[2,000,000] SHARES OF COMMON STOCK
SECURACOM, INCORPORATED
UNDERWRITING AGREEMENT
June __, 1997
Xxxxxxx, Xxxxxx Inc.
Xxxxx & Xxxxxxxxxxxx, Inc.
As Representatives of the Several Underwriters
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Securacom, Incorporated (the "Company"), confirms its agreement to
issue and sell to the several underwriters (the "Underwriters") named in
Schedule A hereto for whom you are acting as representatives (the
"Representatives") an aggregate of [1,400,000] shares (the "Company Firm
Shares") of the Company's Common Stock, $0.01 par value per share (the "Common
Stock"). Moreover, a certain stockholder of the Company named in Schedule B
hereto (the "Selling Stockholder") confirms its agreement to sell to the
Underwriters [600,000] shares of the Common Stock (the "Stockholder Firm
Shares"). The Company Firm Shares and the Stockholder Firm Shares are
hereinafter collectively referred to as the "Firm Shares." The respective
amounts of the Firm Shares to be purchased by the several Underwriters are set
forth opposite their names in Schedule A. In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, the
Company and the Selling Stockholder confirm their agreement to grant to the
Underwriters options to purchase up to an additional 210,000 shares and 90,000
shares, respectively of Common Stock (collectively, the "Option Shares"). The
Firm Shares and any Option Shares purchased pursuant to this Agreement are
hereinafter referred to as the "Shares." The Company and the Selling Stockholder
are hereinafter collectively referred to as the "Sellers."
As the Representatives, you have advised the Company that you are
authorized to enter into this Agreement on behalf of the several Underwriters
and that the several Underwriters are willing, acting severally and not jointly,
to purchase the number of Firm Shares set forth opposite their respective names
in Schedule A plus their pro rata portion of the Option Shares if you elect to
exercise the over allotment option in whole or in part for the accounts of the
several Underwriters.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto hereby agree as follows:
1. Representations and Warranties of the Company. In order to induce the
Underwriters to enter into this Agreement, the Company represents and warrants
to each Underwriter that:
(A) A registration statement on Form S-1 (File No. _________) with
respect to the Shares has been prepared by the Company and executed by its
directors in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act") and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") promulgated
thereunder and has been filed with the Commission. Copies of such registration
statement and all forms of the prospectuses included therein and the exhibits,
financial statements and schedules thereto, as finally amended and revised, have
heretofore been delivered by the Company to the Representatives. Such
registration statement, and the prospectus therein, Part II thereof, any
documents incorporated by reference therein, and all financial schedules and
exhibits thereto, as amended at the time when it became effective, and including
all information omitted therefrom in reliance upon Rule 430A of the Rules and
Regulations is hereinafter referred to as the "Registration Statement." Such
Registration Statement has been declared effective under the Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or threatened by the Commission. The prospectus included as part
of the Registration Statement on file with the Commission when it became
effective or, if the procedure in Rule 430A of the Rules and Regulations is
followed, the prospectus that discloses all the information that was omitted
from the prospectus on the effective date pursuant to such Rule, and in either
case, together with any changes contained in any prospectus filed with the
Commission by the Company after the effective date of the Registration
Statement, is hereinafter referred to as the "Prospectus." Each prospectus
included in the Registration Statement and any amendments thereto prior to the
effective date of the Registration Statement or which is filed with the
Commission pursuant to Rule 424(a) of the Rules and Regulations is referred to
herein as a "Preliminary Prospectus."
(B) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings have been
instituted for that purpose; each Preliminary Prospectus, at the time of filing
thereof, (a) conformed in all material respects to the requirements of the Act
and the Rules and Regulations and (b) did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(C) As of the time it became effective, as the case may be, and at all
times subsequent thereto, the Registration Statement and any post-effective
amendment thereto and the Prospectus and any supplement thereto conformed and
will conform in all material respects with the requirements of the Act and the
Rules and Regulations. Neither the Registration Statement nor any amendment
thereto, and neither the Prospectus nor any supplement thereto, at the time the
Registration Statement or any amendment thereto became or will become effective,
and, with respect to the Prospectus or any supplement thereto, at the effective
date, the date the Prospectus or any supplement is filed with the Commission and
at each Closing Date (as such term is defined below), contained or will contain,
as the case may be, any untrue statement of a material fact or omitted or will
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(D) Except as disclosed in the Registration Statement, the Company does not
have any beneficial or record ownership of, or control, any corporation,
partnership, joint venture, limited liability company, unincorporated
association or other entity.
(E) There are no contracts, leases, indentures, instruments or other
documents which are required by the Act and the Rules and Regulations to be
filed as exhibits to the Registration Statement or described in the Prospectus
which have not been so filed or described. All such contracts and other
documents to which the Company is a party have been duly authorized, executed
and delivered by the Company, constitute valid and binding agreements of the
Company and are enforceable by and against the Company in accordance with the
terms thereof. Neither the Company, nor, to the Company's knowledge, any other
party is in default in the observance or performance of any term or obligation
to be performed by it under any such agreement, and no event has occurred which
with notice or lapse of time or both would constitute such a default, in any
such case in which a default or event would have a material adverse effect on
the assets or properties, business, results of operations, prospects or
financial condition of the Company. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default, in the
due performance and observance of any term, covenant or condition by the Company
of any other agreement or instrument to which the Company is now a party or by
which it or its properties or business may be bound or affected which default or
event would have a material adverse effect on the assets or properties,
business, results of operations, prospects or condition (financial or otherwise)
of the Company.
(F) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
organization, with full power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the Prospectus.
The Company is duly qualified to transact business as a foreign corporation and
is in good standing in all jurisdictions in which the character of the business
conducted by it or the properties owned or leased by it requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on the business, condition (financial or otherwise), results of
operations, assets, properties or prospects of the Company. Complete and correct
copies of the certificate of incorporation and of the bylaws of the Company and
all amendments thereto have been delivered to the Underwriters and, with respect
to the Company, filed with the Commission as part of the Registration Statement
and no changes therein will be made subsequent to the date hereof and prior to
each Closing Date.
(G) The capitalization of the Company as of March 31, 1997 is as set
forth under the caption "Capitalization" in the Prospectus, and the Common Stock
conforms to the description thereof contained under the caption "Description of
Capital Stock" in the Prospectus. The outstanding shares of Common Stock have
been duly authorized, validly issued, fully paid and are non-assessable. The
Shares, the Representatives' Warrants, and the Common Stock underlying the
Representatives' Warrants and the shares of Common Stock to be issued upon the
exercise of the warrants and options described in the Prospectus upon issuance
and delivery and payment therefor in the manner herein described, will be duly
authorized, validly issued, fully paid and non-assessable. There are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company's certificate of incorporation, bylaws or other governing
documents or any agreement or other instrument to which the Company is a party
or by which it may be bound other than certain rights pursuant to the stock
purchase agreements entered into between the Company and certain of its current
stockholders that have been waived or satisfied in connection with the offering
or sale of the shares contemplated by this Agreement. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement will give rise to any right, other than those which have been
waived or satisfied, for or relating to the registration of any shares of Common
Stock. The Representatives' Warrants (as defined in Section 3(e) hereof) conform
to all statements with regard to them in the Registration Statement. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any share of stock of the
Company or any security convertible into, or exercisable or exchangeable for,
such stock.
(H) Xxxxx Xxxxxxx LLP and Amper, Politziner & Xxxxxx, whose reports
appear in the Prospectus, are independent certified public accountants as
required by the Act and the Rules and Regulations. The consolidated financial
statements and schedules of the Company, together with the related notes
included in the Registration Statement, each Preliminary Prospectus or the
Prospectus, comply in all material respects with the requirements of the Act and
the Rules and Regulations and present fairly the financial condition, results of
operations and cash flows of the entities purported to be shown thereby at the
dates and for the periods indicated. All of such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of results for such periods have been made.
The information set forth in the Registration Statement under the captions
"Summary Financial Information," "Capitalization" and "Selected Financial Data"
present fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented in the Registration
Statement. The pro forma financial information set forth in the Registration
Statement reflects, subject to the limitations set forth in the Registration
Statement as to such pro forma financial statements, the results of operations
of the entities purported to be shown thereby for the periods indicated and
conforms to the requirements of Regulation S-X of the Rules and Regulations.
(I) Except as described in the Prospectus, there is no litigation or
governmental action or proceeding pending or threatened before any court or
governmental, administrative or regulatory agency, domestic or foreign or, to
the knowledge of the Company, contemplated, to which the Company or any officer
thereof in their capacity as such is a party or of which any of the Company's
property is the subject and which, either (i) if determined adversely to the
Company would have a material adverse effect on the business, condition
(financial and otherwise), results of operations, assets, properties or
prospects of the Company, or (ii) is required to be disclosed in the Prospectus.
(J) The Company has good and marketable title in fee simple to all
items of real property and good and marketable title to all personal property
owned by them, in each case clear of all liens, encumbrances and defects except
such as are disclosed in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made or proposed to be
made of such property by the Company; and any real property and buildings held
under lease by the Company are held by it under valid, existing and enforceable
leases with such exceptions as are not material and do not interfere with the
uses made or proposed to be made of such property and buildings by the Company.
(K) The Company has correctly and timely filed all necessary federal,
state, local and foreign income, property and franchise tax returns and paid all
taxes required to be shown as due thereon and all assessments received by it to
the extent that the same are material and have become due. Neither the Company
nor any of its officers has any knowledge of any tax deficiency of the Company
or any tax proceeding or action pending or threatened against the Company. There
are no liens for taxes on the assets of the Company, except for taxes not yet
due. There are no audits pending of the Company's tax returns (federal, state,
local or foreign), and there are no claims which have been or, to the best of
the Company's knowledge, may be asserted relating to any such tax returns which,
if determined adversely, would result in the assertion by any governmental
agency of any deficiency material to the Company. There have been no waivers of
any statute of limitations by the Company relating to tax returns (federal,
state, local and foreign). The Internal Revenue Service has not asserted or
threatened to assert any assessment, claim or liability for taxes due or to
become due in connection with any review or examination of the tax returns of
the Company for any year.
(L) The Company is not, and with the giving of notice or lapse of time
or both, would not be, in violation of or in default under, nor will the
execution or delivery of this Agreement, the consummation of the transactions
contemplated herein or the fulfillment of the terms hereof conflict with or
result in a violation of or default under, (i) the certificate of incorporation,
bylaws or other governing documents of the Company, (ii) any foreign or domestic
permit, judgment, decree, order, statute, rule or regulation applicable to the
Company, or (iii) any lease, license, contract, indenture, mortgage, deed of
trust, loan agreement or other agreement, instrument, obligation, arrangement or
understanding to which the Company is a party or by which it or any of its
respective properties is bound, or result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or assets of the Company,
which violation or default would have a material adverse effect on the business,
condition (financial and otherwise), results of operations, assets, properties
or prospects of the Company. Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body or court necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions contemplated herein (except such additional steps as may be
required by the Act, the Exchange Act, the National Association of Securities
Dealers, Inc. ("NASD") or which may be necessary to qualify the Shares for
public offering by the Underwriters under state securities or Blue Sky laws, all
of which have been or will be completed before the Closing Date) has been
obtained or made and is in full force and effect.
(M) The Company is not an "investment company" or an "affiliated person"
of, or a "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
(N) Since the respective dates as of which information is given in the
Registration Statement or, if later, the Prospectus, as each may be amended or
supplemented, there has not been any material adverse change in, or any
development which materially affects the business, condition (financial and
otherwise), results of operations, assets, properties or prospects of the
Company, whether or not occurring in the ordinary course of business. Since the
respective dates as of which information is given in the Registration Statement
or, if later, the Prospectus, as each may be amended or supplemented, and except
as set forth in the Prospectus, there has not been any change in the capital
stock of the Company, or any transactions entered into by the Company (other
than those in the ordinary course of business consistent with past practices)
that are material with respect to the Company, or any dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital
stock or any issuance of warrants, options, convertible securities or other
rights to purchase or acquire capital stock of the Company.
(O) The business and operations conducted by the Company are being
conducted in accordance with all applicable laws, rules, regulations and decrees
of all public authorities, foreign or domestic, having jurisdiction over the
Company. The Company has all requisite corporate authority and owns or possesses
all authorizations, approvals, orders, licenses, registrations, other
certificates and permits of and from all governmental regulatory officials and
bodies, necessary to conduct the business of the Company as presently described
in or contemplated in the Prospectus except where the failure to own or possess
all such authorizations, approvals, orders, licenses, registrations, other
certificates and permits would not have a material adverse effect on the Company
or its business, condition (financial or otherwise), results of operations,
assets, properties or prospects; there is no proceeding pending or threatened
(or any basis therefor known to the Company) that may cause any such
authorization, approval, order, license, registration, certificate or permit to
be revoked, withdrawn, canceled, suspended or not renewed.
(P) The Company owns, licenses or possesses adequate rights to use all
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses, inventions,
trade secrets and other proprietary and similar rights necessary for the conduct
of its business as currently conducted. Neither the Company, nor any of their
products has infringed upon, or is presently infringing upon, any patents,
patent rights, trademarks, service marks, trade names, copyrights, licenses,
inventions, trade secrets or other proprietary rights of other persons. The
Company is not aware that any other party has infringed upon, or is presently
infringing upon, any patents, patent rights, trademarks, service marks, trade
names, copyrights, licenses, inventions, trade secrets or other proprietary
rights of the Company.
(Q) Any document hereafter filed by the Company pursuant to Section 12,
13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the termination of the offering of the Shares, at the
time such documents were or are filed with the Commission, complied or will
comply in all material respects with the requirements of the Act and the Rules
and Regulations and the Exchange Act and the rules and regulations thereunder,
and did not at the time of filing, or will not when filed, include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading.
(R) The Company has the full power and authority (corporate and other)
to execute, deliver and perform this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as to rights to either indemnity
hereunder which may be limited by federal or state securities laws and except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
(S) The Company has adequate liability and other insurance policies
insuring it against the risks of loss arising out of or related to its
businesses, issued by insurers of recognized financial responsibility.
(T) All transactions during the Company's current fiscal year and last
three (3) full fiscal years between the Company and any person who is or was
during such period an officer, director or 5% or greater stockholder of the
Company have been (i) on terms which were fair to and in the best interest of
the Company, (ii) approved by a majority of the Company's directors who did not
have an interest in such transactions and (iii) disclosed in the Prospectus to
the extent required under the Act or the Rules and Regulations.
(U) Other than the over-allotment option granted to the Underwriters,
the Company has not taken and will not take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of shares of Common Stock to facilitate the sale or resale of the Shares.
(V) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act and the Rules and Regulations to be distributed
by the Company.
(W) The Common Stock and the Shares have been approved for quotation on
the Nasdaq SmallCap Market, subject only to official notification of issuance.
(X) The Company has not and will not incur any liability for any finder's
or broker's fee in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(Y) The Company is in compliance in all material respects with all
federal, state and local laws and regulations respecting the employment of its
employees and employment practices, terms and conditions of employment and wages
and hours relating thereto. There are no pending investigations involving the
Company by the United States Department of Labor or any other governmental
agency responsible for the enforcement of such federal, state or local laws and
regulations. There is no labor strike, dispute or work stoppage or lockout
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company, and no such labor strike, dispute, work stoppage or lockout has
occurred with respect to any employees of the Company, during the two years
prior to the date of this Agreement. No union organization activity is in
progress with respect to the employees of the Company, and no question
concerning representation exists with respect to such employees. No unfair labor
practice charge or complaint against the Company is pending or, to the knowledge
of the Company, threatened, before the National Labor Relations Board or similar
foreign authorities, and no such charge or complaint against the Company has
been filed during the past two years. There is no pending, or, to the knowledge
of the Company, threatened, grievance that, if adversely decided, would have a
material adverse effect on the business, results of operations, prospects or
financial condition of the Company. No charges with respect to or relating to
the Company are pending before the Equal Employment Opportunity Commission or
any similar state, local or foreign agency responsible for the prevention of
unlawful employment practices, and no such charges have been filed with respect
to the Company.
(Z) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document delivered in connection
with this Agreement to be delivered to the Representatives was or will be, when
made, inaccurate, untrue or incorrect.
(AA) The Company has obtained from each of its officers, directors and
one percent or greater shareholders their written agreement that, for a period
of 180 days from the date of the Prospectus, they will not, without the prior
written consent of the Representatives, sell, contract to sell, grant any option
for the sale of or otherwise dispose of, directly or indirectly, any shares of
Common Stock of the Company owned by them (or any securities convertible into or
exercisable for such shares of Common Stock) or file a registration statement
contemplating such sale or disposition.
(BB) The Company has not engaged in the handling, manufacture,
treatment, storage, use or generation of any Hazardous Materials (as defined
below) upon any real property owned or leased by it. The Company has not been a
party to any litigation in which it is alleged, nor has it at any time received
written notice of any violation, other allegation, or investigation of the
possibility, that any of them or any of their assets is or was subject to any
liability, clean-up or other obligation arising out of or relating to any
discharge, or the storage, handling or disposal, of any Hazardous Material
except such as could not have a material adverse effect on the business,
financial position, stockholders' equity or results of operations present or
prospective, of the Company. To the Company's knowledge there has been no
discharge at any time by the Company of any Hazardous Material that the Company
has reported or is or was obligated to report to any governmental agency the
occurrence of which may have a material adverse effect on the Company. For the
purposes of this Agreement, "Hazardous Material" means any substance: (i) the
presence of which requires investigation or remediation under any federal,
state, provincial, or local statute, regulation, ordinance, order, action,
policy or common law; (ii) that is or becomes defined as a "hazardous waste,"
"hazardous substance," pollutant or contaminant under any federal, state or
local statute, regulation, rule or ordinance or amendments thereto including,
without limitation the Comprehensive Environmental Response Compensation and
Liability Act (42 U.S.C. 9601 et seq.) and/or the Resource Conservation and
Recovery Act (42 U.S.C. section 6901 et seq.); (iii) that is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous and is or becomes regulated by any governmental authority,
agency, department, commission, board, agency or instrumentality of the United
States or of any state or any political subdivision thereof or any similar
Polish political entity; or (iv) which contains polychlorinated biphenyls
(PCBs), asbestos, urea formaldehyde foam insulation or radon gas.
(CC) None of the Company, or any officer or director purporting to act
on behalf of the Company has during the past five years (i) made any
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law; (ii) made any payment to any
Federal, state, local or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law; (iii) made any payment outside the
ordinary course of business to any purchasing or selling agent or person charged
with similar duties of any entity to which the Company, sells (or has in the
past sold) or from which the Company, buys (or has in the past bought) products
for the purpose of influencing such agent or person to buy products from or sell
products to the Company; or (iv) engaged in any transaction, maintained any bank
account or used any corporate funds except for transactions, bank accounts and
funds which have been and are reflected in the normally maintained books and
records of the Company.
(DD) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is (or was) taken with respect to
any differences.
(EE) The Company is not required to register as a "broker" or "dealer" in
accordance with the provisions of the Exchange Act or the rules and regulations
promulgated thereunder.
(FF) The Company has complied with all of the requirements and filed
the required forms, if any, as specified in Florida Statutes Section 517.075.
(GG) The Company is in compliance with the Foreign Corrupt Trade Practices
Act.
2. REPRESENTATIONS AND WARRANTIES OF SELLING STOCKHOLDER.
The Selling Stockholder represents and warrants to each Underwriter (a)
that the Selling Stockholder now has valid marketable title to such number of
shares of the Common Stock as are to be sold by the Selling Stockholder pursuant
to this Agreement (the "Stockholder Shares"), and on each Closing Date on which
the Selling Stockholder will sell Common Stock will have valid and marketable
title to the Stockholder Shares free and clear of any security interests,
claims, liens, equities and other encumbrances, (b) that the Stockholder Shares,
when delivered, will have been duly authorized and will be validly issued, fully
paid and nonassessable, (c) that the Selling Stockholder now has, and on each
Closing Date on which such Selling Stockholder will sell Common Stock, will
have, the legal right and power, and all consents, approvals and authorizations
required by law, to enter into this Agreement and to sell, transfer and deliver
the Stockholder Shares in the manner provided in this Agreement and that no such
action will contravene any provision of applicable law or, if Selling
Stockholder is a partnership, the partnership agreement or any other agreement
or other instrument binding upon the Selling Stockholder, (d) that all
information furnished in writing by or on behalf of such Selling Stockholder
expressly for use in the Registration Statement and Prospectus is, and on each
Closing Date will be, true, correct and complete, and does not, and on each
Closing Date will not, contain any untrue statement of a material fact or omit
to state any material fact necessary to make such information not misleading,
(e) that this Agreement has been duly and validly authorized, executed and
delivered by the Selling Stockholder and constitutes a legal, valid and binding
agreement of the Selling Stockholder, enforceable against it in accordance with
its terms, and (f) that all transactions between the Company and the Selling
Stockholder have been (i) on terms which were fair to and in the best interest
of the Company, (ii) approved by a majority of the Company's directors who did
not have an interest in such transaction and (iii) disclosed in the Prospectus
to the extent required under the Act or the Rules and Regulations.
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(A) Subject to the terms and conditions and upon the basis of the
representations, warranties and covenants herein set forth, the Company agrees
to issue and sell to the Underwriters, and each Underwriter agrees, severally
and not jointly, to purchase at a price of $[________] per Share, the number of
Company Firm Shares set forth opposite such Underwriter's name in Schedule A
hereto, and the Selling Stockholder hereby agrees to sell to the Underwriters
and each Underwriter agrees, severally and not jointly, to purchase at a price
of $[________] per Share, the number of Stockholder Firm Shares set forth
opposite the Selling Stockholder's name in Schedule B hereto (in proportion to
the number of Firm Shares set forth opposite such Underwriter's name in Schedule
A hereto), subject to adjustment in accordance with the terms hereof, except
that the respective purchase obligations of each Underwriter shall be adjusted
so that no Underwriter shall be obligated to purchase fractional shares. The
Underwriters agree to offer the Firm Shares to the public as set forth in the
Prospectus.
(B) The Company and the Selling Stockholder hereby grant to the
Underwriters options to purchase from the Company, solely for the purpose of
covering over-allotments in the sale of Firm Shares, all or any portion of the
Option Shares for a period ending thirty (30) days after the date hereof (the
"Option Period") at the purchase price per Share set forth above in Section
3(a). Option Shares shall be purchased from the Company, severally and not
jointly, for the account of each Underwriter as nearly as practicable in
proportion to the number of Firm Shares set forth opposite such Underwriter's
name in Schedule A hereto, except that the respective purchase obligations of
each Underwriter shall be adjusted by the Representatives so that no Underwriter
shall be obligated to purchase fractional Option Shares.
4. DELIVERY OF AND PAYMENT FOR SHARES.
(A) Delivery of certificates for the Firm Shares and certificates for
the Option Shares, if the option to purchase the same is exercised on or before
the third Business Day (as defined below) prior to the Closing Date, to be
purchased by the Underwriters from the Company and the Selling Stockholder and
payments therefor shall be made at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP,
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 (or such other place
as mutually may be agreed upon), at 9:00 a.m. Eastern Time on the third business
day following the date of this Agreement (or the fourth business day if
permitted by Rule 15c6-1(c) promulgated under the Exchange Act), or at such time
on such other date, not later than 10 business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representatives (the
"Closing Date").
(B) The option to purchase Option Shares granted in Section 3 hereof,
may be exercised during the Option Period by delivery of written notice to the
Company and the Selling Stockholder from the Representatives. Such notice shall
set forth the aggregate number of Option Shares as to which the option is being
exercised and the time and date, not earlier than either the Closing Date or the
second Business Day after the date on which the option shall have been exercised
or later than the third Business Day after the date of such exercise, as
determined by the Representatives, when the Option Shares are to be delivered
(the "Option Closing Date"). The Option Closing Date may occur after the
expiration of the Option Period provided that the notice of the exercise of the
option to purchase the Option Shares is delivered during the Option Period.
(C) Delivery and payment for such Option Shares is to be at the offices set
forth above for delivery and payment of the Firm Shares. (The Closing Date and
the Option Closing Date are herein individually referred to as a "Closing Date"
and collectively referred to as the "Closing Dates".)
(D) Delivery of certificates for the Shares shall be made by or on
behalf of the Company and the Selling Stockholder to the Representatives, for
the respective accounts of the Underwriters, with any transfer taxes payable in
connection with the transfer of the Shares to the Underwriters duly paid,
against payment by the Representatives, for the several accounts of the
Underwriters, of the purchase price therefor by certified or bank cashier's
check payable to the order of the Company and each Selling Stockholder, as
applicable in next day funds. The certificates for the Shares shall be
registered in such names and denominations as the Representatives shall have
requested at least two (2) full Business Days prior to the applicable Closing
Date, and shall be made available for checking and packaging at the offices of
or other location designated by the Representatives at least one (1) full
Business Day prior to such Closing Date. 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 each Underwriter.
(E) The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Shares by the Company to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
(F) In consideration of services provided by the Representatives, the
Company hereby grants to the Representatives certain warrants (the
"Representatives' Warrants"), as set forth in the form of Warrant Agreement
attached to this Agreement as Exhibit 1-A and 1-B hereto (the "Warrant
Agreements"), to purchase an aggregate number of shares of Common Stock equal to
8 1/3% of the total number of Shares purchased hereunder (including the Option
Shares). The Representatives' Warrants will be exercisable beginning one year
from the effective date of the Registration Statement and continuing for 24
months thereafter at an exercise price per share equal to [Offering Price *
120%.]
5. OFFERING BY UNDERWRITERS.
It is understood that the several Underwriters intend to make a public
offering of the Firm Shares as soon as you deem it advisable to do so. The Firm
Shares are to be initially offered to the public at the initial public offering
price set forth in the Prospectus; provided, however, that you may from time to
time increase or decrease the public offering price prior to the Closing Date.
To the extent, if at all, that any Option Shares are purchased pursuant to
Section 3 hereof, the Underwriters will offer them to the public on the
foregoing terms.
6. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each Underwriter that:
(A) The Company shall use its best efforts to cause the Registration
Statement and any post-effective amendment subsequently filed to become
effective promptly or, if the procedure in Rule 430A under the Rules and
Regulations is followed, comply with the provisions of and make all requisite
filings with the Commission pursuant to such Rule and to notify you promptly (in
writing, if requested) of all such filings. The Company shall prepare and file
with the Commission, promptly upon your request, any amendments of or
supplements to the Registration Statement or Prospectus which, in your opinion,
may be necessary or advisable in connection with the distribution of the Shares;
and the Company may not file any amendment of or supplement to the Registration
Statement or the Prospectus, that is not approved by you after reasonable notice
thereof.
(B) The Company will advise you promptly, and, if requested by you,
will confirm such advice in writing, (i) when the Registration Statement shall
have become effective and when any amendment thereto shall have become effective
and when any amendment of or any supplement to the Prospectus shall be filed
with the Commission; (ii) of any request of the Commission for additional
information or for any amendment of or supplement to the Registration Statement
or the Prospectus; (iii) of the issuance by the Commission or any other
governmental body of any order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any proceedings
for such purpose; (iv) of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or of the institution of any proceedings
for such purpose; (v) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement, any Preliminary Prospectus or the
Prospectus; or (vi) of the happening of any event which in the judgment of the
Company makes any material statement in the Registration Statement or Prospectus
untrue or which requires the making of any changes on the Registration Statement
or Prospectus in order to make the statements therein not misleading. The
Company will use its best efforts to prevent the issuance of any such order
preventing or suspending the use of the Prospectus, and, if such an order is
issued, to obtain as soon as possible the lifting thereof.
(C) The Company will cooperate with the Representatives in endeavoring
to qualify the Shares for sale under the securities laws of such jurisdictions
as the Representatives may reasonably have designated and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose. The Company will, from time to time,
prepare and file such statements, reports and other documents as are or may be
required to continue such qualifications in effect for so long as is required
under the laws of such jurisdictions for such offering and sale.
(D) The Company will furnish the Underwriters with as many copies of
any Preliminary Prospectus as the Underwriters may reasonably request and,
during the period when delivery of a prospectus is required under the Act, the
Company will furnish the Underwriters with as many copies of the Prospectus in
final form, or as thereafter amended or supplemented, as the Representatives
may, from time to time, request. In addition, the Company will deliver to each
of the Representatives, at or before the Closing Date and without charge, a
signed copy of the Registration Statement (including the exhibits thereto) and
all amendments and supplements thereto.
(E) Within the time during which a prospectus relating to the Shares is
required to be delivered under the Act, the Company shall comply with all
requirements imposed upon it by the Act and the Rules and Regulations, as from
time to time in force, so far as is necessary to permit the continuance of sales
of or dealings in the Shares as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Prospectus to comply with the
Act and the Rules and Regulations, the Company shall promptly notify you and
shall amend the Registration Statement or supplement the Prospectus (at the
expense of the Company) so as to correct such statement or omission or effect
such compliance.
(F) The Company will make generally available to its security holders,
in the manner contemplated by Rule 158(b) under the Act, and will deliver to the
Representatives, as soon as it is practicable to do so, but in any event not
later than 45 days after the end of its fiscal quarter in which the first
anniversary date of the effective date of the Registration Statement occurs (or
not later than 90 days after the end of such fiscal quarter if such fiscal
quarter is the last fiscal quarter of the fiscal year), an earnings statement
satisfying the requirements of Section 11(a) of the Act and covering a period of
at least twelve (12) consecutive months beginning after the effective date of
the Registration Statement, and will advise you in writing when such statement
has been so made available.
(G) The Company will apply the net proceeds from the sale of the Shares
as set forth under the caption "Use of Proceeds" in the Prospectus and shall
file such reports with the Commission with respect to the sale of the Shares and
the application of the proceeds therefrom as may be required in accordance with
Rule 463 under the Act.
(H) During a period of five (5) years from the date hereof, the Company
shall furnish to each Representative and each other Underwriter who may so
request copies of all reports or other communications furnished to stockholders
and copies of any reports or financial statements furnished to or filed with the
Commission or any national securities exchange or quotation system on which any
class of securities of the Company is listed.
(I) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(J) The Company will not at any time, directly or indirectly, take any
action designed, or which might reasonably be expected, to cause or result in,
or which will constitute stabilization of the price of the shares of Common
Stock to facilitate the sale or resale of any of the Shares.
(K) The Company authorizes the Underwriters to use the Prospectus as from
time to time amended or supplemented in connection with the offering and sale of
the Shares.
(L) The Company shall cause the Shares to be listed on the Nasdaq SmallCap
Market and shall use its best efforts to maintain the Common Stock on the Nasdaq
SmallCap Market (or on a national securities exchange) for a period of five
years after the effective date of the Registration Statement.
7. COSTS AND EXPENSES.
The Selling Stockholder agrees to pay or cause to be paid all taxes, if
any, on the transfer and sale of the Stockholder Shares being sold by the
Selling Stockholder and the fees and expenses of counsel and accountants
retained by the Selling Stockholder, all to the extent the Company has not
agreed by separate instrument with the Selling Stockholder to pay such fees and
expenses of the Selling Stockholder. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective or is
terminated, the Company agrees to pay or reimburse if paid by the
Representatives, all costs, expenses and fees incident to the performance of the
obligations of the Company and the Selling Stockholder under this Agreement
except as set forth above, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company and the Selling
Stockholder; the fees and disbursements of counsel for the Company and the
Selling Stockholder; all expenses incident to the issuance and delivery of the
Shares (including all printing and engraving costs); all fees and expenses of
the registrar and transfer agent of the Common Stock; the cost of preparation,
printing and filing of the Registration Statement, each Preliminary Prospectus
and the Prospectus (including the financial statements therein and all exhibits
thereto) and any amendments and supplements thereto and the printing, mailing
and delivery to the Underwriters and dealers of copies thereof and of this
Agreement, the Agreement Among Underwriters, any Selected Dealers Agreement, any
other underwriting document, the Blue Sky memorandum and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees incident
to securing any required review by the NASD of the terms of the sale of the
Shares; filing fees and listing fees, if any, transfer taxes and the expenses
(including the fees and disbursements of counsel for the Underwriters up to
$20,000) incurred in connection with the qualification of the Shares under state
securities or Blue Sky laws; the Company's slide presentation and travel in
connection with informational meetings for the brokerage community and
institutional and retail investors; and all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Stockholder
hereunder which are not otherwise specifically provided for in this Section 7.
In addition, the Company shall pay Xxxxxxx, Xxxxxx Inc. ("Xxxxxxx") an aggregate
of $75,000 to reimburse Xxxxxxx for expenses actually incurred by it in
connection with the Offering. Xxxxxxx acknowledges receipt of $50,000 of such
funds which the parties agree shall be non-refundable whether or not the
transactions contemplated hereby are consummated. The remaining $25,000 shall be
due and payable on the Closing Date with respect to the Firm Shares. If the sale
of the Shares provided for herein is not consummated by reason of any failure,
refusal or inability on the part of either the Company or the Selling
Stockholder to perform any agreement on their respective parts to be performed
or because any other condition of the Underwriters' obligations hereunder is not
fulfilled, the Company shall reimburse the several Underwriters for all
reasonable out-of-pocket expenses and disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Shares or otherwise in
contemplation of performing their obligations hereunder.
8. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters hereunder are subject to
the accuracy as of the date hereof and each Closing Date (as if made at such
Closing Date) of the representations and warranties of the Company and the
Selling Stockholder contained herein, and to the performance and fulfillment by
the Company and the Selling Stockholder of their covenants, obligations and
conditions hereunder, and to the following additional conditions:
(A) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made within the time
required by the Act and the Rules and Regulations; no order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto or the qualification or registration of the Shares under the securities
or Blue Sky laws of any jurisdiction, shall have been issued and no proceedings
for such purposes shall have been initiated or threatened, or, to the knowledge
of the Company, shall be contemplated and all requests for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been disclosed to the Representatives and complied with to
its satisfaction and the satisfaction of the Commission; and neither the
Registration Statement or Prospectus nor any amendment or supplement thereto
shall have been filed to which counsel to the Underwriters shall have reasonably
objected or have not given their consent.
(B) No Underwriter shall have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact which, in the opinion of counsel to the Underwriter, is
material, or required to be stated therein or is necessary to make the
statements therein not misleading.
(C) Subsequent to the respective dates as of which information is given
in the Registration Statement and Prospectus, there shall not have been any
change in, or any development which affects the capital stock of the Company or
the business condition (financial or otherwise), results of operations, assets,
properties or prospects of the Company that, in your judgment, makes it
impractical or inadvisable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(D) You shall have received on each Closing Date the opinion of Xxxx Xxxxx
& Xxxxxx, P.C., counsel for the Company, dated as of such Closing Date addressed
to the Underwriters, in form and substance satisfactory to you and counsel for
the Underwriters to the effect that:
(I) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its organization, with full corporate power and
authority to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in
which the character of the business conducted by it or the location of
the properties owned or leased by it makes such qualification
necessary, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company;
(II) The Company has all requisite corporate power and
authority and, to such counsel's knowledge, all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits required to own, lease and license its assets and properties
and to conduct its business as now being conducted and as described in
the Registration Statement and the Prospectus. The Company has all
requisite corporate power and authority and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits to enter into, deliver and perform this Agreement, and, to
issue and sell the Shares and the Representatives' Warrants, other than
those authorizations, approvals, consents, orders licenses,
certificates and permits required under state and foreign securities
laws. To such counsel's knowledge, the Company does not control,
directly or indirectly, any corporation, partnership, joint venture,
association or other business organization.
(III) The Company had authorized, issued and outstanding
capital stock as of March 31, 1997 as described under the caption
"Capitalization" in the Prospectus and the Common Stock, the
Representatives' Warrants, and the rights issued under the shareholder
rights plan conform to the descriptions thereof contained under the
caption "Description of Capital Stock" in the Prospectus. The
outstanding shares of the Company's capital stock have been, and the
Shares, the Representatives' Warrants, the Common Stock underlying the
Representatives' Warrants (the "Warrant Shares") and the shares of
Common Stock to be issued upon the exercise of the warrants and options
described in the Prospectus, upon issuance, delivery and payment
therefor in the manner herein described, will be, duly authorized,
validly issued, fully paid and non-assessable. The certificates for the
Shares, the Representatives' Warrants and the Warrant Shares, are in
due and proper form under the corporations law of the State of the
Company's organization. There are no preemptive or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of the Company's capital stock pursuant to the
Company's certificate of incorporation, bylaws, other governing
documents or any agreements or other instruments to which the Company
is a party or by which any of them is bound, other than certain rights
pursuant to stock purchase agreements entered into between the Company
and certain of its current stockholders that have been waived or
satisfied in connection with the offering or sale of the Shares
contemplated by this Agreement; and to such counsel's knowledge, after
conducting a reasonable investigation, neither the filing of the
Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, which have not
been waived or satisfied, for or relating to the registration of any
shares of the Company's capital stock. All corporate action required to
be taken on the part of the Company for the authorization, issuance and
sale of the Shares, the Representatives' Warrants and the Warrant
Shares by the Company has been duly and validly taken;
(IV) The Registration Statement and all post-effective
amendments thereto have become effective under the Act and, to such
counsel's knowledge, after conducting a reasonable investigation, such
counsel has reasonable grounds to believe and does believe that no stop
order proceedings with respect thereto have been instituted or are
pending before or threatened by the Commission and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations have
been made;
(V) The Registration Statement and the Prospectus and any
amendment or supplement thereto, as of their respective effective dates
comply in all material respects with the requirements of the Act and
the Rules and Regulations (except that counsel need express no opinion
on the financial statements or other financial data) and such counsel,
after conducting a reasonable investigation, have no reason to believe
that the Registration Statement or any amendment thereto at the time it
became effective contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that, on
each Closing Date, the Prospectus or any amendment or supplement
thereto contains any untrue statement of a material fact or omits 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;
(VI) The Company is not, or with the giving of notice or lapse
of time or both will not, in violation of or in default under, nor will
the execution or delivery hereof or consummation of the transactions
contemplated hereby result in a violation of, or constitute a default
under, the certificate of incorporation, bylaws or other governing
documents of the Company, or, to the knowledge of such counsel, any
agreement, indenture or other instrument to which the Company is a
party or by which it is bound, or to which any of their properties are
subject, nor will the performance by the Company of its obligations
hereunder violate any law, rule or regulation of any governmental
agency or body having jurisdiction over the Company, or its properties,
or result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or assets of the Company. Except for
permits and similar authorizations required under the Act, the NASD,
and the securities or Blue Sky laws of certain jurisdictions and for
such permits and authorizations which have been obtained, no consent,
approval, authorization or order of any court, governmental agency or
body or financial institution is required in connection with execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement;
(VII) The descriptions of matters in the Registration
Statement and Prospectus under the headings "Description of Capital
Stock" and "Shares Eligible for Future Sale" are accurate and fairly
present the information required to be shown; and such counsel, after
conducting a reasonable investigation, do not know of or believe that
any contracts or documents of a character required to be summarized or
described therein or to be filed as exhibits thereto which are not so
summarized, described or filed, nor after conducting a reasonable
investigation do such counsel know of or believe that there is any
pending or threatened litigation or any governmental proceeding,
statute or regulation, disclosed by the Act, the Exchange Act and the
respective rules and regulations thereunder. All descriptions in the
Prospectus of statutes, regulations, legal or governmental proceedings,
contracts and other documents, insofar as such statements constitute a
summary of the legal matters, documents or proceeding referred to
therein are accurate and fairly present the information required to be
shown; and such counsel, after conducting a reasonable investigation,
do not know of or believe that any contracts or documents of a
character required to be summarized or described therein or to be filed
as exhibits thereto which are not so summarized, described or filed,
nor after conducting a reasonable investigation do such counsel know of
or believe that there is any pending or threatened litigation or any
governmental proceeding, statute or regulation required to be described
in the Prospectus which is not so described;
(VIII) Each of this Agreement, the Warrant Agreements and the
Representatives' Warrants have been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
agreement of the Company and is enforceable against the Company in
accordance with its terms, except as the right to indemnity under this
Agreement may be limited by Federal or state securities laws and except
as (i) may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and (ii) is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(IX) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended;
(X) To such counsel's knowledge, the Company is in
compliance with the Foreign Corrupt Trade Practices Act; and
(XI) To such counsel's knowledge after conducting a reasonable
investigation, there are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the Securities
Act, except as waived or disclosed in the Registration Statement and
the Prospectus.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of officers of the Company and
public officials and on the opinions of other counsel satisfactory to
the Underwriters as to matters which are governed by laws other than
the Federal laws of the United States and the Delaware General
Corporation Law; provided that such counsel shall state that they
believe that they and the Underwriters are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished upon request to the Underwriters and counsel for the
Underwriters.
(E) You shall have received on the Closing Date an opinion of
[__________________], counsel for the Selling Stockholder, dated the Closing
Date, to the effect that:
(I) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder and constitutes a
legal, valid and binding agreement of Selling Stockholder and is
enforceable against the Selling Stockholder in accordance with its
terms, except as the right to indemnity under this Agreement may be
limited by Federal or state securities laws and except as (i) may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and (ii) is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);;
(II) The execution, delivery and performance of this Agreement
by the Selling Stockholder will not contravene, any provision of
applicable law, (ii) the certificates of incorporation, bylaws or other
governing documents of the Selling Stockholder that is a corporation,
or the articles of partnership of the Selling Stockholder that is a
limited partnership, or the trust agreement of the Selling Stockholder
that is a trust or (iii) any agreement or other instrument known to
such counsel to be binding upon the Selling Stockholder, no consent,
approval or authorization of any governmental body is required for the
performance of this Agreement by the Selling Stockholder, except such
as are specified and have been obtained and except such as may be
required by federal securities laws and state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(III) The Selling Stockholder has valid marketable title to
the Shares to be sold by the Selling Stockholder and has the legal
right and power, and all authorization and approval required by law, to
enter into this Agreement and to sell, transfer and deliver the Shares
to be sold by the Selling Stockholder;
(IV) The Custody Agreement signed by the Selling Stockholder
and the Custodian relating to the deposit of the Shares to be sold by
the Selling Stockholder, and the Power-of-Attorney appointing certain
individuals as the Selling Stockholder's attorneys-in-fact to the
extent set forth therein, relating to the transactions contemplated
hereby and by the Registration Statement, have been duly authorized,
executed and delivered by the Selling Stockholder and are valid and
binding agreements of the Selling Stockholder; and
(V) Delivery of the certificates for the Shares to be sold by
the Selling Stockholder pursuant to this Agreement to each of the
several Underwriters (who such counsel may assume have purchased the
Shares in good faith and without notice of any adverse claim) will pass
to each such Underwriter marketable title to such Shares free and clear
of any security interests, claims, liens, equities and other
encumbrances.
With respect to all of paragraph (e) above, counsel may rely, to the
extent such counsel deems appropriate, as to matters of fact upon the
representations of the Selling Stockholder contained herein and in the
aforementioned Custody Agreements and Powers of Attorney and in other documents
and instruments and opinions of local counsel; provided however, that copies of
such Custody Agreements and Powers of Attorney and of such other documents and
instruments shall be delivered to the Underwriters and shall be reasonably
satisfactory to your counsel and, in the case of local counsel, such local
counsel shall be reasonably satisfactory to your counsel, (a) a copy of each
opinion from local counsel so relied upon shall be delivered to you and shall be
reasonably satisfactory to your counsel and (b) counsel for each Selling
Stockholder shall state that they have no reason to believe that they are not
justified in relying thereon. With respect to all of paragraph (e) above,
counsel may assume the legal capacity and the absence of any legal disability to
contract as to each Selling Stockholder that is a natural person. The opinions
as to all of paragraph (e) above shall state that such opinions may be relied
upon by the Custodian and the attorneys-in-fact appointed under the Powers of
Attorney executed by the Selling Stockholder.
(F) You shall have received on the date of this Agreement and also on
each Closing Date, signed letters from Xxxxx Xxxxxxx LLP and Amper, Politziner &
Xxxxxx, in form and substance satisfactory to you and your counsel regarding the
financial information contained in the Prospectus, the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Blue Sky Application (as defined below).
(G) You shall have received on each Closing Date, a certificate or
certificates signed by the Chairman of the Board, Chief Executive Officer and
the Chief Financial Officer of the Company, in form and substance satisfactory
to you, to the effect that:
(I) The Registration Statement has become effective under the Act, no order
suspending the effectiveness of the Registration Statement has been issued, and
no proceedings for that purpose have been initiated or threatened or are, to
their knowledge, contemplated by the Commission;
(II) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of such Closing
Date, and the Company has complied with all the covenants and
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to such Closing Date;
(III) Any and all filings required by Rule 424 and Rule 430A
of the Rules and Regulations have been made;
(IV) The signers of said certificate and each director of the
Company have carefully examined the Registration Statement and the
Prospectus, and any amendments or supplements thereto, and such
documents contain all statements and information required to be
included therein, and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
(V) Since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set forth; and
(VI) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition (financial or
otherwise), results of operations, properties or prospects of the Company from
that set forth in the Registration Statement.
(H) Since the effective date of the Registration Statement, the Company
shall not have sustained any loss by fire, flood, accident or other calamity, or
shall have become a party to or the subject of any litigation, which is material
to the Company, nor shall there have been a material adverse change in the
general affairs, key personnel, or net worth of the Company whether or not
arising in the ordinary course of business, which loss, litigation or change, in
your judgment, shall make it impractical or inadvisable to proceed with the
marketing of the Shares.
(I) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may request and each such qualification shall be in effect and
not subject to any stop order or other proceeding on each Closing Date.
(J) Prior to the Closing Date the Shares shall have been duly authorized
for listing on the Nasdaq SmallCap Market, subject only to official notice of
issuance.
(K) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at each Closing Date of any statement in the Registration
Statement, the Prospectus as to the accuracy at each Closing Date of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Representatives.
(L) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Underwriters.
(M) The Company will have obtained from each of its officers, directors
and one percent or greater shareholders of record their written agreement that,
for a period of 180 days from the date of the Prospectus, that they will not,
without the prior written consent of the Representatives, sell, contract to
sell, grant any option for the sale of or otherwise dispose of, directly or
indirectly, any shares of Common Stock of the Company owned by them (or any
securities convertible into or exercisable for such shares of Common Stock) or
file a registration statement contemplating such sale or disposition.
The several obligations of the Underwriters to purchase Option Shares
hereunder are further subject to the delivery to you on the Option Closing Date
of such documents comparable to the foregoing as you may reasonably request.
9. INDEMNIFICATION.
(A) The Company will indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning set forth
in the Act (i) against any losses, claims, damages or liabilities to which such
Underwriter or such controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (A) any untrue
statement or alleged untrue statement made by the Company in Section 1 hereof,
(B) any untrue statement or alleged untrue statement of any material fact
contained (x) in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (y) in any Blue Sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Shares under
the securities or Blue Sky laws thereof (any such application, document or
information being hereinafter called a "Blue Sky Application"), or (C) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or
in any Blue Sky Application, a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any, governmental agency or body, commenced or
threatened, or of any claim, in each case arising out of or based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
if such settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including, subject to
Section 9(d) hereof, the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim, in each case arising out
of or based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above, and will reimburse promptly each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon an untrue statement or alleged untrue statement, or omission or
alleged omission, made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company through you by or on behalf of any
Underwriter specifically for use in the preparation of the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or in any Blue Sky Application; provided further, however,
that the indemnity agreement provided in this Section with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, charges, liabilities,
expenses or litigation purchased Shares (or to the benefit of any person
controlling such Underwriter), if a copy of the Prospectus correcting such
untrue statement or omission has not been sent or given to such person within
the time required by the Act and the rules and regulations promulgated
thereunder, unless such failure is the result of noncompliance by the Company
with the terms of this Agreement. This indemnity agreement will be in addition
to any liability which the Company may otherwise have, including but not limited
to the obligations to indemnify the Underwriters pursuant to the Engagement
Letter dated April 1, 1997.
(B) Each Underwriter severally, but not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, each person, if any, who controls the Company
within the meaning set forth in the Act and the Selling Stockholder, (i) against
any losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained (A) in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (B) in any Blue Sky Application, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, (ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any,
governmental agency or body, commenced or threatened, or of any claim, in each
case arising out of or based upon any such untrue statement or omission, if such
settlement is effected with the written consent of the Underwriters; and (iii)
against any and all expense whatsoever, as incurred (including, subject to
Section 9(d) hereof, the fees and disbursements of counsel chosen by the
indemnified parties), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim, in each case
arising out of or based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense is not
paid under (i) or (ii) above, and will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damages, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case as provided in subsection (i), (ii) and
(iii) of this Section to the extent, but only to the extent, that such loss,
liability, claim, damage or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission that has
been made in the Registration Statement, Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto or in any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of such Underwriter
specifically for use in the preparation thereof or from the failure of any
Underwriter within the time required by the Act and the Rules and Regulations to
send or deliver a copy of the Prospectus (or the Prospectus as amended or
supplemented) to the person asserting any such losses, claims, charges,
liabilities or litigation, unless such failure is the result of noncompliance by
the Company with the terms of this Agreement. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(C) Each Selling Stockholder, severally and not jointly, will indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning set forth in the Act (i) against any losses,
claims, damages or liabilities to which such Underwriter or such controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (A) any untrue statement or alleged untrue
statement made by such Selling Stockholder in Section 2 hereof, (B) any untrue
statement or alleged untrue statement of any material fact contained (x) in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (y) in any Blue Sky application or other
document executed by such Selling Stockholder specifically for that purpose or
based upon written information furnished by such Selling Stockholder filed in
any state or other jurisdiction in order to qualify any or all of the Shares
under the securities or Blue Sky laws thereof or (C) the omission or alleged
omission to state in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or in any Blue Sky
Application, a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any, governmental agency or body, commenced or threatened, or of
any claim, in each case arising out of or based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of such Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred (including, subject to
Section 9(d) hereof, the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim, in each case arising out
of or based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above, and will reimburse promptly each Underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that any Selling Stockholder will be liable in any such case
to the extent, but only to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission, made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder specifically for use in the preparation of
the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or in any Blue Sky Application; provided
further, however, that the indemnity agreement provided in this Section with
respect to any Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, charges, liabilities,
expenses or litigation purchased Shares (or to the benefit of any person
controlling such Underwriter), if a copy of an amendment or supplement to the
Prospectus correcting such untrue statement or omission has not been sent or
given to such person within the time required by the Act and the rules and
regulations promulgated thereunder, unless such failure is the result of
noncompliance by such Selling Stockholder or the Company with the terms of this
Agreement. This indemnity agreement will be in addition to any liability which
the Selling Stockholder may otherwise have.
(D) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity or
contribution may be sought pursuant to this Section 9, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 9(a), (b) or (c) or contribution
provided for in Section 9(e) shall be available to any party who shall fail to
give notice as provided in this Section 9(d) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party otherwise than on
account of the provisions of Section 9(a), (b), (c) or (d). In case any such
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
and shall pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred the reasonable fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to material actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the fees and expenses of more than one separate firm for all such indemnified
parties. Such firm shall be designated in writing by you and shall be reasonably
satisfactory to the Company in the case of parties indemnified pursuant to
Section 9(a) and 9(c) and shall be designated by the Company and shall be
reasonably satisfactory to you in the case of parties indemnified pursuant to
Section 9(b). The indemnifying party 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 from and against any loss or
liability by reason of such settlement or judgment.
(E) If the indemnification provided for in this Section 9 is legally
unavailable to hold harmless an indemnified party under Section 9(a), (b) or (c)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company, the Selling Stockholder and the
Underwriters from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Stockholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Selling Stockholder, or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9(e). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereto) referred to above in
this Section 9(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriter's obligations in this Section 9(e) to
contribute are several in proportion to the respective numbers of Firm Shares
set forth opposite their names in Schedule A hereto (or such number of Firm
Shares increased as set forth in Section 10 hereof).
(F) In any proceeding relating to the Registration Statement, the
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto or
any Blue Sky Application, the Company and the Underwriters, and each other party
against whom contribution may be sought under this Section 9, hereby consent to
the exclusive jurisdiction and venue of any court situated in the State of
Colorado, City of Denver, and all such parties agree that process issuing from
such court may be served upon him or it by any other contributing party and
consents to the service of such process and agrees that any other contributing
party may join him or it as an additional defendant in any such proceeding in
which such other contributing party is a party.
10. SUBSTITUTION OF UNDERWRITERS.
If any Underwriter shall fail to purchase the Shares set forth opposite
its name in Schedule A hereto, and such failure to purchase shall constitute a
default by such Underwriter in its obligation to purchase the number of Shares
which it has agreed to purchase under this Agreement, the non-defaulting
Underwriters shall have the right and shall be obligated to purchase (in the
respective proportions which the number of Shares set forth opposite the name of
each non-defaulting Underwriter in Schedule A hereto bears to the total number
of Shares set forth opposite the names of all the non-defaulting Underwriters in
Schedule A hereto) the Shares which the defaulting Underwriter agreed but failed
to purchase; except that the non-defaulting Underwriters shall not be obligated
to purchase any of the Shares if the total number of Shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase exceed 10% of the
total number of Shares, and any non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of Shares set forth its name
in Schedule A hereto plus the applicable Option Shares, if any, purchasable by
it pursuant to the terms of Section 2; provided further, that if the foregoing
maximums are exceeded, the non-defaulting Underwriters, and any other
underwriters satisfactory to you who so agree, shall have the right, but shall
not be obligated, to purchase (in such proportions as may be agreed upon among
them) all the Shares. If the non-defaulting Underwriters or the other
underwriters satisfactory to you do not elect to purchase the Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company except for the payment of expenses to be borne by the
Company and the Underwriters as provided in Section 7 and the indemnity and
contribution agreement of the Company and the Underwriters contained in Section
9 hereof.
If any of the Underwriters shall fail to purchase the entire number of
shares set forth opposite its name and such failure to purchase shall not
constitute a default by such Underwriter in the performance of its obligations
under this Agreement, the remaining Underwriters shall have the right, but shall
not be obligated, to take up and pay for (in such proportions as may be agreed
upon among them) the entire amount (but not less than all) of the Shares which
all withdrawing Underwriters agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have for damages caused by its default. If the other
underwriters satisfactory to you are obligated or agree to purchase the Shares
of a defaulting Underwriter, either you or the Company may postpone the Closing
Date for up to seven (7) full Business Days in order to effect any changes that
may be necessary in the Registration Statement or Prospectus or in any other
document or agreement, and to file promptly any amendment or any supplements to
the Registration Statement or the Prospectus which in you opinion may thereby be
made necessary.
11. NOTICES.
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered or sent by facsimile or telex as
follows: (a) if to the Company, at the office of the Company, 0000 Xxxxxxxx
Xxx., X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxx Xxxxxx III
(Facsimile:(000) 000-0000), with a copy to Xxxx Xxxxx & Xxxxxx, P.C., 000 Xxx
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxxx
Xxxxxx, Esq. (Facsimile: (000) 000-0000), (b) if to the Underwriters, to the
Underwriters at the offices of Xxxxxxx, Xxxxxx Inc., 0000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Finance Department
(Facsimile: (000) 000-0000) with a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxx, Esq. (Facsimile: (000) 000-0000), and (c) if to the Selling
Stockholder, to the address set forth on Exhibit B, with a copy to
_______________________________.
12. EFFECTIVE DATE AND TERMINATION.
This Agreement shall become effective at 6:30 p.m. Eastern Time, on the
date hereof. Until this Agreement is effective, it may be terminated by the
Company by giving written notice to the Representatives or by the
Representatives by giving written notice to the Company, except that the
provisions of Section 7 and 9 shall at all time be effective. This Agreement may
be terminated at any time on or prior to each Closing Date by the
Representatives by notice to the Company as follows:
(A) At any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in, or
any adverse development or discovery which materially affects the business,
condition (financial and otherwise), results of operations, properties or
prospects of the Company whether or not arising in the ordinary course of
business, (ii) trading in any of the equity securities of the Company shall have
been suspended by the Commission, by the exchange that lists the Shares, or by
the NASDAQ, (iii) any outbreak or escalation of hostilities or declaration of
war or national emergency after the date hereof or other national or
international calamity or crises if the effect of such outbreak, escalation,
declaration, emergency, calamity or crises would, in your judgment, make the
offering or delivery of the Shares impracticable or inadvisable, (iv) suspension
or material limitation of trading in securities on the New York Stock Exchange,
the American Stock Exchange, Nasdaq National Market, the Chicago Board of
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade
or limitation on prices for securities on any such exchange or quotation system,
(v) additional material governmental restrictions, not in force on the date of
this Agreement, shall have been imposed upon trading in securities generally by
any such exchange or quotation system or by order of the Commission or any court
or other governmental authority, (vi) declaration of a banking moratorium by
either federal or New York authorities or (vii) if there shall have been such a
material change in general economic, political or financial conditions or if the
effect of international conditions on the financial markets in the United States
shall be such as, in you judgment, makes it impracticable or inadvisable to
proceed with the delivery of the Shares; or
(B) As provided in Sections 8 and 10 of this Agreement.
If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party, except to the extent
provided in Sections 8 and 10 hereof. If this Agreement is terminated pursuant
to this Section, you shall notify the Company thereof promptly by telephone or
facsimile, confirmed by express mail.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
ELIVERY.
The indemnity and contribution agreements contained in Section 9 and
the representations, warranties and agreements of the Company and the Selling
Stockholder in Sections 1, 2, 5, 6 and 7 hereof shall survive the delivery of
the Shares to the Underwriters hereunder and shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any Underwriter or other indemnified
party.
14. INFORMATION FURNISHED BY UNDERWRITERS.
The statements set forth in the last paragraph of the cover page and
under the caption "Underwriting" in any Preliminary Prospectus and in the
Prospectus constitute the only written information furnished by or on behalf of
any Underwriter.
15. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Selling Stockholder and the Company and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to in Section 9, and no other person
will acquire or have any right or obligation hereunder. The term "successors and
assigns" shall not include any purchaser of any of the Shares merely by reason
of such purchase.
16. MARKET STAND-OFF.
Each Seller hereby agrees that, without your prior written consent, it
will not offer, sell, contract to sell or otherwise dispose of any shares of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for such Common Stock for a period of 180 days after the date of
the public offering of the Shares, other than the Shares to be sold hereunder.
However, the Company may issue options under existing option plans and shares of
Common Stock upon the exercise of existing options. The Company will not file
any registration statement with respect to any capital stock of the Company with
the Commission for a period of 180 days after the date of the public offering of
the Shares.
17. MISCELLANEOUS.
For purposes of this Agreement, "Business Day" means any day on which
the New York Stock Exchange, Inc. is open for trading and Subsidiary has the
meaning set forth in Rule 405 of the Rules and Regulations.
Except as otherwise provided herein, this Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all other agreements and understandings except that the
provisions of Paragraphs I(m) and (n) and II of the Engagement Letter dated
April 1, 1997 between the Company and the Representatives shall survive the
execution of this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to the choice of law or
conflicts of law principles thereof.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholder and the several Underwriters in accordance with its terms.
Very truly yours,
Securacom, Incorporated
By:
Its:
The Selling Stockholder named in Schedule B hereto:
By:
Attorney-in-Fact
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
XXXXXXX, XXXXXX INC.
XXXXX & XXXXXXXXXXXX, INC.
as Representatives of the Several
Underwriters names in Schedule A
hereto
XXXXXXX, XXXXXX INC.
By:
Its:
