict with in any
material respect patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses or other intellectual property or
franchise rights of any person. Except as described in the Prospectus, no
claim has been made against the Company alleging the infringement by the
Company of any patent, trademark, service xxxx, tradename, copyright, trade
secret, license in or other intellectual property right or franchise right
of any person.
(s) The Company has performed all material obligations required to be
performed by it under all contracts required by Item 601(b)(10) of
Regulation S-K under the Securities Act to be filed as exhibits to the
Registration Statement, and neither the Company nor any other party to such
contract is in default under or in breach of any such obligations. The
Company has not received any notice of such default or breach.
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(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive, key
employee or significant group of employees of the Company plans to
terminate employment with the Company or (B) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the
present or proposed business activities of the Company. The Company does
not have or expect to have any liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal liability with
respect to any pension, profit sharing or other plan which is subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
to which the Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant. With respect to
such plans, the Company is in compliance in all material respects with all
applicable provisions of ERISA.
(u) The Company has, and the Company as of the Closing Date will have,
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be owned by
it which is material to the business of the Company, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Prospectus or such as would not have a material adverse effect on
the Company; and any real property and buildings held under lease by the
Company or proposed to be held after giving effect to the transactions
described in the Prospectus are, or will be as of the Closing Date, held by
it under valid, subsisting and enforceable leases with such exceptions as
would not have a material adverse effect on the Company, in each case
except as described in or contemplated by the Prospectus.
(v) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged; and the Company does
not have any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations
of the Company, except as described in or contemplated by the Prospectus.
(w) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement.
(x) The Company has complied with all provisions of Section 517.075
Florida Statutes (Chapter 92-198; Laws of Florida).
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary
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to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(z) To the Company's knowledge, neither the Company nor any employee
or agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to
be disclosed in the Prospectus.
(aa) The Company is not and will not become an "investment company" or
an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended, after the closing of the
offering and the application of the proceeds therefrom.
(bb) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company as to the matters
covered thereby.
3. Purchase by, and Sale and Delivery to, Underwriters-Closing Dates.
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The Company agrees to sell to the Underwriters the Firm Stock, and on the basis
of the representations, warranties, covenants and agreements herein contained,
but subject to the terms and conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase the Firm Stock from the Company,
the number of shares of Firm Stock to be purchased by each Underwriter being set
opposite its name in Schedule A, subject to adjustment in accordance with
Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the Company
will be $ ______ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York Time, on the second full business day preceding the
First Closing Date (as defined below) or, if no such direction is received, in
the names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by wire transfer (same day funds), payable to the order of the
Company, all at the offices of Murtha, Cullina, Xxxxxxx and Xxxxxx, CityPlace 1,
000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The time and date of the
delivery and closing shall be at 10:00 A.M., New York Time, on _______________,
1996, in accordance with Rule 15c6-1 of the Exchange Act. The time and date of
such payment and delivery are herein referred to as the "First Closing Date".
The Closing Date and the location of delivery of, and the form of payment for,
the Firm Stock may be varied by agreement between the Company and Cowen. The
Closing Date may be postponed pursuant to the provisions of Section 12.
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The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or Xxxxxx Xxxxxxxxxx Xxxxx Inc., individually
and not as Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or Underwriters.
Any such payment by Cowen or Xxxxxx Xxxxxxxxxx Xxxxx Inc. shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public offering of the
Firm Stock at the initial public offering price as soon after the effectiveness
of the Registration Statement as in their judgment is advisable. The
Representatives shall promptly advise the Company of the making of the initial
public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, up to 450,000 shares of Optional Stock. The price per share to be
paid for the Optional Stock shall be the Purchase Price. The option granted
hereby may be exercised as to all or any part of the Optional Stock at any time,
and from time to time, not more than thirty (30) days subsequent to the
effective date of this Agreement. No Optional Stock shall be sold and delivered
unless the Firm Stock previously has been, or simultaneously is, sold and
delivered. The right to purchase the Optional Stock or any portion thereof may
be surrendered and terminated at any time upon notice by the Underwriters to the
Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from Cowen to the Company setting forth the number of shares of
the Optional Stock to be purchased by them and the date and time for delivery of
and payment for the Optional Stock. Each date and time for delivery of and
payment for the Optional Stock (which may be the First Closing Date, but not
earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date
are herein called individually a "Closing Date" and collectively the "Closing
Dates".) All purchases of Optional Stock from the Company shall be made on a
pro rata basis. Optional Stock shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock set
forth opposite such Underwriter's name in Schedule B hereto bears to the total
number of shares of Firm Stock (subject to adjustment by the Underwriters to
eliminate odd lots). Upon exercise of the option by the Underwriters, the
Company agrees to sell to the Underwriters the number of shares of Optional
Stock set forth in the written notice of exercise and the Underwriters agree,
severally and not jointly and subject to the terms and conditions herein set
forth, to purchase the number of such shares determined as aforesaid.
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The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York Time, on the second full business day preceding
the Option Closing Date or, if no such direction is received, in the names of
the respective Underwriters or in such other names as Cowen may designate
(solely for the purpose of administrative convenience) and in such denominations
as Cowen may determine, against payment of the aggregate Purchase Price therefor
by wire transfer (same day funds), payable to the order of the Company all at
the offices of Murtha, Cullina, Xxxxxxx and Xxxxxx, CityPlace 1, 000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The Company shall make the certificates
for the Optional Stock available to the Underwriters for examination not later
than 10:00 A.M., New York Time, on the business day preceding the Option Closing
Date at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement between the Company
and Cowen. The Option Closing Date may be postponed pursuant to the provisions
of Section 12.
4. Covenants and Agreements of the Company. The Company covenants and
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agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A, use its best efforts to
cause the Registration Statement to become effective, (ii) if the Company
and the Representatives have determined to proceed pursuant to Rule 430A,
use its best efforts to comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 430A and Rule 424 of
the Rules and Regulations and (iii) if the Company and the Representatives
have determined to deliver Prospectuses pursuant to Rule 434 of the Rules
and Regulations, to use its best efforts to comply with all the applicable
provisions thereof. The Company will advise the Representatives promptly
as to the time at which the Registration Statement becomes effective, will
advise the Representatives promptly of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to obtain
as soon as possible the lifting thereof, if issued. The Company will
advise the Representatives promptly of the receipt of any comments of the
Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for
additional information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which shall not
previously have been submitted to the Representatives a reasonable time
prior to the proposed filing thereof or which the Representatives shall not
have previously approved in writing (such approval not to be unreasonably
withheld or delayed) or which is not in compliance with the Securities Act
and the Rules and Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary
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to enable the several Underwriters to continue the distribution of the
Stock and will use its best efforts to cause the same to become effective
as promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to be
delivered under the Securities Act any event relating to or affecting the
Company occurs as a result of which the Prospectus or any other prospectus
as then in effect would include an untrue statement of a material fact, or
omit to state any material fact necessary 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 the Prospectus to comply with
the Securities Act, the Company will promptly notify the Representatives
thereof and will prepare an amended or supplemented prospectus which will
correct such statement or omission; and in case any Underwriter is required
to deliver a prospectus relating to the Stock nine (9) months or more after
the effective date of the Registration Statement, the Company upon the
request of the Representatives and at the expense of such Underwriter will
prepare promptly such prospectus or prospectuses as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally
filed with the Commission, and all amendments thereto including all
financial statements and exhibits thereto, and will deliver to the
Representatives such number of copies of the Registration Statement,
including such financial statements but without exhibits, and all
amendments thereto, as the Representatives may reasonably request. The
Company will deliver or mail to or upon the order of the Representatives,
from time to time until the effective date of the Registration Statement,
as many copies of the Preeffective Prospectus as the Representatives may
reasonably request. The Company will deliver or mail to or upon the order
of the Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the Stock is required under the Securities Act, as
many copies of the Prospectus, in final form or as thereafter amended or
supplemented as the Representatives may reasonably request; provided,
however, that the expense of the preparation and delivery of any prospectus
required for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its shareholders as
soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which
will be in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date" (as defined
in Rule 158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such jurisdictions
as the Representatives may designate and at the request
-11-
of the Representatives will make such applications and furnish such
consents to service of process or other documents as may be required of it
as the issuer of the Stock for that purpose; provided, however, that the
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Company shall not be required to qualify to do business or to file a
general consent (other than that arising out of the offering or sale of the
Stock) to service of process in any such 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 of it as the issuer of the
Stock to continue such qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of the Stock.
The Company will advise the Representatives promptly after the Company
becomes aware of the suspension of the qualifications or registration of
(or any such exception relating to) the Common Stock of the Company for
offering, sale or trading in any jurisdiction or of any initiation or
threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives
use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public accountants
and with quarterly summary financial information in reasonable detail which
may be unaudited. During the period of five (5) years from the date
hereof, the Company will deliver to the Representatives and, upon request,
to each of the other Underwriters, as soon as they are available, copies of
each annual report of the Company and each other report furnished by the
Company to its shareholders and will deliver to the Representatives, (i) as
soon as they are available, copies of any other reports (financial or
other) which the Company shall publish or otherwise make available to any
of its shareholders as such, (ii) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from time to time
such other information concerning the Company as you may request.
(h) The Company will use its best efforts to list the Stock on the
Nasdaq National Market.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the Company
will have its independent auditors perform a limited quarterly review of
its quarterly numbers.
(k) The Company will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option to purchase or otherwise dispose of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock
of the Company which may be deemed to be beneficially owned by the
undersigned in accordance with the Rules and Regulations) during the 180
days following the date on which the price of the Common Stock to be
purchased by the Underwriters is set (except with prior written consent of
each of the
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Representatives), other than the Company's sale of Common Stock
hereunder and the Company's issuance of Common Stock upon the exercise of
warrants and stock options which are presently outstanding and described in
the Prospectus.
(l) The Company will apply the net proceeds from the sale of the Stock
as set forth in the description under "Use of Proceeds" in the Prospectus,
which description complies in all respects with the requirements of Item
504 of Regulation S-K.
(m) The Company will supply you with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act and the
Exchange Act.
(n) Prior to the Closing Dates the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods subsequent
to the periods covered by the financial statements appearing in the
Registration Statement and the Prospectus.
(o) Prior to the Closing Dates the Company will issue no press release
or other communications directly or indirectly and hold no press conference
with respect to the Company, the financial condition, results of operation,
business, prospects, assets or liabilities of the Company, or the offering
of the Stock, without your prior written consent. For a period of twelve
(12) months following the Closing Date, the Company will use its best
efforts to provide to you copies of each press release or other public
communications with respect to the financial condition, results of
operations, business, prospects, assets or liabilities of the Company at
least twenty-four (24) hours prior to the public issuance thereof or such
longer advance period as may reasonably be practicable.
(p) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the Representatives, to
each of the Underwriters: (i) as soon as practicable after the end of each
fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and
statements of income, stockholder's equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing thereof, copies
of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Report on Form 8-K or other report filed by the Company with the
Commission, or the NASD or any securities exchange; (iii) as soon as
available, copies of any report or communication of the Company mailed
generally to holders of its Common Stock; and (iv) from time to time, such
other information concerning the Company as you may reasonably request.
(q) The Company has not distributed and, prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the Stock, will
not distribute any offering material in connection with the offering and
sale of the Stock other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or other materials, if any, permitted by the Act.
-13-
5. Payment of Expenses.
-------------------
(a) The Company will pay (directly or by reimbursement) all costs,
fees and expenses incurred in connection with expenses incident to the
performance of its obligations under this Agreement and in connection with
the transactions contemplated hereby, including but not limited to (i) all
expenses and taxes incident to the issuance and delivery of the Stock to
the Representatives; (ii) all expenses incident to the registration of the
Stock under the Securities Act; (iii) the costs of preparing stock
certificates (including printing and engraving costs); (iv) all fees and
expenses of the registrar and transfer agent of the Stock; (v) all
necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Stock to the Underwriters; (vi) fees and expenses
of the Company's counsel and the Company's independent accountants; (vii)
all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement,
each Preeffective Prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for
herein, the "Agreement Among Underwriters" between the Representatives and
the Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and the Blue Sky memoranda and this Agreement; (viii) all
filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with exemptions from the qualifying or
registering (or obtaining qualification or registration of) all or any part
of the Stock for offer and sale and determination of its eligibility for
investment under the Blue Sky or other securities laws of such
jurisdictions as the Representatives may designate; (ix) all fees and
expenses paid or incurred in connection with filings made with the NASD;
and (x) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in
this Section.
(b) In addition to its other obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon (i) any statement or omission or any alleged statement or
omission or (ii) any breach or inaccuracy in its representations and
warranties, it will reimburse each Underwriter on a quarterly basis for all
reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company's
obligation to reimburse each Underwriter for such expenses and the
possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the Company together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from
time to time by Chemical Bank, New York, New York (the "Prime Rate"). Any
such interim reimbursement payments which are not made to an Underwriter in
a timely manner as provided below shall bear interest at the Prime Rate
from the due date for such reimbursement. This expense
-14-
reimbursement agreement will be in addition to any other liability which
the Company may otherwise have. The request for reimbursement will be sent
to the Company.
(c) In addition to its other obligations under Section 6(b) hereof,
each Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in Section 6(b) hereof which relates to
information furnished by the Underwriters to the Company, directly or
through the Representatives, it will reimburse the Company (and, to the
extent applicable, each officer, director or controlling person) on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) for such expenses
and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director or controlling
person) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments which are not made to the Company
within thirty (30) days of a request for reimbursement shall bear interest
at the Prime Rate from the date of such request. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise
have.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (b) and/or
(c) of this Section 5, including the amounts of any requested reimbursement
payments and the method of determining such amounts, shall be settled by
arbitration conducted under the provisions of and pursuant to the
arbitration procedures of the National Association of Securities Dealers,
Inc. Any such arbitration must be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in
such demand or notice, then the party responding to said demand or notice
is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in paragraph
(b) and/or (c) of this Section 5 and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse expenses which
is created by the provisions of Section 6.
6. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls such Underwriter within the meaning
of the Securities Act and the respective officers, directors, partners,
employees, representatives and agents of each of such Underwriter
(collectively, the "Underwriter Indemnified Parties" and, each, an
"Underwriter Indemnified Party"), against any losses, claims, damages,
liabilities or
-15-
expenses (including the reasonable cost of investigating and defending
against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the Securities Act,
the Exchange Act or any other statute or at common law, on the ground or
alleged ground that any Preeffective Prospectus, the Registration Statement
or the Prospectus (or any Preeffective Prospectus, the Registration
Statement or the Prospectus as from time to time amended or supplemented)
includes or allegedly includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or
through the Representatives, specifically for use in the preparation
thereof. The Company will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Company elects to assume the
defense, such defense shall be conducted by counsel chosen by it. In the
event the Company elects to assume the defense of any such suit and retain
such counsel, any Underwriter Indemnified Parties, defendant or defendants
in the suit, may retain additional counsel but shall bear the fees and
expenses of such counsel unless (i) the Company shall have specifically
authorized the retaining of such counsel or (ii) the parties to such suit
include any such Underwriter Indemnified Parties, and the Company and such
Underwriter Indemnified Parties at law or in equity have been advised by
counsel to the Underwriters that one or more legal defenses may be
available to it or them which may not be available to the Company, in which
case the Company shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such
counsel. This indemnity agreement is not exclusive and will be in addition
to any liability which the Company might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity
to each Underwriter Indemnified Party.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the
"Company Indemnified Parties") against any losses, claims, damages,
liabilities or expenses (including, unless the Underwriter or Underwriters
elect to assume the defense, the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which arise out of or are based in
whole or in part upon the Securities Act, the Exchange Act or any other
federal, state, local or foreign statute or regulation, or at common law,
on the ground or alleged ground that any Preeffective Prospectus, the
Registration Statement or the Prospectus (or any Preeffective Prospectus,
the Registration Statement or the Prospectus, as from time to time amended
and supplemented) includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in
which they were made, not misleading, but only insofar as any such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter, directly
or through the Representatives, specifically for use in the preparation
thereof; provided, however, that in no case is such Underwriter to be
liable with respect to any
-16-
claims made against any Company Indemnified Party against whom the action
is brought unless such Company Indemnified Party shall have notified such
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall
have been served upon the Company Indemnified Party, but failure to notify
such Underwriter of such claim shall not relieve it from any liability
which it may have to any Company Indemnified Party otherwise than on
account of its indemnity agreement contained in this paragraph. Such
Underwriter shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but, if such Underwriter elects to assume the
defense, such defense shall be conducted by counsel chosen by it. In the
event that any Underwriter elects to assume the defense of any such suit
and retain such counsel, the Company Indemnified Parties and any other
Underwriter or Underwriters or controlling person or persons, defendant or
defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, respectively. The Underwriter against whom
indemnity may be sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's consent.
This indemnity agreement is not exclusive and will be in addition to any
liability which such Underwriter might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity
to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein,
then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the
Stock. 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 on the one hand and the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. 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 the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation
(even if the
-17-
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating, defending, settling or
compromising any such claim. Notwithstanding the provisions of this
subsection (c), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the shares of the
Stock underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Underwriters' obligations to
contribute are several in proportion to their respective underwriting
obligations and not joint. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. The respective
---------------------------------------
obligations of the several Underwriters hereunder shall be subject to the
accuracy, at and (except as otherwise stated herein) as of the date hereof and
at and as of the Closing Dates, of the representations and warranties made
herein by the Company, to compliance at and as of the Closing Dates by the
Company with its covenants and agreements herein contained and other provisions
hereof to be satisfied at or prior to the Closing Dates, and to the following
additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge
of the Company or the Representatives, shall be threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable satisfaction
of the Representatives. Any filings of the Prospectus, or any supplement
thereto, required pursuant to Rule 424(b) or Rule 434 of the Rules and
Regulations, shall have been made in the manner and within the time period
required by Rule 424(b) and Rule 434 of the Rules and Regulations, as the
case may be.
(b) The Representatives shall have been satisfied that there shall not
have occurred any change prior to the Closing Dates in the condition
(financial or otherwise), properties, business, management, prospects, net
worth or results of operations of the Company, or any change in the capital
stock, short-term or long-term debt of the Company,
-18-
such that (i) the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
which, in the opinion of the Representatives, is material, or omits to
state a fact which, in the opinion of the Representatives, is required to
be stated therein or is necessary to make the statements therein not
misleading, or (ii) it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the Stock
as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is
material and adverse to the Company or which affects or may affect the
Company's ability to perform its obligations under this Agreement shall
have been instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from Price Waterhouse LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from Price Waterhouse
LLP, independent certified public accountants, a letter, dated the Closing
Dates, to the effect that such accountants reaffirm, as of the Closing
Dates, and as though made on the Closing Dates, the statements made in the
letter furnished by such accountants pursuant to paragraph (d) of this
Section 8.
(f) The Representatives shall have received from Murtha, Cullina,
Xxxxxxx and Xxxxxx, counsel for the Company, an opinion, dated the Closing
Date, to the effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, their opinion or opinions
dated the Closing Date with respect to the incorporation of the Company,
the validity of the Stock, the Registration Statement and the Prospectus
and such other related matters as it may reasonably request, and the
Company shall have furnished to such counsel such documents as they may
request for the purpose of enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated the
Closing Dates, of the chief executive officer or the President and the
chief financial or accounting officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any amendment or
supplement
-19-
thereto, as of the time when the Registration Statement became
effective and at all times subsequent thereto up to the delivery of
such certificate, included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as set forth or contemplated in the Prospectus, the Company
has not incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions not in the
ordinary course of business and there has not been any material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company, or any change in the capital stock, short-term or long-
term debt of the Company;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing Date, and
the Company has complied with all the agreements and performed or
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
disclosed in or contemplated by the Prospectus, (i) there has not been
any material adverse change or a development involving a material
adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company; (ii) the business and operations conducted by the Company
and its subsidiaries have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not insured) of such a
character as to interfere materially with the conduct of the business
and operations of the Company; (iii) no legal or governmental action,
suit or proceeding is pending or threatened against the Company which
is material to the Company, whether or not arising from transactions
in the ordinary course of business, or which may materially and
adversely affect the transactions contemplated by this Agreement; (iv)
since such dates and except as so disclosed, the Company has not
incurred any material liability or obligation, direct, contingent or
indirect, made any change in its capital stock (except pursuant to its
stock plans), made any material change in its short-term or funded
debt or repurchased or otherwise acquired any of the Company's capital
stock; and (v) the Company has not declared or paid any dividend, or
made any other distribution, upon its outstanding capital stock
payable to stockholders of record on a date prior to the Closing Date.
(i) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have reasonably
requested as to the accuracy, at and as of the Closing Date, of the
representations and warranties made herein by it and as to
-20-
compliance at and as of the Closing Date by it with its covenants and
agreements herein contained and other provisions hereof to be satisfied at
or prior to the Closing Date, and as to satisfaction of the other
conditions to the obligations of the Underwriters hereunder.
(j) Cowen shall have received the written agreements of the
officers, directors and holders of Common Stock listed in Schedule C that
each will not offer, sell, assign, transfer, encumber, contract to sell,
grant an option to purchase or otherwise dispose of any shares of Common
Stock (including, without limitation, Common Stock of the Company which may
be deemed to be beneficially owned by the undersigned in accordance with
the Rules and Regulations) during the 180 days following the date of the
final Prospectus.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Date, but Cowen shall be
entitled to waive any of such conditions.
9. Effective Date. This Agreement shall become effective immediately as
--------------
to Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
10. Termination. This Agreement (except for the provisions of Section 5)
-----------
may be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be terminated
by the Representatives at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of
this Agreement under this or any other provision of this Agreement, there shall
be no liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date or the Option Closing Date trading in securities on any of the New York
Stock Exchange, American Stock Exchange, or the Nasdaq National Market shall
have been suspended or minimum or maximum prices shall have been established on
any such exchange or market, or a banking moratorium shall have been declared by
New York or United States authorities; (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) if at or prior to the First
-21-
Closing Date or the Option Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis which, in the judgment of
the Representatives, makes it impractical or inadvisable to offer or sell the
Firm Stock or Optional Stock, as applicable, on the terms contemplated by the
Prospectus; (iv) if there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or the transactions contemplated by this Agreement, which, in the
judgment of the Representatives, makes it impracticable or inadvisable to offer
or deliver the Firm Stock or the Optional Stock, as applicable, on the terms
contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding, pending or threatened, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
Firm Stock or Optional Stock, as applicable, on the terms contemplated by the
Prospectus; or (vi) if there shall have occurred any of the events specified in
the immediately preceding clauses (i) - (v) together with any other such event
that makes it, in the judgment of the Representatives, impractical or
inadvisable to offer or deliver the Firm Stock or Optional Stock, as applicable,
on the terms contemplated by the Prospectus.
11. Reimbursement of Underwriters. Notwithstanding any other provisions
-----------------------------
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. Substitution of Underwriters. If any Underwriter or Underwriters
----------------------------
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Date for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the
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Registration Statement or supplements to the Prospectus which may thereby be
made necessary, and (ii) the respective numbers of shares to be purchased by the
remaining Underwriters or substituted Underwriters shall be taken as the basis
of their underwriting obligation for all purposes of this Agreement. Nothing
herein contained shall relieve any defaulting Underwriter of its liability to
the Company or the other Underwriters for damages occasioned by its default
hereunder. Any termination of this Agreement pursuant to this Section 12 shall
be without liability on the part of any non-defaulting Underwriter or the
Company, except for expenses to be paid or reimbursed pursuant to Section 5 and
except for the provisions of Section 6.
13. Notices. All communications hereunder shall be in writing and, if
-------
sent to the Underwriters shall be mailed, delivered or telegraphed and confirmed
to you, as their Representatives c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such Underwriter at the address furnished by
the Representatives or, if sent to the Company, shall be mailed, delivered or
telegraphed and confirmed at Accent Color Sciences, Inc., 000 Xxxxxxxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxx, XX 00000.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the person or persons, if any, who control any
Underwriter or Underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the indemnities of the several
Underwriters shall also be for the benefit of each director of the Company, each
of its officers who has signed the Registration Statement and the person or
persons, if any, who control the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act.
15. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New York.
16. Authority of the Representatives. In connection with this Agreement,
--------------------------------
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by Cowen, as Representative, will be binding on all the
Underwriters.
17. Partial Unenforceability. The invalidity or unenforceability of any
------------------------
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
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18. General. This Agreement constitutes the entire agreement of the
-------
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
19. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
[Balance of Page Intentionally Left Blank]
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
ACCENT COLOR SCIENCES, INC.
By:
------------------------------------
Name:
Title:
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
XXXXXX XXXXXXXXXX XXXXX INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: Cowen Incorporated,
its general partner
By:
-------------------------------
Name:
Title:
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SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
Xxxxx & Company ...................................
Xxxxxx Xxxxxxxxxx Xxxxx Inc........................
Total ...........................................
----------- -----------
=========== ===========
EXHIBIT I
---------
FORM OF OPINION TO BE DELIVERED BY COUNSEL TO COMPANY
-----------------------------------------------------
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of its jurisdiction of
organization, with corporate power and authority to own or lease its properties
and conduct its businesses as described in the Prospectus. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where its ownership or leasing of properties on the conduct of
its business requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company. The Company does not own or control, directly or
indirectly, any corporation, association or other entity.
2. On the date hereof, the authorized capital stock of the Company
consists of _________ shares of Common Stock, $.01 par value, and ________
shares of undesignated Preferred Stock, $.01 par value. The outstanding shares
of the capital stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable, conform to the description thereof
contained in the Prospectus in all material respects and, to such counsel's
knowledge, have not been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or other
similar right.
3. The Stock to be issued by the Company has been duly and validly
authorized and, upon issuance, delivery and payment therefor as described in the
Underwriting Agreement, will be validly issued, fully paid and nonassessable and
free and clear of any preemptive or similar rights and will conform to the
description thereof in the Prospectus in all material respects. The
certificates representing the Stock are in proper form under the Delaware
General Corporation Law assuming conformance with the specimen certificate filed
as an Exhibit to the Registration Statement.
4. The authorized capital stock of the Company conforms in all
material respects to the description thereof set forth in the Prospectus under
the caption "Description of Capital Stock."
5. The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus is
in effect and no proceedings for that purpose have been instituted or are
pending by the Commission.
6. The Registration Statement and the Prospectus comply as to form in
all material respects with the requirements of the Securities Act and with the
Rules and Regulations, except as to the financial statements, the notes thereto
and the related schedules and other financial data contained therein, as to
which such counsel need not express an opinion.
7. To such counsel's knowledge after due inquiry, the Company has not
received notice of any claim or challenge regarding the ownership of any
patents, trademarks, service marks, trade names, licenses, inventions or any
other rights described in the Prospectus. To such counsel's knowledge after due
inquiry (i) no claim has been made against the Company alleging infringement by
the Company of any patent, trademark, service xxxx, trade names, trade secret,
license in or other intellectual property or franchise rights of any person,
(ii) no legal or governmental proceedings are pending relating to the foregoing,
other than review of pending patent applications, and (iii) no such proceedings
are currently threatened by governmental authorities or others.
8. The statements under the captions "Risk Factors", "Business -
Proprietary Rights", "Business - Legal Proceedings", "Management - Benefit
Plans", "Certain Transactions", "Principal and Selling Stockholders" and
"Description of Capital Stock" [sections subject to change] in the Prospectus,
only to the extent that such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries in all material
respects and fairly present the information called for by the Securities Act and
the Rules and Regulations with respect to such documents and matters. Such
counsel does not know of any laws, rules or regulations or legal or governmental
proceedings applicable to the business of the Company required to be described
in the Registration Statement or the Prospectus that are not described as
required.
9. Such counsel knows of no franchise, lease, contract, agreement or
document, which is required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed therein.
10. To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company of a character required to
be disclosed in the Registration Statement or the Prospectus by the Act or the
Rules and Regulations.
11. The Company has the corporate power and authority to enter into
the Underwriting Agreement and to perform its obligations thereunder (including
to issue, sell and deliver the Stock to be issued and sold by it), and the
Underwriting Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the Company.
12. The execution and delivery of the Underwriting Agreement and the
issue and sale of the Stock will not result in a breach or violation of any of
the terms or provisions of or constitute a default under or violate or conflict
with the Certificate of Incorporation or Bylaws of the Company or any material
provision of any material contract or instrument to which the Company is a party
or by which the Company is bound or any law of the United States or the State of
Connecticut, any rule or regulation of any governmental authority or regulatory
body of the United States or the State of Connecticut, or any judgment, order or
decree known to us and applicable to the Company or any of its properties of any
court, governmental authority or arbitrator or will result in the creation of a
lien.
-2-
13. To such counsel's knowledge, no person or entity has the right to
require registration of shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the Registration Statement or
otherwise.
14. No consent, approval, authorization or order of, and no notice to
or filing with, any court or governmental agency or body is required to be
obtained or made by the Company for the issue and sale of the Stock pursuant to
the Underwriting Agreement, except such as have been obtained or made and such
as may be required under state securities or blue sky laws or by the National
Association of Securities Dealers, Inc., as to which such counsel's expresses no
opinion.
15. To such counsel's knowledge, no material default exists on the
part of the Company in the performance of any provision contained in any of the
contracts filed as exhibits to the Registration Statement.
16. The Company is not, and will not be as a result of the
consummation of the transactions contemplated by the Underwriting Agreement, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
17. Nothing came to such counsel's attention during the preparation
of the Registration Statement that led it to believe that the Registration
Statement, as of the date it was declared effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date or on the date hereof, contained or contains
an 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
(provided that such counsel shall not be required to express a view with respect
to the financial statements, the notes thereto and the related schedules and
other financial data included in the Registration Statement or the Prospectus).
-3-
