EXHIBIT 1.1
Opinion Research Corporation
[________] Shares
Common Stock
UNDERWRITING AGREEMENT
[_____], 2005
Friedman, Billings, Xxxxxx & Co., Inc.
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Opinion Research Corporation, a Delaware corporation (the "Company"),
confirms its agreement with each of the Underwriters listed on Schedule I hereto
(collectively, the "Underwriters"), for whom Friedman, Billings, Xxxxxx & Co.,
Inc. is acting as representative (in such capacity, the "Representative"), with
respect to the sale by the Company of [_________] shares (the "Initial Shares")
of Common Stock, par value $0.01 per share, of the Company ("Common Stock"), and
the purchase by the Underwriters, acting severally and not jointly, of the
respective number of shares of Common Stock set forth opposite the names of the
Underwriters in Schedule I hereto. The Company also confirms the grant of the
option described in Section 1(b) hereof to purchase all or any part of [______]
additional shares of Common Stock to cover over-allotments (the "Option
Shares"), if any, from the Company to the Underwriters, acting severally and not
jointly. The Initial Shares of Common Stock to be purchased by the Underwriters
and all or any part of the Option Shares of Common Stock subject to the option
described in Section l(b) hereof are hereinafter called, collectively, the
"Shares."
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), a registration statement on Form S-1 (No.
333-119875) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations thereunder (the "Securities Act Regulations"). The
Company has prepared and filed such amendments thereto, if any, and such amended
preliminary prospectuses, if any, as may have been required to the date hereof,
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. The registration statement has been declared
effective under the Securities Act by the Commission. The registration statement
as amended at the time it became effective (including all exhibits, financial
schedules and information deemed (whether by incorporation by reference or
otherwise) to be a part of the registration statement
at the time it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations or otherwise) is hereinafter called the "Registration Statement,"
except that, if the Company files a post-effective amendment to such
registration statement which becomes effective prior to the Closing Time (as
defined below), "Registration Statement" shall refer to such registration
statement as so amended. Any registration statement filed pursuant to Rule
462(b) of the Securities Act Regulations is hereinafter called the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the 462(b) Registration Statement. Each prospectus included in the
registration statement, or amendments thereof or supplements thereto, before it
became effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule
424(a) of the Securities Act Regulations is hereinafter called the "Preliminary
Prospectus." The term "Prospectus" means the prospectus in the form included in
the Registration Statement at the time of effectiveness, or if Rule 430A of the
Securities Act Regulations is relied upon, the term "Prospectus" shall also
include the final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Securities Act Regulations, and any
amendments thereof or supplements thereto. The Commission has not issued any
order preventing or suspending the use of any Preliminary Prospectus.
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Underwriters deem advisable after the
effective date of the Registration Statement and this Agreement has been
executed and delivered. The Company hereby confirms that the Underwriters and
dealers have been authorized to distribute or cause to be distributed each
Preliminary Prospectus and are authorized to distribute the Prospectus (as from
time to time amended or supplemented if the Company furnishes any amendments or
supplements thereto to the Underwriters).
The Company and the Underwriters agree as follows:
1. Sale and Purchase.
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, at the purchase price per share
of [________], the Company agrees to sell to the Underwriters the number of
Initial Shares set forth in Schedule I opposite its name, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the number of
Initial Shares set forth in Schedule I opposite such Underwriter's name, plus
any additional number of Initial Shares which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 8 hereof, subject in
each case, to such adjustments among the Underwriters as the Representative in
its sole discretion shall make to eliminate any sales or purchases of fractional
shares. The Underwriters may from time to time increase or decrease the public
offering price after the public offering to such extent as the Underwriters may
determine.
(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, at the purchase
price per share
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set forth in paragraph (a), the Company hereby grants an option to purchase all
or any part of the [_______] Option Shares to the Underwriters. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Shares upon notice by the Representative to the
Company setting forth the number of Option Shares as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Shares. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representative, but shall not be later
than ten full business days (or earlier, without the consent of the Company,
than two full business days) after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined. If the option is exercised as
to all or any portion of the Option Shares, each of the Underwriters, acting
severally and not jointly, will purchase the number of Option Shares which the
Company has been advised by the Representative have been attributed to such
Underwriter or, if the Company has not been so advised, that proportion of the
total number of Option Shares then being purchased which the number of Initial
Shares set forth in Schedule I opposite the name of such Underwriter bears to
the total number of Initial Shares, plus any additional number of Option Shares
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 8 hereof, subject in each case to such adjustments among
the Underwriters as the Representative in its sole discretion shall make to
eliminate any sales or purchases of fractional shares. The Underwriters may from
time to time increase or decrease the public offering price of the Option Shares
after the public offering to such extent as the Underwriters may determine.
2. Payment and Delivery.
(a) Initial Shares. The Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of The Depository Trust Company ("DTC")
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representative by the Company
upon at least forty-eight hours' prior notice. To the extent the Representative
requests that the Initial Shares be delivered in certificated form and not in
book entry through the facilities of DTC, the Company will cause the
certificates representing the Initial Shares to be made available for checking
and packaging at least twenty-four hours prior to the Closing Time (as defined
below) with respect thereto at the office of the Representative, 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of DTC or its
designated custodian, as the case may be (the "Designated Office"). The time and
date of such delivery and payment shall be 9:30 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time and date shall be agreed to by
the Representative and the Company). The time at which such payment and delivery
are actually made is hereinafter sometimes called the "Closing Time."
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(b) Option Shares. Any Option Shares to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as the Representative may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to the Representative, including, at the option of the
Representative, through the facilities of DTC for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified to the Representative by the Company upon at least forty-eight hours'
prior notice. To the extent the Representative requests that the Option Shares
be delivered in certificated form and not in book entry through the facilities
of DTC, the Company will cause the certificates representing the Option Shares
to be made available for checking and packaging at least twenty-four hours prior
to the Date of Delivery with respect thereto at the Designated Office. The time
and date of such delivery and payment shall be 9:30 a.m., New York City time, on
the date specified by the Representative in the notice given by the
Representative to the Company of the Underwriters' election to purchase such
Option Shares or on such other time and date as the Company and the
Representative may agree upon in writing.
3. Representations and Warranties of the Company.
The Company represents and warrants to each Underwriter that:
(a) The subsidiaries listed on Schedule II attached hereto are the only
subsidiaries of the Company (each a "Subsidiary"). The Company and its
Subsidiaries each have been duly incorporated or organized and are validly
existing as corporations or limited liability companies in good standing under
the laws of their respective jurisdictions of incorporation or organization with
full power and authority to own, lease, license and operate their respective
assets and properties and to conduct their respective business as described in
the Registration Statement and Prospectus and, in the case of the Company, to
execute and deliver this Agreement and to consummate the transactions described
in this Agreement;
(b) the Company and all of its Subsidiaries are duly qualified or licensed
by each jurisdiction in which they conduct their respective businesses, and the
Company and its Subsidiaries are duly qualified, and are in good standing, in
each jurisdiction in which they own or lease real property or maintain an office
and in which such qualification is necessary, except where the failure to be so
qualified or licensed and in good standing, individually and in the aggregate,
would not have a material adverse effect on the assets, business, operations,
earnings, prospects, properties or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole (a "Material Adverse Effect");
except as disclosed in the Prospectus, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the Company, or
from making any other distribution with respect to such Subsidiary's capital
stock or from repaying to the Company or any other Subsidiary any amounts which
may from time to time become due under any loans or advances to such Subsidiary
from the Company or such other Subsidiary, or from transferring any such
Subsidiary's property or assets to the Company or to any other Subsidiary; other
than as
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disclosed in the Prospectus, the Company does not control or own, directly or
indirectly, any capital stock or other equity securities of any other
corporation (other than the Subsidiaries) or any ownership interest in any
partnership, joint venture or other association;
(c) the Company and its Subsidiaries, and, to the Company's knowledge,
each of the officers and directors of the Company and the Subsidiaries, in their
capacity as such, are in compliance in all respects with all applicable laws,
rules, regulations, orders, decrees and judgments, including, without
limitation, those relating to fiduciary obligations of directors, transactions
with affiliates, and the Xxxxxxxx-Xxxxx Act of 2002, as amended, and except
where the failure to be so in compliance could not reasonably be expected to
have a Material Adverse Effect;
(d) neither the Company nor its Subsidiaries is in breach or violation of
or in default (nor has any event occurred which with notice, lapse of time, or
both would constitute a breach of, or default under), (i) under any term or
provision of its respective certificate of incorporation or charter or by-laws,
or (ii) in the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, mortgage, deed of trust, loan
or credit agreement or other agreement or instrument to which the Company or its
Subsidiaries is a party or by which any of them or their respective properties
is bound, except, in the case of clause (ii) only, for such breaches or
defaults, individually and in the aggregate, which would not have a Material
Adverse Effect; and the execution, delivery and performance of this Agreement,
and consummation of any of the transactions contemplated hereby and the
application of the net proceeds from the offering and sale of the Shares to be
sold by the Company in the manner set forth in the Prospectus under the caption
"Use of Proceeds" will not give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with, or result in any breach or
violation of, or constitute a default under (nor constitute any event which with
notice, lapse of time, or both would constitute a breach of, or default under),
or require any consent or waiver under, (a) any provision of the certificate of
incorporation or charter or by-laws of the Company or its Subsidiaries; (b) any
provision of any franchise, permit, license, indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument to which the Company
or its Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected; or (c) any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to the
Company or its Subsidiaries, or result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or asset of the Company or
its Subsidiaries, except in the case of clauses (b) or (c) for such conflicts,
breaches or defaults which have been validly waived or would not reasonably be
expected to have a Material Adverse Effect or result in the creation or
imposition of any material lien, charge, claim or encumbrance upon any property
or asset of the Company or any of its Subsidiaries;
(e) all necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement
and the issuance and sale of the Shares by the Company; this Agreement has been
duly authorized, executed and delivered by the Company and is a legal, valid and
binding agreement of the Company
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enforceable in accordance with its terms, except as may be limited or affected
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except to
the extent that the indemnification and contribution provisions of Section 9
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(f) no approval, authorization, consent, license, permit, certificate or
order of or filing by or with any federal, state or local governmental or
regulatory commission, board, body, authority or agency is required in
connection with the Company's execution, delivery and performance of this
Agreement, its consummation of the transactions contemplated hereby, and its
sale and delivery of the Shares, other than (A) such as have been obtained and
are in full force and effect, or will have been obtained and will be in full
force and effect at the Closing Time or the relevant Date of Delivery, as the
case may be, under the Securities Act, (B) such approvals as have been obtained
and are in full force and effect in connection with the approval of the
quotation of the Shares on the Nasdaq National Market, (C) any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters, and (D) where the
failure to obtain any such approval, authorization, consent, license, permit,
certificate or order could not reasonably be expected to affect adversely in any
material respect the transactions contemplated by this Agreement or to have a
Material Adverse Effect.
(g) each of the Company and its Subsidiaries has all necessary licenses,
authorizations, consents, permits, certificates and approvals and has made all
necessary filings required under any federal, state or local law, regulation or
rule, and has obtained all necessary licenses, authorizations, consents,
permits, certificates and approvals from other persons, required in order to
own, lease and license their respective assets and properties and conduct their
respective businesses as described in the Prospectus, all of which are valid and
in full force and effect, except to the extent that any failure to have any such
licenses, authorizations, consents or approvals, to make any such filings or to
obtain any such licenses, authorizations, consents, permits, certificates or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor any of its Subsidiaries is required by any
applicable law to obtain accreditation or certification from any governmental
agency or authority in order to provide the products and services which it
currently provides or which it proposes to provide as set forth in the
Prospectus, except such accreditations or certifications as have been obtained
by the Company and are in full force and effect and except to the extent that
the failure to have such accreditations or certifications could not reasonably
be expected to have a Material Adverse Effect; neither the Company nor any of
its Subsidiaries has received any notice regarding a possible violation, default
or revocation of, and, to the Company's knowledge, neither the Company nor any
of its Subsidiaries is in violation of or in default under, any such license,
authorization, consent, permit, certificate or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or its Subsidiaries the effect of which could be
material and adverse to the assets, business, operations, earnings, prospects,
properties or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole; to the Company's knowledge, no event has occurred
that allows, or after notice or lapse of time
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would allow, revocation or termination of any such license, authorization,
consent, permit, certificate or approval or results in any other material
impairment of the rights of the Company or any Subsidiary thereunder; and no
such license, authorization, consent, permit, certificate or approval contains a
materially burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectus;
(h) the Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization;" all of the issued and outstanding
shares of capital stock of the Company and its Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable and none of
them was issued in violation of any preemptive or other similar right, and all
of the outstanding shares of capital stock of the Subsidiaries are directly or
indirectly owned of record and beneficially by the Company; all securities
issued by the Company, its Subsidiaries or any trust established by the Company
or its Subsidiaries, have been issued and sold by the Company, its Subsidiaries
or any trust established by the Company or its Subsidiaries, as the case may be,
in compliance with (x) all applicable federal and state securities laws, (y) the
laws of the applicable jurisdiction of incorporation of the issuing entity and
(z) to the extent applicable, the requirements of the Nasdaq National Market;
except as disclosed in the Prospectus, there are no outstanding (i) securities
or obligations of the Company or its Subsidiaries convertible into or
exchangeable for any capital stock of the Company or the Subsidiaries, (ii)
warrants, rights or options to subscribe for or purchase from the Company or any
of its Subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations, or (iii) obligations, commitments, plans
or arrangements of the Company or the Subsidiaries to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options; there are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any shares of
capital stock of the Company or any such rights pursuant to its certificate of
incorporation or by-laws or any agreement or instrument to or by which the
Company is a party or bound;
(i) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement or the use of the Prospectus has been issued
under the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are threatened by
the Commission, and any request on the part of the Commission for additional
information has been complied with; any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Securities Act Regulations
has been or will be made in the manner and within the time period required by
such Rule 424(b);
(j) the Preliminary Prospectus and the Registration Statement comply and
the Prospectus and any further amendments or supplements thereto will, when they
have become effective or are filed with the Commission, as the case may be,
comply in all material respects with the requirements of the Securities Act, the
Securities Act Regulations, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the Commission promulgated
thereunder; the Registration Statement did not,
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and any amendment thereto will not, in each case as of the applicable effective
date, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representative to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the last sentence of the first
paragraph of Section 9(c) hereof);
(k) all information furnished in writing to the Underwriters by the
Company for use in the preparation of the documents to be filed with the
National Association of Securities Dealers, Inc. or state securities or blue sky
authorities is true and correct and does not contain an untrue statement of a
material fact nor does it omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(l) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical to the
versions of the Preliminary Prospectus and Prospectus created to be transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and
Retrieval System ("XXXXX"), except to the extent permitted by Regulation S-T;
(m) all legal or governmental proceedings, contracts, leases or documents
of a character required to be filed as exhibits to the Registration Statement or
to be summarized or described in the Prospectus have been so filed, summarized
or described as required; the summaries and descriptions in the Registration
Statement and the Prospectus of the contracts, leases and other legal documents
therein described present fairly the information required to be shown; each
agreement described in the Registration Statement and the Prospectus or listed
in the exhibits to the Registration Statement or incorporated by reference is in
full force and effect and is valid and enforceable by and against the Company or
the Subsidiary party thereto in accordance with its terms, except as may be
limited or affected by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, and by general principles of
equity;
(n) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries or any of their respective officers and directors or to
which the properties, assets or rights of any such entity are subject, at law or
in equity, before or by any federal, state, local or foreign
8
governmental or regulatory commission, board, body, authority, arbitral panel or
agency which is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed;
(o) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly, in all material
respects, the consolidated financial position of the entities to which such
financial statements relate (the "Covered Entities") as of the dates indicated
and the consolidated results of operations and changes in financial position and
cash flows of the Covered Entities for the periods specified; such financial
statements and related notes have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the periods
involved and in accordance with Regulation S-X promulgated by the Commission and
all adjustments necessary for a fair presentation of the results for such
periods have been made; the amounts in the Prospectus under the captions
"Prospectus Summary - Summary Financial Data" and "Selected Financial Data"
present fairly, in all material respects, the information shown therein and have
been compiled on a basis consistent with the financial statements included in
the Registration Statement and the Prospectus;
(p) Ernst & Young LLP, whose reports on the consolidated financial
statements of the Company and its Subsidiaries are filed with the Commission as
part of the Registration Statement and Prospectus, were during the periods
covered by their reports independent registered public accountants with respect
to the Company as required by the Securities Act and the Securities Act
Regulations; Xxxxx Xxxxxxxx LLP, which the Company engaged on August 12, 2004,
is an independent registered public accounting firm with respect to the Company.
(q) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or Prospectus, there has not been (A) any
material adverse change in the assets, business, operations, earnings,
prospects, properties or condition (financial or otherwise), present or
prospective, of the Company and its Subsidiaries taken as a whole, whether or
not arising in the ordinary course of business, (B) any transaction, which is
material to the Company and its Subsidiaries taken as a whole, as to which
negotiations have commenced or which has been entered into by the Company or any
of its Subsidiaries, (C) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of its Subsidiaries, which is material
to the Company and its Subsidiaries taken as a whole, (D) any dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock, or any redemption, purchase or other acquisition by the
Company (or agreement to do any of the foregoing) of any shares of its capital
stock, (E) any issuance of any securities of the Company other than pursuant to
the stock option plans and stock purchase plans described in the Prospectus or
(F) any loss or interference with the Company or its Subsidiaries' assets,
business or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree which is material to the Company and its Subsidiaries taken as a
whole;
9
(r) except as set forth in the Prospectus and except for Allied Capital
Corporation and Allied Investment Corporation, there are no persons with
registration or other similar rights to have any equity securities, including
securities which are convertible into or exchangeable for equity securities,
registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act; no holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement, which rights have not been waived by the
holder thereof as of the date hereof;
(s) the Shares have been duly authorized and, when issued and duly
delivered against payment therefor as contemplated by this Agreement, will be
validly issued, fully paid and non-assessable, free and clear of any pledge,
lien, encumbrance, security interest or other claim arising through the Company
or the Subsidiaries, and the issuance and sale of the Shares by the Company is
not subject to preemptive or other similar rights arising by operation of law,
under the certificate of incorporation or by-laws of the Company, under any
agreement to which the Company or any of its Subsidiaries is a party or
otherwise;
(t) the Company has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares;
(u) neither the Company nor any of its officers, directors, stockholders
or affiliates (i) is required to register as a "broker" or "dealer" in
accordance with the provisions of the Exchange Act or the rules and regulations
thereunder, or (ii) directly, or indirectly through one or more intermediaries,
controls or has any other association with (within the meaning of Article I of
the By-laws of the National Association of Securities Dealers, Inc. (the
"NASD")) any member firm of the NASD, except as set forth in the Registration
Statement or otherwise disclosed in writing to the Representative;
(v) the Company has not relied upon the Representative or legal counsel
for the Representative for any legal, tax or accounting advice in connection
with the offering and sale of the Shares;
(w) any certificate signed by any officer of the Company or any Subsidiary
delivered to the Representative or to counsel for the Underwriters pursuant to
or in connection with this Agreement shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
(x) the Common Stock conforms in all material respects to the description
thereof contained in the Registration Statement and Prospectus; the form of
certificate used to evidence the Common Stock complies in all material respects
with all applicable statutory requirements and with any applicable requirements
of the certificate of incorporation and by-laws of the Company and of the Nasdaq
National Market; the Company has filed an
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additional listing notification with the Nasdaq National Market with respect to
the Shares, and has received notification that the listing has been approved,
subject to notice of issuance of the Shares;
(y) the Company and its Subsidiaries have good and marketable title in fee
simple to all real property, if any, and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as do not materially and adversely affect
the value of such property and do not interfere with the use made or proposed to
be made of such property by the Company and the Subsidiaries; and any real
property and buildings held under lease by the Company or the Subsidiaries are
held under valid, existing and enforceable leases, free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects, with
such exceptions as are disclosed in the Prospectus or are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company or the Subsidiaries;
(z) the Company and the Subsidiaries own or possess adequate and
enforceable license or other rights to use all material patents, trademarks,
service marks, trade names, copyrights, software and design licenses, trade
secrets, manufacturing processes, other intangible property rights (including
applications for any of the foregoing) and know-how (collectively "Intangibles")
necessary to entitle the Company and the Subsidiaries to conduct their business
as described in the Prospectus, and neither the Company, nor any of the
Subsidiaries, has received notice of infringement of or conflict with (and the
Company knows of no such infringement of or conflict with) asserted rights of
others with respect to any Intangibles;
(aa) the books, records and accounts of the Company and its Subsidiaries
accurately and fairly reflect, in all material respects and in reasonable
detail, the transactions in and dispositions of the assets and the results of
operations of the Company and the Subsidiaries; the Company and its Subsidiaries
maintain a system of internal control over financial reporting, as such term is
defined in Rule 13a-15(f) under the Exchange Act;
(bb) (i) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act),
which (x) are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company's
principal executive officer and its principal financial officer by others within
those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (y) have been evaluated for
effectiveness as of the end of the last fiscal period covered by the
Registration Statement, and (z) are effective in all material respects to
perform the functions for which they were established, and (ii) based on the
evaluation of the Company's disclosure controls and procedures described above,
the Company is not aware of (A) any significant deficiency or material weakness
in the design or operation of its disclosure controls and procedures which is
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial information, or (B) any fraud, whether or not
material, that
11
involves management or other employees who have a significant role in the
Company's internal control over financial reporting. Since the most recent
evaluation of the Company's disclosure controls and procedures described above,
there have been no significant changes in internal control over financial
reporting or in other factors that could significantly affect internal control
over financial reporting;
(cc) each of the Company and the Subsidiaries has filed on a timely basis
all necessary federal, state, local and foreign tax returns required to be filed
through the date hereof, or has properly requested an extension thereof, and has
paid all taxes shown as due thereon; no tax deficiency or proposed additional
tax assessment has been asserted against any such entity, nor does any such
entity know of any tax deficiency or assessment which is likely to be asserted
against any such entity which if determined adversely to any such entity, could
reasonably be expected to have a Material Adverse Effect; all tax liabilities
are adequately provided for on the respective books of such entities; and there
are no tax audits or investigations pending with respect to the Company or any
of its Subsidiaries;
(dd) each of the Company and its Subsidiaries maintains insurance (issued
by insurers of nationally recognized financial responsibility) of the types and
in the amounts generally deemed adequate for their respective businesses and
consistent with insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering real and personal
property owned or leased by the Company or its Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect; the Company and its
Subsidiaries are in compliance with the terms of such insurance policies and
instruments in all material respects; neither the Company nor any of its
Subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business; neither the Company nor any of its Subsidiaries has, during the past
three fiscal years, been denied any insurance coverage which it has sought or
for which it has applied;
(ee) neither the Company nor any of its Subsidiaries has violated, or
received notice of any violation or asserted claim with respect to, any
applicable environmental, health, safety or similar law, regulation, decision or
order of any governmental agency or body or court, domestic or foreign,
applicable to the business of the Company or its Subsidiaries, or any federal or
state law relating to discrimination in the hiring, promotion or pay of
employees, or any applicable federal or state wages and hours law, or any
provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, or any state law precluding the denial of
credit due to the neighborhood in which a property is situated, where any such
violation could have a Material Adverse Effect; to the Company's knowledge, the
Company and its Subsidiaries have received all permits, licenses or other
approvals required of them under applicable environmental laws to conduct their
respective business, and are in compliance with all terms and conditions
thereof; to the Company's knowledge, no facts currently exist that will require
the Company or the Subsidiaries to make future material capital expenditures to
comply with environmental laws;
12
to the Company's knowledge, no property which is or has been owned, leased or
occupied by the Company or any Subsidiary has been designated as a Superfund
site pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980, as amended ("CERCLA") or otherwise designated as a
contaminated site under applicable state or local law and neither the Company
nor any of its Subsidiaries has been named as a "potentially responsible party"
under the CERCLA;
(ff) neither the Company nor any of its Subsidiaries, nor any officer,
director, agent or employee purporting to act on behalf of the Company or its
Subsidiaries has at any time, directly or indirectly, (i) made any contributions
to any candidate for political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment to any state, federal
or foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments required or allowed
by applicable law (including the Foreign Corrupt Practices Act of 1977, as
amended), (iii) engaged in any transactions, maintained any bank account or used
any corporate funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the
Company and its Subsidiaries, (iv) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (v) made any other unlawful payment;
(gg) except as otherwise disclosed in the Prospectus, there are no
material outstanding loans or advances or material guarantees of indebtedness by
the Company or any of its Subsidiaries to or for the benefit of any of the
officers or directors of the Company or any of its Subsidiaries or any of the
members of the families of any of them;
(hh) neither the Company, nor to the Company's knowledge, any employee or
agent of the Company, has made any payment of funds of the Company or received
or retained any funds in violation of any law, rule or regulation, including
without limitation the "know your customer" and anti-money laundering laws of
any jurisdiction;
(ii) each of the individuals named in the Prospectus who is or is expected
to be an independent director of the Company satisfies the requirements for
independence under the Xxxxxxxx-Xxxxx Act of 2002 and the rules of the NASD;
(jj) in connection with this offering, the Company has not offered and
will not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock, in a manner in violation of the
Securities Act; and the Company has not distributed and will not distribute any
Prospectus or other offering material in connection with the offer and sale of
the Shares, except as specifically contemplated herein;
(kk) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated;
13
(ll) no relationship, direct or indirect, exists between or among the
Company or any of its Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its Subsidiaries
on the other hand, which is required by the Securities Act and the Securities
Act Regulations to be described in the Registration Statement and the Prospectus
and which is not so described;
(mm) neither the Company nor any of its Subsidiaries is and, after giving
effect to the offering and sale of the Shares and the application of the net
proceeds therefrom as described in the Prospectus, will be 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 (the "Investment
Company Act");
(nn) there is no existing or, to the knowledge of the Company, threatened
labor dispute with the employees of the Company or any of its Subsidiaries, nor
is the Company aware of any existing or imminent labor disturbance by the
employees of any of the Company's or any of its Subsidiaries' principal
suppliers or contractors or any threatened or pending litigation between the
Company or any of its Subsidiaries and any of its respective executive officers,
in each case which are likely to have, individually or in the aggregate, a
Material Adverse Effect; and
(oo) for purposes of this Agreement, (A) "U.S. Government" includes any
agency, department, division, subdivision or office of the federal government of
the United States, including the officials, employees and agents thereof, (B)
"Contract" includes any agreement, Prime Contract, subcontract, basic ordering
agreement, letter contract, purchase order or delivery order of any kind,
whether written or oral, including all amendments, modifications and options
thereunder or relating thereto, (C) "Government Contract" means any Prime
Contract or any subcontract with a prime contractor or higher-tier subcontractor
under a Prime Contract, and (D) "Prime Contract" means any Contract entered into
directly with the U.S. Government.
(i) There are no Government Contracts under which the parties
thereto are currently experiencing material cost, billing, schedule, technical
or quality problems that could result in claims against the Company (or its
successors in interest) or its Subsidiaries by the U.S. Government, a prime
contractor or a higher-tier subcontractor that would have a Material Adverse
Effect.
(ii) All of the Company's Government Contracts that are material to
the assets, business, operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole
were, to the knowledge of the Company, legally awarded, are binding on the
parties thereto (except as may be limited or affected by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, by federal government contracting laws and regulations and by general
principles of equity), and are in full force and effect. To the Company's
knowledge, such Government Contracts (or, where applicable, the Prime Contracts
under which such Government Contracts were awarded) are not currently the
subject of bid or award protest proceedings.
14
(iii) Except as could not reasonably be expected to have a Material
Adverse Effect, the Company and its Subsidiaries have complied in all material
respects with all statutory and regulatory requirements applicable to the
Government Contracts to which the Company or a Subsidiary is a party, as set
forth by such statutes and regulations and as interpreted by courts, Boards of
Contract Appeals, and other relevant authorities. In this regard, the Company
and its Subsidiaries have complied in all material respects with, but not
limited to, the Federal Procurement and Administrative Services Act, the Federal
Acquisition Regulation ("FAR") and agency supplements to the FAR, FAR cost
principles and Cost Accounting Standards, where and as applicable to each of the
Company's and its Subsidiaries' Government Contracts and each of the Company's
and its Subsidiaries' quotations, bids and proposals for Government Contracts.
Furthermore, the Company represents that there are no actual or alleged
violations or breaches of any statute, regulation, representation,
certification, disclosure obligation, or contract term with respect to any
Government Contract of the Company or any of its Subsidiaries.
(iv) Except as could not reasonably be expected to have a Material
Adverse Effect, all facts set forth in or acknowledged by any representations or
certifications made or submitted by or on behalf of the Company in connection
with each of the Company's and its Subsidiaries' Government Contracts and each
of the Company's and its Subsidiaries' quotations, bids, and proposals for
Government Contracts, were current, accurate and complete in all respects as of
the date of submission.
(v) Except as could not reasonably be expected to have a Material
Adverse Effect, none of the Company or any of its Subsidiaries have received any
materially adverse or negative government past performance evaluations or
ratings in connection with the Company's and its Subsidiaries' Government
Contracts that could affect the evaluation of the Company's (or its successors')
or its Subsidiaries' bids or proposals for future Government Contracts, and no
facts currently exist that are reasonably likely to give rise to negative
government performance evaluations in the future.
(vi) Except as could not reasonably be expected to have a Material
Adverse Effect, to the knowledge of the Company, no facts exist that could give
rise to a claim under the False Claims Act, the Truth in Negotiations Act or any
other request for a reduction in the price of any of the Company's Government
Contracts.
(vii) Except as could not reasonably be expected to have a Material
Adverse Effect, (i) none of the Company or its Subsidiaries has received a show
cause, cure, deficiency, default or similar notices relating to its outstanding
Government Contracts, (ii) none of the Company's or its Subsidiaries' Government
Contracts has been terminated for default, (iii) no facts exist that are
reasonably likely to give rise to a termination for default of any of the
Company's or its Subsidiaries' Government Contracts, and (iv) the Company has
received no notice, written or otherwise, terminating any of the Company's or
its Subsidiaries' Government Contracts for convenience or indicating an intent
to terminate any of the Company's Government Contracts for convenience. Except
as could not reasonably be expected to have a Material Adverse Effect, there are
no material outstanding claims or disputes relating to the Company's or its
Subsidiaries' Government Contracts and involving
15
either the U.S. Government, any prime contractor, any higher-tier subcontractor
or any third party. To the knowledge of the Company, there exist no facts or
allegations, past or present, being put forth by any person that could give rise
to such a claim or dispute in the future. No negative determination of
responsibility has ever been issued against the Company with respect to any
quotation, bid or proposal for a Government Contract. The Company has not been
and is not now suspended, debarred, or proposed for suspension or debarment from
government contracting. To the knowledge of the Company, no facts exist which
could cause or give rise to such suspension or debarment.
(viii) To the knowledge of the Company, no audit, review,
inspection, investigation, survey or examination of records by the U.S.
Government has revealed any fact, occurrence or practice which could have a
Material Adverse Effect.
(ix) Except as could not reasonably be expected to have a Material
Adverse Effect, neither the U.S. Government nor any prime contractor or
higher-tier subcontractor under a Government Contract has questioned or
disallowed any costs claimed by the Company or its Subsidiaries under the
Company's or its Subsidiaries' outstanding Government Contracts. To the
knowledge of the Company, there is no fact or occurrence presently existing that
could reasonably be expected to be a basis for disallowing any such costs.
(x) The Company has complied in all material respects with all
applicable requirements under each of the Company's and its Subsidiaries'
Government Contracts relating to the safeguarding of and access to classified
information, and to the knowledge of the Company, no facts currently exist which
are reasonable likely to give rise to the revocation of the Company's or its
Subsidiaries' security clearances.
4. Certain Covenants.
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as the Representative may designate and to maintain
such qualifications in effect as long as required for the distribution of the
Shares, provided that the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to the service of process under the
laws of any such state (except service of process with respect to the offering
and sale of the Shares);
(b) to prepare the Prospectus in a form approved by the Underwriters and
file such Prospectus with the Commission within the time period required by Rule
424(b) under the Securities Act or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Securities Act, and to furnish promptly
(and with respect to the initial delivery of such Prospectus, not later than
10:00 a.m. (New York City time) on the day following the execution and delivery
of this Agreement) to the Underwriters as many copies of the Prospectus (or of
the Prospectus as amended or supplemented if the Company shall have
16
made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may reasonably request for the
purposes contemplated by the Securities Act Regulations, which Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be
identical to the version created to be transmitted to the Commission for filing
via XXXXX, except to the extent permitted by Regulation S-T;
(c) to advise the Representative promptly and (if requested by the
Representative) to confirm such advice in writing, when the Registration
Statement has become effective under the Securities Act Regulations;
(d) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement to be
declared effective before the offering of the Shares may commence, the Company
will endeavor to cause such post-effective amendment to become effective as soon
as possible and will advise the Representative promptly and, if requested by the
Representative, will confirm such advice in writing, when such post-effective
amendment has become effective;
(e) to advise the Representative immediately, confirming such advice in
writing, of (i) the receipt of any comments from, or any request by, the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and, if
the Commission or any other government agency or authority should issue any such
order, to make every reasonable effort to obtain the lifting or removal of such
order as soon as possible; to advise the Representative promptly, and to furnish
the Representative with a copy for its review prior to filing, of any proposal
to amend or supplement the Registration Statement or Prospectus and to file no
such amendment or supplement to which the Representative shall reasonably object
in writing;
(f) to furnish to the Representative for a period of five years from the
date of this Agreement such other information as the Representative may
reasonably request;
(g) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Securities Act Regulations which,
in the judgment of the Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and, during such time,
to prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to such Prospectus as may be necessary to reflect
any such change and to furnish to the Underwriters a copy of such proposed
amendment or supplement before filing any such amendment or supplement with the
Commission and not to file any
17
such amendment or supplement to which the Representative shall reasonably object
in writing;
(h) to furnish promptly to the Representative and counsel for the
Underwriters, without charge, a copy of the signed Registration Statement, as
initially filed with the Commission, and of all amendments or supplements
thereto (including all exhibits filed therewith or incorporated by reference
therein) and such number of conformed copies of the foregoing as the
Representative may reasonably request, and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Securities Act or the
Securities Act Regulations, as many copies of any Preliminary Prospectus and the
Prospectus and any amendments thereof or supplements thereto as the
Representative reasonably requests;
(i) to furnish to the Representative, not less than two business days
before filing with the Commission subsequent to the effective date of the
Prospectus and during the period referred to in paragraph (g) above, a copy of
any document proposed to be filed with the Commission pursuant to Section 13,
14, or 15(d) of the Exchange Act; notwithstanding the foregoing, during such
period Current Reports on Form 8-K of the Company shall be furnished to the
Representative not less than 24 hours before filing with the Commission;
(j) to apply the net proceeds of the sale of the Shares by the Company
in accordance with its statements under the caption "Use of Proceeds" in the
Prospectus;
(k) to make generally available to its security holders and to deliver
to the Representative as soon as practicable, but in any event not later than
the end of the full fiscal quarter first occurring after the first anniversary
of the effective date of the Registration Statement an earnings statement
complying with the provisions of Section 11(a) of the Securities Act (including
the provisions of Rule 158 of the Securities Act Regulations), covering a period
of 12 months beginning after the effective date of the Registration Statement;
(l) to use commercially reasonable efforts to effect and maintain the
quotation of the Shares on the Nasdaq National Market and to file with the
Nasdaq National Market all documents and notices required by the Nasdaq National
Market of companies that have securities that are traded and quotations for
which are reported by the Nasdaq National Market;
(m) to engage and maintain, at its expense, a registrar and transfer
agent for the Shares;
(n) to refrain during a period of 90 days from the date of the
Prospectus, without the prior written consent of the Representative, from (i)
offering, pledging, selling, contracting to sell, selling any option or contract
to purchase, purchasing any option or contract to sell, granting any option for
the sale of, or otherwise disposing of or transferring, directly or indirectly,
any equity security of the Company or any securities convertible into or
18
exercisable or exchangeable for equity securities of the Company, or filing any
registration statement under the Securities Act with respect to any of the
foregoing, or (ii) entering into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of equity securities of the Company, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option outstanding on the date hereof and generally referred to
in the Prospectus, or (C) any shares of Common Stock issued by the Company
pursuant to the Company's existing stock purchase plans;
(o) to not itself, and to use its best efforts to cause its officers,
directors and affiliates not to, (i) take, directly or indirectly prior to
termination of the underwriting syndicate contemplated by this Agreement, any
action designed to stabilize or manipulate the price of any security of the
Company, or which may cause or result in, or which might in the future
reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any security of the Company, to facilitate the sale or resale of
any of the Shares, (ii) sell, bid for, purchase or pay anyone any compensation
for soliciting purchases of the Shares or (iii) pay or agree to pay to any
person any compensation for soliciting any order to purchase any other
securities of the Company;
(p) to use its best efforts to cause Xxxx X. Short, Xxxxx X. Xxxxx and
Xxxxxxx X. Xxx and each of the Company's directors to furnish to the
Representative, prior to the first Date of Delivery, a letter or letters,
substantially in the form of Exhibit A hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (i) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case for a period of 90 days from the date of the Prospectus, without
the prior written consent of the Representative on behalf of the Underwriters;
(q) upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, OPINION RESEARCH CORPORATION service xxxx and corporate logo
(collectively, the "Marks") for use on the website, if any, operated by such
Underwriter; the Company hereby grants to each such Underwriter a
nontransferable, non-assignable, non-exclusive, royalty free license to use the
Marks solely for the purpose of facilitating the on-line offering of the Shares
(the "License"); all use of the Marks shall inure to the benefit of the Company,
and such Underwriter shall acquire no interests or rights of any kind in or to
the Marks (except as explicitly stated in the License) or the goodwill
associated therewith;
19
(r) that the provisions of the letter agreement dated September 16, 2004
between the Company and Friedman, Billings, Xxxxxx & Co., Inc. (the "Engagement
Letter") shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby;
(s) if at any time during the 30-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in the reasonable
opinion of the Representative, the market price of the Common Stock has been or
is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus) and after written notice from the Representative advising the
Company to the effect set forth above, to forthwith prepare, consult with the
Representative concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to the Representative,
responding to or commenting on such rumor, publication or event;
(t) that the Company will comply with all of the provisions of any
undertakings in the Registration Statement; and
(u) that, from and after the Closing Time, the Company shall have in
place and maintain a system of internal control over financial reporting, as
such term is defined in Rule 13a-15(f) under the Exchange Act.
5. Payment of Expenses.
(a) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, all exhibits thereto, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment) as may be
reasonably requested, (ii) the preparation, issuance and delivery of the
certificates for the Shares to the Underwriters, including any stock or other
transfer taxes or duties payable upon the sale and delivery of the Shares to the
Underwriters, (iii) the printing of this Agreement and any dealer agreements and
furnishing of copies of each to the Underwriters and to dealers (including costs
of mailing and shipment), (iv) the registration or qualification of the Shares
for offering and sale under state laws that the Company and the Representative
have mutually agreed are appropriate and the determination of their eligibility
for investment under state law as aforesaid (including the legal fees and filing
fees and other disbursements of counsel for the Underwriters) and the
preparation, printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) filing for review of
the public offering of the Shares by the NASD (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters relating
thereto), (vi) the fees and expenses of any transfer agent or registrar for the
Shares and miscellaneous expenses referred to in the
20
Registration Statement, (vii) the fees and expenses incurred in connection with
the listing of the Shares on the Nasdaq National Market, (viii) making road show
presentations with respect to the offering of the Shares, (ix) preparing and
distributing bound volumes of transaction documents for the Representative and
its legal counsel and (x) the performance of the Company's other obligations
hereunder. Upon the request of the Representative, the Company will provide
funds in advance for filing fees.
(b) The Company agrees to reimburse the Representative for their
reasonable out-of-pocket expenses in connection with the performance of their
activities under this Agreement, including, but not limited to, costs such as
printing, facsimile, courier service, direct computer expenses, accommodations
and travel, and fees and expenses of the Underwriters' outside legal counsel and
any other advisors, accountants, appraisers, etc. (other than the fees and
expenses of counsel with respect to state securities or blue sky laws and
obtaining the filing for review of the public offering of the Shares by the
NASD, all of which shall be reimbursed by the Company pursuant to the provisions
of subsection (a) above). Notwithstanding any provision herein to the contrary,
the Company's liability for all fees of counsel to the Underwriters under this
Agreement shall be limited to (i) $100,000, if the offering of the Shares
contemplated by this Agreement is consummated, or (ii) $200,000, if the offering
of the Shares contemplated by this Agreement is not consummated.
(c) If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (such as printing, facsimile, courier service, direct
computer expenses, accommodations, travel and the fees and disbursements of
Underwriters' counsel) and any other advisors, accountants, appraisers, etc.
reasonably incurred by such Underwriters in connection with this Agreement or
the transactions contemplated herein. If this Agreement shall be terminated by
the Underwriters, or any of them, other than pursuant to Section 7 or because of
any reason other than failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company shall not be liable for payment of any of the fees or expenses of
counsel to the Underwriters.
6. Conditions of the Underwriters' Obligations.
The obligations of the Underwriters hereunder to purchase Shares at the
Closing Time or on the Date of Delivery, as applicable, are several and not
joint, and are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the Closing Time and on each
Date of Delivery, as applicable, the performance by the Company of its
respective obligations hereunder in all material respects and to the
satisfaction of the following further conditions at the Closing Time or on the
Date of Delivery, as applicable:
21
(a) The Company shall furnish to the Underwriters at the Closing Time
and on each Date of Delivery an opinion of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx
LLP, counsel for the Company and its Subsidiaries, or, with respect to those
portions of the opinions based upon the laws of any jurisdiction other than the
United States, Pennsylvania or Delaware, counsel licensed in such jurisdiction,
addressed to the Underwriters and dated the Closing Time and each Date of
Delivery and in form and substance reasonably satisfactory to the Representative
and Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the Company and the Subsidiaries listed on Schedule III
("Material Subsidiaries") each have been duly incorporated or organized and are
validly existing as corporations or limited liability companies in good standing
under the laws of their respective jurisdictions of incorporation or
organization with full corporate or limited liability company power and
authority to own, lease, license and operate their respective assets and
properties and to conduct their respective business as described in the
Registration Statement and Prospectus and, in the case of the Company, to
execute and deliver this Agreement and to consummate the transactions described
in this Agreement;
(ii) the Company and all of its Material Subsidiaries are duly
qualified or licensed by each jurisdiction in which they conduct their
respective businesses, and the Company and its Material Subsidiaries are duly
qualified, and are in good standing, in each jurisdiction in which they own or
lease real property or maintain an office and in which such qualification is
necessary, except where the failure to be so qualified or licensed and in good
standing, individually and in the aggregate, would not have a Material Adverse
Effect; except as provided in the law of the jurisdiction of incorporation or
formation of such entity or pursuant to agreements of which such counsel has no
knowledge or as disclosed in the Prospectus, the Material Subsidiaries are not
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such Material
Subsidiaries' capital stock or from repaying to the Company any amounts which
may from time to time become due under any loans or advances to such Material
Subsidiaries from the Company, or from transferring such Material Subsidiaries'
property or assets to the Company, except, in each case, as may be affected or
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of equity;
(iii) to the best of such counsel's knowledge, neither the Company
nor any of its Material Subsidiaries is in breach or violation of, or in default
under (nor has any event occurred which with notice, lapse of time, or both
would constitute a breach of, or default under), its respective certificates of
incorporation or charter or by-laws, any indenture, mortgage, deed of trust,
loan or credit agreement or any other agreement or instrument to which the
Company or any of its Material Subsidiaries is a party or by which any of them
or their respective properties may be bound or affected or under any law,
regulation or rule or any decree, judgment or order applicable to the Company or
its Material Subsidiaries, except such breaches or defaults which would not be
reasonably likely to have a Material Adverse Effect;
22
(iv) the execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
by this Agreement do not and will not (A) give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with, or result in
any breach or violation of, or constitute a default under (nor constitute any
event which with notice, lapse of time, or both would constitute a breach of or
default under), or require any consent or waiver, except for such consents or
waivers which have been obtained and are in full force and effect, under, (i)
any provisions of the certificate of incorporation, charter or by-laws of the
Company or the Material Subsidiaries, (ii) to such counsel's knowledge, any
provision of any material contract, franchise, permit, license, indenture,
mortgage, deed of trust, loan, credit or other agreement or instrument to which
the Company or the Material Subsidiaries is a party or by which any of them or
their respective properties or assets may be bound or affected, (iii) any law or
regulation binding upon or applicable to the Company or the Material
Subsidiaries or any of their respective properties or assets normally applicable
to transactions of the type contemplated by this Agreement, or (iv) to such
counsel's knowledge, any decree, judgment or order known to such counsel to be
applicable to the Company or the Material Subsidiaries; or (B) to the best of
such counsel's knowledge, result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or assets of the Company or its
Material Subsidiaries, except in the case of clauses (ii), (iii) and (iv) for
such conflicts, breaches or defaults which have been validly waived or would not
reasonably be expected to have a Material Adverse Effect or result in the
creation or imposition of any material lien, charge, claim or encumbrance upon
any property or asset of the Company or any of its Material Subsidiaries;
(v) all necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company; this Agreement
has been duly and validly authorized, executed and delivered by the Company and
is a legal, valid and binding agreement of the Company, enforceable against it
in accordance with its terms, except as may be affected or limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except
that enforceability of the indemnification and contribution provisions set forth
in Section 9 of this Agreement may be limited by the federal or state securities
laws of the United States or public policy underlying such laws;
(vi) to such counsel's knowledge, no approval, authorization,
consent, license, permit, certificate or order of or filing by or with any
federal or state governmental or regulatory commission, board, body, authority
or agency is required to be obtained or made by the Company in connection with
the execution, delivery and performance of this Agreement, the consummation by
the Company of the transaction contemplated hereby, and the sale and delivery of
the Shares by the Company as contemplated hereby, other than such as have been
obtained or made and are in full force and effect under the Securities Act and
the Securities Act Regulations and such approvals as have been obtained and are
in full force and effect in connection with the approval of the quotation of the
Shares on the Nasdaq
23
National Market, and except that such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the Underwriters
or any approval of the underwriting terms and arrangements by the National
Association of Securities Dealers, Inc.;
(vii) [intentionally omitted]
(viii) the Company has authorized preferred stock and common stock
as set forth in the Prospectus under the caption "Capitalization"; to such
counsel's knowledge, all of the issued and outstanding shares of capital stock
of the Company and its Material Subsidiaries have been duly and validly
authorized and issued and are fully paid and non-assessable and none of them was
issued in violation of any preemptive or other similar right, and all of the
issued and outstanding shares of capital stock of the Material Subsidiaries are
directly or indirectly owned of record and beneficially by the Company; except
as disclosed in the Prospectus, to such counsel's knowledge, there are no
outstanding (i) securities or obligations of the Company or its Material
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any of its Material Subsidiaries, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any of its Material Subsidiaries
any such capital stock or any securities or obligations convertible into or
exchangeable for such capital stock, or (iii) obligations, commitments, plans or
arrangements of the Company or any of its Material Subsidiaries to issue any
shares of capital stock, any such convertible or exchangeable securities or
obligation, or any such warrants, rights or options; there are no statutory
preemptive or other similar rights to subscribe for or to purchase or acquire
any shares of capital stock of the Company or any such rights pursuant to the
Company's certificate of incorporation or by-laws or any agreement or instrument
known to such counsel to or by which the Company or any of its Material
Subsidiaries is a party or bound or, to such counsel's knowledge, otherwise;
(ix) the Shares have been duly authorized, and when the Shares have
been issued and duly delivered against payment therefor as contemplated by this
Agreement, the Shares will be validly issued, fully paid and non-assessable, and
the Underwriters will acquire good and marketable title to the Shares, free and
clear of any pledge, lien, encumbrance, security interest, or other claim
arising through the Company or otherwise;
(x) the issuance and sale of the Shares by the Company is not
subject to preemptive or other similar rights arising by operation of law, under
the certificate of incorporation, charter or bylaws of the Company, or, to such
counsel's knowledge, under any agreement to which the Company or any of its
Material Subsidiaries is a party;
(xi) to the best of such counsel's knowledge and except for Allied
Capital Corporation and Allied Investment Corporation, there are no persons with
registration or other similar rights to have any equity securities, including
securities which are convertible into or exchangeable for equity securities,
registered by the Company pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act;
24
(xii) the Shares conform in all material respects to the description
thereof contained in the Registration Statement and Prospectus; the form of
certificate used to evidence the Common Stock complies in all material respects
with all applicable statutory requirements and with any applicable requirements
of the certificate of incorporation and by-laws of the Company and of the Nasdaq
National Market;
(xiii) the capital stock of the Company conforms as to legal matters in
all material respects to the description thereof set forth in the Prospectus
under the caption "Description of Capital Stock;"
(xiv) the Registration Statement, including the Prospectus and such
amendments to such Registration Statement as may be required prior to the date
of this Agreement, has become effective under the Securities Act, and no stop
order preventing or suspending the effectiveness of the Registration Statement
or the use of the Prospectus has been issued and, to the best of such counsel's
knowledge, no proceedings with respect thereto have been commenced or
threatened; any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made in the manner and
within the time period required by such Rule 424(b);
(xv) the Registration Statement, all Preliminary Prospectuses and the
Prospectus and each amendment or supplement thereto (except as to the financial
statements and other financial data contained therein, as to which such counsel
need express no opinion) complied as to form in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(xvi) the statements under the captions "Capitalization," "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources," "Our Business - Government Contracts,"
"Management - Management Compensation," "Description of Capital Stock," and
"Material United States Income and Estate Tax Considerations to Non-United
States Holders," in the Registration Statement and the Prospectus, insofar as
such statements constitute a summary of the documents or legal matters referred
to therein, constitute fair summaries thereof in all material respects and
accurately present the information called for with respect to such documents or
matters;
(xvii) to the best of such counsel's knowledge, there are no actions,
suits or proceedings, inquiries, or investigations pending or threatened against
the Company or any of its Material Subsidiaries or any of their respective
officers and directors or to which the properties, assets or rights of any such
entity are subject, at law or in equity, before or by any federal, state, local
or foreign governmental or regulatory commission, board, body, authority,
arbitral panel or agency which are required to be described in the Prospectus
but are not so described;
(xviii) to the best of such counsel's knowledge, there are no
contracts, leases or documents of a character which are required to be filed as
exhibits to the Registration Statement or required to be described or summarized
in the Prospectus which have not been
25
so filed, summarized or described, and all such summaries and descriptions
fairly and accurately set forth the material provisions of such contracts and
documents required to be shown;
(xix) none of the Company or any of its Material Subsidiaries is, or,
if operated solely in the manner described in the Prospectus, will be, (i) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act, or (ii) a "broker" within the meaning of Section 3(a)(4)
of the Exchange Act or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act or required to be registered pursuant to Section 15(a) of the
Exchange Act; and
(xx) the Shares have been duly authorized for listing on the Nasdaq
National Market, subject to notice of issuance.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company, independent
public accountants of the Company and representatives of the Representative, at
which the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus (except as and
to the extent stated in subparagraphs (viii), (xii), (xiii), (xvi) and (xvii)
above), on the basis of the foregoing, no facts have come to the attention of
such counsel that lead them to believe that the Registration Statement at the
time it became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or that any Preliminary Prospectus or the Prospectus,
as amended or supplemented, as of their respective effective or issue date, and
as of the date of such counsel's opinion, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that, in each case, such counsel need express no view with
respect to the financial statements and other financial data included in the
Registration Statement, Preliminary Prospectus or Prospectus).
(b) The Representative shall have received from Ernst & Young LLP and
Xxxxx Xxxxxxxx LLP letters dated, respectively, as of the date of this
Agreement, the Closing Time and each Date of Delivery, as the case may be,
addressed to the Representative, in form and substance satisfactory to the
Representative, relating to the financial statements, including any pro forma
financial statements, of the Company and its Subsidiaries, and such other
matters customarily covered by comfort letters issued in connection with
registered public offerings.
In the event that the letters referred to above set forth any changes in
indebtedness, decreases in total assets or retained earnings or increases in
borrowings, it shall be a
26
further condition to the obligations of the Underwriters that (A) such letters
shall be accompanied by a written explanation of the Company as to the
significance thereof, unless the Representative deems such explanation
unnecessary, and (B) such changes, decreases or increases do not, in the
reasonable judgment of the Representative, make it impractical or inadvisable to
proceed with the purchase and delivery of the Shares as contemplated by the
Registration Statement.
(c) The Representative shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP, dated the
Closing Time or such Date of Delivery, addressed to the Representative and in
form and substance satisfactory to the Representative.
(d) No amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Underwriters shall have reasonably objected
in writing.
(e) Notification that the Registration Statement has become effective
shall have been received by the Representative and the Prospectus shall have
been timely filed with the Commission in accordance with Section 4(b) of this
Agreement.
(f) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus has
been issued, and no proceedings for such purpose shall have been initiated or
threatened, by the Commission, and no suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes, has occurred; (ii) the
Registration Statement and the Prospectus shall not contain an untrue statement
of material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (iii) any requests 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 satisfaction of the Commission and the Representative.
(g) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery (i) no material and unfavorable change in the
assets, business, operations, earnings, prospects, properties or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole
shall occur or become known (whether or not arising in the ordinary course of
business), and (ii) no transaction which is material and unfavorable to the
Company shall have been entered into by the Company or any of its Subsidiaries.
(h) The Shares shall have been duly authorized for listing on the Nasdaq
National Market upon official notice of issuance.
(i) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
27
(j) The Representative shall have received lock-up agreements from each
director and executive officer of the Company listed on Schedule IV attached
hereto, in the form of Exhibit A attached hereto, and such letter agreements
shall be in full force and effect.
(k) The Company will, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its Chairman of the Board and Chief
Executive Officer, its President and Chief Operating Officer, and its Vice
President and Chief Financial Officer, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Prospectus
and this Agreement and (i) the representations and warranties of the Company set
forth in this Agreement are true and correct on and as of such date with the
same effect as if made on such date, (ii) the Company has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to such date
and (iii) the conditions set forth in paragraphs (f), (g) and (h) have been
satisfied, in each case as of such date.
(l) The Company shall have furnished to the Underwriters such other
documents and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus, the representations,
warranties and statement of the Company contained herein, and the performance by
the Company of its covenants contained herein, and the fulfillment of any
conditions contained herein, as of the Closing Time or any Date of Delivery as
the Underwriters may reasonably request.
(m) The Company shall have performed such of its respective obligations
under this Agreement as are to be performed by the terms hereof and thereof at
or before the Closing Time or the relevant Date of Delivery.
7. Termination. The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of the Representative, at any
time prior to the Closing Time or any Date of Delivery, (i) if any of the
conditions specified in Section 6 shall not have been fulfilled when and as
required by this Agreement to be fulfilled, or (ii) if there has been since the
respective dates as of which information is given in the Registration Statement,
in the judgment of the Representative, any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
assets, business, operations, earnings, prospects, properties, condition
(financial or otherwise) or management of the Company or any Subsidiary, whether
or not arising in the ordinary course of business, or (iii) if there has
occurred any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic, political or other
conditions the effect of which is material and adverse to the financial markets
of the United States so as to make it, in the judgment of the Representative,
impracticable to market the Shares or enforce contracts for the sale of the
Shares, or (iv) if trading in any securities of the Company has been suspended
by the Commission or by Nasdaq, or if trading generally on the New York Stock
Exchange or in the Nasdaq National Market has been suspended or limited
(including an automatic halt in trading pursuant to market-decline triggers
other than those in which solely program trading is temporarily halted), or
28
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or the NASD or Nasdaq or by order of the
Commission or any other governmental authority, or (v) if there has been any
downgrade in the rating of any of the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act); or (vi) if any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which in
the reasonable opinion of the Representative materially adversely affects or
will materially adversely affect the business or operations of the Company, or
(vii) if any action has been taken by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in the reasonable
opinion of the Representative has a Material Adverse Effect on the securities
markets in the United States, or (viii) if any domestic or international event
or act or occurrence has materially disrupted, or in the reasonable opinion of
the Representative will in the future materially disrupt, the securities
markets, or (ix) if a banking moratorium has been declared by any state or
federal authority.
If the Representative elects to terminate this Agreement as provided in
this Section 7, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. If any Underwriter shall default at
the Closing Time or on a Date of Delivery in its obligation to take up and pay
for the Shares to be purchased by it under this Agreement on such date the
Representative shall have the right, within 48 hours after such default, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Shares which such
Underwriter shall have agreed but failed to take up and pay for (the "Defaulted
Shares"). Absent the completion of such arrangements within such 48 hour period,
(i) if the total number of Defaulted Shares does not exceed 10% of the total
number of Shares to be purchased on such date, each non-defaulting Underwriter
shall take up and pay for (in addition to the number of Shares which it is
otherwise obligated to purchase on such date pursuant to this Agreement) the
portion of the total number of Shares agreed to be purchased by the defaulting
Underwriter on such date in the proportion that its underwriting obligations
hereunder bears to the underwriting obligations of all non-defaulting
Underwriters; and (ii) if the total number of Defaulted Shares exceeds 10% of
such total, the Representative may terminate this Agreement by notice to the
Company, without liability to any non-defaulting Underwriter.
29
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that the
Company will not sell any Shares hereunder on such date unless all of the Shares
to be purchased on such date are purchased on such date by the Underwriters (or
by substituted Underwriters selected by the Representative with the approval of
the Company or selected by the Company with the approval of the Representative).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the
non-defaulting Underwriters shall have the right to postpone the Closing Time or
the relevant Date of Delivery for a period not exceeding five business days in
order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with the like effect as if such
substituted Underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (or action in respect
thereof) (including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or controlling person may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, expense,
liability, damage or claim (or action in respect thereof) arises out of or is
based upon (i) any breach of any representation, warranty or covenant of the
Company contained herein, (ii) any failure on the part of the Company to comply
with any applicable law, rule or regulation relating to the offering of
securities being made pursuant to the Prospectus, (iii) any application or other
document, or any amendment or supplement thereto, executed by the Company or
based upon written information furnished by or on behalf of the Company filed in
any jurisdiction (domestic or foreign) in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application") or (iv)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company), a Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), any Application or any audio or visual materials
prepared, approved or used by the Company in connection with the marketing of
the Shares, including without limitation, slides, videos, films and tape
recordings, or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in either such Registration
Statement or Prospectus or such other materials or necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, and
30
will promptly reimburse any Underwriter for all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense arising from any threatened or
pending claim, except insofar as any such loss, expense, liability, damage or
claim (or action in respect thereof) arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in and made in reliance upon and in conformity with
information furnished in writing by the Underwriters through the Representative
to the Company expressly for use in such Registration Statement or such
Prospectus.
(b) If any action is brought against an Underwriter or controlling person
in respect of which indemnity may be sought against the Company pursuant to
subsection (a) above, such Underwriter shall promptly notify the Company in
writing of the institution of such action, and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses, provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be liable for
the expenses of more than one separate firm of attorneys for the Underwriters or
controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, the Company's directors, the Company's
officers that signed the Registration Statement, and any person who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any loss, expense, liability, damage or claim
(or action in respect thereof) (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur under the
Securities Act, the Exchange Act or otherwise, but only insofar as such loss,
expense, liability, damage or claim (or action in respect thereof) arises out of
or is based upon any untrue statement or alleged untrue statement of a material
fact contained in and made in reliance upon and in conformity with information
furnished in writing by such Underwriter through the Representative to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment
31
thereof by the Company), a Prospectus or any Application, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated either in such
Registration Statement, Prospectus or Application or necessary to make such
information, in the light of the circumstances under which made, not misleading,
and will promptly reimburse the Company for all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense arising from any threatened or
pending claim. The statements set forth in the table under paragraph one, and in
paragraphs three, eight, nine, ten, eleven, twelve, thirteen, fourteen and
fifteen under the caption "Underwriting" in the Preliminary Prospectus and the
Prospectus (to the extent such statements relate to the Underwriters) constitute
the only information furnished by or on behalf of any Underwriter through the
Representative to the Company for purposes of Section 3(j) and this Section 9.
If any action is brought against the Company, or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representative in writing of the institution of such action and the
Representative, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by the Representative in connection with the defense of such action
or the Representative shall not have employed counsel to have charge of the
defense of such action within a reasonable time or such indemnified party or
parties shall have reasonably concluded (based on the advice of counsel) that
there may be defenses available to it or them which are different from or
additional to those available to the Underwriters (in which case the
Representative shall not have the right to direct the defense of such action on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses
of more than one separate firm of attorneys in any one action or series of
related actions in the same jurisdiction (other than local counsel in any such
jurisdiction) representing the indemnified parties who are parties to such
action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representative.
(d) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless an indemnified party under subsections (a),
(b) or (c) of this Section 9 in respect of any losses, expenses, liabilities,
damages or claims (or actions in respect thereof) referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, expenses, liabilities, damages or claims (or actions in
respect thereof) (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Underwriters from the offering
of the Shares or (ii) if (but only if) the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in
32
clause (i) above but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted in
such losses, expenses, liabilities, damages or claims (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bear to the underwriting discounts and commissions received by the Underwriters.
The relative fault of the Company and of the Underwriters shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any claim or action.
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 in subsection (d)(i) and, if applicable
(ii), above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter. 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. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
10. Survival. The indemnity and contribution agreements contained in Section 9
and the covenants, warranties and representations of the Company contained in
this Agreement, including the covenants, warranties and representations of the
Company in Sections 3, 4 and 5, and the provisions of Section 7 of this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, or any person who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, or by or on behalf of the Company, its directors and
officers or any person who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination or cancellation of this Agreement or the sale and delivery of the
Shares. The Company and each Underwriter agree promptly to notify the others of
the commencement of any litigation or proceeding against it and, in the case of
the Company, against any of the Company's officers and directors, in connection
with the sale and delivery of the Shares, or in connection with the Registration
Statement or Prospectus.
33
11. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department; if to the Company, shall be sufficient in all
respects if delivered to the Company at the offices of the Company at 000
Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxxxxxxxx, Xxx Xxxxxx 00000 with a copy to Xxxxx
Xxxxxx, Esq., Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, 0000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxxxxxx, XX 00000.
12. Governing Law; Headings. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a part of this
Agreement.
13. Parties at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Company and the controlling
persons, directors and officers referred to in Sections 9 and 10 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. Counterparts and Facsimile Signatures. This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes.
[The remainder of this page is intentionally left blank.]
34
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this Agreement shall constitute a binding agreement among
the Company and the Underwriters.
Very truly yours,
Opinion Research Corporation
By:
-----------------------------
By:
Title:
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, XXXXXX & CO., INC.
By:
-------------------------------
Title:
For itself and as Representative of the other
Underwriters named on Schedule I hereto.
35
Schedule I
Name of Underwriter Number of Shares
---------------------------------------------------------------------
Friedman, Billings, Xxxxxx & Co., Inc.
Xxxxxxxxxxx & Co. Inc.
Total
==========
Schedule II
Active Subsidiaries of the Company
Macro International Inc.
ORC Holdings, Ltd.
ORC International Holdings, Ltd.
O.R.C. International, Ltd.
ORC Korea, Ltd.
ORC ProTel, LLC
Opinion Research Corporation, S.A. de C.V.
ORC Telecommunications Ltd.
ORC TeleService Corporation
Social & Health Services, Ltd.
Schedule III
Material Subsidiaries
Macro International Inc.
O.R.C. International, Ltd.
ORC ProTel, LLC
ORC TeleService Corporation
Social & Health Services, Ltd.
Schedule IV
Persons/Entities Delivering Lock-Ups
Xxxx X. Short
Xxxxx X. Xxxxx
Xxxxxxx X. Xxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, D.B.A.
Xxxxxx X. Xxxxx
Xxxxxx X. XxXxxxx
Xxxx X. Xxxx
Exhibit A
Form of Lock-up Agreement
[___________], 2005
Friedman, Billings, Xxxxxx & Co., Inc.
as Representative of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
The undersigned understands and agrees as follows:
1. Friedman, Billings, Xxxxxx & Co., Inc. ("FBR") proposes to
enter into an Underwriting Agreement (the "Underwriting Agreement")
with Opinion Research Corporation, a Delaware corporation (the
"Company"), providing for the public offering (the "Public Offering")
by the several Underwriters, including FBR (the "Underwriters"), of
[_______] shares of the Common Stock, $0.01 par value, of the Company
(the "Common Stock") to be issued by the Company, and in connection
therewith, the Company has filed a registration statement, File No.
[333-________] (as amended, the "Registration Statement") with the
Securities and Exchange Commission.
2. After consultation, the Company and FBR, acting as
representative of the Underwriters for the Public Offering, have agreed
that sales by certain officers and the directors of the Company within
the 90-day period after the date of effectiveness of the Registration
Statement could have an adverse effect on the market price for the
Common Stock and that the public to whom the Common Stock is being
offered should be protected for a reasonable time from the impact of
such sales.
3. It is in the best interest of the Company and its officers,
directors and stockholders to have a successful public offering and
stable and orderly public market thereafter.
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of FBR on
behalf of the Underwriters, he or she will not, during the period commencing on
the effective date of the Registration Statement and ending 90 days after the
date of the final prospectus relating to the Public Offering, (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any equity
securities of the Company that he, she or it may own or acquire or any
securities convertible into or exercisable or exchangeable for equity securities
of the Company or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
equity securities of the Company, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
The undersigned acknowledges that FBR is relying on the agreements of
the undersigned set forth herein in making its decision to enter into the
Underwriting Agreement and to continue its efforts in connection with the Public
Offering.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Virginia without regard to principles of
conflict of laws.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to the Underwriting Agreement, the terms of which are subject to
negotiation among the Company and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
-------------------------
(Address)
