SHARES GLOBAL SECURE CORP. COMMON STOCK UNDERWRITING AGREEMENT
Exhibit 1.1
[___________] SHARES
COMMON STOCK
[____________] [___], 2005
[____________] [___], 2005
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXXXX & COMPANY, INC.
XXXXXXXXX & COMPANY, INC.
And the other several Underwriters named in
Schedule II
Schedule II
c/o
Xxxxxx Xxxxxx & Company, Inc.
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Xxxxxxx, Xxxxxxxxx 00000
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Global Secure Corp., a Delaware corporation (the “Company”), proposes to issue and sell to the
several Underwriters named in Schedule II hereto (the “Underwriters”) for whom Xxxxxx Xxxxxx &
Company, Inc. and Xxxxxxxxx & Company, Inc. are acting as representatives (in such capacity, the
“Representatives”), and certain stockholders of the Company (the “Selling Stockholders”) named in
Schedule I hereto severally propose to sell to the several Underwriters, an aggregate of
[8,250,000] shares of the common stock, $.0001 par value per share, of the Company (the “Firm
Shares”), of which [7,555,303] shares (the “Company Firm Shares”) are to be issued and sold by the
Company and [694,679] shares (the “Selling Stockholder Firm Shares”) are to be sold by certain
Selling Stockholders (the “Firm Selling Stockholders”). Each Firm Selling Stockholder will sell
the number of Firm Shares set forth opposite such Selling Stockholder’s name under the heading
“Number of Selling Stockholder Firm Shares to Be Sold” in Schedule I hereto.
The Company and the Option Selling Stockholders (as defined herein) also severally propose to
sell to the several Underwriters not more than an additional [1,237,500] shares of the common
stock, $.0001 par value per share, of the Company (the “Overallotment Shares”) of which up to
[787,500] shares are to be issued and sold by the Company (the “Company Overallotment Shares”) and
up to [450,000] shares are to be sold by the Option Selling Stockholders (the “Selling Stockholder
Overallotment Shares”) as more fully described herein, if and to the extent that the
Representatives shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3 hereof. The Firm
Shares and the Overallotment Shares are hereinafter collectively referred to as the “Shares.” The
common stock, $.0001 par value per share, of the Company is hereinafter referred to as the “Common
Stock.”
The Company (i) has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-1 (File No. 333-127490) and (ii) has prepared, and
will file with the Commission promptly after execution and delivery of this Agreement in accordance
with Rule 424(b) and Rule 430A under the Securities Act (as defined below), a prospectus relating
to the Shares. Such registration statement, as amended, including the financial statements,
exhibits and schedules thereto, in the form in which it was declared effective by the Commission
under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), and any information deemed to be a part thereof, at the time
of effectiveness pursuant to Rule 430A under the Securities Act is called the “Registration
Statement.” Such prospectus relating to the Shares that is first filed pursuant to Rule 424(b) is
called the “Prospectus.” All references in this Agreement to the Registration Statement, the
Prospectus or any amendments or supplements to any of the foregoing, shall include any copy thereof
filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System
(“XXXXX”).
If any registration statement is filed pursuant to Rule 462(b) under the Securities Act, the
term “Registration Statement” as used herein shall include any Rule 462(b) registration statement.
As used herein, “Knowledge” shall be deemed to mean the actual awareness of a fact or other matter
by any of the following persons: Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxx and Xxxx X. Xxxxxxx; “Subsidiary”
shall mean each of Global Secure Safety Inc., Global Secure Safety (Filtered Air) Corp., Homeland
Gas Masks, Inc., Neoterik Liason Corporation, GlobalSecure Safety Products, Inc., Global Secure
Systems Corp. and Global Secure Training Corp.; and “Material Adverse Change” shall mean any
change, development or occurrence, whether or not arising in the ordinary course of business, that
would reasonably be expected to result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business, operations of the Company and its Subsidiaries, considered
as one entity.
The Company hereby confirms its agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each of the Underwriters as follows:
(a) Compliance with Registration Requirements.
The Registration Statement has been declared effective by the Commission under the Securities
Act. The Company has complied with all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to the Knowledge of the
Company, are contemplated or threatened by the Commission. No order preventing or suspending the
use of the Prospectus has been issued and no proceeding for that purpose has been instituted or, to
the Knowledge of the Company, threatened or contemplated by the Commission or by the state
securities authority of any jurisdiction.
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The Prospectus when first filed pursuant to Rule 424(b) under the Securities Act, on the First
Closing Date and any Option Closing Date (each as defined below) (i) complied, and will comply, in
all material respects with the Securities Act, (ii) will be identical to the copy thereof delivered
to the Underwriters for use in connection with the offer and sale of the Shares and (iii) did not
and will not contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Registration Statement, at the time it became effective and as of
the First Closing Date and any Option Closing Date, complied and will comply in all material
respects with the Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to statements in or omissions from the Registration
Statement, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to the Underwriters furnished to the Company in writing by
the Underwriters through the Representatives expressly for use therein, it being understood and
agreed that the only such information furnished to the Company consists of the information
described as such in Section 9(c) hereof. There are no contracts or other documents required to be
disclosed in the Prospectus or to be filed as exhibits to the Registration Statement which have not
been disclosed or filed as required and the filing of any such contract or other document, or the
reference thereto in the Registration Statement or Prospectus, did not require the consent of any
third parties which has not been obtained.
Each preliminary prospectus and the prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto complied when so filed in all material
respects with the Securities Act.
(b) Registration Statement Furnished to Representatives.
The Company has delivered to each Representative one conformed copy of the Registration
Statement and each amendment thereto.
(c) Distribution of Offering Material By the Company.
The Company has not distributed and will not distribute, prior to the completion of the
Underwriters’ distribution of the Shares, any written offering material in connection with the
offering and sale of the Shares other than the Prospectus or the Registration Statement.
(d) The Underwriting Agreement; Custody Agreements.
This Agreement and the Custody Agreements have been duly authorized, executed and delivered by
the Company and constitute valid and binding agreements of the Company enforceable against the
Company in accordance with their terms.
(e) Authorization of the Shares.
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The Shares to be purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by the Company against
payment therefor pursuant to this Agreement, will be validly issued, fully paid and nonassessable.
(f) No Applicable Registration or Other Similar Rights.
No persons possess registration or other similar rights to have any equity or debt securities
registered for sale under the Registration Statement or included in the offering contemplated by
this Agreement, except for the rights of the Selling Stockholders to sell the Shares held by them
as contemplated by this Agreement and such rights as have been duly waived.
(g) No Material Adverse Change.
Except as otherwise disclosed in the Prospectus, subsequent to [June 30, 2005]: (i) there has
been no Material Adverse Change; (ii) the Company and its Subsidiaries, considered as one entity,
have not incurred any material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business or entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company or any of its Subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its Subsidiaries of any class of capital stock.
(h) Independent Accountants.
Xxxxxx LLP, who has expressed its opinion with respect to certain financial statements (which
term as used in this Agreement includes the related notes thereto) and supporting schedules filed
with the Commission as a part of the Registration Statement and included in the Prospectus, is an
independent registered public accounting firm as required by the Securities Act and the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the
“Exchange Act”).
(i) Preparation of the Financial Statements.
The financial statements included in the Prospectus present fairly in all material respects
the consolidated financial position of the Company and its Subsidiaries as of and at the dates
indicated and the consolidated results of their operations, cash flows and changes in stockholders’
equity for the periods specified. The supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. Such financial statements and
supporting schedules have been prepared in conformity with generally accepted accounting principles
in the United States (“GAAP”) applied on a consistent basis throughout the periods involved, except
as may be expressly stated in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration Statement. The pro forma
financial statements and the related notes thereto, and the other pro forma financial information,
included in the Prospectus and the Registration Statement present fairly the information shown
therein, have been prepared in accordance with the Commission’s
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rules and guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, in all material respects, 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. The other financial and statistical
information and data included in the Prospectus and in the Registration Statement are, in all
material respects, accurately presented and prepared on a basis consistent with applicable
financial statements and the books and records of the Company and its Subsidiaries. All non-GAAP
financial measures included in the Registration Statement and Prospectus comply with the Securities
Act in all material respects, including Regulation G and Item 10(e) of Regulation S-K, and present
fairly the information shown therein and the Company’s basis for using such measures.
(j) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and each Subsidiary that is a corporation has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the jurisdiction of its
incorporation and has corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and each Subsidiary that is a
corporation is duly qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which the ownership or lease of property or the conduct of its business
requires such qualification, except for such jurisdictions where the failure to so qualify or to be
in good standing would not, individually or in the aggregate, result in a Material Adverse Change.
Except as is disclosed in the Prospectus, all of the issued and outstanding capital stock of each
Subsidiary that is a corporation has been duly authorized and validly issued, is fully paid and
nonassessable and is owned by the Company, directly or through Subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim. The Company does not own or
control, directly or indirectly, any interest in any corporation, association or other entity other
than the Subsidiaries.
(k) Capitalization and Other Capital Stock Matters.
As of [___] [___], 2005, the authorized capital stock of the Company is as set forth,
and the outstanding capital stock of the Company is in all material respects as set forth, in the
Prospectus under the caption “Description of Capital Stock.” The Common Stock (including the
Shares) conforms in all material respects to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in the instruments defining the
same. All of the issued and outstanding shares of Common Stock, including the Shares to be
purchased by the Underwriters from Selling Stockholders, have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance in all material
respects with federal, state and foreign securities laws. None of the outstanding shares of Common
Stock, including the Shares to be purchased by the Underwriters from Selling Stockholders, were
issued in violation of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. Other than those disclosed in the Prospectus,
there are no (i) shares of Common Stock reserved for any purpose except for options to purchase
Common Stock under the Global Secure Corp. 2005 Stock Incentive Plan
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and (ii) authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable
or exercisable for, capital stock of the Company or capital stock, partnership interests or
membership interests of any of its Subsidiaries. All options, warrants and other rights to
purchase shares of capital stock in the Company have been duly and validly authorized and issued,
were issued in compliance in all material respects with federal, state and foreign securities laws,
and conform to the description thereof contained in the Prospectus.
(l) Nasdaq National Market Listing.
The Shares have been approved for listing on the Nasdaq National Market subject to official
notice of issuance, and such approval was obtained by the Company prior to the effectiveness of the
Registration Statement.
(m) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required.
Neither the Company nor any of its Subsidiaries is in violation of its charter, by-laws,
partnership agreement, operating agreement or similar organizational documents nor is any of them
in default (or, with the giving of notice or lapse of time, none of them would be in default)
(“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other agreement or instrument to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject (each, an “Existing Instrument”),
except for such Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company’s execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in any violation of the provisions
of the charter or by-laws of the Company or the charter, by-laws, partnership agreement, operating
agreement or similar organizational documents of any Subsidiary, (ii) will not conflict with or
constitute a breach of, or Default 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, or require the consent (other than consents that have been obtained) of any other
party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a Material Adverse Change
and (iii) will not result in any violation of any applicable law, administrative regulation or
administrative or court decree applicable to the Company or any Subsidiary, except for such
violation as would not, individually or in the aggregate, result in a Material Adverse Change. No
consent, approval, authorization or other order of, or registration or filing with, any court or
other governmental or regulatory authority, agency or body (each, a “Governmental Authority”), is
required for the Company’s execution, delivery and performance of this Agreement and consummation
of the transactions contemplated hereby and by the Prospectus, except such as (i) have been
obtained or made by the Company and are in full force and effect under the Securities Act, and (ii)
may be required by applicable state securities or blue sky laws and from the National Association
of Securities Dealers, Inc. (the “NASD”).
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(n) No Material Actions or Proceedings.
Except as disclosed in the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending or, to the Company’s Knowledge, threatened
(i) against or affecting the Company or any of its Subsidiaries or (ii) which has as the subject
thereof property owned or leased by, the Company or any of its Subsidiaries, where in any such case
(A) there is a reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or such Subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. Furthermore, except as disclosed
to the Representatives in writing, to the Company’s Knowledge, no domestic or foreign regulatory
body (including the NASD), securities exchange or market has conducted, is conducting or has
threatened to commence or conduct any investigations, actions or proceedings relating to the
Company or any of its Subsidiaries or any offering of the Common Stock or other security of the
Company or any of its Subsidiaries.
(o) Intellectual Property Rights.
The Company and its Subsidiaries own or possess sufficient trademarks, trade names, patent
rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as
described in the Prospectus; and the expected expiration of any of such Intellectual Property
Rights if not renewed or replaced would not result in a Material Adverse Change. Neither the
Company nor any of its Subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of
an unfavorable decision, would result in a Material Adverse Change. To the Company’s Knowledge,
none of the technology employed by the Company and/or any of its Subsidiaries has been obtained or
is being used by the Company and/or any of its Subsidiaries in violation of any contractual
obligation binding on the Company, any of its Subsidiaries or any of their officers, directors or
employees or otherwise in violation of the rights of any persons.
(p) All Necessary Permits, etc.
Except as disclosed in the Prospectus, the Company and each of its Subsidiaries possess such
valid and current certificates, authorizations or permits issued by the appropriate local, state,
federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses
as currently conducted, and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singularly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse Change.
(q) Title to Properties.
Except as disclosed in the Prospectus, the Company and/or each of its Subsidiaries have good
and marketable title to all the properties and assets owned by them, in each case free and clear of
any security interests, mortgages, liens, encumbrances, equities, claims and other
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defects, except (i) such as would not materially and adversely affect the value of such
property, and (ii) such as would not materially interfere with the current use of such property by
the Company or such Subsidiary, as the case may be. The real property, improvements, equipment and
personal property held under lease by the Company or any Subsidiary are held under valid and
enforceable leases, with such exceptions as would not materially interfere with the current use of
such real property, improvements, equipment or personal property by the Company or such Subsidiary,
as the case may be. As used herein, the term “lease” shall not include any exploration,
exploitation or rehabilitation permit held by the Company and/or its Subsidiaries.
(r) Tax Law Compliance.
The Company and each of its Subsidiaries have accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to be filed by it and have paid or
made provision for the payment of all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes, fines, penalties, and all taxes which the
Company and each of its Subsidiaries is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax returns (whether or
not such amounts are shown as due on any tax return), except, in all cases, for any such tax,
assessment or similar charge that the Company is contesting in good faith and except in any case in
which the failure to so file or pay would not in the aggregate result in a Material Adverse Change.
The Company has made adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 1(i) above in respect of all federal, state and foreign income and franchise
taxes for all periods as to which the tax liability of the Company or any of its Subsidiaries has
not been finally determined, except where failure to make such charges, accruals and reserves would
not result in a Material Adverse Change. No deficiency assessment with respect to a proposed
adjustment of the Company’s or any of its Subsidiaries’ federal, state, or other taxes is pending
or, to the best of the Company’s Knowledge, threatened which would in the aggregate result in a
Material Adverse Change. There is no tax lien, whether imposed by any federal, state, or other
taxing authority, outstanding against the assets, properties or business of the Company or any of
its Subsidiaries. No audits or other administrative proceedings or court proceedings are presently
pending nor, to the Company’s Knowledge, threatened against the Company or any of the Subsidiaries
with regard to any taxes or returns of such entities, and no taxing authority has notified the
Company or any of the Subsidiaries that it intends to investigate its tax affairs.
(s) Company Not an “Investment Company.”
The Company has been advised of the rules and requirements under the Investment Company Act of
1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment
for the Shares and the application thereof will not be, an “investment company” within the meaning
of Investment Company Act and intends to conduct its business in a manner so that it will not
become subject to the Investment Company Act.
(u) Insurance.
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Except as disclosed in the Prospectus, each of the Company and its Subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such amounts and with
such deductibles and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal property owned or
leased by the Company and/or its Subsidiaries against theft, damage, destruction, acts of vandalism
and earthquakes. Except as disclosed in the Prospectus, the Company has no reason to believe that
it or any Subsidiary will not be able to renew its existing insurance coverage as and when such
policies expire.
(w) Related Party Transactions.
No relationship, direct or indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director, officer, stockholder, customer or
supplier or any of them, on the other hand, which is required by the Securities Act to be described
in the Prospectus which has not been described in the Prospectus.
(x) No Unlawful Contributions or Other Payments.
Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any employee
or agent of the Company or any Subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation of any applicable
law or of the character required to be disclosed in the Prospectus.
(y) Company’s Accounting System and Internal Controls.
The Company maintains a system of accounting controls sufficient to provide reasonable
assurances that: (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
The Company and its Subsidiaries employ disclosure controls and procedures that are designed
with the objective of causing information that will be required to be disclosed by the Company in
the reports that it will be required to file or submit under the Exchange Act to be recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and
forms, and to be accumulated and communicated to the Company’s management, including its principal
executive officer or officers and principal financial officer or officers, as appropriate to allow
timely decisions regarding disclosure.
(aa) Compliance with Environmental Laws.
Except as otherwise disclosed in the Prospectus or as would not otherwise require disclosure
under federal securities laws, (i) to the Knowledge of the Company, neither the Company nor any of
its Subsidiaries is in violation of any federal, state, local or foreign law or
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regulation relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including without limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”),
or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environment Concern (collectively, “Environmental
Laws”), which violation includes, but is not limited to, noncompliance with any environmental
permits or other environmental governmental authorizations required for the operation of the
business of the Company or its Subsidiaries under applicable Environmental Laws, or noncompliance
with the terms and conditions thereof except where such violation would not cause a Material
Adverse Change, nor has the Company or any of its Subsidiaries received any written communication
from a Governmental Authority that alleges that the Company or any of its Subsidiaries is in
violation of any material Environmental Law; (ii) there is no claim, action or cause of action
filed with a court or Governmental Authority or investigation with respect to which the Company has
received notice alleging potential material liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Materials of Environmental Concern at any location or alleging a
potential or actual violation of Environmental Laws (collectively, “Environmental Claims”), pending
or, to the Company’s Knowledge, threatened against the Company or any of its Subsidiaries; and
(iii) to the Company’s Knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Materials of Environmental Concern, that reasonably would result in a
material violation of any Environmental Law or form the basis of a potential material Environmental
Claim against the Company or any of its Subsidiaries or against any person or entity whose
liability for any Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law which would result in a Material Adverse
Change.
(bb) ERISA Compliance.
The Company and its Subsidiaries and any “employee benefit plan” (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, “ERISA”)) established or maintained by the
Company, its Subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all
material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a Subsidiary,
any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company or such Subsidiary is a member. No “reportable event”
(as defined under ERISA) has occurred with respect to any “employee benefit plan” established or
maintained by the Company, its Subsidiaries or any of their ERISA Affiliates. No “employee benefit
plan” established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates,
if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit
liabilities” (as defined in ERISA
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Section 4001(a)(18)). Neither the Company, its Subsidiaries nor any of their ERISA Affiliates has
incurred any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan” established or maintained by the Company, its Subsidiaries or any of their
ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or failure to act, which would cause the loss of such
qualification.
(cc) Brokers.
Except as otherwise disclosed in the Prospectus, there is no broker, finder or other party
that is entitled to receive from the Company any brokerage or finder’s fee or other fee or
commission as a result of any transactions contemplated by this Agreement.
(dd) No Outstanding Loans or Other Indebtedness.
There are no outstanding loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company, except as disclosed in the Prospectus.
(ee) No Labor Disputes.
No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to
the Knowledge of the Company, is threatened or imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or the Subsidiaries’
principal suppliers, developers, designers, contractors, business partners or customers that would
have a Material Adverse Change, except as set forth in or contemplated by the Prospectus (exclusive
of any supplement thereto).
(ff) Compliance with Laws.
In addition to the representations and warranties of the Company contained in Sections 1(p),
1(r), 1(x), 1(aa), 1(bb), 1(gg), 1(ii), 1(jj), 1(kk), 1(ll), 1(mm) and 1(nn) hereof, the Company
has not been advised, and has no Knowledge, that it and each of its Subsidiaries is not conducting
business in compliance with all applicable laws, rules and regulations of the jurisdictions in
which it is conducting business, except where failure to be so in compliance would not result,
individually or in the aggregate, in a Material Adverse Change.
(gg) Xxxxxxxx-Xxxxx.
The Company is in material compliance with all provisions of the Xxxxxxxx-Xxxxx Act of 2002
that are effective and applicable to the Company and is actively taking (or will take) all
reasonable steps necessary to ensure that it will be in material compliance with other provisions
of the Xxxxxxxx-Xxxxx Act of 2002 as and when such provisions become applicable to the Company.
(hh) Off-Balance Sheet Transactions.
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There are no off-balance sheet transactions, arrangements, obligations (including contingent
obligations), or any other similar relationships with unconsolidated entities or other persons.
(ii) Compliance with the FCPA.
With respect to the conduct of the business of the Company and its Subsidiaries, none of the
Company or the Subsidiaries or, to the Knowledge of the Company, any director, officer, agent,
employee or affiliate of such entities has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA and the Company and the
Subsidiaries have conducted their businesses in compliance with the FCPA.
(jj) Bank Secrecy Act; Patriot Act.
With respect to the conduct of the business of the Company and its Subsidiaries, neither the
Company nor any of its Subsidiaries, nor, to the Company’s Knowledge, any of its affiliates or any
director, officer, agent or employee of, or other person acting on behalf of, the Company, has
violated in any material respect the Bank Secrecy Act, as amended, the Uniting and Strengthening of
America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA
PATRIOT ACT) of 2001 or the rules and regulations promulgated under any such law or any successor
law.
(kk) Money Laundering Laws.
The operations of the Company and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the Money Laundering Control Act of 1986,
as amended, any other money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any Governmental Authority (collectively, the “Money Laundering Laws”), except for any
such non-compliance as would not, singly or in the aggregate, result in a Material Adverse Change,
and no action, suit or proceeding by or before any court or Governmental Authority or any
arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering
Laws is pending or, to the Company’s Knowledge, threatened.
(ll) Export and Import Laws.
With respect to the conduct of the business of the Company and its Subsidiaries, each of the
Company and its Subsidiaries, and, to the Company’s Knowledge, each of their affiliates and any
director, officer, agent or employee of, or other person acting on behalf of, the Company has acted
at all times in compliance in all material respects with applicable Export and Import Laws
-12-
(as defined below)
and there are no claims, complaints, charges, investigations or proceedings
pending or expected or, to the Knowledge of the Company, threatened between the Company or any of
its Subsidiaries and any Governmental Authority under any Export or Import Laws. The term “Export
and Import Laws” means the Arms Export Control Act, the International Traffic in Arms Regulations,
the Export Administration Act of 1979, as amended, the Export Administration Regulations, and all
other laws and regulations of the U.S. Government regulating the provision of services to non-U.S.
parties or the export and import of articles or information from and to the United States of
America.
(mm) Sanctions.
With respect to the conduct of the business of the Company and its Subsidiaries, neither the
Company nor any of its Subsidiaries, nor, to the Company’s Knowledge, any of its affiliates or any
director, officer, agent or employee of, or other person acting on behalf of, the Company, is
currently subject to any United States sanctions administered by the Office of Foreign Assets
Control of the United States Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any Subsidiary, partner or joint venturer or other person or entity, for the purpose of
financing the activities of any person currently subject to any United States sanctions
administered by OFAC.
(nn) Government Contracts and Government Bids.
(i) Except (A) as would not result in a Material Adverse Change and (B) for any Government
Contract or Government Bid containing classified information or requiring special security
clearances for access, with respect to each Government Contract and each Government Bid to which
the Company or its Subsidiaries is a party: (1) the Company has complied with the terms and
conditions of such Government Contract or Government Bid; (2) the Company has complied with all
requirements of all applicable laws or agreements pertaining to such Government Contract or
Government Bid; (3) all representations and certifications set forth in or pertaining to such
Government Contract or Government Bid were complete and correct as of their effective date, and the
Company has complied with all such representations and certifications; (4) neither the U.S.
Government nor any prime contractor, subcontractor or other person has notified the Company in
writing that the Company has breached or violated any applicable law pertaining to such Government
Contract or Government Bid; (5) no termination for convenience or termination for default has
occurred since January 1, 2000, and no cure notice or show cause notice is currently in effect
pertaining to such Government Contract or Government Bid; (6) no cost incurred by the Company
pertaining to such Government Contract has been disallowed or, to the Company’s Knowledge, is the
subject of a federal investigation, by the U.S. Government since January 1, 2000; (7) no money due
to the Company pertaining to such Government Contract has been withheld or set off; and (8) each
Government Contract is valid and binding agreement of the Company and is enforceable against the
Company, and to the Company’s Knowledge, the other party thereto, in accordance with its terms.
(ii) Except as would not result in a Material Adverse Change (A) to the Knowledge of the
Company, none of the Company’s current employees, consultants or agents is (or during the last five
years has been) under administrative, civil or criminal investigation or indictment by any
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Governmental Authority, or any audit or investigation by the Company with respect to any
alleged irregularity, misstatement or omission arising under or relating to any Government Bid, and
(B) during the last five years, the Company has not conducted or initiated any internal
investigation or, to the Company’s Knowledge, had reason to conduct, initiate or report any
internal investigation, or made a voluntary disclosure to the U.S. Government, with respect to any
alleged irregularity, misstatement or omission arising under or relating to a Government Contract
or Government Bid.
(iii) Except as would not result in a Material Adverse Change, there exist no outstanding
claims against the Company or any of its Subsidiaries, either by the U.S. Government or by any
prime contractor, subcontractor, vendor or other third party, arising under or relating to any
Government Contract or Government Bid.
(iv) Except as would not result in a Material Adverse Change, all test and inspection results
the Company or any Subsidiary has provided to the U.S. Government or to any other person pursuant
to any Government Contract or as a part of the delivery to the U.S. Government pursuant to any such
Government Contract of any article designed, engineered or manufactured by the Company or any
Subsidiary were complete and correct as of the date so provided. Except as would not result in a
Material Adverse Change, the Company has provided all test and inspection results to the U.S.
Government pursuant to any such Government Contract as required by applicable law and the terms of
the applicable Government Contracts.
(v) For purposes of this Section:
(A) “Government Bid” means, with respect to the Company or any Subsidiary, any firm quotation,
bid or proposal made by such person that if accepted or awarded would lead to a Government
Contract.
(B) “Government Contract” means, with respect to the Company or any Subsidiary, any contract,
including any prime contract, subcontract, facility contract, teaming agreement or arrangement,
joint venture, basic ordering agreement, letter contract, purchase order, delivery order, change
order or other contractual arrangement of any kind, between the Company or any Subsidiary and (1)
the U.S. Government (acting on its own behalf or on behalf of another country or international
organization), (2) any prime contractor of the U.S. Government or (3) any subcontractor with
respect to any contract of a type described in clauses (1) or (2) above.
(C) “U.S. Government” means the federal government of the United States of America and any
agencies, instrumentalities and departments thereof.
(oo) Forward-Looking Statements.
No forward-looking statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(pp) Compliance with Regulation M.
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None of the Company, its Subsidiaries nor any of their respective officers, directors or, to
the Company’s Knowledge, controlling persons, has taken, directly or indirectly, any action
designed to or that might reasonably be expected to result in a violation of Regulation M under the
Exchange Act or cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares.
Any certificate signed by an officer of the Company and delivered to the Representatives or to
counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to
the Underwriters as to the matters set forth therein.
The Company acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company, counsel to the Selling Stockholders
and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder, severally and not jointly, represents and warrants to and agrees
with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by or on behalf of such
Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of, and the performance by such
Selling Stockholder of its obligations under, this Agreement, the Custody Agreement signed by such
Selling Stockholder and the Company, as Custodian, relating to the deposit of the Shares to be sold
by such Selling Stockholder (the “Custody Agreement”) and the Power of Attorney appointing certain
individuals as such Selling Stockholder’s attorneys-in-fact to the extent set forth therein,
relating to the transactions contemplated hereby and by the Registration Statement (the “Power of
Attorney”) will not contravene (i) any provision of applicable law, (ii) the charter, by-laws,
partnership agreement, operating agreement or similar organizational document of such Selling
Stockholder (if such Selling Stockholder is not an individual), (iii) any agreement or other
instrument binding upon such Selling Stockholder or (iv) any judgment, order or decree of any
Governmental Authority or court having jurisdiction over such Selling Stockholder, and no consent,
approval, authorization or order of, or qualification with, any Governmental Authority is required
for the performance by such Selling Stockholder of its obligations under this Agreement or the
Custody Agreement or Power of Attorney of such Selling Stockholder, except such as may be required
by the Securities Act, the Exchange Act, the securities or Blue Sky laws of any jurisdiction,
irrevocable or the rules and regulations of the NASD in connection with the offer and sale of the
Shares.
(c) Such Selling Stockholder has, and on each Closing Date will have, valid title to the
Shares to be sold by such Selling Stockholder free and clear of all security interests, claims,
liens, equities or other encumbrances and the legal right and power, and all authorization and
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approval required by law, to enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Shares to be sold by such Selling Stockholder.
(d) The Custody Agreement and Power of Attorney have been duly authorized, executed and
delivered by such Selling Stockholder and constitute valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with their terms.
(e) Such Selling Stockholder is not prompted to sell its Shares pursuant to this Agreement by
any information concerning the Company or its subsidiaries that is not included in the Prospectus
and the inclusion of which is necessary to make the statements in the Prospectus not misleading.
(f) The Registration Statement, at the time it became effective and as of the First Closing
Date and, with respect to the sale of Selling Stockholder Overallotment Shares, any Option Closing
Date, did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading and the Registration Statement and the Prospectus complied and will comply in all
material respects with the Securities Act. The Prospectus and any amendment or supplement thereto,
as of its date and as of the First Closing Date and, with respect to the sale of Selling
Stockholder Overallotment Shares, as of any Option Closing Date, did not contain and will not
contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not
misleading. For the avoidance of doubt, the representations and warranties of each Selling
Stockholder set forth in the two preceding sentences are several and not joint, and shall only
apply to statements in or omissions from the Registration Statement or the Prospectus, made in
reliance upon and in conformity with written information relating to such Selling Stockholder that
was furnished by or on behalf of such Selling Stockholder to the Company expressly for use in the
Registration Statement or the Prospectus or any amendment thereto.
SECTION 3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) Agreements to Sell and Purchase.
(i) On the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth: (A) the Company agrees to
sell to the Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $[•] per share (the “Purchase
Price”), that number of Firm Shares (subject to adjustment by the Representatives to
eliminate fractions) obtained by multiplying the number of Company Firm Shares by a
fraction the numerator of which is the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule II hereto and the denominator of which is the
total number of Firm Shares; and (B) each Selling Stockholder agrees, severally and
not jointly, to sell to the Underwriters, and each Underwriter agrees, severally and
not jointly, to purchase from each Selling Stockholder, at the Purchase Price, that
number of
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Selling Stockholder Firm Shares (subject to adjustment by the Representatives to
eliminate fractions) obtained by multiplying the number of Selling Stockholder Firm
Shares set forth opposite such Selling Stockholder’s name in Schedule I hereto under
the heading “Number of Selling Stockholder Firm Shares to be Sold” by a fraction the
numerator of which is the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto and the denominator of which is the total number
of Firm Shares. Payment for the Firm Shares to be sold hereunder shall be made by
wire transfer of immediately available funds against delivery of such Firm Shares
for the respective accounts of the several Underwriters at 9:00 a.m., eastern
standard time, on ___, 2005, or at such other time on the same or such other
date, as shall be designated by the Representatives. The time and date of such
payment are hereinafter referred to as the “First Closing Date.”
(ii) Upon written notice from the Representatives given to the Company and C. Xxxxxx
XxXxxxxx (“XxXxxxxx”), Xxxx X. Xxxxxxx (“Xxxxxxx”) and Sky Capital Enterprises, Inc.
(“SCE” and, together with Xxxxxxx and XxXxxxxx, the “Option Selling Stockholders”)
from time to time not more than 30 days subsequent to the date of the Prospectus,
the Underwriters may purchase all or less than all of the Overallotment Shares at
the Purchase Price. The Company and the Option Selling Stockholders agree,
severally and not jointly, to sell to the Underwriters up to the number of Company
Overallotment Shares or Selling Stockholder Overallotment Shares, as applicable. If
the number of Overallotment Shares specified in such notice is less than the total
number of Overallotment Shares to be sold by the Company and the Option Selling
Stockholders, then the Underwriters shall first purchase all of the Selling
Stockholder Overallotment Shares before purchasing any Company Overallotment Shares.
If the number of Overallotment Shares specified in such notice is less than the
total number of Selling Stockholder Overallotment Shares, the number of shares to be
sold by each of the Option Selling Stockholders shall be the number of Overallotment
Shares obtained by multiplying the number of Overallotment Shares specified in such
notice by a fraction, the numerator of which is the number of shares set forth
opposite the name of each Option Selling Stockholder in Schedule II hereto under the
caption “Number of Overallotment Shares to be Sold,” and the denominator of which is
the total number of Selling Stockholder Overallotment Shares (subject to adjustment
to eliminate fractions) to be sold by the Option Selling Stockholders. Thereafter,
and only to the extent that all of the Selling Stockholder Overallotment Shares have
previously been sold or are committed to be sold, the Underwriters shall purchase
any remaining Overallotment Shares not previously sold by, or committed to be sold
by, the Option Selling Stockholders, from the Company. On each day, if any, that
Overallotment Shares are to be purchased (each an “Option Closing Date”), such
Overallotment Shares shall be purchased for the account of each Underwriter in the
same proportion as the number of Firm Shares set forth opposite such Underwriter’s
name bears to the total number of Firm Shares (subject to adjustment by the
Representatives to eliminate fractions) and may be purchased by the Underwriters
only for the purpose of covering overallotments
-17-
made in connection with the sale of the Firm Shares. No Overallotment Shares shall
be sold or delivered unless the Firm Shares previously have been, or simultaneously
are, sold and delivered. The right to purchase the Overallotment Shares or any
portion thereof may be exercised from time to time and to the extent not previously
exercised may be surrendered and terminated at any time upon notice by the
Representatives to the Company and the Option Selling Stockholders.
(b) Public Offering of the Common Shares.
The Representatives hereby advise the Company that the Underwriters intend to offer for sale
to the public, as disclosed in the Prospectus, the Shares as soon after this Agreement has been
executed as the Representatives, in their sole judgment, have determined is advisable and
practicable, subject to the requirements of the Securities Act.
(c) Delivery of the Shares.
The Company shall deliver, or cause to be delivered, to the Representatives, through the
facilities of the Depository Trust Company (“DTC”), for the account of the Underwriters, the Firm
Shares at the First Closing Date, against receipt of a wire transfer of immediately available funds
for the amount of the purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representatives, through the facilities of DTC, for the account of the
Underwriters, any Overallotment Shares the Underwriters have agreed to purchase on the First
Closing Date or any Option Closing Date, as the case may be, against receipt of a wire transfer of
immediately available funds for the amount of the purchase price therefor. The certificates for the
Shares shall be in definitive form and registered in such names and denominations as the
Representatives shall have requested at least two full business days prior to the First Closing
Date (or Option Closing Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or Option Closing Date, as the case may be) at the
office of DTC or its designated custodian or at such other location in New York City as the
Representatives may designate (the “Designated Office”). The documents to be delivered on the First
Closing Date (or Option Closing Date, as the case may be) on behalf of the parties hereto pursuant
to this Agreement shall be delivered at the offices of King & Spalding, LLP, 0000 Xxxxxxxxxxxx
Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000 (or at such other location as the Underwriters may designate)
and the Shares shall be delivered at the Designated Office, all on the First Closing Date (or
Option Closing Date, as the case may be). Time shall be of the essence, and delivery at the time
and place specified in this Agreement is a further condition to the obligations of the
Underwriters.
(d) Delivery of Prospectus.
Not later than 12:00 p.m. on the second business day following the date hereof, the Company
shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such
places as the Representatives shall reasonably request.
SECTION 4. ADDITIONAL COVENANTS OF THE COMPANY.
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The Company covenants and agrees with the Underwriters as follows:
(a) Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of the First Closing
Date (or any Option Closing Date, as the case may be) or such date, as in the opinion of counsel
for the Underwriters, the Prospectus is no longer required by law to be delivered in connection
with sales by any Underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement (including any registration statement filed under Rule
462(b) under the Securities Act) or the Prospectus, the Company shall promptly furnish to the
Representatives for review a copy of each such proposed amendment or supplement and shall permit
the Representatives a reasonable opportunity to comment thereon, and shall consider in good faith
any comments made by, or changes requested by, or objections to the filing of any such amendment or
supplement communicated within three business days (or such shorter period to the extent required
to comply with the Securities Act) to the Company by the Representatives or their attorneys or
advisors.
(b) Securities Act Compliance.
During the Prospectus Delivery Period, the Company shall promptly advise the Representatives
in writing (i) of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to the Prospectus, (iii) of
the time and date that any post-effective amendment to the Registration Statement becomes effective
and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order preventing or
suspending the use of the Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange or market upon which it is
listed for trading or included or designated for quotation, or of the threatening or initiation of
any proceedings for any of such purposes of which the Company has Knowledge. If the Commission
shall enter any such stop order at any time, the Company will use its best efforts to obtain the
lifting of such order at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act
and will use its reasonable efforts to confirm that any filings made by the Company under Rule
424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters.
If, during the Prospectus Delivery Period, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if in the reasonable opinion of the Representatives and counsel for
the Underwriters, after consultation with, and with the reasonable agreement of, the Company
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and its counsel, it is otherwise necessary to amend or supplement the Prospectus to comply
with applicable law, the Company agrees to promptly prepare (subject to Section 4(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to dealers, amendments
or supplements to the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with
applicable laws.
(d) Copies of any Amendments and Supplements to the Prospectus.
The Company agrees to furnish to each Underwriter, without charge, during the Prospectus
Delivery Period, as many copies of the Prospectus and any amendments and supplements thereto as the
Underwriter may reasonably request.
(e) Blue Sky Compliance.
The Company shall cooperate with the Underwriters and counsel for the Underwriters to qualify
or register the Shares for sale under (or obtain exemptions from the application of) the state
securities or blue sky laws or other jurisdictions designated by the Representatives, shall comply
with such laws and shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Shares. The Company shall not be required to qualify
as a foreign corporation or to take any action that would subject it to general service of process
in any such jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the Shares
for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the withdrawal thereof
at the earliest possible moment.
(f) Transfer Agent.
The Company shall engage and maintain, at its expense, a registrar and transfer agent for the
Common Stock.
(g) Earnings Statement.
As soon as practicable, but not later than the Availability Date (as defined below), the
Company will make generally available, including, but not limited to, by filing on XXXXX, to its
security holders an earnings statement of the Company and its Subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act. “Availability Date” means the dates
such information is required to be filed with the Commission.
(h) Nasdaq National Market Listing.
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The Company will use its best efforts to effect the listing of the Shares on the Nasdaq
National Market. In the alternative, the Company may use its best efforts to have the Shares
listed on the New York Stock Exchange.
(i) Exchange Act Compliance.
During the Prospectus Delivery Period, the Company will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and
within the time periods required by the Exchange Act.
(j) Agreement Not to Offer or Sell Additional Securities.
During a period of three hundred sixty (360) days from the date of the Prospectus (the
“Initial Lockup-Period”), the Company will not, without the prior written consent of the
Representatives, 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 to purchase or otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any registration statement
under the Securities 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 clauses (i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided, however, that if (A) during the last 17 days of the
Initial Lock-up Period, the Company releases earnings results or material news or a material event
relating to the Company occurs or (B) prior to the expiration of the Initial Lock-up Period, the
Company announces that it will release earnings results during the 16-day period beginning on the
last day of the Initial Lock-up Period, then in each case the Initial Lock-up Period will be
extended until the expiration of the 18-day period beginning on the date of release of the earnings
results or the occurrence of the material news or material event, as applicable, unless the
Representatives waive in writing such extension; provided, further, however, that in no event shall
any such extension be beyond the 32nd day following the expiration of the Initial Lock-up Period
(the Initial Lock-up Period, as extended, the “Lock-up Period”). The foregoing sentence shall not
apply to (i) the Shares to be sold hereunder, (ii) any shares of Common Stock issued by the Company
upon the exercise of an option outstanding on the date hereof and referred to in the Prospectus or
(iii) any options to purchase Common Stock granted pursuant to existing stock option or incentive
plans of the Company referred to in the Prospectus. The Company has obtained the agreement: (i) of
each officer named in the Prospectus, each director continuing in office and each member of the
Company’s advisory board, on such officer’s, director’s or advisory board member’s own behalf, not
to engage in any of the transactions set forth in the preceding sentence during the Lock-Up Period;
(ii) of XxXxxxxx not to engage in any of the transactions set forth in the preceding sentence
during the Lock-up Period; provided, however, that XxXxxxxx may sell in each of the three-month
periods following the expiration of the 180th day after the date of the Prospectus not
greater than (A) two percent of the aggregate amount of shares of Common Stock outstanding or (B)
twice the average weekly reported trading volume of the Company’s Common Stock on the Nasdaq
National Market during the four calendar weeks preceding any sale; (iii) of each director not
continuing in office not to
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engage in any of the transactions set forth in the preceding sentence during a period of one
hundred eighty (180) days from the date of the Prospectus, subject to extension in the manner
described in the preceding sentence. The Company agrees not to waive any agreement obtained
pursuant to this subsection (j).
(k) No Manipulation of Price.
None of the Company, its Subsidiaries nor any of their respective officers, directors or
controlling persons will take, directly or indirectly, any action designed to or that might
reasonably be expected to result in a violation of Regulation M under the Exchange Act or cause or
result in stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares.
(l) Additional Documents.
On or before each of the First Closing Date and any Option Closing Date, as the case may be,
the Company will provide to the Representatives and counsel for the Underwriters such information,
documents and opinions as they may reasonably require for the purposes of enabling them to pass
upon the issuance and sale of the Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the conditions
or agreements, herein contained.
(m) Press Releases During the Prospectus Delivery Period.
The Company shall furnish to the Representatives for review a copy of any press release that
the Company or any of its affiliates proposes to issue with respect to or that otherwise references
the offering of the Shares, and, except as required by law, shall not issue any such press release
or make any public statement with respect to or otherwise referring to the offering of the Shares
without the approval of the Representatives, which approval shall not be unreasonably withheld.
(n) Use of Proceeds.
The Company shall apply the net proceeds from the sale of the Shares sold by it in the manner
described under the caption “Use of Proceeds” in the Prospectus.
(o) Investment Limitation.
The Company shall not invest, or otherwise use the net proceeds received by the Company from
its sale of the Shares in such a manner as would require the Company or any of its Subsidiaries to
register as an investment company under the Investment Company Act.
The Representatives may, in their sole discretion, waive in writing the performance of any one
or more of the foregoing covenants or extend the time for their performance.
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SECTION 5. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (a) all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs), (b) all fees and expenses of the registrar and
transfer agent of the Common Stock, (c) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Shares to the Underwriters, (d) all fees and expenses
of the Company’s counsel, independent public or certified public accountants and other advisors,
(e) all costs and expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), each preliminary prospectus and the Prospectus,
and all amendments and supplements thereto, and this Agreement, (f) all filing fees, attorneys’
fees and expenses incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of) all or any part of
the Shares for offer and sale under the state securities or blue sky laws or the laws of any
foreign jurisdiction, and, if reasonably requested by the Underwriters, preparing and printing a
“Blue Sky Survey” or memorandum, and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (g) the costs and expenses of the Company relating to
investor presentations on any “road show” undertaken in connection with the marketing of the
Shares, including without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with the road show
presentations with the prior written approval of the Company, travel and lodging expenses of the
officers of the Company and with the prior written approval of the Company any such consultants,
and the cost of aircraft and other transportation chartered in connection with the road show, (h)
the filing fees incident to, and the reasonable fees and expenses of counsel for the Underwriters
in connection with, the NASD’s review and approval of the Underwriters’ participation in the
offering and distribution of the Shares, (i) the fees and expenses associated with listing the
Shares on the Nasdaq National Market, and (j) all other fees, costs and expenses referred to in
Item 14 of Part II of the Registration Statement. Except as provided in this Section 5, Section 7,
Section 9 and Section 10 hereof, the Underwriters shall pay their own expenses, including, without
limitation, the fees and disbursements of their counsel.
SECTION 6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The Underwriters are only obligated to purchase and pay for the Shares as provided herein on
the First Closing Date and any Option Closing Date, as the case may be, if (i) the representations
and warranties of the Company set forth in Section 1 of this Agreement that are qualified as to
materiality or Material Adverse Change are true and correct and those not so qualified are true and
correct in all material respects, as of the date hereof and as of the First Closing Date as though
then made and, with respect to any Option Closing Date, as of such Option Closing Date as though
then made, and (ii) the Company has complied in all material respects with all the agreements and
covenants on its part to be performed hereunder and has satisfied all the conditions on its part to
be satisfied hereunder and to each of the following conditions:
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(a) Accountants’ Comfort Letter. On the date hereof, the Underwriters shall have received from
Xxxxxx LLP, an independent registered public accounting firm for the Company, a letter dated the
date hereof addressed to the Underwriters, in form and substance reasonably satisfactory to the
Underwriters, containing statements and information of the type ordinarily included in an
accountant’s “comfort letter” to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration Statement and the
Prospectus.
(b) Compliance with Registration Requirements; No Stop Order; No Objection of NASD. For the
period from and after effectiveness of this Agreement and prior to the First Closing Date and any
Option Closing Date, as the case may be:
(i) the Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and within
the time period required by Rule 424(b) under the Securities Act;
(ii) no stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment to the Registration Statement shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by the
Commission; and
(iii) the NASD shall have raised no objection to the fairness and reasonableness of
the underwriting terms and arrangements.
(c) No Material Adverse Change. For the period from and after the date of this Agreement and
prior to the First Closing Date and any Option Closing Date, as applicable, in the reasonable
judgment of the Representatives there shall not have occurred any Material Adverse Change that
makes it impractical or inadvisable to proceed with the completion of the public offering or the
sale and payment for the Shares.
(d) Opinion of Counsel for the Company. On the First Closing Date and any Option Closing Date,
as the case may be, the Underwriters shall have received the favorable opinion of DLA Xxxxx Xxxxxxx
Xxxx Xxxx US LLP, counsel for the Company, dated the First Closing Date and, with respect to any
Option Closing Date, dated such Option Closing Date, in each case, substantially to the effect set
forth in Exhibit A.
(e) Opinion of Counsel for the Underwriters. On the First Closing Date and any Option Closing
Date, as the case may be, the Underwriters shall have received from King & Spalding LLP, counsel
for the Underwriters, such opinion or opinions, dated the First Closing Date and, with respect to
any Option Closing Date, dated such Option Closing Date, with respect to such matters as the
Representatives may reasonably require.
(f) Opinions of Counsel for the Selling Stockholders.
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(i) On the First Closing Date, the Underwriters shall have received the favorable
opinion of DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, counsel for the Firm Selling
Stockholders, dated the First Closing Date, substantially to the effect set forth in
Exhibit B.
(ii) On any Option Closing Date at which the Option Selling Stockholders are selling
Overallotment Shares, the Underwriters shall have received the favorable opinion of
(A) [___], counsel to Xxxxxxx and SCE, and (B)
[___], counsel to XxXxxxxx, dated such Option Closing Date,
substantially to the effect set forth in Exhibit B.
(g) Company Officers’ Certificate. On the First Closing Date and any Option Closing Date, as
the case may be, the Underwriters shall have received a written certificate executed by the Chief
Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated the First Closing Date and, with respect to any Option Closing Date,
dated such Option Closing Date, to the effect set forth in subsections (b)(ii) of this Section 6,
and further to the effect that:
(i) for the period from and after the date of this Agreement and prior to the First
Closing Date and any Option Closing Date, as the case may be, there has not occurred
any Material Adverse Change;
(ii) the representations and warranties of the Company set forth in Section 1 of
this Agreement are true and correct with the same force and effect as though
expressly made on and as of the First Closing Date and, with respect to any Option
Closing Date, as though expressly made on and as of such Option Closing Date;
(iii) the Company has complied in all material respects with all the agreements and
covenants on its part to be performed hereunder and has satisfied all the conditions
on its part to be satisfied hereunder at or prior to the First Closing Date and,
with respect to any Option Closing Date, at or prior to such Option Closing Date;
and
(iv) they have examined the Registration Statement and the Prospectus and nothing
has come to their attention that would lead them to believe that (A) either the
Registration Statement or the Prospectus, or any amendment or supplement thereto as
of their respective effective, issue or filing dates, as the case may be, or (B) the
Prospectus, as amended or supplemented as of the First Closing Date or any Option
Closing Date, as the case may be, contained or contains, as of such date, any untrue
statement of a material fact, or omitted or omits to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
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(h) Selling Stockholders’ Certificate. On the First Closing Date, and on any Option Closing
Date, as the case may be, the Underwriters shall have received a written certificate executed by an
attorney-in-fact on behalf of each Selling Stockholder selling Shares to the effect that:
(i) the representations and warranties of such Selling Stockholder set forth in
Section 2 of this Agreement are true and correct with the same force and effect as
though expressly made on and as of the First Closing Date and, with respect to any
Option Closing Date, as though expressly made on and as of such Option Closing Date;
and
(ii) such Selling Stockholder has complied in all material respects with all the
agreements and covenants on its part to be performed hereunder and has satisfied all
the conditions on its part to be satisfied hereunder at or prior to the First
Closing Date and, with respect to any such Option Closing Date, at or prior to such
Option Closing Date.
(i) Bring-down Comfort Letter. On First Closing Date and any Option Closing Date, as the case
may be, the Underwriters shall have received from Xxxxxx LLP, an independent registered public
accounting firm for the Company, a letter dated such date, in form and substance satisfactory to
the Underwriters, to the effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 6, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business days prior to the
First Closing Date and, with respect to any Option Closing Date, no more than three business days
prior to any Option Closing Date.
(j) Lock-up Agreements. At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit C hereto signed by the persons listed on
Exhibit D hereto.
(k) The Company shall have furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to the Company and to
the Selling Stockholders at any time on or prior to the First Closing Date or any Option Closing
Date, as the case may be, which termination shall be without liability on the part of any party to
any other party, except that Section 5, Section 7, Section 9, Section 10 and Sections 14 through 20
shall at all times be effective and shall survive such termination, provided, however, that if such
termination occurs with respect to any Option Closing after the First Closing Date, this Agreement
will not terminate as to the Shares purchased at the First Closing or any Overallotment Shares
purchased at any Option Closing prior to such termination.
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SECTION 7. REIMBURSEMENT OF UNDERWRITERS’ EXPENSES.
If (a) this Agreement is terminated by the Representatives pursuant to Section 6, (b) the sale
to the Underwriters of the Shares on the First Closing Date (or any Option Closing Date, as the
case may be) is not consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof (except to the
extent due to any material breach by the Underwriters) or (c) the Company prints and distributes a
preliminary prospectus (red xxxxxxx) and the Underwriters price the sale of the Shares at or above
the minimum price printed in the preliminary prospectus (red xxxxxxx) and the Company subsequently
decides not to complete the sale to the Underwriters of the Shares (except to the extent due to any
material breach by the Underwriters), the Company agrees to reimburse the Underwriters upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the Underwriters in
connection with the proposed purchase and the offering and sale of the Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges. If the sale to the Underwriters of the Shares on the First
Closing Date is consummated, the Company agrees to reimburse the Underwriters upon demand an amount
in respect of the counsel fees incurred by the Underwriters in connection with the transactions
contemplated hereby equal to the lesser of (a) $150,000 or (b) fifty percent (50%) of the fees and
expenses of counsel incurred by the Underwriters in connection with the transactions contemplated
hereby.
SECTION 8. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
SECTION 9. INDEMNIFICATION.
(a) Indemnification by the Company. The Company agrees to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who controls the Underwriter
within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which the Underwriter or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment thereto, 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; (ii) any untrue statement or alleged untrue statement of a material fact contained 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; or (iii) any
press releases, publicity, or publications related to or
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mentioning the Company or its initial public offering or the other transactions contemplated
by this Agreement that were issued or published by or on behalf of, or any written or oral
communications relating to or mentioning the Company’s initial public offering by, the Company or
any of its officers, directors, Subsidiaries, or other affiliates (including SCE and its
affiliates) since April 25, 2005; and, in the case of (i), (ii) and (iii) above, to reimburse each
Underwriter and each such controlling person for any and all reasonable expenses (including
reasonable legal fees and disbursements of counsel) as such expenses are reasonably incurred by the
Underwriter or such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Underwriters through the
Representatives expressly for use in the Registration Statement or the Prospectus (or any amendment
or supplement thereto), it being understood and agreed that the only such information furnished to
the Company consists of the information described as such in Section 9(c) below. The indemnity
agreement set forth in this Section 9(a) shall be in addition to any liabilities that the Company
may otherwise have.
(b) Indemnification by the Selling Stockholders. Each Selling Stockholder, severally and not
jointly, agrees to indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls the Underwriter within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which the
Underwriter or such controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written consent of the
Selling Stockholder), insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon: (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, or any
amendment thereto, 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 (ii) any untrue
statement or alleged untrue statement of a material fact contained 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; and to reimburse each Underwriter and
each such controlling person for any and all reasonable expenses (including reasonable legal fees
and disbursements of counsel) as such expenses are reasonably incurred by the Underwriter or such
controlling person in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however, that: (i) in any
such case, each Selling Stockholder will only be liable, severally and not jointly, to the extent
that any such loss, claim, damage, liability or expense arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission was made in reliance upon and in
conformity with written information relating to such Selling Stockholder that was furnished by or
on behalf of such Selling Stockholder to the Company expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the Prospectus (or any
amendment or
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supplement thereto); (ii) no Selling Stockholder will be liable under this Section 9(b) for
any amount in excess of the aggregate gross proceeds received by such Selling Stockholder from the
sale of Shares less underwriting discounts and commissions; and (iii) the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Underwriters through the Representatives expressly for use in the
Registration Statement or the Prospectus (or any amendment or supplement thereto), it being
understood and agreed that the only such information furnished to the Company consists of the
information described as such in Section 9(c) below. The indemnity agreement set forth in this
Section 9(b) shall be in addition to any liabilities that each Selling Stockholder may otherwise
have.
(c) Indemnification of the Company, its Directors, Officers and Selling Stockholders. The
Underwriters agree to indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, and each Selling Stockholder and each person, if any, who controls any
Selling Stockholder within the meaning of the Securities Act or the Exchange Act, against any loss,
claim, damage, liability or expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written consent of the
Underwriters), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment
thereto, 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 (ii) any untrue statement or
alleged untrue statement of a material fact contained 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, in the case of each of (i) and (ii) above
to the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, 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 the Underwriters through the Representatives
expressly for use therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action. The Company and
the Selling Stockholders hereby acknowledge that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) is the concession figure
appearing in the third paragraph under the caption “Underwriting” in the Prospectus and the
information contained in the fifth paragraph and eighth paragraph under the caption “Underwriting”
in the Prospectus; and the Underwriters confirm that
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such statements are correct. The indemnity agreement set forth in this Section 9(c) shall be
in addition to any liabilities that the Underwriters may otherwise have.
(d) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 9 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, which approval shall not be unreasonably withheld, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the proviso to the
immediately preceding sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party, representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the reasonable fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder by such
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indemnified party, unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter of such
action, suit or proceeding.
SECTION 10. CONTRIBUTION.
(a) If the indemnification provided for in Section 9 is for any reason held to be unavailable
to or otherwise insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders, on the one hand, and the Underwriters, on the other hand, from the offering
of the Shares pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders, on the one hand, and the Underwriters, on the other hand, in connection
with the statements or omissions herein which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Stockholders, on the one hand, and the Underwriters, on the other
hand, in connection with the offering of the Shares pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total gross proceeds less underwriting discounts and
commissions from the offering of the Shares pursuant to this Agreement received by the Company and
the Selling Stockholders, and the total underwriting discount received by the Underwriters, bear to
the aggregate initial public offering price of the Shares. The relative fault of the Company and
the Selling Stockholders, 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 and the Selling Stockholders, on the one hand, or the Underwriters, on the
other hand, and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(b) The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the limitations
set forth in Section 9(d), any legal or other reasonable fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim. The provisions set
forth in Section 9(d) with respect to notice of commencement of any action shall apply if a claim
for contribution is to be made under this Section 10; provided, however, that no additional notice
shall be required with respect to any action for which notice has been given under Section 9(d) for
purposes of indemnification.
(c) The Company, the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable considerations
referred to in this Section 10.
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(d) Notwithstanding the provisions of this Section 10, (i) the Underwriters shall not be
required to contribute any amount in excess of the underwriting commissions received by the
Underwriters in connection with the Shares underwritten by it and distributed to the public and
(ii) no Selling Stockholder shall be required to contribute any amount in excess of the aggregate
gross proceeds less underwriting discounts and commissions received by such Selling Stockholder
from the sale of Shares by such Selling Stockholder to the Underwriters. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 10, each officer and employee of the Underwriters and each person, if
any, who controls the Underwriters within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Underwriters, and each director of the Company,
each officer of the Company, and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Company or such Selling Stockholder, as the case may be.
SECTION 11. TERMINATION OF THIS AGREEMENT.
Prior to the First Closing Date, this Agreement may be terminated by the Representatives by
notice given to the Company and the Selling Stockholders if at any time: (a) trading or quotation
in any of the Company’s securities shall have been suspended or materially limited by the
Commission or by the Nasdaq National Market, or trading in securities generally on the New York
Stock Exchange or the Nasdaq National Market shall have been suspended or materially limited, or
minimum or maximum prices shall have been generally established on any of such stock exchanges or
markets by the Commission or the NASD or any other Governmental Authority, or a material disruption
has occurred in commercial banking or securities settlement or clearance services in the United
States; (b) a general banking moratorium shall have been declared by any of federal or New York
authorities; (c) there shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a prospective substantial
change in United States’ or international political, financial or economic conditions, as in the
reasonable judgment of the Representatives is material and adverse and makes it impracticable or
inadvisable to market the Shares in the manner and on the terms disclosed in the Prospectus or to
enforce contracts for the sale of securities; (d) in the reasonable judgment of the Representatives
there shall have occurred any Material Adverse Change that makes it impractical or inadvisable to
proceed with the completion of the public offering or the sale and payment for the Shares; or (e)
the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other
calamity of such character that in the judgment of the Representatives would, individually or in
the aggregate, result in a Material Adverse Change. Any termination pursuant to this Section 11
shall be without liability on the part of (i) the Company and the Selling Stockholders to the
Underwriters, (ii) the Underwriters to the Company and the Selling Stockholders, or (iii) of any
party hereto to any other party except
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that the provisions of Section 9, Section 10 and Section 12 shall at all times be effective
and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other statements of
the Company, the Selling Stockholders and of the Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, regardless of (a) any investigation,
or statement as to the results thereof, made by or on behalf of the Underwriters, the officers or
employees of the Underwriters, any person controlling the Underwriters, any person controlling the
Company, or the officers and employees of the Company or of any person controlling the Company, (b)
acceptance of the Shares and payment for them hereunder and (c) termination of this Agreement.
SECTION 13. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS.
(a) If one or more of the Underwriters shall fail at the First Closing Date or any Option
Closing Date to purchase the Shares that it or they are obligated to purchase under this Agreement
(the “Defaulted Shares”), 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
reasonably satisfactory to the Company, to purchase all, but not less than all, of the Defaulted
Shares 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:
(i) if the number of Defaulted Shares does not exceed 10% of the number of Shares 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
(ii) if the number of Defaulted Shares exceeds 10% of the number of Shares to be
purchased on such date, this Agreement (with respect to the First Closing Date) or,
with respect to any Option Closing Date, the obligation of the Underwriters to
purchase and of the Company and Option Selling Stockholders to sell the
Overallotment Shares to be purchased and sold on such Option Closing Date shall
terminate without liability on the part of any non defaulting Underwriter, the
Company or the Selling Stockholders.
(b) No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
(c) In the event of any such default that does not result in a termination of this Agreement
or, in the case of an Option Closing Date, that does not result in a termination of the
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obligation of the Underwriters to purchase and the Company and Option Selling Stockholders to
sell the relevant Overallotment Shares, as the case may be, either (i) the Representatives or (ii)
the Company shall have the right to postpone the First Closing Date or the relevant Option Closing
Date, as the case may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectus or in any other documents or arrangements.
As used herein, the term “Underwriter” includes any person substituted for an Underwriter under
this Section 13.
SECTION 14. NOTICES.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Underwriters:
Xxxxxx Xxxxxx & Company, Inc.
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxxx
00 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxxxx
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxx
000 Xxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxx
with a copy to:
King & Spalding LLP
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
If to the Company or the Selling Stockholders:
Global Secure Corp.
0000 Xxxxxxxx Xxx., XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, Chief Executive Officer
0000 Xxxxxxxx Xxx., XX
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, Chief Executive Officer
with a copy (which shall not constitute notice) to:
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DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Any party hereto may change the address for receipt of communications by giving written notice to
the others.
SECTION 15. TAX DISCLOSURE.
Notwithstanding any other provision of this Agreement, from the commencement of discussions
with respect to the transactions contemplated hereby, the Company (and each employee,
representative or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure (as such terms are used in Sections
6011, 6111 and 6112 of the United States Code and the Treasury Regulations promulgated thereunder)
of the transactions contemplated by this Agreement and all materials of any kind (including
opinions or other tax analyses) that are provided relating to such tax treatment and tax structure.
SECTION 16. ARM’S LENGTH RELATIONSHIP; NO FIDUCIARY DUTY.
The Company and each Selling Stockholder acknowledges and agrees that (a) the purchase and
sale of the Shares pursuant to this Agreement, including the determination of the public offering
price of the Shares and any related discounts and commissions, is an arm’s length commercial
transaction between the Company and the Selling Stockholders, on the one hand, and the several
Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and the
process leading to such transaction each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, any Selling Stockholder, or their respective
stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company or any Selling Stockholder
with respect to the offering contemplated hereby or the process leading thereto (irrespective of
whether such Underwriter has advised or is currently advising the Company or any such Selling
Stockholder on other matters) and no Underwriter has any obligation to the Company or any Selling
Stockholder with respect to the offering contemplated hereby except the obligations expressly set
forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the Company or any
Selling Stockholder, and (e) the Underwriters have not provided any legal, accounting, regulatory
or tax advice with respect to the offering contemplated hereby and the Company and each Selling
Stockholder has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
SECTION 17. SUCCESSORS.
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This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the
benefit of the employees, officers and directors and controlling persons referred to in Section 9
and Section 10, and in each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term “successors” shall not include
any purchaser of the Shares as such from the Underwriters merely by reason of such purchase.
SECTION 18. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be
invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 19. GOVERNING LAW PROVISIONS.
This Agreement shall be governed by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed in such state.
SECTION 20. GENERAL PROVISIONS.
(a) This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
(b) Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 9 and the contribution provisions of
Section 10, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 9 and 10 hereto fairly allocate the risks in light of
the ability of the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.
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(c) Except as otherwise provided, this Agreement has been and is made solely for the benefit
of and shall be binding upon the Company, the Selling Stockholders, the Underwriters, the
Underwriters’ officers and employees, any controlling persons referred to herein, the Company’s
directors and the Company’s officers and its successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right under or by virtue
of this Agreement.
(d) This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute one and the same
Agreement.
[The following page is the signature page.]
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, GLOBAL SECURE CORP. |
||||
| By: | ||||
| Xxxxx X. Xxxxxx | ||||
| President and Chief Executive Officer | ||||
| The Selling Shareholders named in Schedule I hereto: |
||||
| By: | ||||
| Attorney-in-fact | ||||
| By: | ||||
| C. Xxxxxx XxXxxxxx | ||||
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The foregoing Underwriting Agreement is hereby confirmed and accepted by the Underwriters as
of the date first above written.
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXXXX & COMPANY, INC.
XXXXXXXXX & COMPANY, INC.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
Representatives of the several Underwriters
| XXXXXX XXXXXX & COMPANY, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| XXXXXXXXX & COMPANY, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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SCHEDULE I
SELLING STOCKHOLDERS
| Number of | Number of | ||||
| Selling Stockholder | Overallotment | ||||
| Firm Shares | Shares | ||||
| to be Sold | to be Sold | ||||
Total |
|||||
SCHEDULE II
UNDERWRITERS
| Number of | ||||
| Firm Shares | ||||
| Underwriter | to be Purchased | |||
Xxxxxx Xxxxxx & Company, Inc. |
||||
Xxxxxxxxx & Company, Inc. |
||||
Xxxxxx Xxxxxx Partners LLC |
||||
Total |
||||
EXHIBIT A
OPINION OF COUNSEL TO THE COMPANY
EXHIBIT B
OPINIONS OF COUNSEL TO THE SELLING STOCKHOLDERS
EXHIBIT C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS
OR OTHER STOCKHOLDERS
OR OTHER STOCKHOLDERS
EXHIBIT D
PERSONS TO EXECUTE LOCK-UP AGREEMENTS
