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SUREBEAM CORPORATION
(a Delaware corporation)
6,700,000 Shares of Class A Common Stock
PURCHASE AGREEMENT
Dated: February -, 2001
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TABLE OF CONTENTS
PAGE
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SECTION 1. Representations and Warranties.......................................................3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND TITAN .......................3
(i) Compliance with Registration Requirements.............................3
(ii) Independent Accountants...............................................4
(iii) Financial Statements..................................................4
(iv) No Material Adverse Change in Business................................4
(v) Good Standing of the Company and Titan................................5
(vi) Good Standing of Subsidiaries.........................................5
(vii) Capitalization........................................................5
(viii) Authorization of Agreement............................................5
(ix) Authorization and Description of Securities...........................6
(x) Absence of Defaults and Conflicts ....................................6
(xi) Absence of Labor Dispute..............................................6
(xii) Absence of Proceedings................................................7
(xiii) Accuracy of Exhibits..................................................7
(xiv) Possession of Intellectual Property...................................7
(xv) Absence of Further Requirements.......................................7
(xvi) Possession of Licenses and Permits....................................8
(xvii) Title to Property.....................................................8
(xviii) Investment Company Act................................................8
(xix) Environmental Laws....................................................8
(xx) Registration Rights...................................................9
(xxi) Intercompany Agreements...............................................9
(xxii) Intercompany Contribution.............................................9
(b) OFFICERS' CERTIFICATES........................................................10
SECTION 2. Sale and Delivery to Underwriters; Closing..........................................10
(a) INITIAL SECURITIES............................................................10
(b) OPTION SECURITIES.............................................................10
(c) PAYMENT.......................................................................10
(d) DENOMINATIONS; REGISTRATION...................................................11
SECTION 3. Covenants of the Company and Titan..................................................11
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS................11
(b) FILING OF AMENDMENTS..........................................................12
(c) DELIVERY OF REGISTRATION STATEMENTS...........................................12
(d) DELIVERY OF PROSPECTUSES......................................................12
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS ....................................12
(f) BLUE SKY QUALIFICATIONS.......................................................13
(g) RULE 158......................................................................13
(h) USE OF PROCEEDS...............................................................13
i
(i) LISTING.......................................................................13
(j) RESTRICTION ON SALE OF SECURITIES.............................................13
(k) REPORTING REQUIREMENTS........................................................14
(l) COMPLIANCE WITH RULE 463......................................................14
SECTION 4. Payment of Expenses.................................................................14
(a) EXPENSES......................................................................14
(b) TERMINATION OF AGREEMENT......................................................15
SECTION 5. Conditions of Underwriters' Obligations.............................................15
(a) EFFECTIVENESS OF REGISTRATION STATEMENT.......................................15
(b) OPINION OF COUNSEL FOR THE COMPANY............................................15
(c) OPINION OF COUNSEL FOR TITAN .................................................15
(d) OPINION OF PATENT COUNSEL FOR THE COMPANY.....................................16
(e) OPINION OF COUNSEL FOR UNDERWRITERS...........................................16
(f) OFFICERS' CERTIFICATES........................................................16
(g) ACCOUNTANT'S COMFORT LETTER...................................................16
(h) BRING-DOWN COMFORT LETTER.....................................................16
(i) APPROVAL OF LISTING ..........................................................17
(J) NO OBJECTION..................................................................17
(K) LOCK-UP AGREEMENTS............................................................17
(l) CONDITIONS TO PURCHASE OF OPTION SECURITIES...................................17
(i) Officers' Certificate................................................17
(ii) Opinion of Counsel for Company.......................................17
(iii) Opinion of Counsel for Titan.........................................17
(iv) Opinion of Patent Counsel for Company................................17
(v) Opinion of Counsel for Underwriters..................................17
(vi) Bring-down Comfort Letter............................................18
(m) ADDITIONAL DOCUMENTS..........................................................18
(n) TERMINATION OF AGREEMENT......................................................18
SECTION 6. Indemnification.....................................................................18
(a) INDEMNIFICATION OF UNDERWRITERS...............................................18
(b) INDEMNIFICATION OF COMPANY, TITAN, DIRECTORS AND OFFICERS.....................20
(c) ACTIONS AGAINST PARTIES; NOTIFICATION.........................................20
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE............................20
SECTION 7. Contribution........................................................................21
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......................22
SECTION 9. Termination of Agreement............................................................22
ii
(a) TERMINATION; GENERAL..........................................................22
(b) LIABILITIES...................................................................23
SECTION 10. Default by One or More of the Underwriters.........................................23
SECTION 11. Notices............................................................................24
SECTION 12. Parties............................................................................24
SECTION 13. GOVERNING LAW AND TIME.............................................................24
SECTION 14. Effect of Headings.................................................................24
SCHEDULES
Schedule A - List of Underwriters...........................................Sch A-1
Schedule B - Pricing Information............................................Sch B-1
Schedule C - List of Persons Subject to Lock-up.............................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.............................A-1
Exhibit B - Form of Opinion of Titan's Counsel...............................B-1
Exhibit C - Form of Opinion of Xxxxxxxx Xxxxxx Xxx &
Xxxxxx, LLP, Company's Patent Counsel.......................C-1
Exhibit D - Form of Lock-up from Directors, Officers or other
Stockholders pursuant to Section 5(k).......................D-1
iii
SUREBEAM CORPORATION
(a Delaware corporation)
6,700,000 Shares of Class A Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
February -, 2001
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Credit Suisse First Boston Corporation
First Union Securities, Inc.
X.X. Xxxxxxx & Sons, Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
SureBeam Corporation, a Delaware corporation (the "Company"), confirms
its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx, Credit Suisse First Boston Corporation, First
Union Securities, Inc. and X.X. Xxxxxxx & Sons, Inc. are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Class A Common
Stock, par value $.001 per share, of the Company ("Class A Common Stock") set
forth in said Schedule A, and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 1,005,000 additional shares
of Class A Common Stock to cover over-allotments, if any. The aforesaid
6,700,000 shares of Class A Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 1,005,000 shares of
Class A Common Stock subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to 335,000 shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and their
families and friends and certain individuals and entities having business
relationships with the Company, as part of the distribution of the Securities by
the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Securities are not orally confirmed for purchase by
such persons and entities by the end of the first business day after the date of
this Agreement, such Reserved Securities may be offered to the public as part of
the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-43672) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated [ ], 2001 together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
2
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND TITAN The Company
and The Titan Corporation, a Delaware corporation ("Titan"), jointly and
severally represent and warrant to each Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agree with each
Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company and Titan, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not 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 not misleading, and the
Prospectus, any preliminary prospectus and any supplement thereto or
prospectus wrapper prepared in connection therewith, at their
respective times of issuance and, as amended or supplemented, at the
Closing Time, complied and will comply in all material respects with
any applicable laws or regulations of foreign jurisdictions in which
the Prospectus and such preliminary prospectus, as amended or
supplemented, if applicable, are distributed in connection with the
offer and sale of Securities. Neither the Prospectus nor any amendments
or supplements thereto (including any prospectus wrapper), at the time
the Prospectus or any such amendment or supplement was issued and at
the Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and
the Prospectus shall not be "materially different," as such term is
used in Rule 434, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Xxxxxxx Xxxxx expressly
for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to
3
Rule 424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations, in each case, except insofar
as any corrections to any preliminary prospectus are made in the
Prospectus (or any amendment or supplement thereto) and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who
certified the financial statements and supporting schedules included
in the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The historical financial
statements included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated subsidiaries at
the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
for the periods specified; said financial statements comply as to form
with the applicable accounting requirements of Regulation S-X under the
1933 Act and have been prepared in conformity with United States
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in all
material respects in accordance with GAAP the information required to
be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly in all
material respects the information shown therein and have been compiled
on a basis consistent with that of the audited financial statements
included in the Registration Statement. The pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus present fairly in all material respects
the information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
4
(v) GOOD STANDING OF THE COMPANY AND TITAN. Each of the
Company and Titan has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement; and
each of the Company and Titan is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of
the Company listed on Exhibit 21.1 to the Registration Statement (each
a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The following subsidiaries
(including indirectly owned subsidiaries) of the Company currently have
no operations and have incurred no liabilities: Titan Food
Pasteurization Corp., Titan SureBeam Brazil, Inc., SureBeam Holding
Company Limitada and SureBeam Brazil Limitada (the "Inactive
Subsidiaries"). The only subsidiaries of the Company are the Inactive
Subsidiaries and the subsidiaries listed on Exhibit 21.1 to the
Registration Statement.
(vii) CAPITALIZATION. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus listed in the line item descriptions under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise
of convertible securities or options referred to in the Prospectus).
The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been
duly authorized, executed and delivered by the Company and by Titan.
5
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Class A Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the same;
and the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. The Company,
Titan and each of their subsidiaries are not in violation of their
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company, Titan or any of their subsidiaries are a party or by which
it or any of them may be bound, or to which any of the property or
assets of the Company, Titan or their subsidiaries are subject
(collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations
hereunder and the performance by each of the Company and Titan of
their respective obligations under the Intercompany Agreements (as
defined below) have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments and the
Intercompany Agreements (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in
a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the
Company, Titan or any of their subsidiaries or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company, Titan or any of their
subsidiaries or any of their assets, properties or operations
(except for such violations of applicable law that would not result
in a Material Adverse Effect). As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company, Titan or any of their subsidiaries exist or,
to the knowledge of the Company and Titan, is imminent, and neither the
Company nor Titan is aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's
principal
6
suppliers, manufacturers, customers or contractors, which, in either
case, may reasonably be expected to result in a Material Adverse
Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, or to the Company's or Titan's knowledge, any inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the Company's or Titan's
knowledge threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement or the
performance by the Company and Titan of their obligations hereunder;
the aggregate of all pending legal or governmental proceedings to which
the Company or any of its subsidiaries is a party, or of which any of
their respective property or assets is the subject, or to which Titan
or any of its subsidiaries is a party and relates to the business of
the Company, which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company
and its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, rights or other intellectual
property (collectively, "Intellectual Property") necessary to carry on
the business now operated by them, and, except as disclosed in the
Prospectus, the Company, Titan or any of their subsidiaries have not
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would result in a Material Adverse Effect. To the knowledge
of the Company and Titan, upon due inquiry, the business of the Company
as now conducted and as proposed to be conducted as described in the
Prospectus does not and will not infringe or conflict with any
Intellectual Property Rights or franchise right of any person.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with,
or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company and
Titan of their obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement or the Contribution
Agreement dated August 4, 2000,
7
except (i) such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state or foreign
securities laws or by the National Association of Securities
Dealers, Inc. and (ii) such as have been obtained under the laws and
regulations of jurisdictions outside the United States in which the
Reserved Securities are offered.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate Federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess such Governmental Licenses would
not, singly or in the aggregate, have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) TITLE TO PROPERTY. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions, encumbrances or other
defects of any kind except such as (a) are described in the Prospectus
or (b) do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xviii) INVESTMENT COMPANY ACT. The Company is not, and
upon the issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended (the "1940 Act").
(xix) ENVIRONMENTAL LAWS. Except as described in the
Registration Statement and except for any violation of Environmental
Laws (as defined below), failure to have required permits,
authorizations and approvals, or any Environmental Legal Actions (as
8
defined below), which would not, singly or in the aggregate, result in
a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any Federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, 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 the release or
threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the Company's or Titan's knowledge,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and there are, to
the Company's or Titan's knowledge, no events or circumstances that
might reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or any
of its subsidiaries relating to Hazardous Materials or any
Environmental Laws (collectively, "Environmental Legal Actions").
(xx) REGISTRATION RIGHTS. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act, except such rights
disclosed in the Prospectus.
(xxi) INTERCOMPANY AGREEMENTS. Each of the Contribution
Agreement, Corporate Services Agreement and Tax Allocation Agreement,
each dated as of August 4, 2000, between the Company and Titan,
(collectively the "Intercompany Agreements") has been duly authorized,
executed and delivered by the Company and Titan, is in full force and
effect, and constitutes a valid and legally binding obligation of each
of the Company and Titan, enforceable against each of the Company and
Titan in accordance with its terms.
(xxii) INTERCOMPANY CONTRIBUTION. Except for the assets
used by the Company pursuant to the Corporate Services Agreement,
Titan has effectively transferred to the Company substantially all
of the assets and liabilities previously used by it to conduct its
electronic food pasteurization business as such business is
described in the Prospectus and all of its intellectual property
relating to its electron beam accelerator technology, whether or not
patented, and as a result of the transfers and the Intercompany
Agreements, the Company will be able to conduct such business in
substantially the same manner and to the same extent as they were
conducted prior to such transfers.
9
(b) OFFICERS' CERTIFICATES. Any certificate signed by any officer of
the Company, Titan or any of its subsidiaries delivered to the Representatives
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Company and Titan to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 1,005,000 shares of Class A
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities. 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 Securities upon notice by the Representatives to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by the Representatives, but shall not be later
than five 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 Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxx &
Wood LLP, Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
10
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
two full business days before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. COVENANTS OF THE COMPANY AND TITAN. The Company and Titan
jointly and severally covenant with each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) 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, and (iv) of 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 of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
11
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act"), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters
12
such number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for as long as may be
necessary to complete the distribution of the Securities.
(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) LISTING. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 180 days from
the date of the Prospectus, the Company and Titan will not, without the prior
written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, 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 or
otherwise transfer or dispose of any share of Class A Common Stock or Class B
Common Stock, par value $.001 per share, of the Company ("Class B Common Stock"
and together with Class A Common Stock, "Common Stock") or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter 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 the Common Stock, 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 Securities to be sold hereunder, (B) any shares of Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectus, or (C) any shares of Common Stock issued or options to purchase
Common Stock granted
13
pursuant to existing employee benefit plans or employee stock purchase plans of
the Company referred to in the Prospectus.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) COMPLIANCE WITH NASD RULES. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
(m) COMPLIANCE WITH RULE 463. The Company will file with the Commission
such reports as may be required pursuant to Rule 463 of the 1933 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. Each of the Company and Titan, jointly and severally will
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities, (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the inclusion
of the Securities in the Nasdaq National Market and (xi) all costs and expenses
of the Underwriters, including the fees and disbursements of counsel for the
14
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to certain eligible employees and
their families and friends and certain individuals and entities having business
relationships with the Company.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and Titan contained in Section 1
hereof or in certificates of any officer of the Company, Titan or any subsidiary
of the Company delivered pursuant to the provisions of this Section 5, to the
performance by the Company and Titan of their covenants and other obligations
hereunder, and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) OPINION OF COUNSEL FOR THE COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Godward LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request. Such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and certificates of public officials.
(c) OPINION OF COUNSEL FOR TITAN. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of Xxxxxxxx
X. Xxxxxxxx, Esq., general counsel for Titan, in form and substance satisfactory
to counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Underwriters may
reasonably request. Such counsel may state that, insofar as such opinion
involves factual matters, he has relied, to the extent he deems proper, upon
certificates of officers of the Company and certificates of public officials.
15
(d) OPINION OF PATENT COUNSEL FOR THE COMPANY. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Xxxxxxxx Xxxxxx Xxx & Xxxxxx, LLP, patent counsel for the
Company, in the form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit C hereto and to such further
effect as counsel to the Underwriters may reasonably request. Such counsel may
state that, insofar as such opinion involves factual matters, he has relied, to
the extent he deems proper, upon certificates of officers of the Company and
certificates of public officials.
(e) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Xxxxx & Wood LLP, counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters with respect
to the matters set forth in clauses (i), (v), (viii), (x) and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York, the Federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(f) OFFICERS' CERTIFICATES. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received certificates of the President or a Vice President of the Company and
Titan and of the chief financial or chief accounting officer of the Company and
Titan, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company and Titan have complied with
all agreements and satisfied all conditions on their respective parts to be
performed or satisfied at or prior to Closing Time and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Representatives shall have received from Xxxxxx Xxxxxxxx LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as of Closing Time,
to the effect that they
16
reaffirm the statements made in the letter furnished pursuant to
subsection (g) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(j) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit D hereto signed by the persons listed on Schedule C hereto.
(l) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) OFFICERS' CERTIFICATE. Certificates, dated such Date of
Delivery, of the President or a Vice President of the Company and Titan
and of the chief financial or chief accounting officer of the Company
and Titan confirming that the certificate delivered at the Closing Time
pursuant to Section 5(f) hereof remains true and correct as of such
Date of Delivery.
(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion
of Xxxxxx Godward LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR TITAN. The favorable opinion of
Xxxxxxxx X. Xxxxxxxx, Esq., general counsel for Titan, in form and
substance satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) OPINION OF PATENT COUNSEL FOR COMPANY. The favorable
opinion of Xxxxxxxx Xxxxxx Xxx & Xxxxxx, LLP, patent counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchase on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(d) hereof.
(v) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable
opinion of Xxxxx & Wood LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the
17
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(e)
hereof.
(vi) BRING-DOWN COMFORT LETTER. A letter from Xxxxxx
Xxxxxxxx LLP, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(h) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
(m) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(n) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company and Titan agree,
jointly and severally, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
18
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (A) the violation of
any applicable laws or regulations of foreign jurisdictions where
Reserved Securities have been offered and (B) any untrue statement or
alleged untrue statement of a material fact included in the supplement
or prospectus wrapper material distributed in connection with the
reservation and sale of the Reserved Securities to certain eligible
employees and persons having business relationships with the Company or
the omission or alleged omission therefrom of a material fact necessary
to make the statements therein, when considered in conjunction with the
Prospectus or preliminary prospectus, not misleading;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission or in
connection with any violation of the nature referred to in Section
6(a)(ii)(A); provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission or in connection with any
violation of the nature referred to in Section 6(a)(ii)(A) hereof, to
the extent that any such expense is not paid under (i), (ii) or (iii)
above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Xxxxxxx Xxxxx expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and, PROVIDED FURTHER, that
this indemnity agreement shall not apply with respect to any preliminary
prospectus to the extent that any loss, liability, claim, damage or expense
resulted from the fact that such Underwriter, in contravention of a requirement
of this Agreement or applicable law, sold Securities to a person to whom such
Underwriter failed to send or give, at or prior to the Closing Time, a copy of
the Prospectus, as then amended or supplemented if: (i) the Company has
previously furnished copies thereof, in accordance with Section 3(d) of this
Agreement at least 48 hours prior to the Closing Time, to the Underwriters and
the loss, liability, claim, damage or expense of such Underwriter resulted from
an untrue statement or omission of a material fact contained in or omitted from
the preliminary prospectus which was corrected in the Prospectus as, if
applicable, amended or supplemented prior to the Closing Time, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person and (ii) sending or giving such Prospectus
by the Closing Time to the party or parties asserting such loss, liability,
claim,
19
damage or expense would have cured the defect giving rise to such loss,
liability, claim, damage or expense.
(b) INDEMNIFICATION OF COMPANY, TITAN, DIRECTORS AND OFFICERS. Each
Underwriter severally agrees to indemnify and hold harmless the Company, Titan,
their directors, each of their officers who signed the Registration Statement,
and each person, if any, who controls the Company or Titan within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsections (a)(i) through (a)(iii) of this Section, as incurred, but only
with respect to untrue statements of any material facts or omissions to state a
material fact required to be stated or necessary to make the statements not
misleading, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and
20
expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) and
6(a)(iii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior
to the date of such settlement.
(e) INDEMNIFICATION FOR RESERVED SECURITIES. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request in writing, to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of certain eligible employees and their
families and friends and certain individuals and entities having business
relationships with the Company to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by, in the case of the
Company or Titan, the Company on the one hand and the Underwriters on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
Titan on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions or in connection with any violation of the
nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by, in the case of the Company or Titan,
the Company on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the Underwriters, in each case as set forth on the cover of the Prospectus,
or, if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company and Titan on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or Titan or by the Underwriters and the parties'
21
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission or any violation of the nature referred
to in Section 6(a)(ii)(A) hereof.
The Company, Titan and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company or Titan, each officer of the Company or Titan who
signed the Registration Statement, and each person, if any, who controls the
Company or Titan within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company, Titan or any of the
Company's subsidiaries submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or
Titan, and shall survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is
22
given in the Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, the effect of
which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale
of the Securities, or (ii) if there has occurred any material adverse change
in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, 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 Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
23
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Xxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of Xxxxxxxxxxx
Xxxxxxxx; and notices to the Company shall be directed to it at 0000 Xxxxxxx
Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000-0000, attention of Xxxxxxxx X.
Xxxxxxxx, Esq.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and Titan and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and Titan and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company and
Titan and their respective successors, and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Company and Titan in accordance with
its terms.
Very truly yours,
SUREBEAM CORPORATION
By:_____________________________________
Name:
Title:
THE TITAN CORPORATION
By:_____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
FIRST UNION SECURITIES, INC.
X.X. XXXXXXX & SONS, INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ___________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named
in Schedule A hereto.
25
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated....................................
Credit Suisse First Boston Corporation...............................
First Union Securities, Inc..........................................
X.X. Xxxxxxx & Sons, Inc.............................................
------------------
------------------
Total................................................................ 6,700,000
==================
Sch A-1
SCHEDULE B
SUREBEAM CORPORATION
6,700,000 Shares of Class A Common Stock
(Par Value .001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial
public offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable
on the Option Securities.
Sch B-1
SCHEDULE C
List of persons and entities
subject to lock-up
Titan Corporation
Xxxx X. Xxx
Xxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxxx
Xxxx X. XxXxxxx
Xxxx Xxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx Xxxxx
Sch C-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus listed in the line
item descriptions under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to the Purchase
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in
the Prospectus); the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and, to the best
of our knowledge, none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company.
(v) The Securities have been duly authorized for issuance and sale
to the Underwriters pursuant to the Purchase Agreement and,
when issued and delivered by the Company pursuant to the
Purchase Agreement against payment of the consideration set
forth in the Purchase Agreement, will be validly issued and
fully paid and non-assessable.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights of any securityholder of the Company
under the Company's Certificate of Incorporation or bylaws or,
to our best knowledge, under any agreement to which the
Company is a party or by which it is bound.
(vii) Each U.S. subsidiary of the Company listed on Exhibit 21.1 to
the Registration Statement (the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus to the extent described therein
and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect on the
Company and the Subsidiaries taken as a whole; except as
otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of our knowledge, is owned by
the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; to the best of
A-2
our knowledge, none of the outstanding shares of capital stock
of any Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such Subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Intercompany Agreements have been duly authorized,
executed and delivered by the Company and each constitutes a
valid and legally binding agreement of the Company, except as
rights to indemnity under Sections 1.2 and 8.13 of the
Contribution Agreement and Section 12.15 of the Tax Allocation
Agreement may be limited by applicable laws and except as
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other
similar laws effecting creditors' rights, and subject to
general equity principles and to limitations on availability
or equitable relief, including specific performance.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and, to the best of our
knowledge, (i) no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act, and (ii) no
proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(xi) The Registration Statement, including any Rule 426(b)
Registration Statement, the Rule 430A Information and the Rule
434 Information, as applicable, the Prospectus and each
amendment or supplement to the Registration Statement and
Prospectus as of their respective effective or issue dates
(other than the financial statements, supporting schedules and
other financial data included therein or omitted therefrom, as
to which we express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xii) The form of certificate used to evidence the Class A Common
Stock complies in all material respects with all applicable
statutory requirements, with any applicable requirements of
the charter and by-laws of the Company and the requirements of
the Nasdaq National Market.
(xiii) The best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to
which the Company or any Subsidiary is a party, or to which
the property of the Company or any Subsidiary is subject,
before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the
consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company of its obligations
thereunder that is not already disclosed in the Registration
Statement or the Prospectus.
A-3
(xiv) The information in the Prospectus under "Business - Government
Regulation," "Description of Capital Stock" and "Shares
Eligible for Future Sale" and in the Registration Statement
under Item 14, to the extent that it constitutes summaries of
legal matters, the Company's charter and bylaws or legal
proceedings, has been reviewed by us and is correct in all
material respects and fairly summarizes the legal matters, the
Company's charter and bylaws or legal proceedings described
therein.
(xv) All descriptions in the Registration Statement under
"Business - Our Services - Strategic Relationships,"
"Business - Our Services - Customers," "Certain Relationships
and Related Party Transactions -- Contribution Agreement,"
"-- Corporate Services Agreement," "-- Tax Allocation
Agreement," "-- License Agreement" and "-- Subordinated
Promissory Note," of contracts and other documents to which
the Company or the Subsidiaries are a party fairly summarize
the contracts or other documents described therein in all
material respects. To the best of our knowledge, (a) neither
the Company or any Subsidiary of the Company is in violation
of its charter or by-laws and (b) no default by the Company
or any Subsidiary of the Company exists in the due performance
or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument
that is described or referred to in the Registration Statement
or the Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xvi) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other
than under the 1933 Act and the 1933 Act Regulations, which
have been obtained, or as may be required under the securities
or blue sky laws of the various states or foreign countries or
as may be required by the NASD, as to which we express no
opinion) is necessary or required in connection with the due
authorization, execution and delivery by the Company of the
Purchase Agreement, or for the offering, issuance or sale of
the Securities.
(xvii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions
contemplated in the Purchase Agreement, the issuance and sale
of the Securities as contemplated by the Purchase Agreement,
the compliance by the Company with its obligations under the
Purchase Agreement, the use of the proceeds from the sale of
the Securities as described in the Prospectus and the
performance by the Company of its obligations under the
Contribution Agreement and the Corporate Services Agreement
do not and will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
any agreement or instrument which the Company, or any
Subsidiary is a party or by which the Company or any
Subsidiary is bound, or to which any of the properties of
the Company or any Subsidiary is subject, and which is
filed as an exhibit to the Registration Statement (except
for such breaches or defaults that would not have a Material
Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, or
any of the Subsidiaries, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the
A-4
Company, or any of the Subsidiaries or any of their respective
properties, assets or operations the violation or
contravention of which would materially and adversely affect
the Company, its assets, financial condition or operations or
the consummation of the transactions contemplated by the
Purchase Agreement.
(xviii) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any
securities issued by the Company registered pursuant to the
Registration Statement or otherwise registered by the Company
under the 1933 Act other than as disclosed in the Prospectus.
(xix) The Company is not an "investment company" as such term is
defined in the 1940 Act.
During the course of the preparation of the Registration Statement and
the Prospectus, we participated in conferences with representatives of the
Underwriters and with officers and other representatives of the Company, and
with the certified independent public accountants of the Company. At such
conferences, we have made inquiries of such officers, representatives and
accountants and discussed the contents of the Registration Statement and the
Prospectus. We have not independently verified and are not passing upon the
accuracy, completeness or fairness of the statements made in the Registration
Statement and the Prospectus, except to the extent otherwise stated herein and
except insofar as such statements expressly refer to us. On the basis of the
foregoing, no facts have come to our attention that have caused us to believe
that (except for financial statements and schedules and other financial
information included therein and derived therefrom, as to which we make no
comment) the Registration Statement at the time the Registration Statement
became effective or as the date hereof, or any amendment thereto, as of its
effective date or as the date hereof, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto, as of its issue date
or as of the date hereof (except for the financial statements and schedules and
other financial information included therein and derived therefrom, as to which
we express no comment) contains any untrue statement of a material fact or omits
to state any 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.
A-5
Exhibit B
FORM OF OPINION OF TITAN'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) Titan has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) Titan has corporate power and authority to own,
lease and operate its properties
and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under the Purchase
Agreement.
(iii) Titan is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a
Material Adverse Effect.
(iv) The Purchase Agreement has been duly
authorized, executed and delivered by Titan.
(v) The Intercompany Agreements have been duly
authorized, executed and delivered by Titan, and each
constitutes a valid and legally binding agreement of Titan,
enforceable against Titan in accordance with its terms, except
as rights to indemnity under Sections 1.2 and 8.13 of the
Contribution Agreement and Section 12.15 of the Tax Allocation
Agreement may be limited by applicable laws and except as
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other
similar laws affecting creditors' rights and subject to
general equity principles and to limitations on availability
of equitable relief, including specific performance.
(vi) Titan has transferred and conveyed all of its
right, title and interest in and to the Titan Assets, as defined in the
Contribution Agreement, to the Company.
(vii) To the best of my knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any subsidiary is a
party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the
B-1
consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company and Titan of their
obligations thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party, or of which any of their respective
property or assets is the subject, or to which Titan or any of
its subsidiaries is a party and relates to the business of the
Company, which are not described in the Registration
Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a
Material Adverse Effect.
(vii) To the best of my knowledge, Titan is not in
violation of its charter or by-laws.
(viii) The execution, delivery and performance of
the Purchase Agreement, the consummation of the transactions
contemplated in the Purchase Agreement, the issuance and sale
of the Securities as contemplated by the Purchase Agreement,
and the compliance by Titan with its obligations under the
Purchase Agreement do not and will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default under, any agreement or instrument to which Titan is
a party or by which Titan is bound or to which any of the
properties of Titan is subject, and which is filed as an
exhibit to the Registration Statement (except for such
breaches or defaults that would not have a Material Adverse
Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of Titan, or any
applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over Titan or any of its respective properties,
assets or operations.
B-2
Exhibit C
FORM OF OPINION OF XXXXXXXX XXXXXX XXX & XXXXXX, LLP,
COMPANY'S PATENT COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(d)
(i) We have reviewed portions of the Prospectus relating to
an IPO of SureBeam. These portions of the Prospectus are designated as
"Business-Patents and Proprietary Rights" and "Business-Government
Regulation." To our best knowledge and information, these portions of
the Prospectus are correct in all material respects to the extent that
they constitute legal matters, legal proceedings and legal conclusions.
(ii) It is our understanding that a suit filed by IBA has
been transferred to the United States District Court for the Southern
District of California. Our understanding also is that, in the suit,
IBA has asked the District Court to hold that the claims in United
States patent 5,396,074 owned by SureBeam or its parent Company, The
Titan Corporation, are invalid and are not infringed by IBA. Our
further understanding is that this action is at a very early stage of
proceedings and that SureBeam has not responded to the complaint as
yet.
To our best knowledge and information, there are no
other legal or government proceedings which relate to patents, patent
applications or other intellectual property rights involving technology
of the Company as described in the Prospectus and in which the Company
or any of its affiliates is a party. We also do not know of any
proceedings, as specified above in this paragraph, which are threatened
or contemplated by governmental authorities or others.
(iii) We are unaware of any basis for a finding that the
Company does not have clear title or valid license rights to the
patents or patent applications referenced in the Prospectus as being
owned by or licensed to the Company and covering the Company's
technology. On the basis of the facts that we have, we are of the
opinion that the Company's patents are valid and enforceable.
(iv) Other than as described in the Prospectus, based upon
a review of the third party rights made known to us by the Company and
upon discussions with the Company and with Titan, we are not aware of
any United States patent containing any valid claim that is or would be
infringed, either literally or under the doctrine of equivalents, by
the current activities, or the proposed activities disclosed to us, of
the Company in the use of the technology described in the Prospectus.
Very truly yours,
C-1
Exhibit D
FORM OF LOCK-UP FROM DIRECTORS,
OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO SECTION 5(k)
-, 2000
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Credit Suisse First Boston Corporation
First Union Securities, Inc.
X.X. Xxxxxxx & Sons, Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PROPOSED PUBLIC OFFERING BY SUREBEAM CORPORATION
Ladies & Gentlemen:
The undersigned, a stockholder [and an officer and/or director] of
SureBeam Corporation, a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Credit Suisse First Boston Corporation, First Union
Securities, Inc. and X.X. Xxxxxxx & Sons, Inc. propose to enter into a Purchase
Agreement (the "Purchase Agreement") with the Company providing for the public
offering of shares (the "Securities") of the Company's class A common stock, par
value $.001 per share. In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder [and an officer and/or director] of
the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of Xxxxxxx Xxxxx, directly or indirectly, (i) 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 for
the sale of, or otherwise dispose of or transfer any shares of the Company's
common stock or any securities convertible into or exchangeable or exercisable
for common stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter 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 the
common stock, whether any such swap or transaction is to be settled by delivery
of common stock or other securities, in cash or otherwise.
Very truly yours,
Signature: _____________________________
Print Name:
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