Draft Dated 11/6/96
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2,500,000 Shares/1/
Viisage Technology, Inc.
Common Stock
UNDERWRITING AGREEMENT
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November, 1996
XXXXX & COMPANY
XXXXXXX & COMPANY, INC.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Viisage Technology, Inc., a Delaware corporation (the
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"Company"), and Xxx Acquisition Corp. ("Xxx"), a stockholder of the Company (the
"Selling Stockholder") propose 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 2,500,000 shares of Common Stock, $.001
par value per share (the "Common Stock"), of the Company, of which 2,000,000
shares will be sold by the Company and 500,000 shares will be sold by the
Selling Stockholder. The aggregate of 2,500,000 shares so proposed to be sold
is hereinafter referred to as the "Firm Stock." The respective amounts of the
Firm Stock to be so purchased by the several Underwriters are set forth opposite
their names in Schedule A hereto. The Company also has granted to the
Underwriters, upon the terms and conditions set forth in Section 3 hereof, the
option to purchase up to an additional 375,000 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 Xxxxxxx
& Company, Inc. ("Xxxxxxx") are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. (a) Representations and Warranties of the Company and the Selling
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Stockholder. The Company and the Selling Stockholder jointly and severally
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represent and warrant to, and agree with, the several Underwriters that:
________________________________
/1/ Plus an option to purchase up to 375,000 additional shares from the
Company to cover over-allotments.
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(i) A registration statement on Form S-1 (File No. 333-10649) 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 (the "Registration Statement") 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 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
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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 Pre-effective 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.
(ii) The Commission has not issued or, to the knowledge of the
Company or the Selling Stockholder, 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
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 became or
becomes effective and at all times subsequent thereto up to and
including the Closing Dates, the Registration Statement and the
Prospectus and any amendments or supplements thereto conformed and will
conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations; and when the Registration Statement
became or becomes effective, neither the Registration Statement nor any
amendment or supplement thereto, 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 not
misleading; and, on the Effective Date the Prospectus did not, and on
the Closing Dates the Prospectus will not, contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
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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
descriptions of such documents in all material respects.
(iii) 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
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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, net worth or results of operations of the Company, or any
change in the capital stock, or any material change in the short-term
or long-term debt of the Company.
(iv) 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.
(v) Xxxxxx Xxxxxxxx LLP, who have expressed their opinions on the
audited financial statements and related schedules (if any) included in
the Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(vi) 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 business as described in the Prospectus; the Company is in
possession of and operating in material compliance with all franchises,
grants, authorizations, licenses, permits, easements, consents,
certificates and orders required for the conduct of its business as now
being conducted and as described in the Registration Statement and the
Prospectus, 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, except to the extent that the failure to be so qualified
would not have a material adverse effect on the Company. 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
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Statement and the Prospectus. The Company does not own or control,
directly or indirectly, any corporation, partnership, association or
other entity.
(vii) 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 capital stock (including the outstanding shares of 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, are duly listed on the Nasdaq National Market 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.
(viii) 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.
(ix) 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 is a party or of which any property of the
Company or any affiliate is 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, net worth or results of operations of
the Company; and to the knowledge of the Company or the
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Selling Stockholder, no such proceedings are threatened or contemplated
against the Company or any affiliate 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.
(x) 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,
trust (constructive or other), note, loan agreement, lease, franchise,
license or other material 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 judgment, order, decree, 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.
(xi) 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.
(xii) 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.
(xiii) The Company is in all material respects in compliance with,
and conducts its business in material conformity with, all applicable
federal, state, local and foreign laws, rules and regulations
(including but not limited to the Foreign Corrupt Practices Act and any
laws, rules and regulations regarding government contracting and
procurement) or any court or governmental agency or body and the
Company has all permits or licenses required thereunder; to the
knowledge of the Company or the Selling Stockholder, otherwise than as
set forth in the Registration Statement and the Prospectus, no
prospective change in any of such federal or state laws, rules
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or regulations has been adopted which, when made effective, would have
a material adverse effect on the operations of the Company.
(xiv) 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 or the Selling Stockholder has been threatened
or is likely to be, asserted against the Company or any of its
properties or assets that would adversely affect the financial
position, business or results of operations of the Company.
(xv) 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, except as
described in the Prospectus, otherwise.
(xvi) Neither the Company nor any of its officers or directors 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 the Common Stock of the Company.
(xvii) 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 six months ended
June 30, 1996.
(xviii) The Company owns, possesses, or has rights to use all
patents, trademarks, trademark registrations, service marks, service
xxxx registrations, tradenames, copyrights, copyright registrations,
licenses, inventions, trade secrets and rights (collectively,
"Intellectual Property") necessary for the conduct of its business or
described in the Prospectus as being owned, licensed or used by it.
Other than as described in the Prospectus, the Company has not received
any notice or claim or any challenge by any other person to the rights
of the Company with respect to the Intellectual Property necessary for
the conduct of its business or described in the Prospectus as being
owned, licensed or used by it. To the knowledge of the Company or the
Selling Stockholder, the Company's business as now conducted does not
and will not infringe or conflict with any Intellectual Property or
franchise right of any person. Other than as described in the
Prospectus, no claim has been made against the Company alleging the
infringement by the Company of any Intellectual Property right or
franchise right of any person. The Company owns no patents and, to the
knowledge of the Company or the Selling Stockholder, none of the
patents licensed by the Company are unenforceable or invalid. The
Company, or the Selling Stockholder, as the case may be, has duly and
properly filed or
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caused to be filed with the United States Patent and Trademark Office
(the "PTO") and applicable foreign and international patent authorities
all patent applications described or referred to in the Prospectus, and
believes it has complied with the PTO's duty of candor and disclosure
for each of the United States patent and patent applications described
or referred to in the Prospectus; notwithstanding that the Company has
been notified by the PTO that its pending patent applications (Serial
Nos. 08/___,___ and 08/___,___) have been rejected over certain prior
art identified by the PTO in such rejections, neither the Company nor
the Selling Stockholder is aware of any facts which would preclude the
grant of a patent from each of its respective patent applications
described or referred to in the Prospectus; neither the Company nor the
Selling Stockholder has knowledge of any facts which would preclude it
from having clear title to its patent applications referenced in the
Prospectus; and neither the Company nor the Selling Stockholder has
terminated or breached, and is not in violation of, any agreement
covering any Intellectual Property rights.
(xix) No breach or default exists in the due performance and
observance by the Company of any term, covenant or condition of its
material contracts. To the knowledge of the Company or the Selling
Stockholder, no other party to any such contract is in material default
under or in breach of any such obligations. The Company has not
received any notice of such default or breach.
(xx) 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.
(xxi) The Company has, and the Company as of the Closing Dates will
have, good and marketable title in fee simple to all real property (if
any) and good and marketable title to all personal property 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 the Prospectus or such as would not have a material adverse
effect on the Company; and any real property and buildings held
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under lease by the Company are, or will be as of the Closing Dates,
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.
(xxii) The Company is insured by insurers of financial
responsibility against such losses and risks and in such amounts as are
customary in the business in which it is engaged; and no such insurer
has notified or indicated to the Company that it will not be able to
renew its existing insurance coverage as and when such coverage
expires; and the Company has no reason to believe that, if such
coverage is not renewed, that it will not be able 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.
(xxiii) 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.
(xxiv) 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 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.
(xxv) To the knowledge of the Company or the Selling Stockholder,
neither the Company nor any employee or agent of the Company has made
any payment or received or retained any payment 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.
(xxvi) The Company is not or 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.
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(xxvii) 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.
(xxviii) The Company has obtained the written agreement described in
Section 8(k) of this Agreement from each of its officers, directors,
holders of Common Stock and holders of options to purchase Common
Stock.
(xxix) Each of the Amended and Restated Asset Transfer Agreement
dated August 20, 1996 (the "Transfer Agreement"), the Amended and
Restated License Agreement dated August 20, 1996, the Administrations
and Services Agreement dated November 1, 1996, and Use and Occupancy
Agreement dated November 1, 1996, in each case between the Company and
Xxx and pursuant to which the Company was initially organized and
capitalized (collectively, the "Organization Agreements") has been duly
and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company enforceable in accordance
with its terms. The execution, delivery and performance of each of the
Organization Agreements by the Company, the consummation of the
transactions therein contemplated and compliance with the terms thereof
do not and will not result in a breach or violation of, or constitute a
default under, the certificate of incorporation, by-laws or other
governing documents of the Company, or any indenture, mortgage, deed of
trust, trust (constructive or other), note, loan agreement, lease,
franchise, license or other material agreement or instrument to which
the Company is a party or by which it is bound, or to which any of its
properties is subject, and do not and will not violate any existing
law, rule, administrative regulation or decree or judgment of any court
or any governmental agency or body having jurisdiction over the Company
or any of its properties, or result in the creation or imposition of
any lien, charge, claim or encumbrance upon any property or asset of
the Company. No consent, approval, authorization or order of any
court, governmental agency or body, financial institution or other
person is required in connection with the consummation of the
transactions contemplated by such Organization Agreements. The
transactions contemplated by the Transfer Agreement have been
consummated.
(b) Representations and Warranties and Agreements of the Selling
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Stockholder. The Selling Stockholder represents and warrants to, and agrees
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with, the several Underwriters that:
(i) The Selling Stockholder now has, and on the Closing Dates will
have, valid and marketable title to the Stock to be sold by the Selling
Stockholder, free and clear of any lien, claim, security interest or
other encumbrance, including, without limitation, any restriction on
transfer, and has full right, power and authority to enter into this
Agreement, and, that it is a corporation, duly organized
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and validly existing and in good standing as a corporation under the
laws of its jurisdiction of organization.
(ii) The Selling Stockholder now has, and on the Closing Dates will
have full right, power and authority and approval required by law to
sell, transfer, assign and deliver the Stock being sold by the Selling
Stockholder hereunder, and each of the several Underwriters will, upon
delivery of and payment for each share of Stock hereunder, acquire
valid and marketable title to all of the Stock being sold to the
Underwriters by the Selling Stockholder, free and clear of any liens,
encumbrances, equities claims, restrictions on transfer or other
defects whatsoever.
(iii) For a period of 180 days after the date of this Agreement,
without the prior written consent of Cowen, the Selling Stockholder
will not directly or indirectly offer, sell, pledge, contract to sell,
grant an option to purchase or otherwise dispose of any shares of
Common Stock held by such Selling Stockholder (including without
limitation any shares of Common Stock that may be deemed to be
beneficially owned by such Selling Stockholder on the date hereof in
accordance with the Rules and Regulations and any shares if Common
Stock which may be issued upon exercise of a stock option or warrant)
or any securities convertible into, derivative of or exercisable or
exchangeable for such Common Stock except for shares of Common Stock
sold by such Selling Stockholder pursuant to this Agreement.
(iv) This Agreement has been duly and validly authorized, executed
and delivered by the Selling Stockholder and is a valid and binding
obligation of the Selling Stockholder, enforceable against the Selling
Stockholder 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.
(v) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in
a breach or violation by the Selling Stockholder of any of the terms or
provisions of, or constitute a default by the Selling Stockholder
under, any indenture, mortgage, deed of trust, trust (constructive or
other), note, loan agreement, lease, franchise, license or other
material agreement or instrument to which the Selling Stockholder is a
party or by which the Selling Stockholder or any of its properties is
or may be bound, or any judgment of any court or governmental agency or
body applicable to the Selling Stockholder or any of its properties, or
to the Selling Stockholder's knowledge, any statute, decree, order,
rule or regulation of any court or governmental agency or body
applicable to the Selling Stockholder or any of its properties.
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(vi) The Selling Stockholder has reviewed the Registration Statement
and Prospectus, and nothing has come to the attention of the Selling
Stockholder that would lead the Selling Stockholder to believe that (A)
on the Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading and (B) on the Effective Date the
Prospectus did not, and on the Closing Date and any later date on which
Optional Stock is to be purchased the Prospectus will not, contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(vii) The Selling Stockholder owns, and will own as of each Closing
Date, of record and beneficially, the number of shares of Common Stock
of the Company set forth in the Prospectus, free and clear of any
liens, encumbrances, claims or restrictions, except as described in the
Prospectus and except that certain of such shares are reserved for
issuance pursuant to stock option and other benefit plans under which
options to purchase Common Stock of the Company owned by Xxx are
granted to certain employees, directors or consultants of the Company.
(viii) Each of the Organization Agreements to which Xxx is a party
has been duly and validly authorized, executed and delivered by Xxx and
is a valid and binding obligation of Xxx enforceable against Xxx in
accordance with its terms. The execution, delivery and performance of
each of the Organization Agreements by Xxx, the consummation of the
transactions therein contemplated and compliance with the terms thereof
do not and will not result in a breach or violation of, or constitute a
default under, the articles of organization, by-laws or other governing
documents of Xxx, or any indenture, mortgage, deed of trust, trust
(constructive or other), note, loan agreement, lease, franchise,
license or other material agreement or instrument to which Xxx is a
party or by which it is bound, or to which any of its properties is
subject, and do not and will not violate any existing law, rule,
administrative regulation or decree or judgment of any court or any
governmental agency or body having jurisdiction over Xxx or any of its
properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of Xxx. No
consent, approval, authorization or order of any court, governmental
agency or body, financial institution or other person is required in
connection with the consummation by Xxx of the transactions
contemplated by the Organization Agreements.
(ix) The Selling Stockholder has filed all tax returns required to be
filed by it, except for such returns for which its failure to file
would not have a material adverse effect on Xxx or the Company, and has
paid all taxes which have become
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due, including without limitation, all taxes which it is obligated to
withhold for amounts owing to employees, creditors and third parties.
All taxes with respect to which Xxx has become obligated pursuant to
elections made by it in accordance with generally accepted practice
have been paid, and adequate reserves have been established for all
taxes accrued but not yet payable. No waivers of statutes of limitation
with respect to any of the returns have been given by or requested from
Xxx. There are no liens for taxes (other than for current taxes not yet
due and payable) upon the assets of the Company. Neither Xxx nor the
Company is not a party to any agreement, contract, arrangement or plan
that has resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of
Section 280G of the Code. Xxx does not have and has not had a permanent
establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States of America and such
foreign country. Xxx and its shareholders made a valid election for the
Company to be treated as an "S corporation," as that term is defined in
Section 1361(a) of the Code, and at all times after such election and
prior to ______, 1996 Xxx was qualified as an S corporation.
(x) Neither the Selling Stockholder nor any of its officers or
directors 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 the Common Stock of the
Company.
(xi) The Selling Stockholder agrees that its obligations hereunder
shall not be terminated by operation of law, whether by liquidation or
distribution of the Selling Stockholder, or any other event.
3. Purchase by, and Sale and Delivery to, Underwriters -- Closing
--------------------------------------------------------------
Dates. The Company and the Selling Stockholder agree, severally and not
-----
jointly, to sell to the Underwriters the Firm Stock in accordance with Section 1
hereof 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 and the Selling Stockholder, 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
number of shares of Stock to be purchased by each Underwriter from the Company
and the Selling Stockholder hereunder shall bear the same proportion to the
total number of shares of Stock to be purchased by such Underwriter hereunder as
the number of shares of Stock being sold by the Company or the Selling
Stockholder, as the case may be, bears to the total number of shares of Stock
being sold by the Company and the Selling Stockholder, subject to adjustment by
the Representatives to eliminate fractions.
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The purchase price per share to be paid by the Underwriters to the
Company and the Selling Stockholder will be $ _____ per share (the "Purchase
Price").
The Company and the Selling Stockholder 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 and the Selling Stockholder all at the
offices of Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., Twenty Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 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.
The Company and the Selling Stockholder 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 Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or Xxxxxxx, 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 Xxxxxxx 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 and the Selling
Stockholder 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 an aggregate of 375,000 shares. 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
-15-
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 the "Closing Dates"). 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 A 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.
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 and the
Selling Stockholder 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 or payable as directed by the Company all at
the offices of Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., Twenty Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 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 Option 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 and the
---------------------------------------
Selling Stockholder covenant and agree 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
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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 to 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 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.
-17-
(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 stockholders 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, provided that such jurisdictions are
within the United States, Guam or Puerto Rico, and at the request 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 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.
-18-
(g) The Company will furnish to its stockholders annual reports
containing financial statements certified by independent public accountants
and with quarterly summary financial information in reasonable detail which
may be unaudited.
(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 first six 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, derivative of 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 Company in accordance with the Rules and
Regulations) during the 180 days after the date of this Agreement (except
with prior written consent of Cowen acting alone or each of the
Representatives acting jointly), 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 or pursuant to the Company's stock option plans
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 material 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 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 First Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company, its financial condition, results of
operation, business, prospects, assets or
-19-
liabilities, 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 communication 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, stockholders' 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, Current Report on Form 8-K or other report filed by the Company
with the Commission, or the NASD or any securities exchange; and (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.
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with or
incident to the performance of the obligations of the Company and of the Selling
Stockholder 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" among 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 reasonable costs and expenses
incident to the performance of their obligations hereunder which are not
otherwise specifically provided for in this Section.
-20-
(b) The Selling Stockholder will pay (directly or by reimbursement)
all fees and expenses incident to the performance of the Selling Stockholder's
obligations under this Agreement which are not otherwise specifically provided
for herein, including but not limited to any fees and expenses of counsel for
the Selling Stockholder and all expenses and taxes incident to the sale and
delivery of the Stock to be sold by the Selling Stockholder to the Underwriters
hereunder.
(c) In addition to their other obligations under Sections 6(a) and (b)
hereof, the Company and the Selling Stockholder agree 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 misstatement or omission
or any alleged misstatement or omission or (ii) any breach or inaccuracy in
their representations and warranties, they 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
and Selling Stockholder's obligations 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 or the Selling Stockholder, as the case
may be, 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 timed 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 reimbursement
agreement will be in addition to any other liability which the Company and the
Selling Stockholder may otherwise have. The request for reimbursement will be
sent to the Company with a copy to the Selling Stockholder. In the event that
the Company fails to make such reimbursement payment within thirty (30) days of
the reimbursement request, the Representatives shall notify the Selling
Stockholder of its obligation to make such reimbursement payments within fifteen
(15) days.
(d) In addition to its other obligations under Section 6(c) 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 misstatement or omission of a material fact, or
any alleged misstatement or omission of a material fact, described in Section
6(c) hereof which was made in reliance upon, and in conformity with, written
information furnished to the Company by the Underwriters, directly or through
the Representatives, specifically for use in the preparation of the Registration
Statement or the Prospectus, it will reimburse the Company (and, to the extent
applicable, each officer, director, or controlling person or Selling
Stockholder) 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
-21-
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 or Selling Stockholder) 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 or
Selling Stockholder) 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.
(e) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in paragraph (c) and/or (d) 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 American Arbitration Association. 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 (c) and/or (d) 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, shareholders, partners and employees of each of
such Underwriter or person who controls such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter Indemnified
Party"), against any losses, claims, damages, liabilities or 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 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; provided, however, that with respect to any untrue
-------- -------
statement or omission or alleged untrue statement or omission made in any
Registration Statement, the indemnity
-22-
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter Indemnified Party from whom the person asserting any such losses,
claims, damages or liabilities purchased the shares of Stock concerned to the
extent that any such loss, claim, damage or liability of such Underwriter
Indemnified Party results from the fact that a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the sale
of such shares of Stock to such person as required by the Securities Act and if
the untrue statement or omission concerned has been corrected in the Prospectus;
provided, further, that in no case is the Company to be liable with respect to
-------- -------
any claims made against any Underwriter Indemnified Party against whom the
action is brought unless such Underwriter Indemnified Party shall have notified
the Company in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim served upon the
Underwriter Indemnified Party, but failure to notify the Company of such claim
shall not relieve it from any liability which it may have to any Underwriter
Indemnified Party otherwise than on account of its indemnity agreement contained
in this paragraph. 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 in writing 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. The Company shall not be liable to
indemnify any person for any settlement of any such claim effected without the
Company's consent. 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) The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter Indemnified Party against any losses, claims, damages, liabilities
or expenses (including, unless the Selling Stockholder elects 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 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 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 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
-23-
Underwriter, directly or through the Representatives, specifically for use in
the preparation thereof; provided, however, that with respect to any untrue
-------- -------
statement or omission or alleged untrue statement or omission made in any
Registration Statement, the indemnity agreement contained in this subsection (b)
shall not inure to the benefit of any Underwriter Indemnified Party from whom
the person asserting any such losses, claims, damages or liabilities purchased
the shares of Stock concerned to the extent that any such loss, claim, damage or
liability of such Underwriter Indemnified Party results from the fact that a
copy of the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such shares of Stock to such person as
required by the Securities Act and if the untrue statement or omission concerned
has been corrected in the Prospectus; provided, further, that in no case is such
-------- -------
Selling Stockholder to be liable with respect to any claims made against any
Underwriter Indemnified Party against whom the action is brought unless such
Underwriter Indemnified Party shall have notified such Selling Stockholder in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim served upon the Underwriter
Indemnified Party, but failure to notify such Selling Stockholder of such claim
shall not relieve it from any liability which it may have to any Underwriter
Indemnified Party otherwise than on account of its indemnity agreement contained
in this paragraph. The Selling Stockholder 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 the Selling Stockholder
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event that the Selling Stockholder elects to assume the defense of
any such suit and retain such counsel, the 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 Selling Stockholder shall
have specifically authorized the retaining of such counsel or (ii) the parties
to such suit include such Underwriter Indemnified Parties, and the Selling
Stockholder and such Underwriter Indemnified Parties have been advised by
counsel that one or more legal defenses may be available to it or them which may
not be available to the Selling Stockholder, in which case, the Selling
Stockholder shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Selling Stockholder against whom indemnity may be sought shall not be liable
to indemnify any person for any settlement of any such claim effected without
such Selling Stockholder's consent. This indemnity agreement is not exclusive
and will be in addition to any liability which the Selling Stockholder 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. The Company
and the Selling Stockholder may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to their respective
amounts of such liability for which they each shall be responsible.
(c) 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") and the Selling Stockholder and each person, if any, who controls a
Selling Stockholder within the meaning of the Securities Act (collectively,
-24-
the "Stockholder 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 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 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 claims made against any Company Indemnified
Party or Stockholder Indemnified Party against whom the action is brought unless
such Company Indemnified Party or Stockholder 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 or Stockholder 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 or
Stockholder 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 or Stockholder 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, unless (i) the Underwriter shall have specifically
authorized in writing the retaining of such counsel or (ii) the parties to such
----------
suit include the Company or a Stockholder Indemnified Party, and the
Underwriters and such Company or Stockholder Indemnified Party have been advised
by counsel to the Company or such Stockholder Indemnified Party that one or more
defenses may be available to them which may not be available to the
Underwriters, in which case the Underwriters shall not be entitled to assume the
defense of such suit notwithstanding its obligation to bear fees and expenses of
such counsel. 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 or Stockholder Indemnified
Party.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) or (c) above in
-25-
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 and the Selling Stockholder 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 and the Selling Stockholder 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 and the 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 and the Selling Stockholder 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, the Selling
Stockholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take 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 (d), 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, the Selling Stockholder 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,
-26-
regardless of any investigation made by or on behalf of any Underwriter, the
Selling Stockholder, 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 and the Selling Stockholder, to compliance at and as of
the Closing Dates by the Company and the Selling Stockholder with their
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, the Selling Stockholder 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,
net worth or results of operations of the Company, or any change in
the capital stock, or any material change in short-term or long-term
debt of the Company, 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
impracticable 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 or the Selling Stockholder' ability to perform their
respective 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.
-27-
(d) At the time of execution of this Agreement, the
Representatives shall have received from Xxxxxx Xxxxxxxx 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 Xxxxxx Xxxxxxxx
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 Date(s), the
statements made in the letter furnished by such accountants pursuant
to paragraph (d) of this Section 8.
(f) The Representatives shall have received the following
opinions:
(i) from Finnegan, Hickey, Xxxxxxxx & Xxxxxxx, P.C., counsel
for the Company and for the Selling Stockholder, an opinion or
opinions, dated the Closing Dates, to the effect set forth in Exhibits
I and II hereto; and
(ii) from Lahive & Xxxxxxxxx, patent counsel to the Company
and the Selling Stockholder, an opinion or opinions, dated the Closing
Dates, to the effect set forth in Exhibit III hereto.
(g) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, their opinion or
opinions, dated the Closing Dates 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 they may reasonably
request, and the Company and the Selling Stockholder 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 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
-28-
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, net
worth or results of operations of the Company, or any change in
the capital stock, or any material change in the 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
Dates, 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 Dates; 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, net worth or
results of operations of the Company; (ii) the business and
operations conducted by the Company 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.
-29-
(i) The Representatives shall have received a certificate, dated
the Closing Dates of the Selling Stockholder to the effect that as of
the Closing Dates its representations and warranties in this Agreement
are true and correct as if made on and as of the Closing Dates, and
that it has performed all its obligations and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Dates.
(j) The Company and the Selling Stockholder 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 Dates, of the representations and warranties
made herein by them and as to compliance at and as of the Closing
Dates by them with their covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to the Closing
Dates, and as to satisfaction of the other conditions to the
obligations of the Underwriters hereunder.
(k) Cowen shall have received the written agreements of all
officers, directors and holders of Common Stock and options to
purchase Common Stock that each will not offer, sell, pledge, contract
to sell, grant an option to purchase or otherwise dispose of any
shares of Common Stock held by such person (including without
limitation any shares of Common Stock that may be deemed to be
beneficially owned by such person on the date hereof in accordance
with the Rules and Regulations and shares of Common Stock which may be
issued upon exercise of a stock option or warrant) or any securities
convertible into, derivative of or exercisable or exchangeable for
such Common Stock for the 180 day period after the date of this
Agreement, except for shares of Common Stock sold pursuant to this
Agreement.
(l) The transactions contemplated by the Transfer Agreement have
been consummated.
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 Dates, 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.
-30-
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 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.
-31-
11. Reimbursement of Underwriters. Notwithstanding any other
-----------------------------
provisions hereof, if this Agreement shall not become effective by reason of any
election of the Company or the Selling Stockholder pursuant to the first
paragraph of Section 10 or shall be terminated by the Representatives under
Section 8 or Section 10, the Company and the Selling Stockholder will bear and
pay the expenses specified in Section 5 hereof and, in addition to their
obligations pursuant to Section 6 hereof, the Company and the Selling
Stockholder 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 and
the Selling Stockholder shall have the right to postpone the Closing Dates for a
period of not more than five (5) full business days in order that the Company
and the Selling Stockholder 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 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, the Selling Stockholder 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, the Selling Stockholder 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
-32-
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
Viisage Technology, Inc., 000 Xxxx Xxxxxx, Xxxxx, XX 00000. With respect to the
Selling Stockholder, notices may be sent to Xxx at 000 Xxxx Xxxxxx, Xxxxx, XX
00000.
14. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and the Selling Stockholder
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 and the Selling
Stockholder 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 or any Selling Stockholder 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.
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. In this Agreement, the term
"Company's knowledge" means the knowledge of the Company and the Selling
Stockholder. The section headings in this
-33-
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, the Selling Stockholder 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.
-34-
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,
VIISAGE TECHNOLOGY, INC.
By:
---------------------------------
Name:
Title:
XXX ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
-35-
Accepted and delivered in
New York, New York as of
the date first above written.
XXXXX & COMPANY
XXXXXXX & COMPANY, INC.
By: XXXXX & COMPANY
Acting on their own behalf and as
Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: Cowen Incorporated,
its general partner
By:
-----------------------------
Name:
Title:
-36-
SCHEDULE A
Number
of Shares
of Firm Stock
to be
Purchased
---------
Name
----
Xxxxx & Company................................
Xxxxxxx & Company, Inc. .......................
---------
Total.................................... 2,500,000
=========
-37-
EXHIBITS I AND II
-----------------
FORM OF OPINION TO BE DELIVERED BY COUNSEL TO COMPANY
AND THE SELLING STOCKHOLDER
---------------------------
-38-
November , 1996
XXXXX & COMPANY
XXXXXXX & COMPANY, INC.
as Representatives of the several
Underwriters named in Schedule A
to the Underwriting Agreement
dated November __, 1996 among
the Underwriters, Viisage
Technology, Inc. and Xxx Acquisition
Corp.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 8(f)(i) of the
Underwriting Agreement dated November __, 1996 (the "Underwriting Agreement")
among Viisage Technology, Inc., a Delaware corporation (the "Company"), Xxx
Acquisition Corp., a Massachusetts corporation (the "Selling Stockholder"), and
the several Underwriters named in Schedule A to the Underwriting Agreement, for
whom you are acting as Representatives, relating to the Company's and Selling
Stockholder's sale of an aggregate 2,500,000 shares of Common Stock, $.001 Par
Value (the "Shares") to the Underwriters. The Company has granted to the
Underwriters an option to purchase 375,000 additional shares of Common Stock.
Capitalized terms used but not defined herein shall have the respective meanings
ascribed to them in the Underwriting Agreement.
We have acted as counsel for the Company and Selling Stockholder with
respect to the issuance and sale of the Shares. We have attended the Closing of
the sale of the Shares held today. We have examined the original or certified
copies of the Certificate of Incorporation of the Company, the Articles of
Organization of the Selling Stockholder, the By-laws of the Company and the
Selling Stockholder, the relevant minutes of the meetings or written consents of
the Board of Directors and stockholders of the Company and Selling Stockholder
through the date hereof, and we have examined a specimen form of the stock
certificate which will evidence ownership of the Shares.
We have also examined the Company's Registration Statement on Form S-1,
Registration No. 333-10649, filed on August 22, 1996 with the Securities and
Exchange Commission (the "SEC") for the registration of the Shares under the
Securities Act of 1933 (the "Act"), as amended by Amendment No. 1 filed on
October 9, 1996, Amendment No. 2 filed on November 4, 1996 and by Amendment No.
3 filed on November 7, 1996 (the "Registration Statement"), and the final
prospectus dated November 8, 1996 in the form filed under Rule 424(b) of the Act
(the "Prospectus").
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Further, we have examined an executed copy of the Underwriting Agreement
and all other documents (other than the certificates representing the Shares)
listed on Schedule A to the Closing Memorandum pertaining to the sale of the
Shares.
The opinions rendered below "to our knowledge" or on the basis of what we
"know" are based only on the actual knowledge of the attorneys currently with
our firm who have given substantive legal representation to the Company or the
Selling Stockholder.
We have made such examination of the laws of the United States, the
Commonwealth of Massachusetts and the Delaware General Corporation Law as we
have deemed relevant for the purposes of this opinion, but we have not made an
independent review of the laws of any other state or jurisdiction. To the
extent that any of the opinions expressed may require the application of the law
of the State of New York, we have assumed, with your permission, that the
applicable law would be equivalent to that of Massachusetts.
As to certain questions of fact, we have relied on representations or
certificates of officers of the Company or the Selling Stockholder, and of
government officials, upon which representations or certificates we believe it
is justifiable for you and for us to rely. As to the opinion in the first
sentence of paragraph 1 relating to the organization, existence and standing of
the Company in Delaware, we have relied solely upon a certificate of the
Secretary of State of Delaware dated November 7, 1996 and on the date hereof.
As to the opinion in paragraph 22 relating to the organization, existence and
good standing of the Selling Stockholder in Massachusetts, we have relied solely
upon a certificate of the Secretary of State of The Commonwealth of
Massachusetts dated November 7, 1996 and a verbal representation of a
representative of that office on the date hereof. As to the opinion in the
second sentence of paragraph 1 relating to the qualification and standing of the
Company in other jurisdictions, we have relied solely upon certificates of
government officials as of recent dates and no opinion is given with respect to
any day after the date of the applicable certificate. The opinion set forth in
paragraph 5 below as to the effectiveness of the Registration statement is based
solely on a verbal confirmation from N. Xxxx Xxxxxxxx, Esquire, of the
Commission on November __, 1996.
We have examined such other papers and made such investigations as to
matters of fact and law as we have considered necessary in order to give the
opinions set forth below.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Delaware, 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 as a
foreign corporation and is in good standing in ____________________________.]
To our knowledge, the Company does not own or control, directly or indirectly,
any corporation, association or other entity.
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2. On the date hereof, the authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock, $.001 par value per share, and
2,000,000 shares of undesignated Preferred Stock, $.001 par value per share.
The outstanding shares of the capital stock of the Company (including the shares
of stock to be sold by the Selling Stockholder) have been duly authorized and
validly issued, are fully paid and nonassessable, conform to the description
thereof contained in the Prospectus in all material respects and, to our
knowledge, have not been issued in violation of or are subject to any preemptive
right, co-sale right, registration right, right of first refusal or other
similar right, except as described in the Prospectus under the caption "Shares
Eligible for Future Sale -- Registration Rights."
3. The Shares to be issued by the Company have been duly and validly
authorized and, upon 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.
4. The authorized and outstanding 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." The certificates representing
the Shares are in proper form under the Delaware General Corporation Law
assuming conformance with the specimen certificate filed as an Exhibit to the
Registration Statement.
5. The Registration Statement has become effective under the Act and, to
our knowledge, 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 (except as to the
financial statements, the notes thereto and the related schedules and other
financial operations and statistical data contained therein, as to which we
express no opinion) comply as to form in all material respects with the
requirements of the Act and with the Rules and Regulations.
7. To our knowledge, 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 our knowledge, except as described in the Prospectus under the
caption "Business -- Legal Proceedings," (i) no claim has been made against the
company alleging infringement by the Company of an patent, trademark, service
xxxx, trade names, trade secret, license 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 - Shares Eligible",
"Risk Factors - Potential Adverse Impact of Anti-takeover Provisions on Market
Price of Shares", "Risk
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Factors - Limited Protection of Intellectual Property...", Business -
Intellectual Property and Proprietary Rights," "Business - Legal Proceedings,"
"Management - Incentive and Stock Plans," "Relationship and Certain Transactions
with Xxx Technologies," "Principal and Selling Stockholders," "Description of
Capital Stock" and "Shares Eligible for Future Sale" 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. We do 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. To our knowledge, 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 is not described or
filed therein.
10. To our knowledge, except as described in the Prospectus under the
caption "Business -- Legal Proceedings," 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 Shares to be issued and sold by it), and the
Underwriting Agreement has been duly and validly authorized, executed and
delivered by the Company.
12. The execution and delivery of the Underwriting Agreement and the issue
and sale of the Shares 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 By-laws of the Company or, to our knowledge,
(a) any material provision of any contract or instrument filed as an exhibit to
the Registration Statement, (b) any law of the United States or the Commonwealth
of Massachusetts or the Delaware General Corporation Law, (c) any rule or
regulation of any governmental authority or regulatory body of the Untied States
or the Commonwealth of Massachusetts, (d) any judgment, order or decree of any
court, governmental authority or arbitrator known to us and applicable to the
Company or its properties or assets, or (e) will result in the creation of a
lien.
13. To our 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, except as described in the Prospectus under the caption "Shares
Eligible for Future Sale - Registration Rights."
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 shares pursuant to the
Underwriting Agreement, except such as have
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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
we express no opinion.
15. The Company is not, and upon the consummation of the transactions
contemplated by the Underwriting Agreement and application of the proceeds as
set forth under the caption "Use of Proceeds" in the Prospectus will not be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the investment Company Act of 1940, as amended.
16. The Company has the corporate power and authority to enter into each
of the Organization Agreements to perform its obligations thereunder, and each
of such agreements has been duly and validly authorized, executed and delivered
by the Company and each is a valid and binding obligation of the Company
enforceable against the company in accordance with its terms, subject, as to the
availability of legal remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium, or other similar laws affecting creditors' rights
generally, and to any equitable principles limiting the right to obtain specific
performance of any such obligations. The transactions contemplated by the
Transfer Agreement have been consummated.
17. The Selling Stockholder is the record owner and, to our knowledge, has
valid and marketable title to the Shares to be sold by the Selling Stockholder,
free and clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer, and has full right,
power and authority to enter into the Underwriting Agreement.
18. To our knowledge, the Selling Stockholder has, upon delivery of and
payment for each of the Shares being sold by the Selling Stockholder, the right,
power and authority, and any approval required by law to sell, transfer, assign
and deliver the Shares being sold by the Selling Stockholder pursuant to the
Underwriting Agreement. Each of the several Underwriters (assuming that the
Underwriters are bona fide purchasers as defined in Section 8-302 of the
Massachusetts Uniform Commercial Code) will acquire valid and marketable title
to all o the Shares being sold to the Underwriters by the Selling Stockholder,
free and clear of any liens, encumbrances, equities claims, restrictions on
transfer or other defects whatsoever.
19. The Selling Stockholder has the corporate power and authority to enter
into the Underwriting Agreement and to perform its obligations thereunder and
the Underwriting Agreement has been duly and validly authorized, executed and
delivered by the Selling Stockholder.
20. The execution and delivery of the Underwriting Agreement and the sale
of Shares by the Selling Stockholder 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 Articles of Organization or By-Laws of the Selling
Stockholder, or, to our knowledge, (a) any provision of any material contract or
instrument to which the Selling Stockholder is a party or by which the Selling
Stockholder is bound, (b) any law of the United States or the Commonwealth of
Massachusetts, (c) any judgment, order or decree of any court, governmental
authority or arbitrator, known to us
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and applicable to the Selling Stockholder or any of its properties or assets, or
(e) result in the creation of a lien.
21. The Selling Stockholder has the corporate power and authority to enter
into each of the Organization Agreements and to perform its obligations
thereunder, and each of the Organization Agreements has been duly and validly
authorized, executed and delivered by the Selling Stockholder and is a valid and
binding obligation of the Selling Stockholder enforceable against the Selling
Stockholder in accordance with its terms, subject, as to the availability of
legal remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium, or other similar laws affecting creditors' rights generally, and to
any equitable principles limiting the right to obtain specific performance of
any such obligations. To our knowledge, the Selling Stockholder has performed
all of its obligations under the Transfer Agreement defined in the Underwriting
Agreement.
22. The execution, delivery and performance of each of the Organization
Agreements 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
Articles of Organization or By-laws of the Selling Stockholder, or, to our
knowledge, (a) any material provision of any material contract or instrument to
which the Selling Stockholder is a party or by which the Selling Stockholder is
bound, (b) any law of the Untied States or the Commonwealth of Massachusetts or
the Delaware General Corporation Law, (c) any rule or regulation of any
governmental authority or regulatory body of the United States or the
Commonwealth of Massachusetts, (d) any judgment, order or decree of any court,
governmental authority or arbitrator known to us and applicable to the Selling
Stockholder or any of its properties or assets or (e) result in the creation of
a lien.
23. The Selling Stockholder has been duly organized and is validly
existing and in good standing as a corporation under the laws of the
Commonwealth of Massachusetts.
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial, accounting or statistical
matters and because of the wholly or partially non-legal character of many of
the statements contained in the Registration Statement and the Prospectus, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent expressly set forth in
paragraphs (6) and (8) above) and we make no representation that we have
independently verified the accuracy, completeness or fairness of such statements
(except as aforesaid). Without limiting the foregoing, we assume no
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the financial statements or notes thereto or the
other financial and statistical data included in the Registration Statement, and
we have not examined the accounting, financial or statistical records from which
such statements, notes and data are derived. We note that, although certain
portions of the Registration Statement (including financial statements) have
been included therein on the authority of "experts" within the meaning of the
Securities Act, we are not such experts with respect to any portion of the
Registration Statement.
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However, in the course of our acting as counsel for the Company in
connection with the preparation of the Registration Statement and the
Prospectus, we participated in conferences with your representatives,
representatives of the Company, representatives of the Selling Stockholder,
representatives of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the
Underwriters, and representatives of Xxxxxx Xxxxxxxx, LLP, independent
accountants for the Company, during which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed.
In addition, we reviewed certain corporate documents furnished to us by the
Company and the Selling Stockholder or otherwise in our possession, including
the exhibits filed with the Registration Statement and the minutes of meetings
of the stockholders and Board of Directors of the Company and the Selling
Stockholder.
Based on our participation in the above-mentioned conferences, our review
of the documents described above, our understanding of applicable law and the
experience we have gained in our practice thereunder, we advise you that nothing
has come to our attention which leads us to believe that the Registration
Statement and any amendment or supplement thereto when such documents become
effective (other than the financial statements, the notes thereto and the
related schedules and other financial and statistical data included in the
Registration Statement, as to which we express no opinion), at the time it
became effective, contained any 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 and any amendment or
supplement thereto (other than the financial statements, the notes thereto and
the related schedules and other financial and statistical data included in the
Prospectus, as to which we express no opinion), as of the date of the Prospectus
or as of the Closing Dates, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is rendered pursuant to your request and may be relied upon
solely by the Underwriters.
Very truly yours,
FINNEGAN, HICKEY, XXXXXXXX & XXXXXXX, P.C.
_____________________________
Member
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Exhibit III
FORM OF OPINION TO BE DELIVERED
BY PATENT COUNSEL TO COMPANY
----------------------------
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November __, 1996
Xxxxx & Company
Xxxxxxx & Company, Inc.
As Representatives of the several Underwriters
RE: Viisage Technology, Inc.
------------------------
Ladies and Gentlemen:
We have been and are patent counsel to XXX Technologies (the "Company")
with respect to the issued patents, pending patent applications, trade secrets
and other proprietary technology that the Company owns or has rights to. This
opinion is being furnished to you at the request of the Company pursuant to
Section 8(f)(ii) of the Underwriting Agreement dated November __, 1996 between
you and the Company, relating to the sale to you of certain shares of common
stock of the Company.
We are familiar with the technology used by the Company in its business
that is the subject matter of the Company's patent portfolio. We have read the
sections of the Prospectus referring to patents, trade secrets, or other
proprietary information or materials; in particular, we have read the statements
in the Prospectus under the captions "Risk Factors - Limited Protection of
Intellectual Property and Proprietary Rights; Potential Costs of Enforcement or
Defense" and "Business - Intellectual Property and Proprietary Rights."
Subject to the foregoing and the qualifications set forth below we are of
the opinion that:
(i) We are unaware of any facts which would preclude the Company from
having clear title to the Company's patents and patent applications referred to
or described in the Prospectus, except as described in the Prospectus. To the
best of our knowledge, we and the Company have complied with the required duty
of candor and good faith in dealing with the Patent and Trademark Office,
including the duty to disclose to the Office all information believed to be
material to the patentability of each issued U.S. patent or pending application.
We have no knowledge of any facts that would form the basis for a belief that
the Company lacks or will be unable to obtain any rights or licenses to use all
patents and know-how necessary to conduct its business as described in the
Prospectus, except as described in the Prospectus. We have no knowledge of any
facts which would form a basis for a belief that any of the patents or
applications owned or licensed by the Company are unenforceable or invalid, or
would be unenforceable or invalid if issued as patents, except as described in
the Prospectus. We have no knowledge of any patent applications of third
parties, which, if issued, would limit or prohibit the business now conducted or
proposed to be conducted by the Company as described in the Prospectus, except
as described therein. We know of no pending or threatened action, suit,
proceeding or claim by others that the Company is infringing any patent which
could result in any material adverse effect on the Company, except as described
in the Prospectus;
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(ii) To our knowledge, there are no legal or governmental proceedings
pending relating to Patent rights, other than PTO review of pending applications
for patents, including appeal and reissue proceedings, and, to the best of our
knowledge, no such proceedings are threatened or contemplated by governmental
authorities to others;
(iii) To our knowledge, there are no contracts or other documents material
to the Company's patents or proprietary information other than those described
in the Prospectus; and
(iv) Although we have not verified the accuracy or completeness of the
statements contained in the sections of the Prospectus under the captions noted
hereinabove relating to intellectual property, nothing has come to our attention
that would form a basis for a belief that those sections of the Prospectus
contain any untrue statement of a material fact, or omit to state any material
facts necessary to make the statements made therein not misleading.
In rendering this advice, we have relied as to matters of fact, to the
extent we have deemed proper, upon representations of the Company's officers and
management.
We express no opinion as to the laws of any jurisdiction except the laws of
the Commonwealth of Massachusetts and the laws of the United States of America
to the extent specifically referred to herein.
We assume no obligation to advise you of any changes in the foregoing
subsequent to delivery of this opinion. This opinion has been prepared solely
for the benefit of the several Underwriters in connection with the offering
described in the Prospectus and may not be relied on by any other person, or for
any other purpose, without our written consent. In addition, this opinion
should not be quoted in whole or in part (except in a list of closing
documents), or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
Very truly yours,
LAHIVE & XXXXXXXXX
By:
------------------------------
Xxxx X. Xxxxxx, Xx.
