Exhibit 1.1
IBIS TECHNOLOGY CORPORATION
UNDERWRITING AGREEMENT
October 16, 2003
CDC Securities
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Ibis Technology Corporation, a Massachusetts corporation (the "Company"),
proposes to sell (the "Offering"), upon the terms and subject to the conditions
of this Agreement, to CDC Securities (the "Underwriter"), an aggregate of
870,000 shares (the "Firm Shares") of the Company's common stock, par value
$.008 per share ("Common Stock"). The Company also proposes to sell to the
Underwriter, at the option of the Underwriter, an aggregate of not more than
130,000 additional shares of the Company's Common Stock (such additional shares
being hereinafter referred to as the "Optional Shares"). The Firm Shares and the
Optional Shares are herein collectively called the "Offered Shares."
1. Registration Statement and Prospectus. A registration statement (File No.
333-108438) on Form S-3 relating to the Common Stock, and such amendments
to such registration statement as may have been required to the date of
this Agreement, has been prepared by the Company under the provisions of
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. Such registration
statement, including any documents incorporated therein by reference and
any exhibits, financial statements and schedules thereto, together with any
registration statement filed pursuant to Rule 462(b), is herein referred to
as the "Registration Statement." The form of prospectus to be included in
the Registration Statement, as supplemented by any preliminary prospectus
supplement or definitive prospectus supplement relating to the offering of
the Offered Shares and filed by the Company with the Commission pursuant to
Rule 424(b), are herein referred to collectively as the "Prospectus." Any
reference herein to the Registration Statement or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein, as of the date of such Registration Statement or Prospectus, as
the case may be, and, in the case of any reference herein to any
Prospectus, also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments relating to the
Offered Shares being issued and sold pursuant hereto, filed with the
Commission under Rule 424(b), and prior to the termination of the offering
of the Offered Shares by the Underwriter.
2. Representations and Warranties. Except as set forth under the corresponding
section of the Disclosure Schedules attached hereto, the Company hereby
makes the following representations and warranties:
(a) Effectiveness of Registration Statement. The Registration Statement
has been declared effective as of October 3, 2003 by the Commission
under the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. Neither the
Commission nor any state regulatory authority has issued any order
preventing or suspending the use of the Registration Statement or the
Prospectus and no proceedings for a stop order suspending the
effectiveness of the Registration Statement have been instituted, or,
to the Company's knowledge, are threatened.
(b) Accuracy and Completeness of Registration Statement. The Registration
Statement contains and the Prospectus and any amendments or
supplements thereto conforms or will conform, as the case may be, in
all material respects with the requirements of the Act and the Rules
and Regulations. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply, as
the case may be, in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Rules and Regulations promulgated thereunder.
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Underwriting Agreement
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Neither the Registration Statement nor any amendment thereto, and
neither the Prospectus nor any supplement thereto, including any
documents incorporated by reference therein, contains or will contain,
as the case may be, any untrue statement of a material fact or omits
or will omit, as the case may be, to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of the Underwriter, specifically for use in the preparation
thereof.
(c) Covered Security. The Common Stock is a "Covered Security" as defined
in Section 18 of the Securities Act.
(d) Description of Common Stock. The Common Stock conforms to all
statements relating thereto contained in the Registration Statement or
the Prospectus.
(e) Conduct of Business. The Company is not, and does not intend to
conduct its business in a manner in which it would be, an "investment
company" as defined in Section 3 (a) of the Investment Company Act of
1940 (the "Investment Company Act").
(f) No Third Party Rights to Registration. No person or entity has the
right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of
the Registration Statement, except such persons or entities as set
forth on Schedule 2(f) hereto or persons or entities from whom written
waivers of such rights have been received prior to the date hereof.
(g) Nasdaq Authorization for Quotation. The Common Stock, including the
Offered Shares, are qualified for inclusion in Nasdaq and for
quotation on the Nasdaq National Market System.
(h) Subsidiaries. The Company does not have any subsidiaries and does not
own or control, directly or indirectly, and interest in any other
corporation, association or other business entity.
(i) Organization. The Company is duly organized, validly existing and in
good corporate standing under the laws of the jurisdiction of its
organization. The Company has full corporate power and authority to
own, operate and occupy its properties and to conduct its business as
presently conducted and as described in the documents filed by the
Company under the Exchange Act since the end of its most recently
completed fiscal year through the date hereof, including, without
limitation, its most recent report on Form 10-K and is registered or
qualified to do business and in good standing in each jurisdiction in
which the nature of the business conducted by it or the location of
the properties owned or leased by it requires such qualification and
where the failure to be so qualified would have a material adverse
effect upon the condition (financial or otherwise), earnings, business
or business prospects, properties or operations of the Company,
considered as one enterprise (a "Material Adverse Effect"), and no
proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(j) Due Authorization and Valid Issuance. The Company has all requisite
power and authority to execute, deliver and perform its obligations
hereunder (including its obligation to issue, sell and deliver the
Offered Shares), and this Agreement has been duly authorized and
validly executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as rights to indemnity
and contribution may be limited by state or federal securities laws or
the public policy underlying such laws, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject
to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Offered Shares will, upon issuance and payment therefore pursuant to
the terms of this Agreement, be duly authorized, validly issued,
fully-paid and nonassessable.
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(k) Non-Contravention. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not (A) conflict with or constitute a violation of, or default
(with the passage of time or otherwise) under, (i) any material bond,
debenture, note or other evidence of indebtedness, lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company is a party or by
which its properties are bound, (ii) the charter, by-laws or other
organizational documents of the Company, or (iii) any law,
administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the
Company or by which its properties, except in the case of clauses (i)
and (iii) for any such conflicts, violations or defaults which are not
reasonably likely to have a Material Adverse Effect or (B) result in
the creation or imposition of any lien, encumbrance, claim, security
interest or restriction whatsoever upon any of the material properties
or assets of the Company or an acceleration of indebtedness pursuant
to any obligation, agreement or condition contained in any material
bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or
instrument to which the Company is a party or by which it is bound or
to which any of the material property or assets of the Company is
subject. No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States
or any other person is required for the execution and delivery of the
Agreement and the valid issuance and sale of the Common Stock to be
sold pursuant to the Agreement, other than such as have been made or
obtained, and except for any post-closing securities filings or
notifications required to be made under federal or state securities
laws.
(l) No Violation. The Company is not in violation of its charter, bylaws,
or other organizational document, or in violation of any law,
administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the
Company, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or is in default
(and there exists no condition which, with the passage of time or
otherwise, would constitute a default) in any material respect in the
performance of any bond, debenture, note or any other evidence of
indebtedness in any indenture, mortgage, deed of trust or any other
material agreement or instrument to which the Company is a party or by
which the Company is bound or by which the properties of the Company
are bound, which would be reasonably likely to have a Material Adverse
Effect. The business of the Company is not being conducted in
violation of any applicable law, ordinance, rule, regulation, order,
judgment or decree of any governmental entity, court or arbitration
tribunal except for possible violations the sanctions for which either
singly or in the aggregate would not have a Material Adverse Effect.
(m) Capitalization. Except for issuances pursuant to the exercise of
options under the Company's stock option plans, the Company has not
issued any capital stock since June 30, 2003. The Offered Shares to be
sold pursuant to the Prospectus have been duly authorized, and when
issued and paid for in accordance with the terms of the Prospectus
will be duly and validly issued, fully paid and nonassessable. The
outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable, have been issued
in compliance with all applicable federal and state securities laws,
and were not issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as set forth on
Schedule 2(m) hereto, there are no other outstanding rights
(including, without limitation, preemptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any unissued shares of capital stock or other equity interest in
the Company, or any contract, commitment, agreement, understanding or
arrangement of any kind to which the Company is a party or of which
the Company has knowledge and relating to the issuance or sale of any
capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants or options. Without limiting
the foregoing, except as set forth on Schedules 2(f) and 2(m) hereto,
no preemptive right, co-sale right, right of first refusal,
registration right, or other similar right exists with respect to the
Common Stock or the issuance and sale thereof. No further approval or
authorization of any stockholder, the Board of Directors of the
Company or of a third party is required for the issuance and sale of
the Common Stock. Except as set forth on Schedule 2(m) hereto, there
are no stockholders agreements, voting agreements or other similar
agreements with respect to the Common Stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the
Company's stockholders. The Company does not have any so-called
stockholder rights plan or "poison pill" and there are no
"shark-repellant" charter or bylaw provisions or so-called "state
anti-takeover" statutes applicable, in any case, to all or any portion
of the transactions contemplated by the Agreements, including, without
limitation, the issuance of the Common Stock.
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(n) Solvency. The Company (both before and after giving effect to the
Offering) is solvent (i.e., its assets have a fair market value in
excess of the amount required to pay its probable liabilities on its
existing debts as they become absolute and matured) and currently the
Company has no information that would lead it to reasonably conclude
that the Company would not have the ability to, nor does it intend to
take any action that would impair its ability to, pay its debts from
time to time incurred in connection therewith as such debts mature.
The Company did not receive a qualified opinion from its auditors with
respect to its most recent fiscal year end and does not anticipate or
know of any basis upon which its auditors might issue a qualified
opinion in respect of its current fiscal year.
(o) Legal Proceedings. Except as otherwise set forth in the Prospectus,
there is no action, suit, proceeding, or to the knowledge of the
Company, inquiry or investigation before or by any court, public
board, governmental agency or authority, or self-regulatory
organization or body pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its directors or
officers in their capacities as such, wherein an unfavorable decision,
ruling or finding would have a Material Adverse Effect or would
adversely affect the Offering or which would adversely affect the
validity or enforceability of, or the authority or ability of the
Company to consummate the Offering.
(p) No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Company's Common Stock to facilitate
the sale or resale of the Common Stock
(q) Environmental. Except as would not, individually or in the aggregate,
result in a Material Adverse Effect (i) the Company is not in
violation of any applicable federal, state, possession, local or
foreign law or regulation relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum and petroleum products (collectively,
"Materials of Environmental Concern"), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), which violation includes, but is
not limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the
Company under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Company received any written
communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Company is in violation
of any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no
written notice to the Company by any person or entity alleging
potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property
damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the
environment, of any Material of Environmental Concern at any location
owned, leased or operated by the Company, now or to the Company's
knowledge, in the past (collectively, "Environmental Claims"), pending
or, to the best of the Company's knowledge, threatened against the
Company or any person or entity whose liability for any Environmental
Claim the Company has retained or assumed either contractually or by
operation of law; and (iii) to the best of the Company's knowledge,
there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that reasonably could result in a violation of
any Environmental Law or form the basis of a potential Environmental
Claim against the Company or against any person or entity whose
liability for any Environmental Claim the Company has retained or
assumed either contractually or by operation of law.
(r) Intellectual Property. The Company owns, possesses or has pending, or
licenses or otherwise has the right to use all patents, patent
applications, trademarks, trademark applications, trade names, service
marks, copyrights, copyright applications, franchises, licenses,
inventions, trade secrets and other intangible properties and assets
described in the Prospectus (all of the foregoing being collectively
herein called "Intangibles"), and such Intangibles, if applicable, are
in good standing and uncontested. Other than the Intangibles described
in the Prospectus, the Company is unaware of any other Intangibles
necessary for the conduct of its business as now conducted or as
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proposed to be conducted. The Company has not infringed, is not
infringing, nor has it received any notice of infringement with
respect to asserted Intangibles of others. To the knowledge of the
Company there is no infringement by others of Intangibles of the
Company.
(s) Foreign Corrupt Practices. Neither the Company, nor to the Company's
knowledge, any director, officer, agent, employee or other person
acting on behalf of the Company has, in the course of his actions for,
or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of
the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
(t) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the Company and designed such disclosure controls and procedures to
ensure that material information relating to the Company, including
its subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the
Company's Form 10-K or 10-Q, as the case may be, is being prepared.
The Company's certifying officers have evaluated the effectiveness of
the Company's controls and procedures as of a date within 90 days
prior to the filing date of the Form 10-Q for the quarter ended June
30, 2003 (such date, the "Evaluation Date"). The Company presented in
its most recently filed Form 10-K or Form 10-Q the conclusions of the
certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the period covered by
such report. Since the Evaluation Date, there have been no significant
changes in the Company's internal controls (as such term is defined in
Item 307(b) of Regulation S-K under the Exchange Act) or, to the
Company's knowledge, in other factors that could significantly affect
the Company's internal controls.
(u) Financial Statements. The financial statements, together with the
related notes and schedules, set forth or incorporated by reference in
the Prospectus and in the Registration Statement fairly present, on
the basis stated in the Registration Statement, the financial
condition and the results of operations of the Company at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except that interim financial statements do not
contain all of the notes required by generally accepted accounting
principles to be included in audited financial statements and are
subject to normal year-end audit adjustments, and as otherwise may be
set forth in the Prospectus. The selected financial data incorporated
by reference in the Prospectus under the caption "Selected Financial
Data" fairly present, on the basis stated in the Registration
Statement, the information set forth therein.
(v) Independent Auditors. KPMG LLP, who have expressed their opinions on
the audited financial statements and related schedules included in the
Registration Statement and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(w) Material Contracts. The Company has performed all material obligations
required to be performed by it through the date hereof under all
contracts required by Item 601(b)(10) of Regulation S-K under the
Securities Act to be filed as exhibits to the Registration Statement,
and neither the Company nor, to the knowledge of the Company, any
other party to such contract is in default under or in breach of any
such obligations, except with respect to any defaults or breaches
which, singly or in the aggregate, will not result in a Material
Adverse Effect. The Company has not received any notice of such
default or breach.
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(x) Labor Agreements and Actions. The Company is not involved in any
labor dispute of a type likely to have a Material Adverse Effect
and, to the Company's knowledge, no such dispute is threatened.
The Company is not aware that (i) any executive, key employee or
significant group of employees of the Company plans to terminate
employment with the Company, or (ii) any such executive or key
employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that
would be violated by the present or proposed business activities
of the Company. The Company does not have or expect to have any
liability for any prohibited transaction or funding deficiency or
any complete or partial withdrawal liability with respect to any
pension, profit sharing or other plan which is subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), to which the Company makes or ever has made a
contribution and in which any employee of the Company is or has
ever been a participant, except where such liability would not
have a Material Adverse Effect. With respect to such plans, the
Company is in compliance in all material respects with all
applicable provisions of ERISA.
(y) Lock-Up Agreements. The Company has obtained the written
agreement, in substantially the form attached hereto as Exhibit
A, from each of the executive officers and directors listed on
Schedule 2(y) attached hereto.
(z) Title to Property and Assets. The Company has and, as of each
Closing Date, will have good title to all personal property owned
by it which is material to the business of the Company, in each
case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as would not have
a Material Adverse Effect. Any real property and buildings held
under lease by the Company described in the Prospectus are, or
will be as of each Closing Date, held by it under valid,
subsisting and enforceable leases with such exceptions as would
not have a Material Adverse Effect, in each case except as
described in or contemplated by the Prospectus.
(aa) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in
such amounts as the Company believes are reasonable with respect
to the business in which it is engaged all of which insurance is
in full force an effect.
(bb) Brokers. Except for an advisory fee in the amount of .46875%
payable by the Company to Xxxxxxx & Co., there is no broker,
finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or similar fee or
commission as a result of any of the transactions contemplated by
this Agreement.
(cc) Distribution of Offering Materials. The Company has not
distributed and will not distribute prior to the later of (i) the
Closing Date and (ii) the completion of the distribution of the
Offered Shares, any offering material in connection with the
offering and sale of the Offered Shares other than the
Prospectus, the Registration Statement and other materials, if
any, permitted by the Securities Act and the use of which has
been approved in advance by the Underwriter.
(dd) Certificates. Each certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the
Underwriter pursuant to this Agreement or in connection with the
Offering contemplated hereby shall be deemed to be a
representation and warranty of the Company to the Underwriter as
to the matters covered thereby.
3. Purchase and Sale of the Firm Shares. The Company agrees, to sell
to the Underwriter the Firm Shares, and on the basis of the
representations, warranties, covenants and agreements herein
contained, but upon the terms and subject to the conditions
herein set forth, the Underwriter agrees, to purchase the Shares
from the Company.
(a) Purchase Price. The purchase price per Firm Share to be paid by
the Underwriter to the Company will be $12.81 per share (the
"Purchase Price") (representing an underwriter discount of
3.28125%).
(b) First Closing. The Company will deliver the Firm Shares to the
Underwriter in the form of definitive certificates, issued in
such names and in such denominations as the Underwriter may
direct by notice in writing to the Company given at or prior to
10:00 a.m., New York time, on the second full business day
preceding the First Closing Date (as defined below) or, if no
such direction is received, in the name of the Underwriter
(solely for the purpose of administrative convenience) and in
such denominations as the Underwriter may determine, against
payment of the aggregate Purchase Price therefor or other
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immediately available funds, by certified or official bank check
payable to the order of the Company or by wire transfer to
accounts designated by the Company, all at the offices of
Xxxxxxxxx Traurig, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. Such delivery and closing shall occur at 10:00 a.m., New
York time, on the fourth business day after the date of this
Agreement (the "Final Closing Date"). The First Closing Date and
the location of delivery of, and the form of payment for, the
Firm Shares may be varied by agreement between the Company and
the Underwriter.
(c) Certificates for the Firm Shares. The Company shall make the
certificates for the Firm Shares available to the Underwriter not
later than 12:00 p.m., New York time, on the business day
preceding the First Closing Date at such location within New York
City as may be designated by the Underwriter. If the Underwriter
so elects, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository
Trust Company designated by the Underwriter.
(d) Public Offering. The Underwriter agrees to make a public offering
of the Firm Shares at the public offering price of $13.25 per
share as soon after the execution and delivery of this Agreement
as, in its reasonable judgment, is advisable. The Underwriter
shall promptly advise the Company of the making of the public
offering. After making the public offering, the Underwriter may,
in its discretion, after consultation with the Company vary the
public offering price.
(e) Purchase of Optional Shares. In addition, upon written notice
from the Underwriter given to the Company from time to time, the
Underwriter may purchase all or less than all of the Optional
Shares at the Purchase Price per share to be paid for the Firm
Shares. Such Optional Shares may be purchased by the Underwriter
only for the purpose of covering over-allotments made in
connection with the sale of the Firm Shares. No Optional Shares
shall be sold or delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered. The right to
purchase the Optional Shares or any portion thereof may be
exercised from time to time, not more than 45 days subsequent to
the date of the Prospectus, and to the extent not previously
exercised may be surrendered and terminated at any time upon
notice by the Underwriter to the Company. Each time for the
delivery of and payment for the Optional Shares, being herein
referred to as an "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing
Date, if any, being sometimes referred to as a "Closing Date"),
shall be determined by the Underwriter but shall be not earlier
than three and not later than five full business days after
written notice of election to purchase, unless otherwise mutually
agreed to by the underwriter and the Company, Optional Shares is
given. The Company will deliver the Optional Shares to the
Underwriter in the form of definitive certificates, issued in
such names and in such denominations as the Underwriter may
direct upon reasonable notice in writing to the Company prior to
such Optional Closing Date or, if no such direction is received,
in the name of the Underwriter (solely for the purpose of
administrative convenience) and in such denominations as the
Underwriter may determine, against payment of the aggregate
purchase price therefor in Federal or other immediately available
funds, by certified or official bank check or checks payable to
the order of the Company or by wire transfer to accounts
designated by the Company. The Company shall make the
certificates for the Optional Shares available to the Underwriter
at a reasonable time in advance of such Optional Closing Date. If
the Underwriter so elects, delivery of the Optional Shares may be
made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriter.
(f) No Adverse Changes. There shall not have occurred, at any time
prior to the applicable closing (i) any domestic or international
event, act or occurrence which has materially disrupted, or in
the Underwriter's opinion will in the immediate future materially
disrupt, the securities markets; (ii) a general suspension of, or
a general limitation on prices for, trading in securities on the
New York Stock Exchange or the Nasdaq - Amex Stock Exchange or in
the over-the-counter market; (iii) any outbreak of major
hostilities or other national or international calamity; (iv) any
banking moratorium declared by a state or federal authority; (v)
any moratorium declared in foreign exchange trading by major
international banks or other persons; (vi) any material
interruption in the mail service or other significant means of
communication within the United States; (vii) any material
adverse change in the business, properties, assets, results of
operations, or financial condition of the Company; or (viii) any
change in the market for securities in general or in political,
financial, or economic conditions which, in the Underwriter's
reasonable judgment, makes it inadvisable to proceed with the
applicable Offering.
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4. Conditions to Underwriter's Obligations. The obligations of the
Underwriter hereunder to purchase and pay for the Firm Shares on
the First Closing Date and any Optional Shares on each Optional
Closing Date will be subject to the accuracy of the
representations and warranties of the Company herein contained as
of the date hereof and as of each Closing Date, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) No Stop Order. No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or shall
be in effect and no order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for
such purpose shall be pending before or threatened by the
Commission or by any Governmental Authority, and 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 Underwriter.
(b) No Material Misstatements. Neither the Registration Statement,
nor any supplement thereto, will contain any untrue statement of
a fact by the Company which in the opinion of the Underwriter is
material, or omits to state a fact, which in the opinion of the
Underwriter is material and is required to be stated therein, or
is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) Compliance with Agreements. The Company will have complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to each Closing
Date;
(d) Corporate Action. The Company will have taken all necessary
corporate action, including, without limitation, obtaining the
approval of its Board, for the execution and delivery of this
Agreement, the performance by the Company of its obligations
hereunder and the Offering contemplated hereby;
(e) Opinion of Company Counsel. The Underwriter shall receive the
opinion of Xxxxxx Xxxxxx LLP, counsel to the Company, dated as of
each Closing Date, addressed to the Underwriter, with such
knowledge qualifiers as is customary and reasonable,
substantially to the effect that:
(i) if applicable, filing of all pricing information has been
timely made in the appropriate form under Rule 430A, and
based solely upon the oral advice of the Staff of the
Commission, the Registration Statement is effective under
the Act and no stop order suspending the use of the
Registration Statement or the Prospectus or any part of any
thereof or suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to such
counsel's knowledge, threatened or contemplated under the
Act;
(ii) each of the Registration Statement, the Prospectus and any
amendments or supplements thereto (other than the financial
statements and other financial and statistical data included
therein as to which no opinion need be rendered) comply as
to form in all material respects with the requirements of
the Act and the Regulations. Such counsel shall state that
such counsel has participated in conferences with officers
and other representatives of the Company, at which
conferences the content of the Registration Statement and
any amendments or supplements thereto were discussed, and,
although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement and any amendments or supplements thereto, on the
basis of the foregoing, no facts have come to the attention
of such counsel which lead them to believe that either the
Registration Statement or any amendment thereto, at the time
such Registration Statement or amendment or supplement
became effective or the Prospectus or amendment or
supplement thereto as of the date of such opinion contained
any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary
to make the statement therein not misleading (it being
understood that such counsel need express no opinion with
respect to the financial statements and schedules and other
financial and statistical data included in the Registration
Statement or the Prospectus, and any amendments or
supplements thereto);
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CDC Securities
Underwriting Agreement
October 16, 2003
Page 9
(iii) the Company is validly existing and in good corporate standing
under the laws of its state of incorporation, has all requisite
corporate power and authority necessary to own or hold its respective
properties and conduct its business and is duly qualified or licensed
to do business as a foreign corporation in each other jurisdiction in
which the ownership or leasing of its properties or conduct of its
business requires such qualification, except where the failure to so
qualify or be licensed would not have a Material Adverse Effect;
(iv) this Agreement has been duly and validly authorized, executed
and delivered by the Company, and is the valid and binding obligation
of the Company, enforceable against it in accordance with its terms,
subject to any applicable bankruptcy, insolvency or other laws
affecting the rights of creditors generally and to general equitable
principles;
(v) the Offered Shares have been duly authorized, and when issued and
delivered to the Underwriter against payment therefor as provided by
this Agreement, will have been validly issued and will be fully paid
and non-assessable, and the issuance of the Offered Shares, to such
counsel's knowledge, is not subject to any preemptive or similar
rights;
(vi) the authorized, and to such counsel's knowledge the issued and
outstanding capital stock of the Company as of the date hereof
(before giving effect to the transactions contemplated by this
Agreement) is as set forth in the Prospectus. Except as set forth in
this Agreement, the Schedules hereto or as set forth in the
Prospectus, to counsel's knowledge, there are no outstanding
warrants, options, agreements, convertible securities, preemptive
rights or other commitments pursuant to which the Company is, or may
become, obligated to issue any shares of its capital stock or other
securities of the Company. To such counsel's knowledge, all of the
other issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and nonassessable,
and to such counsel's knowledge have not been issued in violation of
the preemptive rights of any securityholder of the Company. Nothing
has come to such counsel's attention indicating that the Company's
offers and sales of such securities were not either registered under
the Securities Act or exempt from such registration requirements;
(vii) other than as set forth in the Prospectus, neither the
execution and delivery of this Agreement nor compliance with the
terms hereof, nor the consummation of the transactions herein
contemplated, nor the issuance of the Offered Shares, has, nor will,
conflict with, result in a breach of, or constitute a default under
the Articles of Organization or By-laws of the Company, or any
material contract, instrument or document known to such counsel and
identified to us by the Company as material, to which the Company is
a party, or by which it or any of its properties is bound or violate
any applicable law, rule, regulation, judgment, order or decree known
to counsel of any governmental agency or court having jurisdiction
over the Company or any of its properties or business;
(viii) other than as set forth in the Prospectus, to counsel's
knowledge, there are no claims, actions, suits, investigations or
proceedings before or by any arbitrator, court, governmental
authority or instrumentality pending or, to such counsel's knowledge,
threatened against or affecting the Company or involving the
properties of the Company that might materially and adversely affect
the business, properties or financial condition of the Company or
that might materially adversely affect the transactions or other acts
contemplated by this Agreement or the validity or enforceability of
this Agreement;
(ix) the Company is not an "investment company" as defined in Section
3(a) of the Investment Company Act and, if the Company conducts its
businesses as set forth in the Prospectus, will not become an
"investment company" and will not be required to be registered under
the Investment Company Act;
(x) except as set forth in the Prospectus or in this Agreement and
the Schedules hereto, to counsel's knowledge, no person or entity has
the right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of
the Registration Statement; and
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CDC Securities
Underwriting Agreement
October 16, 2003
Page 10
(xi) the Offered Shares are a "Covered Security" as defined in
Section 18 of the Securities Act; provided, however, that such
counsel offers no opinion on any state "blue sky" laws, regulation or
requirements, including, but not limited to state notice and filing
requirements, state filing fees, state exemptions or federal or state
requirements relating to broker-dealer or agent-salespersons.
(f) Legal Opinion of Counsel for the Underwriter. The Underwriter shall have
received from Xxxxxxxxx Traurig, LLP counsel for the Underwriter, their
opinion or opinions, dated each Closing Date, with respect to the
validity of the Common Stock, the Registration Statement and the
Prospectus and such other related matters as they may reasonably request,
and the Company shall have furnished to such counsel such documents as
they may request for the purpose of enabling them to pass upon such
matters.
(g) Officers' Certificate. The Underwriter shall receive a certificate of the
Company, signed by the Chief Executive Officer and Chief Financial
Officer thereof, that the representations and warranties contained in
Section 4 hereof are true and accurate in all material respects at each
Closing Date with the same effect as though expressly made at such
Closing Date.
(h) Due Diligence. The Underwriter shall have completed and been satisfied
with the results of its due diligence investigation of the Company,
including, without limitation, the Company's financial statements,
projections, expense budgets, business prospects, capital structure,
background searches and contractual arrangements.
(i) Filing of Prospectus. The Prospectus shall have been timely filed with
the Commission in accordance with Section 5(c) of this Agreement.
(j) Accountant's Letter. The Underwriter shall have received at the time this
Agreement is executed and on each Closing Date, signed letters from KPMG
LLP addressed to the Underwriter and dated, respectively, the date of
this Agreement and each Closing Date, in form and scope reasonably
satisfactory to the Underwriter, with reproduced copies or signed
counterparts thereof for the Underwriter confirming that they are
independent accountants within the meaning of the Act and the
Regulations, that the response to Item 10 of the Registration Statement
is correct in so far as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated by reference in the
Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Act, the Exchange Act and the rules
and regulations;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus, a reading of the minutes
of the meetings of the shareholders and directors of the Company, and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest audited
financial statements, except as disclosed in the Registration
Statement and the Prospectus, nothing came to their attention which
caused them to believe that:
(A) the amounts included or incorporated by reference in the
Registration Statement and the Prospectus do not agree with
the corresponding amounts in the audited financial statements
from which such amounts were derived; or
(B) with respect to the Company, there were, at a specified
date not more than five business days prior to the date of the
letter, any decreases in net sales, income before income taxes
and net income or any increases in long-term debt of the
Company or any decreases in the capital stock, working capital
or the shareholders' equity in the Company, as compared with
the amounts shown on the Company's audited Balance Sheet for
the fiscal year ended December 31, 2002 included in the
Registration Statement or the audited Statement of Operations,
for such year;
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CDC Securities
Underwriting Agreement
October 16, 2003
Page 11
(iii) they have performed certain other procedures as a result of
which they determined that information of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records
of the Company) set forth in the Registration Statement and the
Prospectus and reasonably specified by the Agent agrees with the
accounting records of the Company; and
(iv) as to such other matters as the Underwriter shall reasonably
request.
(k) Satisfaction of Underwriter. All proceedings taken in connection with the
sale of the Offered Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Underwriter and Underwriter's
counsel.
(l) Completeness of Information. On or prior to the applicable Closing Date,
the Underwriter shall have been furnished such documents, certificates
and opinions as they may reasonably require in order to evidence the
accuracy, completeness or satisfaction of any of the representations,
warranties, covenants, agreements or conditions contained in this
agreement.
(m) No NASD Objection. The NASD shall not have objected to the Underwriter's
participation in the Offering nor the advisory fee payable to Xxxxxxx &
Co.
5. Covenants of the Company.
(a) Effectiveness of Registration Statement. The Company will not at any
time, whether before or after the effective date of the Registration
Statement, file any amendment to the Registration Statement or
supplement to the Prospectus or file any document under the Act or
Exchange Act before termination of the offering of the Offered Shares
by the Underwriter of which the Underwriter shall not previously have
been advised and furnished with a copy, or to which the Underwriter
shall have reasonably objected or which is not in compliance with the
Act, the Exchange Act or the Regulations.
(b) Prospectus Supplement. The Company will (A) prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
prospectus supplement setting forth the information and the terms of the
offering contemplated by Section 4 hereof, (B) not file any amendment to
the Registration Statement or supplement to the Prospectus of which the
Underwriter shall not previously have been advised and furnished with a
copy or to which the Underwriter shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and
(C) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Offered Shares by the Underwriter.
(c) Notification. As soon as the Company is advised or obtains knowledge
thereof, the Company will advise the Underwriter and confirm the notice
in writing, (i) when the Prospectus has been filed in accordance with
said Rule 430A and when any post-effective amendment to the Registration
Statement becomes effective, (ii) of the issuance by the Commission of
any proceeding, suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or any amendment or supplement
thereto, or the institution of proceedings for that purpose, (iii) of the
issuance by the Commission or by any state securities commission of any
proceedings for the suspension of the qualification of any of the Common
Stock for offering or sale in any jurisdiction or of the initiation, or
the threatening, of any proceeding for that purpose, (iv) of the receipt
of any comments from the Commission; and (v) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information.
If the Commission or any state securities commission shall enter a stop
order and suspend such qualifications at any time, the Company will use
its best efforts to obtain promptly the lifting of such order.
(d) Amendments. The Company shall give the Underwriter reasonable notice
of its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus (including any revised prospectus which the
Company proposes for use by the Underwriter in connection with the
offering of the Common Stock which differs from the corresponding
prospectus on file at the Commission at the time the Registration
E-12
CDC Securities
Underwriting Agreement
October 16, 2003
Page 12
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the Regulations), and
will furnish the Underwriter with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or
supplement to which the Underwriter or Xxxxxxxxx Traurig, LLP
("Underwriter's Counsel") shall reasonably object.
(e) Copies of Registration Statement and Prospectus. The Company will
deliver to the Underwriter, at or before each Closing Date, conformed
copies of the Registration Statement, and each amendment thereto,
including all financial statements and exhibits thereto, and will deliver
to the Underwriter such number of copies of the Registration Statement,
including such financial statements but without exhibits, and all
amendments thereto, as the Underwriter may reasonably request. The
Company will deliver or mail to the Underwriter on the date of the public
offering, and thereafter from time to time during the period when
delivery of a prospectus relating to the Offered Shares is required under
the Securities Act, as many copies of the Prospectus, in final form or as
thereafter amended or supplemented as the Underwriter may reasonably
request.
(f) Section 11(a) Earnings Statement. The Company will make generally
available to its stockholders as soon as practicable, but not later than
45 days after the end of the fourth fiscal quarter following the fiscal
quarter that includes the "effective date of the registration statement"
(as defined in Rule 158(c) of the Securities Act) if such fourth fiscal
quarter is not the last fiscal quarter of the Company's fiscal year and
not later than 90 days after the end of the fourth fiscal quarter
following the fiscal quarter that includes the "effective date of the
registration statement" if such fourth fiscal quarter is the last fiscal
quarter of the Company's fiscal year, an earnings statement which will be
in reasonable detail (but which need not be audited) and which will
comply with Section 11(a) of the Securities Act, covering a period of at
least twelve (12) months beginning after the "effective date of the
registration statement," provided that compliance with Rule 158 shall
satisfy this subsection (f).
(g) Compliance with Requirements. During the time when a prospectus is
required to be delivered under the Act, the Company shall use all
reasonable efforts to comply with all requirements imposed upon it by the
Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Common Stock in accordance with the
provisions hereof and the Prospectus, or any amendments or supplements
thereto. If at any time when a prospectus relating to the Offered Shares
is required to be delivered under the Act, any event shall have occurred
as a result of which, in the opinion of counsel for the Company or
Underwriter's Counsel, the Prospectus, as then amended or supplemented,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or it is necessary at any time to amend or
supplement the Prospectus to comply with the Act, the Company shall
notify the Underwriter promptly and prepare and file with the Commission
an appropriate amendment or supplement in accordance with Section 10 of
the Act, each such amendment or supplement to be satisfactory to the
Company's and the Underwriter's Counsel, and the Company will furnish to
the Underwriter copies of such amendment or supplement as soon as
available and in such quantities as the Underwriter may request.
(h) Use of Proceeds. The net proceeds of the Offering will be used by the
Company as set forth in the Prospectus. Except as set forth in Schedule
5(h) to this Agreement, the Company shall not use any of the proceeds
from the Offering to repay any indebtedness of the Company (other than
trade payables in the ordinary course), including but not limited to
indebtedness to any current executive officers, directors or principal
stockholders of the Company.
(i) Expenses of Offering. The Company shall be responsible for, and shall
bear all expenses directly incurred in connection with, the proposed
offering including, but not limited to legal fees of the Company's
counsel relating to the costs of preparing the Registration Statement and
all amendments, supplements and exhibits thereto and preparing and
delivering all Underwriter and selling documents, Common Stock
certificates (the "Company Expenses"). In addition, the Company shall
reimburse the Underwriter for all of its out-of-pocket expenses incurred
in connection with the Offering, including, without limitation the
Underwriter's NASD filing fees, mailing, printing, copying, telephone,
E-13
CDC Securities
Underwriting Agreement
October 16, 2003
Page 13
travel, background searches, due diligence investigations, legal and
consulting fees or other similar expenses (the "Underwriter expenses") up
to $25,000.
(j) Press Releases, Etc. The Company shall not, during the period
commencing on the date hereof and ending on the termination of the
offering of the Offered Shares, issue any press release or other
communication, or hold any press conference with respect to the
Company, its financial condition, results of operations, business,
properties, assets, or liabilities, or the Offering, without the prior
consent of the Underwriter, which consent shall not be unreasonably
withheld. The Company shall not include information with respect to
the Offering or use the Underwriter's name in any press release,
advertisement or on any website maintained by the Company with out the
prior written consent of the Underwriter.
(k) Restrictions on Issuances of Securities. During the period commencing
on the date hereof and ending on the later of (i) the Closing Date or
(ii) the termination of the offering of the Offered Shares, the
Company will not, without the prior written consent of the
Underwriter, issue additional shares of Common Stock, other than
pursuant to the exercise of options or warrants outstanding on the
date hereof, or grant any warrants, options or other securities of the
Company except for options under the Company's stock option plans.
(l) Nasdaq National Market. On or before completion of this Offering, the
Company shall make all filings required under applicable securities laws
and by the Nasdaq National Market and will use its best efforts to
maintain the listing of the Common Stock on the Nasdaq National Market
for a period of two (2) years after the date hereof.
(m) Financial Statements. Prior to each Closing Date the Company will
furnish to the Underwriter, as soon as they have been prepared, copies of
any unaudited interim financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
in the Prospectus.
(n) Reports to Underwriter. During the period of three (3) years from the
date hereof, the Company will furnish to the Underwriter, (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of
the close of such fiscal year and statements of income, stockholder's
equity and cash flows of the Company for the year then ended and the
opinion thereon of the Company's independent public accountants, (ii) as
soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Report on Form 8-K or other report filed by the Company with the
Commission, Nasdaq or any securities exchange, (iii) as soon as
available, copies of any report or communication of the Company mailed
generally to holders of its Common Stock, and (iv) such other information
concerning the Company as the Underwriter may reasonably request from
time to time.
(o) Company Lock-Up. No offering, sale or other disposition of any Common
Stock or any other securities convertible or exchangeable or exercisable
for Common Stock or derivatives of Common Stock, will be made for a
period of 90 days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of Underwriter, except that the Company may, without such
consent, (i) issue shares upon the exercise of options outstanding on the
date of this Agreement or otherwise pursuant to the Company's Stock Plans
or upon the exercise of warrants outstanding as of the date hereof, or
(ii) issue options to purchase Common Stock under the Stock Plans.
6. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless the Underwriter, each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, and agents of the Underwriter
and controlling person (collectively, the "Underwriter Indemnified
Parties" and, each, an "Underwriter Indemnified Party") against any
losses, claims, damages, liabilities or expenses (including the
reasonable cost of investigating and defending against any claims
therefor and fees of one counsel incurred in connection therewith), joint
or several, which may be based upon the Securities Act, the Exchange Act,
or any other federal, state, local or foreign statute or regulation, or
at common law, on the ground or alleged ground that the Registration
Statement or the Prospectus (as from time to time amended or
supplemented) includes or allegedly includes an untrue statement of a
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CDC Securities
Underwriting Agreement
October 16, 2003
Page 14
material fact or omits or allegedly omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, written information furnished to
the Company by the Underwriter, directly or through the Underwriter,
specifically for use in the preparation thereof. The Company will be
entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any such
liability, but, if the Company elects to assume the defense, such defense
shall be conducted by counsel chosen by it. In the event the Company
elects to assume the defense of any such suit and retain such counsel,
any Underwriter Indemnified Parties may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) the Company
shall have specifically authorized the retaining of such counsel, or (ii)
the parties to such suit include any such Underwriter Indemnified
Parties, and the Company and such Underwriter Indemnified Parties have
been advised by counsel to the Underwriter that one or more legal
defenses may be available to it or them which may not be available to the
Company, in which case counsel selected by the Underwriter Indemnified
Parties shall participate in such suit with respect to those defenses,
provided that the Company shall not be required to bear the reasonable
fees and expenses of more than one such counsel. The Company shall not be
liable to indemnify any person for any settlement of any such claim
effected without the Company's consent. This indemnity agreement is not
exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to each Underwriter
Indemnified Party.
(b) Indemnification by the Underwriter. The Underwriter agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the Registration Statement and each person,
if any, who controls the Company within the meaning of the Securities Act
(collectively, the "Company Indemnified Parties") against any losses,
claims, damages, liabilities or expenses (including, unless the
Underwriter elects to assume the defense, the reasonable cost of
investigating and defending against any claims therefor and fees of
counsel incurred in connection therewith), joint or several, which arise
out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that the
Registration Statement or the Prospectus (as from time to time amended
and supplemented) includes or allegedly includes an untrue statement of a
material fact or omits or allegedly omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were
made, not misleading, but only insofar as any such statement or omission
was made in reliance upon, and in conformity with, written information
furnished to the Company by the Underwriter, directly or through an agent
of the Underwriter, specifically for use in the preparation thereof, and
the parties acknowledge and agree that the only information furnished by
the Underwriter to the Company for inclusion in the Prospectus, as from
time to time amended or supplemented, is the information under the
captions "Underwriting" and "Plan of Distribution" in the Prospectus that
does not describe this Agreement; provided, however, that in no case is
the Underwriter to be liable with respect to any claims made against any
Company Indemnified Party against whom the action is brought unless such
Company Indemnified Party shall have notified the Underwriter in writing
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon
the Company Indemnified Party, but failure to notify the Underwriter of
such claim shall not relieve it from any liability which it may have to
any Company Indemnified Party except to the extent such failure
prejudices the Underwriter's defense of such action or otherwise than on
account of its indemnity agreement contained in this paragraph. The
Underwriter shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but, if the Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it. In
the event that the Underwriter elects to assume the defense of any such
suit and retain such counsel, the Company Indemnified Parties or
controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them,
respectively. The Underwriter shall not be liable to indemnify any person
for any settlement of any such claim effected without the Underwriter's
consent. This indemnity agreement is not exclusive and will be in
addition to any liability which the Underwriter might otherwise have and
shall not limit any rights or remedies which may otherwise be available
at law or in equity to any Company Indemnified Party.
(c) Contribution. If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages, liabilities or expenses (or actions in respect thereof) referred
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CDC Securities
Underwriting Agreement
October 16, 2003
Page 15
to herein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Underwriter, respectively, from the
offering of the Offered Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law,
then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of
the Company on the one hand, and the Underwriter on the other hand, in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand, and the
Underwriter on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriter, in each case as
set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriter, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree
that it would not be just and equitable if contribution were determined
by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referred to above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating, defending, settling or compromising any such claim.
Notwithstanding the provisions of this subsection (c), the Underwriter
shall not be required to contribute any amount in excess of the amount by
which the total price at which the Offered Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages which the Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Miscellaneous.
(a) Notices. All notices or communications hereunder will be in writing
and will be mailed or delivered as follows: If to the Company, at the
name and address set forth on the first page of this Agreement, facsimile
number (000) 000-0000, with a copy to Xxxxxxxx X. Xxxxxxx, Esq. at Xxxxxx
Xxxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, facsimile number (617)
345-7050; and if to CDC, at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, Attention: Xxxxxxx Xxxxx, facsimile number (000) 000-0000 with a
copy to Xxxx X. Annex, Esq. at Xxxxxxxxx Xxxxxxx, LLP, 000 Xxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, XX 00000, facsimile number (000) 000-0000.
(b) Survival; Governing Law; Entire Agreement; Independent Contractor.
The representations, warranties and covenants of the Company set forth
herein will remain in full force and effect regardless of any
investigation made by or on behalf of the Underwriter, any investor or
any other entity or persons and will survive delivery of the Securities.
The provisions of this Section 7 ("Miscellaneous") and Sections 2 and 6,
shall survive any closing of the Offering or termination of this
Agreement, as applicable. This Agreement contains the entire agreement
between the Company and the Underwriter concerning the Offering and
supersedes any prior understanding or agreement whether written or oral.
Any amendment hereto or waiver of any right or obligation hereunder must
be in writing signed by the party to be charged. This Agreement shall be
governed by and construed in accordance with the internal laws of the
State of New York without giving effect to that state's principles of
conflicts of law. The Underwriter will act under this Agreement as an
independent contractor at "arms-length" with duties solely to the
Company. It is understood that the Underwriter's responsibility to the
Company is solely contractual in nature and that the Underwriter does not
owe the Company, or any other party, any financial advisory, fiduciary,
agency or similar duties as a result of its engagement. The Company
E-16
CDC Securities
Underwriting Agreement
October 16, 2003
Page 16
acknowledges and agrees that any statement made by the Underwriter, or
any of its representatives or agents, in connection with this Agreement
or the transactions contemplated hereby is not advice or a
recommendation, is merely incidental thereto and has not been relied upon
in any way by the Company, its officers, directors or other
representatives. The Company further represents that the Company's
decision to enter into this Agreement and the transactions contemplated
hereby has been based solely on an independent evaluation by the Company
and its representatives. Any information provided by the Underwriter may
not be disclosed or referred to publicly or to any third party except
with the Underwriter's express prior consent. The Company acknowledges
that the business of the Underwriter may give rise to situations where
the Underwriter or its affiliates may have a client whose interest may be
regarded as conflicting with the Company's interests and nothing in this
Agreement shall preclude the Underwriter from performing services for
such other clients. Without the Company's prior written consent, the
Underwriter has no right to describe its services to the Company in
connection with the Offering or to reproduce the Company's name and logo
in the Underwriter's advertisements, marketing materials and equity
research reports, if any. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect. The Company agrees and consents to
personal jurisdiction, service of process and venue in any Federal or
state court within the State of New York for purposes of any action, suit
or proceeding arising out of or relating to this Agreement. The
Underwriter and the Company (on its own behalf and, to the extent
permitted by law, on behalf of its stockholders or other interest
holders) each waives any right to trial by jury in any action, claim,
suit or proceeding with respect to the Underwriter's engagement hereunder
or its role in connection therewith. The benefits of, and the obligations
and liabilities assumed in, this Agreement shall inure to the benefit of,
and be binding upon, any successors and assigns.
E-17
CDC Securities
Underwriting Agreement
October 16, 2003
Page 17
This Agreement is effective as of the date first set forth above. Please
confirm that the foregoing correctly and completely sets forth our
understanding, by signing and returning to us the enclosed duplicate of this
Agreement.
Sincerely,
CDC SECURITIES
/s/Xxxxxxx Xxxxx
--------------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director
/s/Xxxxx Xxxxx
--------------------------------------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
/s/Xxxx Xxxxxxx
--------------------------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
Accepted and agreed:
IBIS TECHNOLOGY CORPORATION
By: /s/Xxxxxx X. Xxxx.
-----------------------------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------------------
Title: Chief Executive Officer & President
------------------------------------------------
E-18
SCHEDULE 2(f)
-------------
REGISTRATION RIGHTS
1. Stock Purchase Warrant for 200,000 shares of Common Stock, dated December
15, 2000, and held by International Business Machines Corporation (the "IBM
Warrant").
SCHEDULE 2(m)
-------------
SHAREHOLDER AGREEMENTS
1. Amended and Restated Shareholder Agreement among the Company and certain
Shareholders, dated August 17, 1989.
OUTSTANDING RIGHTS/INSTRUMENTS
1. Employee Stock Options under the Company's Stock Option's Plans
THE IBM WARRANT [SEE SCHEDULE 2(f)]
SCHEDULE 2(y)
-------------
Xxxxxx X. Xxxx
Xxxxxxx Xxxxxxxxxx, Ph.D.
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. XxXxxxxxxx
Xxxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxx, C.P.A.
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx, C.P.A
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx, Ph.D.
Xxxxxx X. Xxxxx
SCHEDULE 5(h)
-------------
USE OF PROCEEDS
NONE.
