3,100,000 Units
(each Unit consisting of one share of Common Stock, par
value $.01 per share and one redeemable warrant to purchase
one share of Common Stock)
IAT MULTIMEDIA, INC.
UNDERWRITING AGREEMENT
Royce Investment Group, Inc. , 1997
As Representative of the Several Underwriters
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
IAT Multimedia, Inc., a Delaware corporation ( "IAT" or the "Company"),
proposes to issue and sell to the underwriters named in Schedule A (the
"Underwriters") of this Underwriting Agreement (the "Agreement"), for whom you
are acting as representative (the "Representative"), an aggregate of 3,100,000
Units, each unit being hereinafter referred to as a "Unit" and consisting of one
share of Common Stock, par value $.01 per share, ("Shares") and one redeemable
warrant ("Warrants") to purchase one share of Common Stock at a price of $___ at
any time from the Separation Date (as defined in the Warrant Agreement dated the
date hereof among the Company, the Representative and American Stock Transfer &
Trust Company to __________, 2002. The Warrants are subject to redemption, in
certain instances commencing 15 months from the date of this Agreement. In
addition, IAT proposes to grant to the Underwriters (or, at its option, the
Representative, individually) the option referred to in Section 2(b) to purchase
all or any part of an aggregate of 465,000 additional Units. Unless the context
otherwise indicates, the term "Units" shall include the 465,000 additional Units
referred to above.
The aggregate of 3,100,000 Units to be sold by IAT, together with all or
any part of the 465,000 Units which the Underwriters have the option to
purchase, and the Shares and the Warrants comprising such Units, are herein
called the "Units." The Common Stock of IAT to be outstanding after giving
effect to the sale of the Shares is herein called the "Common Stock." The Shares
and Warrants included in the Units (including the Units which the Underwriters
have the option to purchase) are herein collectively called the "Securities."
You have advised IAT that you and the other Underwriters desire to
purchase, severally, the Units, and that you have been authorized by the
Underwriters to execute this agreement on their behalf. IAT confirms the
agreements made by it with respect to the purchase of the Units by the several
Underwriters on whose behalf you are signing this Agreement, as follows:
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriters that:
(a) A registration statement (File No. 333- ) on Form S-1 relating to
the public offering of the Units, including a form of prospectus subject to
completion, copies of which have heretofore been delivered to you, has been
prepared by IAT 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") thereunder, and has been filed with the Commission under the
Act and one or more amendments to such registration statement may have been
so filed. After the execution of this Agreement, IAT will file with the
Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if IAT relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Units that shall identify the
Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434, 430A
and 424(b) under the Act or (B) if IAT does not rely on Rule 434 under the
Act a prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in
such registration statement), with such changes or insertions as are
required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act and in the case of either clause (i)(A) or (i)(B) of this sentence, as
have been provided to and approved by the Representative prior to the
execution of this Agreement, or (ii) if such registration statement, as it
may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement,
including a form of prospectus, a copy of which amendment has been
furnished to and approved by the Representative prior to the execution of
this Agreement.
As used in this Agreement, the term "Registration Statement" means
such registration statement, as amended at the time when it was or is
declared effective, including all financial schedules and exhibits thereto
and including any information omitted therefrom pursuant to Rule 430A under
the Act and included in the Prospectus (as hereinafter defined); the term
"Preliminary Prospectus" means each prospectus subject to completion filed
with such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective); the term "Prospectus" means (A) if IAT relies on Rule 434 under
the Act, the Term Sheet relating to the Units that is first filed pursuant
to Rule 424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements; (B) if IAT does not
rely on Rule 434 under the Act, the prospectus first filed with the
Commission pursuant to Rule 424(b) under the Act or (C) if IAT does not
rely on Rule 434 under the Act and if no prospectus is required to be filed
pursuant to said Rule 424(b), such term means the prospectus included in
the Registration Statement; except that if such registration statement or
prospectus is amended or such prospectus is supplemented, after the
effective date of such registration statement and prior to the Option
Closing Date (as hereinafter defined), the terms "Registration Statement"
and "Prospectus" shall include such registration statement and prospectus
as so amended, and the term "Prospectus" shall include the prospectus as so
supplemented, or both, as the case may be; and the term "Term Sheet" means
any term sheet that
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satisfies the requirements of Rule 434 under the Act. Any reference to the
"date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. At the time the Registration
Statement becomes effective and at all times subsequent thereto up to and
on the Closing Date (as hereinafter defined) or the Option Closing Date, as
the case may be, (i) the Registration Statement and Prospectus will in all
respects conform to the requirements of the Act and the Rules and
Regulations; and (ii) neither the Registration Statement nor the Prospectus
will include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make statements
therein not misleading; provided, however, that IAT makes no
representations, warranties or agreements as to information contained in or
omitted from the Registration Statement or Prospectus in reliance upon, and
in conformity with, written information furnished to IAT by or on behalf of
the Underwriters specifically for use in the preparation thereof. It is
understood that the statements set forth in the Prospectus on page 2 with
respect to stabilization, under the heading "Underwriting" and the identity
of counsel to the Underwriters under the heading "Legal Matters" constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the Registration Statement and Prospectus, as
the case may be.
(c) Each of IAT and IAT AG ("IAT AG") and IAT Deutschland GmbH
Interactive Media Systeme ("IAT Germany" and together with IAT AG, the
"Subsidiaries"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority corporate and other to own its
properties and conduct its business as described in the Prospectus and is
duly qualified to do business as a foreign corporation and is in good
standing in all other jurisdictions in which the nature of its business or
the character or location of its properties requires such qualification,
except where failure to so qualify will not materially affect IAT's or any
of the Subsidiaries' business, properties or financial condition.
(d) The authorized, issued and outstanding capital stock of IAT as of
__________, 1996 is as set forth in the Prospectus under "Capitalization";
the shares of issued and outstanding capital stock of IAT set forth
thereunder have been duly authorized, validly issued and are fully paid and
non-assessable; except as set forth in the Prospectus, no options,
warrants, or other rights to purchase, agreements or other obligations to
issue, or agreements or other rights to convert any obligation into, any
shares of capital stock of IAT have been granted or entered into by IAT;
and the capital stock conforms to all statements relating thereto contained
in the Registration Statement and Prospectus.
(e) The Units and the Shares are duly authorized, and when issued and
delivered pursuant to this Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and free of preemptive rights of any
security holder of IAT. Neither the filing of the Registration Statement
nor the offering or sale of the Units as contemplated in this Agreement
gives rise to any rights, other than those which have been waived or
satisfied, for or
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relating to the registration of any shares of Common Stock, except as
described in the Registration Statement.
The Warrants have been duly authorized and, when issued and delivered
pursuant to this Agreement, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of IAT
enforceable in accordance with their terms and entitled to the benefits
provided by the warrant agreement pursuant to which such Warrants are to be
issued (the "Warrant Agreement"), which will be substantially in the form
filed as an exhibit to the Registration Statement. The shares of Common
Stock issuable upon exercise of the Warrants have been reserved for
issuance upon the exercise of the Warrants and when issued in accordance
with the terms of the Warrants and Warrant Agreement, will be duly and
validly authorized, validly issued, fully paid and non-assessable and free
of preemptive rights and no personal liability will attach to the ownership
thereof. The Warrant Agreement has been duly authorized and, when executed
and delivered pursuant to this Agreement, will have been duly executed and
delivered and will constitute the valid and legally binding obligation of
IAT enforceable in accordance with its terms. The Warrants and the Warrant
Agreement conform to the respective descriptions thereof in the
Registration Statement and Prospectus.
The Shares and the Warrants contained in the Unit Purchase Option have
been duly authorized and, when duly issued and delivered, such Warrants
will constitute valid and legally binding obligations of IAT enforceable in
accordance with their terms and entitled to the benefits provided by the
Unit Purchase Option. The Shares included in the Unit Purchase Option (and
the shares of Common Stock issuable upon exercise of such Warrants) when
issued and sold, will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights and no personal liability will
attach to the ownership thereof.
(f) This Agreement, the Unit Purchase Option, the Warrant Agreement,
the Escrow Agreement and the Merger and Acquisition Agreement have been
duly and validly authorized, executed and delivered by IAT. IAT has full
power and lawful authority to authorize, issue and sell the Units to be
sold by it hereunder on the terms and conditions set forth herein, and no
consent, approval, authorization or other order of any governmental
authority is required in connection with such authorization, execution and
delivery or with the authorization, issue and sale of the Units or the Unit
Purchase Option, except such as may be required under the Act or state
securities laws.
(g) IAT does not own, directly or indirectly, any capital stock or
other equity ownership or proprietary interests in any other corporation,
association, trust, partnership, joint venture or other entity other than
the Subsidiaries.
(h) Except as described in the Prospectus, neither the Company nor any
of the Subsidiaries is in violation, breach or default of or under, and
consummation of the transactions herein contemplated and the fulfillment of
the terms of this Agreement will not conflict with, or result in a breach
or violation of, any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon
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any of the property or assets of IAT or any of the Subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which IAT or any of the Subsidiaries is a
party or by which IAT or any of the Subsidiaries may be bound or to which
any of the property or assets of IAT or any of the Subsidiaries is subject,
nor will such action result in any violation of the provisions of the
articles of incorporation or the by-laws (or other organizational
documents) of IAT or any of the Subsidiaries, as amended, or any statute or
any order, rule or regulation applicable to IAT or any of the Subsidiaries
of any court or of any regulatory authority or other governmental body
having jurisdiction over IAT or any of the Subsidiaries.
(i) Subject to the qualifications stated in the Prospectus, each of
IAT and the Subsidiaries has good and marketable title to all properties
and assets described in the Prospectus as owned by it, free and clear of
all liens, charges, encumbrances or restrictions, except such as are not
materially significant or important in relation to its business; all of the
material leases and subleases under which IAT or any of the Subsidiaries is
the lessor or sublessor of properties or assets or under which IAT or any
of the Subsidiaries hold properties or assets as lessee or sublessee as
described in the Prospectus are in full force and effect, and, except as
described in the Prospectus, IAT and each of the Subsidiaries is not in
default in any material respect with respect to any of the terms or
provisions of any of such leases or subleases, and no claim has been
asserted by anyone adverse to rights of IAT or any of the Subsidiaries as
lessor, sublessor, lessee or sublessee under any of the leases or subleases
mentioned above, or affecting or questioning the right of IAT or any of the
Subsidiaries to continued possession of the leased or subleased premises or
assets under any such lease or sublease except as described or referred to
in the Prospectus; and IAT and each of the Subsidiaries owns or leases all
such properties described in the Prospectus as are necessary to their
operations as now conducted and, except as otherwise stated in the
Prospectus, as proposed to be conducted as set forth in the Prospectus.
(j) Xxxxxxxxx, Xxxx & Company, P.C., who have given their reports on
certain financial statements filed and to be filed with the Commission as a
part of the Registration Statement, which are incorporated in the
Prospectus, are with respect to the Company, independent public accountants
as required by the Act and the Rules and Regulations.
(k) The financial statements, together with related notes, set forth
in the Prospectus (or if the Prospectus is not in existence, the most
recent Preliminary Prospectus) present fairly the financial position and
results of operations and changes in cash flow position of IAT and the
Subsidiaries on the basis stated in the Registration Statement, at the
respective dates and for the respective periods to which they apply. Said
statements and related notes have been prepared in accordance with
generally accepted accounting principles applied on a basis which is
consistent during the periods involved. The information set forth under the
captions "Dilution", "Capitalization", and "Selected Financial Data" in the
Prospectus fairly present, on the basis stated in the Prospectus, the
information included therein. The pro forma financial information filed as
part of the Registration Statement or included in the Prospectus (or such
preliminary prospectus) has been prepared in accordance with the
Commission's rules and guidelines with
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respect to pro forma financial statements, and includes all adjustments
necessary to present fairly the pro forma financial condition and results
of operations at the respective dates and for the respective periods
indicated and all assumptions used in preparing such pro forma financial
statements are reasonable.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), neither IAT
nor any of the Subsidiaries has incurred any liabilities or obligations,
direct or contingent, not in the ordinary course of business, or entered
into any transaction not in the ordinary course of business, which is
material to the business of IAT or any of the Subsidiaries, and there has
not been any change in the capital stock of, or any incurrence of
short-term or long-term debt by, the Company or any issuance of options,
warrants or other rights to purchase the capital stock of the Company or
any adverse change or any development involving, so far as the Company can
now reasonably foresee a prospective adverse change in the condition
(financial or other), net worth, results of operations, business, key
personnel or properties of it which would be material to the business or
financial condition of IAT or any of the Subsidiaries and neither IAT nor
any of the Subsidiaries has become a party to, and neither the business nor
the property of IAT or any of the Subsidiaries has become the subject of,
any material litigation whether or not in the ordinary course of business.
(m) Except as set forth in the Prospectus, there is not now pending
or, to the knowledge of IAT, threatened, any action, suit or proceeding to
which IAT or any of the Subsidiaries is a party before or by any court or
governmental agency or body, which might result in any material adverse
change in the condition (financial or other), business prospects, net
worth, or properties of IAT or any of the Subsidiaries, nor are there any
actions, suits or proceedings related to environmental matters or related
to discrimination on the basis of age, sex, religion or race; and no labor
disputes involving the employees of IAT or any of the Subsidiaries exist or
are imminent which might be expected to adversely affect the conduct of the
business, property or operations or the financial condition or results of
operations of IAT or any of the Subsidiaries.
(n) Except as disclosed in the Prospectus, IAT and each of the
Subsidiaries have filed all necessary income and franchise tax returns with
all federal, state, local and foreign governmental agencies and have paid
all taxes shown as due thereon; and there is no tax deficiency which has
been or to the knowledge of IAT might be asserted against IAT or any of the
Subsidiaries.
(o) IAT and each of the Subsidiaries have sufficient licenses, permits
and other governmental authorizations currently required for the conduct of
their business or the ownership of their properties as described in the
Prospectus and are in all material respects complying therewith. To the
best knowledge of IAT, none of the activities or business of IAT or any of
the Subsidiaries are in violation of, or cause IAT or any of the
Subsidiaries to violate, any law, rule, regulation or order of the United
States, Switzerland or Germany or any state, county or locality, or of any
agency or body of the United States, Switzerland or Germany or of any
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state, county or locality, the violation of which would have a material
adverse impact upon the condition (financial or otherwise), business,
property, prospective results of operations, or net worth of IAT or any of
the Subsidiaries.
(p) IAT and the Subsidiaries own or possess the right to use all
patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as being necessary for the conduct
of their respective businesses, and neither IAT nor any of the Subsidiaries
is aware of any claim to the contrary or any challenge by any other person
to the rights of IAT and the Subsidiaries with respect to the foregoing.
IAT's and the Subsidiaries' business as now conducted does not and will not
infringe or conflict with in any material respect patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any other person. Except as
described in the Prospectus, no claim has been made against IAT or any of
the Subsidiaries alleging the infringement by IAT or any of the
Subsidiaries of any patent, trademark, service xxxx, trade name, copyright,
trade secret, license in or other intellectual property right or franchise
right of any person.
(q) IAT and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as are customary in the businesses in which they are engaged; and neither
IAT nor any of the Subsidiaries has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue their respective businesses at a cost that would not
have a material adverse affect upon the condition (financial or otherwise),
business, property, prospective results of operations, or net worth of IAT
or any of the Subsidiaries.
(r) Neither IAT nor any of the Subsidiaries has, directly or
indirectly, at any time (i) made any contributions to any candidate for
political office, or failed to disclose fully any such contribution in
violation of law or (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments or contributions
required or allowed by applicable law. IAT's and the Subsidiaries' internal
accounting controls and procedures are sufficient to cause IAT and the
Subsidiaries to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
(s) On the Closing Dates (hereinafter defined) all transfer or other
taxes, (including franchise, capital stock or other tax, other than income
taxes, imposed by any jurisdiction) if any, which are required to be paid
in connection with the sale and transfer of the Units to the several
Underwriters hereunder will have been fully paid or provided for by IAT and
all laws imposing such taxes will have been fully complied with.
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(t) All contracts and other documents of IAT or any of the
Subsidiaries which are, under the Rules and Regulations, required to be
filed as exhibits to the Registration Statement have been so filed.
(u) Neither IAT nor any of the Subsidiaries has taken nor will 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 the shares of Common Stock to
facilitate the sale or resale of the Units hereby.
(v) Neither IAT nor any of the Subsidiaries has entered into any
agreement pursuant to which any person is entitled either directly or
indirectly to compensation from IAT or any of the Subsidiaries for services
as a finder in connection with the proposed public offering.
(w) Except as previously disclosed in writing by IAT to the
Representative, no officer, director or stockholder of IAT or any of the
Subsidiaries has any affiliation or association with any member of the
National Association of Securities Dealers Inc. ("NASD").
(x) Neither IAT nor any of the Subsidiaries is, nor upon receipt of
the proceeds from the sale of the Units will be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(y) Neither IAT nor any of the Subsidiaries has distributed nor will
they distribute prior to the First Closing Date (as hereinafter defined)
any offering material in connection with the offering and sale of the Units
other than the Preliminary Prospectus, Prospectus, the Registration
Statement or the other materials permitted by the Act, if any.
(z) There are no business relationships or related-party transactions
of the nature described in Item 404 of Regulation S-K involving IAT or any
of the Subsidiaries and any person described in such Item that are required
to be disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and that have not been
so disclosed.
(aa) IAT and each of the Subsidiaries have complied with all
provisions of Section 517.075 Florida Statutes relating to doing business
with the government of Cuba or with any person or affiliate located in
Cuba.
2. Purchase, Delivery and Sale of the Units.
(a) Subject to the terms and conditions of this Agreement, and upon
the basis of the representations, warranties, and agreements herein
contained, IAT agrees to issue and sell to the Underwriters, and each such
Underwriter agrees, severally and not jointly, to buy from IAT at $_______
per Unit, at the place and time hereinafter specified, the number of Units
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set forth opposite the names of the Underwriters in Schedule A attached
hereto (the "First Units") plus any additional Units which such
Underwriters may become obligated to purchase pursuant to the provisions of
Section 9 hereof. The First Units shall consist of 3,100,000 Units to be
purchased from IAT.
Delivery of the First Units against payment therefor shall take place
at the offices of Royce Investment Group, Inc., 000 Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxx, X.X. (or at such other place as may be designated by agreement
between you and IAT) at 10:00 a.m., New York time, on _____________, 1997,
or at such later time and date as you may designate, such time and date of
payment and delivery for the First Units being herein called the "First
Closing Date."
(b) In addition, subject to the terms and conditions of this
Agreement, and upon the basis of the representations, warranties and
agreements herein contained, IAT hereby grants an option to the several
Underwriters to purchase all or any part of an aggregate of an additional
465,000 Units at the same price per Unit as the Underwriters shall pay for
the First Units being sold pursuant to the provisions of subsection (a) of
this Section 2 (such additional Units being referred to herein as the
"Option Units"). This option may be exercised within 45 days after the
effective date of the Registration Statement upon notice by the
Representative to IAT advising as to the amount of Option Units as to which
the option is being exercised, the names and denominations in which the
certificates for such Option Units are to be registered and the time and
date when such certificates are to be delivered. Such time and date shall
be determined by the Representative but shall not be earlier than four nor
later than ten full business days after the exercise of said option, nor in
any event prior to the First Closing Date, and such time and date is
referred to herein as the "Option Closing Date." Delivery of the Option
Units against payment therefor shall take place at the offices of Royce
Investment Group, Inc., 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, X.X. The number
of Option Units to be purchased by each Underwriter, if any, shall bear the
same percentage to the total number of Option Units being purchased by the
several Underwriters pursuant to this subsection (b) as the number of Units
such Underwriter is purchasing bears to the total number of the First Units
being purchased pursuant to subsection (a) of this Section 2, as adjusted,
in each case by the Representative in such manner as the Representative may
deem appropriate. The option granted hereunder may be exercised only to
cover overallotments in the sale by the Underwriters of First Units
referred to in subsection (a) above. In the event IAT declares or pays a
dividend or distribution on its Common Stock, whether in the form of cash,
shares of Common Stock or any other consideration, prior to the Option
Closing Date, such dividend or distribution shall also be paid on the
Option Units on the Option Closing Date.
(c) IAT will make the certificates for the securities comprising the
Units to be purchased by the Underwriters hereunder available to you for
checking at least two full business days prior to the First Closing Date or
the Option Closing Date (which are collectively referred to herein as the
"Closing Dates"). The certificates shall be in such names and denominations
as you may request, at least two full business days prior to the Closing
Dates.
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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.
Definitive certificates in negotiable form for the Units to be
purchased by the Underwriters hereunder will be delivered by IAT to you for
the accounts of the several Underwriters against payment of the respective
purchase prices by the several Underwriters, by certified or bank cashier's
checks in New York Clearing House funds, payable to the order of IAT.
In addition, in the event the Underwriters exercise the option to
purchase from IAT all or any portion of the Option Units pursuant to the
provisions of subsection (b) above, payment for such Units shall be made to
or upon the order of IAT by certified or bank cashier's checks payable in
New York Clearing House funds at the offices of Royce Investment Group,
Inc., 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, 00000 (or such other
place as may be designated by agreement between you and IAT) at the time
and date of delivery of such Units as required by the provisions of
subsection (b) above, against receipt of the certificates for such Units by
the Representative for the respective accounts of the several Underwriters
registered in such names and in such denominations as the Representative
may request.
It is understood that you, individually and not as Representative of
the several Underwriters, may (but shall not be obligated to) make any and
all payments required pursuant to this Section 2 on behalf of any
Underwriters whose check or checks shall not have been received by the
Representative at the time of delivery of the Units to be purchased by such
Underwriter or Underwriters. Any such payment by you shall not relieve any
such Underwriter or underwriters of any of its or their obligations
hereunder. It is also understood that you individually rather than all of
the Underwriters may (but shall not be obligated to) purchase the Option
Units referred to in subsection (b) of this Section 2, but only to cover
overallotments.
It is understood that the several Underwriters propose to offer the
Units to be purchased hereunder to the public upon the terms and conditions
set forth in the Registration Statement, after the Registration Statement
becomes effective.
3. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) IAT will use its best efforts to cause the Registration Statement
to become effective as promptly as possible. If required, IAT will file the
Prospectus or any Term Sheet that constitutes a part thereof and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act. Upon
notification from the Commission that the Registration Statement has become
effective, IAT will so advise you and will not at any time, whether before
or after the effective date, file the Prospectus, Term Sheet or any
amendment to the Registration Statement or supplement to the Prospectus of
which you shall not previously have been advised and furnished with a copy
or to which you or your counsel shall have objected in writing or which is
not in
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compliance with the Act and the Rules and Regulations. At any time prior to
the later of (A) the completion by all of the Underwriters of the
distribution of the Units contemplated hereby (but in no event more than
nine months after the date on which the Registration Statement shall have
become or been declared effective) and (B) 25 days after the date on which
the Registration Statement shall have become or been declared effective,
IAT will prepare and file with the Commission, promptly upon your request,
any amendments or supplements to the Registration Statement or Prospectus
which, in your opinion, may be necessary or advisable in connection with
the distribution of the Units.
As soon as IAT is advised thereof, IAT will advise you, and confirm
the advice in writing, of the receipt of any comments of the Commission, of
the effectiveness of any post-effective amendment to the Registration
Statement, of the filing of any supplement to the Prospectus or any amended
Prospectus, of any request made by the Commission for amendment of the
Registration Statement or for supplementing of the Prospectus or for
additional information with respect thereto, of the issuance by the
Commission or any state or regulatory body of any stop order or other order
or threat thereof suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Units for
offering in any jurisdiction, or of the institution of any proceedings for
any of such purposes, and will use its best efforts to prevent the issuance
of any such order, and, if issued, to obtain as soon as possible the
lifting thereof.
IAT has caused to be delivered to you copies of each Preliminary
Prospectus, and IAT has consented and hereby consents to the use of such
copies for the purposes permitted by the Act. IAT authorizes the
Underwriters and dealers to use the Prospectus in connection with the sale
of the Units for such period as in the opinion of counsel to the several
Underwriters the use thereof is required to comply with the applicable
provisions of the Act and the Rules and Regulations. In case of the
happening, at any time within such period as a Prospectus is required under
the Act to be delivered in connection with sales by an underwriter or
dealer of any event of which IAT has knowledge and which materially affects
IAT or the securities of IAT, or which in the opinion of counsel for IAT or
counsel for the Underwriters should be set forth in an amendment of the
Registration Statement or a supplement to the Prospectus in order to make
the statements therein not then misleading, in light of the circumstances
existing at the time the Prospectus is required to be delivered to a
purchaser of the Units or in case it shall be necessary to amend or
supplement the Prospectus to comply with law or with the Rules and
Regulations, IAT will notify you promptly and forthwith prepare and furnish
to you copies of such amended Prospectus or of such supplement to be
attached to the Prospectus, in such quantities as you may reasonably
request, in order that the Prospectus, as so amended or supplemented, will
not contain any untrue statement of a material fact or omit to state any
material facts necessary in order to make the statements in the Prospectus,
in the light of the circumstances under which they are made, not
misleading. The preparation and furnishing of any such amendment or
supplement to the Registration Statement or amended Prospectus or
supplement to be attached to the Prospectus shall be without expense to the
Underwriters, except that in case any Underwriter is required, in
connection with the sale of the Units to deliver a
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Prospectus nine months or more after the effective date of the Registration
Statement, IAT will upon request of and at the expense of the Underwriter,
amend or supplement the Registration Statement and Prospectus and furnish
the Underwriter with reasonable quantities of prospectuses complying with
Section 10(a)(3) of the Act.
The Company will comply with the Act, the Rules and Regulations and
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
the rules and regulations thereunder in connection with the offering and
issuance of the Units.
(b) IAT will use its best efforts to qualify to register the Units for
sale under the securities or "blue sky" laws of such jurisdictions as the
Representative may designate and will make such applications and furnish
such information as may be required for that purpose and to comply with
such laws, provided IAT shall not be required to qualify as a foreign
corporation or a dealer in securities or to execute a general consent of
service of process in any jurisdiction in any action other than one arising
out of the offering or sale of the Units. IAT will, from time to time,
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for so long a period as the
Underwriters may reasonably request.
(c) If the sale of the Units provided for herein is not consummated
for any reason caused by the Company, IAT shall pay all costs and expenses
incident to the performance of IAT's obligations hereunder, including but
not limited to, all of the expenses itemized in Section 8, including the
accountable expenses of the Representative.
(d) IAT will use its best efforts to (i) cause a registration
statement under the Exchange Act to be declared effective concurrently with
the completion of this offering and will notify the Representative in
writing immediately upon the effectiveness of such registration statement,
and (ii) if requested by the Representative, to obtain a listing on the
Pacific Stock Exchange and to obtain and keep current a listing in the
Standard & Poors or Xxxxx'x Industrial OTC Manual.
(e) For so long as IAT is a reporting company under either Section
12(g) or 15(d) of the Exchange Act, IAT, at its expense, will furnish to
its stockholders an annual report (including financial statements audited
by independent public accountants), in reasonable detail and at its
expense, will furnish to you during the period ending five (5) years from
the date hereof, (i) as soon as practicable after the end of each fiscal
year, a balance sheet of IAT and any of its subsidiaries as at the end of
such fiscal year, together with statements of income, surplus and cash flow
of IAT and any of its subsidiaries for such fiscal year, all in reasonable
detail and accompanied by a copy of the certificate or report thereon of
independent accountants; (ii) as soon as practicable after the end of each
of the first three fiscal quarters of each fiscal year, consolidated
summary financial information of IAT for such quarter in reasonable detail;
(iii) as soon as they are available, a copy of all reports (financial or
other) mailed to security holders; (iv) as soon as they are available, a
copy of all non-confidential reports and financial statements furnished to
or filed with the Commission or any securities exchange or automated
quotation
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system on which any class of securities of IAT is listed; and (v) such
other information as you may from time to time reasonably request.
(f) In the event IAT has an active subsidiary or subsidiaries, such
financial statements referred to in subsection (e) above will be on a
consolidated basis to the extent the accounts of IAT and its subsidiary or
subsidiaries are consolidated in reports furnished to its stockholders
generally.
(g) IAT will deliver to you at or before the First Closing Date two
signed copies of the Registration Statement including all financial
statements and exhibits filed therewith, and of all amendments thereto, and
will deliver to the several Underwriters such number of conformed copies of
the Registration Statement, including such financial statements but without
exhibits, and of all amendments thereto, as the several Underwriters may
reasonably request. IAT will deliver to you or upon the order of the
several Underwriters, from time to time until the effective date of the
Registration Statement, as many copies of any Preliminary Prospectus filed
with the Commission prior to the effective date of the Registration
Statement as the Underwriters may reasonably request. IAT will deliver to
the Underwriters on the effective date of the Registration Statement and
thereafter for so long as a Prospectus is required to be delivered under
the Act, from time to time, as many copies of the Prospectus, in final
form, or as thereafter amended or supplemented, as the Underwriters may
from time to time reasonably request. IAT, not later than (i) 5:00 p.m.,
New York City time, on the date of determination of the public offering
price, if such determination occurred at or prior to 12:00 noon, New York
City time, on such date or (ii) 6:00 p.m., New York City time, on the
business day following the date of determination of the public offering
price, if such determination occurred after 12:00 noon, New York City time,
on such date, will deliver to the Underwriters, without charge, as many
copies of the Prospectus and any amendment or supplement thereto as the
Underwriters may reasonably request for purposes of confirming orders that
are expected to settle on the First Closing Date.
(h) IAT will make generally available to its security holders and to
the registered holders of its Warrants and deliver to you as soon as it is
practicable to do so but in no event later than 90 days after the end of
twelve months after its current fiscal quarter, an earnings statement
(which need not be audited) covering a period of at least 12 consecutive
months beginning after the effective date of the Registration Statement,
which shall satisfy the requirements of Section 11(a) of the Act.
(i) IAT will apply the net proceeds from the sale of the Units for the
purposes set forth under "Use of Proceeds" in the Prospectus, and will file
such reports with the Commission with respect to the sale of the Units and
the application of the proceeds therefrom as may be required pursuant to
Rule 463 under the Act.
(j) IAT will, promptly upon your request, prepare and file with the
Commission any amendments or supplements to the Registration Statement,
Preliminary Prospectus or Prospectus and take any other action, which in
the reasonable opinion of Xxxxxxx,
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Tally, Xxxxxxx & Xxxxxx LLP, counsel to the several Underwriters, may be
reasonably necessary or advisable in connection with the distribution of
the Units, and will use its best efforts to cause the same to become
effective as promptly as possible.
(k) IAT will reserve and keep available that maximum number of its
authorized but unissued securities which are issuable upon exercise of the
Warrants and the Unit Purchase Options outstanding from time to time.
(l) The Company will deliver to the Representative agreements to the
effect that for a period of 24 months from the First Closing Date, no
officer, director or existing stockholder of IAT (such officers, directors
and stockholders being herein referred to as the "Principal Stockholders"),
will directly or indirectly, offer, sell (including any short sale), grant
any option for the sale of, acquire any option to dispose of, or otherwise
dispose of any securities of IAT. In order to enforce this covenant, IAT
shall impose stop-transfer instructions with respect to the securities
owned by the Principal Stockholders until the end of such period.
(m) Prior to completion of this offering, IAT will make all filings
required, including registration under the Exchange Act, to obtain the
listing of the Units, Common Stock, and Warrants on the Nasdaq National
Market (or a listing on such other market or exchange as the Underwriters
consent to), and will effect and maintain such listing for at least five
years from the date of this Agreement.
(n) IAT and each of the Principal Stockholders represents that it or
he has not taken and agree that it or he will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result in the stabilization or
manipulation of the price of the Units, Shares or the Warrants or to
facilitate the sale or resale of the Securities.
(o) On the Closing Date and simultaneously with the delivery of the
Units, IAT shall execute and deliver to you, individually and not as
representative of the Underwriters, the Unit Purchase Options. The Unit
Purchase Options will be substantially in the form of the Representative's
Unit Purchase Option filed as an Exhibit to the Registration Statement.
(p) During the 18 month period commencing on the date of this
Agreement, IAT will not, without the prior written consent of the
Representative, grant options to purchase shares of Common Stock at an
exercise price less than the greater of (i) the initial public offering
price of the Units (without allocating any value to the Warrants) or (ii)
the fair market value of the Common Stock on the date of grant. During the
six month period commencing on the date of this Agreement, IAT will not,
without the prior written consent of the Representative, grant options to
any current officer of IAT[, or to any individual who will become an
officer of IAT upon the First Closing Date]. During the three year period
from the First Closing Date, IAT will not, without the prior written
consent of the Representative, offer or sell any of its securities pursuant
to Regulation S under the Act.
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(q) IAT will not, without the prior written consent of the
Representative, grant registration rights to any person which are
exercisable sooner than 13 months from the First Closing Date.
(r) Xx. Xxxxxx Xxxx shall be Co-Chairman of the Board, Chief Executive
Officer and President of IAT and Xxxxx Xxxxxxxxxx shall be the Chief
Financial Officer and a director of IAT on the Closing Dates. IAT has
obtained key person life insurance in an amount of not less than $2 million
on the life of Xx. Xxxxxx Xxxx and such other individuals as designated by
the Representative, and will use its best efforts to maintain such
insurance during the three year period commencing with the First Closing
Date. In the event that Xx. Xxxx'x employment with IAT is terminated prior
to three years following the First Closing Date, IAT will obtain a
comparable policy on the life of his successor for the balance of the three
year period. For a period of thirteen months from the First Closing Date,
the compensation of the executive officers of IAT shall not be increased
from the compensation levels disclosed in the Prospectus.
(s) So long as any Warrants are outstanding, IAT shall use its best
efforts to cause post-effective amendments to the Registration Statement to
become effective in compliance with the Act and without any lapse of time
between the effectiveness of any such post-effective amendments and cause a
copy of each Prospectus, as then amended, to be delivered to each holder of
record of a Warrant and to furnish to each Underwriter and dealer as many
copies of each such Prospectus as such Underwriter or dealer may reasonably
request. IAT shall not call for redemption any of the Warrants unless a
registration statement covering the securities underlying the Warrants has
been declared effective by the Commission and remains current at least
until the date fixed for redemption. In addition, for so long as any
Warrant is outstanding, IAT will promptly notify the Representative of any
material change in the business, financial condition or prospects of IAT or
any of the Subsidiaries.
(t) Upon the exercise of any Warrant or Warrants after ___________,
1998, IAT will pay Royce Investment Group, Inc., in its individual capacity
and not as Representative of the Underwriters, a fee (the "Solicitation
Fee") of 6% of the aggregate exercise price of the Warrants if (i) the
market price of IAT's Common Stock is greater than the exercise price of
the Warrants on the date of exercise; (ii) the exercise of the Warrant was
solicited by a member ("Member") of the National Association of Securities
Dealers, Inc., (iii) the Warrant is not held in a discretionary account;
(iv) the disclosure of compensation arrangements has been made in documents
provided to customers, both as part of the original offering and at the
time of exercise, and (v) the solicitation of the Warrant was not in
violation of Rule 10b-6 promulgated under the Securities Exchange Act of
1934, as amended. IAT agrees not to solicit the exercise of any Warrants
other than through Royce Investment Group, Inc. and will not authorize any
other dealer to engage in such solicitation without the prior written
consent of Royce Investment Group, Inc. The Solicitation Fee shall only be
payable to the extent that the Representative (or Member) who solicited the
exercise of any warrant is designated in writing by the holder of the
warrant as having solicited the exercise of such warrant.
-15-
(u) For a period of five (5) years from the Effective Date IAT (i) at
its expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) IAT's financial statements for each
of the first three (3) fiscal quarters prior to the announcement of
quarterly financial information, the filing of IAT's 10-Q quarterly report
and the mailing of quarterly financial information to stockholders and (ii)
shall not change its accounting firm without the prior written consent of
the Chairman or the President of the Representative.
(v) As promptly as practicable after the Closing Date, IAT will
prepare, at its own expense, hard cover "bound volumes" relating to the
offering, and will distribute at least four of such volumes to the
individuals designated by the Representative or counsel to the
Underwriters.
(w) For a period of five years from the First Closing Date (i) the
Representative shall have the right, but not the obligation, to designate a
director to the Board of Directors of IAT and (ii) IAT shall engage a
public relations firm acceptable to the Underwriter.
(x) IAT shall, for a period of six years after date of this Agreement,
submit which reports to the Secretary of the Treasury and to stockholders,
as the Secretary may require, pursuant to Section 1202 of the Internal
Revenue Code, as amended, or regulations promulgated thereunder, in order
for IAT to qualify as a "small business" so that stockholders may realize
special tax treatment with respect to their investment in IAT.
(y) Except for the use of net proceeds from the sale of the Units for
the repayment of up to an aggregate of $1,250,000 of outstanding loans owed
to Xx. Xxxxx-Xxxx Xxxxxx and Xx. Xxxxxx Xxxxxxx, none of the net proceeds
from the sale of the Units will be used to repay any obligations owed by
IAT to any Principal Stockholder.
4. Conditions of Underwriters' Obligation. The obligations of the several
Underwriters to purchase and pay for the Units which they have respectively
agreed to purchase hereunder, are subject to the accuracy (as of the date
hereof, and as of the Closing Dates) of and compliance with the representations
and warranties of IAT herein, to the performance by IAT of its obligations
hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective and you
shall have received notice thereof not later than 10:00 A.M., New York
time, on the date on which the amendment to the registration statement
originally filed with respect to the Units or to the Registration
Statement, as the case may be, containing information regarding the initial
public offering price of the Units has been filed with the Commission, or
such later time and date as shall have been agreed to by the
Representative; if required, the Prospectus or any Term Sheet that
constitutes a part thereof and any amendment or supplement thereto shall
have been filed with the Commission in the manner and within the time
period required by Rule 434 and 424(b) under the Act; on or prior to the
Closing Dates no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
or a similar purpose
-16-
shall have been instituted or shall be pending or, to your knowledge or to
the knowledge of IAT, shall be contemplated by the Commission; any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Bachner, Tally, Xxxxxxx &
Xxxxxx LLP, counsel to the several Underwriters;
(b) At the First Closing Date, you shall have received the opinions,
addressed to the Underwriters, dated as of the First Closing Date, of Xxxxx
& XxXxxxxx, New York, counsel for IAT, and, with respect to matters of
foreign law, the opinion of Xxxxx & XxXxxxxx, Zurich, counsel for IAT AG
and Xx. Xxxxxxxx & Partners, Bremen, counsel for IAT Germany, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) Each of IAT and Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with full corporate power
and authority to own its properties and conduct its business as
described in the Registration Statement and Prospectus and is duly
qualified or licensed to do business as a foreign corporation and is
in good standing in each jurisdiction in which the ownership or
leasing of its properties or conduct of its business requires such
qualification;
(ii) to the best knowledge of such counsel, (a) each of IAT and
the Subsidiaries has obtained, or is in the process of obtaining, all
licenses, permits and other governmental authorizations necessary to
the conduct of its business as described in the Prospectus, (b) such
licenses, permits and other governmental authorizations obtained are
in full force and effect, and (c) each of IAT and the Subsidiaries is
in all material respects complying therewith;
(iii) the authorized capitalization of IAT as of
_________________, 1996 is as set forth under "Capitalization" in the
Prospectus; all shares of IAT's outstanding stock requiring
authorization for issuance by IAT's board of directors have been duly
authorized, validly issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock of IAT have not been issued in
violation of the preemptive rights of any shareholder and the
shareholders of IAT do not have any preemptive rights or other rights
to subscribe for or to purchase, nor are there any restrictions upon
the voting or transfer of any of the Stock; the Common Stock, the
Warrants, the Unit Purchase Option and the Warrant Agreement conform
to the respective descriptions thereof contained in the Prospectus;
the Shares have been, and the shares of Common Stock to be issued upon
exercise of the Warrants and the Unit Purchase Option, upon issuance
in accordance with the terms of such Warrants, the Warrant Agreement
and Unit Purchase Option have been duly authorized and, when issued
and delivered, will be duly and validly issued, fully paid,
non-assessable, free of preemptive rights and no personal liability
will attach to the ownership thereof; all prior sales by IAT of IAT's
securities have been made in compliance with or under an exemption
from registration under the Act and applicable state securities laws
and no shareholders of IAT have any rescission rights with respect to
Company securities; a sufficient number of shares of Common Stock has
been reserved for issuance upon exercise of the
-17-
Warrants and Unit Purchase Option and to the best of such counsel's
knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Units as contemplated by this Agreement gives
rise to any registration rights or other rights, other than those
which have been waived or satisfied for or relating to the
registration of any shares of Common Stock;
(iv) this Agreement, the Unit Purchase Option, the Warrant
Agreement, the Escrow Agreement and the Merger and Acquisition
Agreement have been duly and validly authorized, executed and
delivered by IAT and, assuming due execution by each other party
hereto or thereto, each constitutes a legal, valid and binding
obligation of IAT enforceable against IAT in accordance with its
respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting enforcement of
creditors' rights and the application of equitable principles in any
action, legal or equitable, and except as rights to indemnity or
contribution may be limited by applicable law);
(v) the certificates evidencing the shares of Common Stock are in
valid and proper legal form; the Warrants will be exercisable for
shares of Common Stock of IAT in accordance with the terms of the
Warrants and at the prices therein provided for; at all times during
the term of the Warrants the shares of Common Stock of IAT issuable
upon exercise of the Warrants have been duly authorized and reserved
for issuance upon such exercise and such shares, when issued upon such
exercise in accordance with the terms of the Warrants and at the price
provided for, will be duly and validly issued, fully paid an
non-assessable;
(vi) such counsel knows of no pending or threatened legal or
governmental proceedings to which either IAT or any of the
Subsidiaries is a party which could materially adversely affect the
business, property, financial condition or operations of either IAT or
any of the Subsidiaries; or which question the validity of the
Securities, this Agreement, the Warrant Agreement, the Unit Purchase
Option, the Escrow Agreement or the Merger and Acquisition Agreement,
or of any action taken or to be taken by either IAT or any of the
Subsidiaries pursuant to this Agreement, the Warrant Agreement, the
Unit Purchase Option, the Escrow Agreement or the Merger and
Acquisition Agreement; and no such proceedings are known to such
counsel to be contemplated against either IAT or any of the
Subsidiaries; there are no governmental proceedings or regulations
required to be described or referred to in the Registration Statement
which are not so described or referred to;
(vii) To our knowledge, neither IAT nor any of the Subsidiaries
has received notice of any claim or challenge regarding its ownership
of or its other rights to or under any patents, trademarks, service
marks, trade names, licenses, inventions or any other rights described
in the Prospectus. To our knowledge (i) no claim has been made against
IAT or any of the Subsidiaries alleging infringement by IAT or any of
the Subsidiaries of any patent, trademark, service xxxx, trade name,
trade secret, license in or other intellectual property or franchise
right of any person, (ii) no legal or governmental proceedings are
pending relating to the foregoing, other than review of pending patent
applications, and (iii) no such proceedings are currently threatened
by governmental authorities or others;
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(viii) Neither IAT nor any of the Subsidiaries is in violation of
or default under, nor will the execution and delivery of this
Agreement, the Unit Purchase Option, the Warrant Agreement, the Escrow
Agreement or the Merger and Acquisition Agreement, and the incurrence
of the obligations herein and therein set forth and the consummation
of the transactions herein or therein contemplated, result in a breach
or violation of, or constitute a default under the certificate or
articles of incorporation or by-laws (or other organizational
documents), in the performance or observance of any material
obligations, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness or in any contract,
indenture, mortgage, loan agreement, lease, joint venture or other
agreement or instrument to which IAT or any of the Subsidiaries is a
party or by which IAT's or any of the Subsidiaries' properties may be
bound or in violation of any material order, rule, regulation, writ,
injunction, or decree of any government, governmental instrumentality
or court, domestic or foreign;
(ix) the Registration Statement has become effective under the
Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for that purpose have been instituted or
are pending before, or threatened by, the Commission; the Registration
Statement and the Prospectus (except for the financial statements and
other financial data contained therein, or omitted therefrom, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Rules and Regulations;
(x) such counsel has participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to the
attention of such counsel to cause such counsel to have reason to
believe that the Registration Statement or any amendment thereto at
the time it became effective or as of the Closing Dates contained any
untrue statement of a material fact required to be stated therein or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus or any supplement thereto contains any untrue statement of
a material fact or omits to state a material fact necessary in order
to make statements therein, in light of the circumstances under which
they were made, not misleading (except, in the case of both the
Registration Statement and any amendment thereto and the Prospectus
and any supplement thereto, for the financial statements, notes
thereto and other financial information and schedules contained
therein, as to which such counsel need express no opinion);
(xi) all descriptions in the Registration Statement and the
Prospectus, and any amendment or supplement thereto, of contracts and
other documents are accurate and fairly present the information
required to be shown, and such counsel is familiar with all contracts
and other documents referred to in the Registration Statement and the
Prospectus and any such amendment or supplement or filed as exhibits
to the Registration Statement, and such counsel does not know of 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;
-19-
(xii) no authorization, approval, consent, of license of any
governmental or regulatory authority or agency is necessary in
connection with the authorization, issuance, transfer, sale or
delivery of the Units by IAT, in connection with the execution,
delivery and performance of this Agreement by IAT or any of the
Subsidiaries or in connection with the taking of any action
contemplated herein, or the issuance of the Unit Purchase Option or
the Securities underlying the Unit Purchase Option, other than
registrations or qualifications of the Units under applicable state or
foreign securities or Blue Sky laws and registration under the Act;
(xiii) the statements in the Registration Statement under the
captions "Business", "Use of Proceeds", "Management", and "Description
of Securities" have been reviewed by such counsel and insofar as they
refer to descriptions of agreements, statements of law, descriptions
of statutes, licenses, rules or regulations or legal conclusions, are
correct in all material respects;
(xiv) the Units, the Common Stock and the Warrants have been duly
authorized for quotation on the Nasdaq National Market; and
(xv) to such counsel's knowledge, there are no business
relationships or related-party transactions of the nature described in
Item 404 of Regulation S-K involving IAT or any of the Subsidiaries
and any person described in such Item that are required to be
disclosed in the Prospectus and which have not been so disclosed.
Such opinions shall also cover such matters incident to the
transactions contemplated hereby as the Representative or counsel for
the Underwriters shall reasonably request. In rendering such opinions,
such counsel may rely upon certificates of any officer of IAT or the
Subsidiaries or public officials as to matters of fact; and may rely
as to all matters of law other than in the case of the opinion of
counsel for IAT, the law of the United States, the State of Delaware
or of the State of New York and, in the case of the opinion of counsel
for IAT AG, the laws of Switzerland, and in the case of the opinion of
counsel for IAT Germany, the laws of Germany, upon opinions of counsel
satisfactory to you, in which case the opinions shall state that they
have no reason to believe that you and they are not entitled to so
rely.
(c) All corporate proceedings and other legal matters relating to this
Agreement, the Registration Statement, the Prospectus and other related
matters shall be satisfactory to or approved by Bachner, Tally, Xxxxxxx &
Xxxxxx LLP, counsel to the several Underwriters, and you shall have
received from such counsel a signed opinion, dated as of the First Closing
Date, together with copies thereof for each of the other Underwriters, with
respect to the validity of the issuance of the Units, the form of the
Registration Statement and Prospectus (other than the financial statements
and other financial data contained therein), the execution of this
Agreement and other related matters as you may reasonably require. IAT and
each of the Subsidiaries shall have furnished to counsel for the several
Underwriters such documents as they may reasonably request for the purpose
of enabling them to render such opinion.
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(d) You shall have received a letter prior to the effective date of
the Registration Statement and again on and as of the First Closing Date
from Xxxxxxxxx, Xxxx & Company, P.C., independent public accountants for
IAT, substantially in the form approved by you, and including estimates of
IAT's revenues and results of operations for the period ending at the end
of the month immediately preceding the effective date and results of the
comparable period during the prior fiscal year.
(e) At the Closing Dates, (i) the representations and warranties of
IAT contained in this Agreement shall be true and correct with the same
effect as if made on and as of the Closing Dates and IAT and each of the
Subsidiaries shall have performed all of its obligations hereunder and
satisfied all the conditions on its part to be satisfied at or prior to
such Closing Date; (ii) the Registration Statement and the Prospectus and
any amendments or supplements thereto shall contain all statements which
are required to be stated therein in accordance with the Act and the Rules
and Regulations, and shall in all material respects conform to the
requirements thereof, and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto shall contain 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; (iii) there shall have been, since the respective dates as of
which information is given, no material adverse change, or any development
involving a prospective material adverse change, in the business,
properties, condition (financial or otherwise), results of operations,
capital stock, long-term or short-term debt or general affairs of IAT or
any of the Subsidiaries from that set forth in the Registration Statement
and the Prospectus, except changes which the Registration Statement and
Prospectus indicate might occur after the effective date of the
Registration Statement, and IAT and each of the Subsidiaries shall not have
incurred any material liabilities or entered into any agreement not in the
ordinary course of business other than as referred to in the Registration
Statement and Prospectus; and (iv) except as set forth in the Prospectus,
no action, suit or proceeding at law or in equity shall be pending or
threatened against IAT or any of the Subsidiaries which would be required
to be set forth in the Registration Statement, and no proceedings shall be
pending or threatened against IAT or any of the Subsidiaries before or by
any commission, board or administrative agency in the United States,
Switzerland, Germany or elsewhere, wherein an unfavorable decision, ruling
or finding would materially and adversely affect the business, property,
condition (financial or otherwise), results of operations or general
affairs of IAT or any of the Subsidiaries, and (v) you shall have received,
at the First Closing Date, a certificate signed by each of the Co-Chairman
of the Board, Chief Executive Officer and President and the principal
financial or accounting officer of IAT, dated as of the First Closing Date,
evidencing compliance with the provisions of this subsection (e).
(f) Upon exercise of the option provided for in Section 2(b) hereof,
the obligations of the several Underwriters (or, at its option, the
Representative, individually) to purchase and pay for the Option Units
referred to therein will be subject (as of the date hereof and as of the
Option Closing Date) to the following additional conditions:
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(i) The Registration Statement shall remain effective at the
Option Closing Date, and no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose
shall have been instituted or shall be pending, or, to your knowledge
or the knowledge of IAT, shall be contemplated by the Commission, and
any reasonable request on the part of the Commission for additional
information shall have been complied with to the satisfaction of
Bachner, Tally, Xxxxxxx & Xxxxxx LLP, counsel to the several
Underwriters.
(ii) At the Option Closing Date there shall have been delivered
to you as Representative the signed opinions of Xxxxx & XxXxxxxx, New
York, counsel for IAT, Xxxxx & XxXxxxxx, Zurich, counsel for IAT AG
and Xx. Xxxxxxxx & Partners, Bremen, foreign counsel for the
Subsidiaries, dated as of the Option Closing Date, in form and
substance satisfactory to Bachner, Tally, Xxxxxxx & Xxxxxx LLP,
counsel to the several Underwriters, together with copies of such
opinions for each of the other several underwriters, which opinions
shall be substantially the same in scope and substance as the opinions
furnished to you at the First Closing Date pursuant to Section 4(b)
hereof, except that such opinions, where appropriate, shall cover the
Option Units.
(iii) At the Option Closing Date there shall have been delivered
to you a letter in form and substance satisfactory to you from
Xxxxxxxxx, Kass & Company, P.C., dated the Option Closing Date and
addressed to the Underwriters confirming the information in their
letter referred to in Section 4(d) hereof and stating that nothing has
come to their attention during the period from the ending date of
their review referred to in said letter to a date not more than five
business days prior to the Option Closing Date, which would require
any change in said letter if it were required to be dated the Option
Closing Date.
(iv) At the Option Closing Date there shall have been delivered
to you a certificate of the Co-Chairman of the Board, Chief Executive
Officer and President and the principal financial or accounting
officer of IAT, dated the Option Closing Date, in form and substance
satisfactory to Bachner, Tally, Xxxxxxx & Xxxxxx LLP, counsel to the
several Underwriters, substantially the same in scope and substance as
the certificate furnished to you at the First Closing Date pursuant to
Section 4(e) hereof.
(v) All proceedings taken at or prior to the Option Closing Date
in connection with the sale and issuance of the Option Units shall be
satisfactory in form and substance to you, and you and Bachner, Tally,
Xxxxxxx & Xxxxxx LLP, counsel to the several Underwriters, shall have
been furnished with all such documents, certificates, and opinions as
you may request in connection with this transaction in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements of IAT and each of the Subsidiaries or its
compliance with any of the covenants or conditions contained herein.
(g) No action shall have been taken by the Commission or the NASD the
effect of which would make it improper, at any time prior to the Closing
Date, for members of the NASD to execute transactions (as principal or
agent) in the Units, Common Stock or the
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Warrants and no proceedings for the taking of such action shall have been
instituted or shall be pending, or, to the knowledge of the Representative
or IAT, shall be contemplated by the Commission or the NASD. IAT represents
that at the date hereof it has no knowledge that any such action is in fact
contemplated by the Commission or the NASD. IAT and each of the
Subsidiaries shall have advised the Underwriters of any NASD affiliation of
any of its officers, directors, stockholders or their affiliates.
(h) If any of the conditions herein provided for in this Section shall
not have been fulfilled as of the date indicated, this Agreement and all
obligations of the several Underwriters under this Agreement may be
cancelled at, or at any time prior to, each Closing Date by the
Representative. Any such cancellation shall be without liability of the
Underwriters to IAT.
5. Conditions of the Obligations of IAT. The obligation of IAT to sell and
deliver the Units is subject to the condition that at the Closing Dates, no stop
orders suspending the effectiveness of the Registration Statement shall have
been issued under the Act or any proceedings therefor initiated or threatened by
the Commission.
If the condition to the obligations of IAT provided for in this Section
have been fulfilled on the First Closing Date but are not fulfilled after the
First Closing Date and prior to the Option Closing Date, then only the
obligation of IAT to sell and deliver the Units on exercise of the option
provided for in Section 2(b) hereof shall be affected.
6. Indemnification.
(a) IAT agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the
Act against any losses, claims, damages or liabilities, joint or several
(which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all
attorneys' fees), to which such Underwriter or such controlling person may
become subject, under the Act or otherwise, and will reimburse, as
incurred, such Underwriters and such controlling persons for any legal or
other expenses reasonably incurred in connection with investigating,
defending against or appearing as a third party witness in connection with
any losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in (A) the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, (B) any
blue sky application or other document executed by the Company or any of
the Subsidiaries specifically for that purpose or based upon written
information furnished by the Company or any Subsidiaries filed in any state
or other jurisdiction in order to qualify any or all of the Units under the
securities laws thereof (any such application, document or information
being hereinafter called a "Blue Sky Application"), or arise out of or are
based upon the omission or alleged omission to state in the Registration
Statement, any Preliminary Prospectus, Prospectus, or any amendment or
supplement thereto, or in any Blue Sky Application, a material fact
-23-
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that IAT will not be liable in any such
case to the extent, but only to the extent, that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company or
any Subsidiaries by or on behalf of the Underwriters specifically for use
in the preparation of the Registration Statement or any such amendment or
supplement thereof or any such Blue Sky Application or any such preliminary
Prospectus or the Prospectus or any such amendment or supplement thereto.
This indemnity will be in addition to any liability which IAT may otherwise
have.
(b) Each Underwriter severally, but not jointly, will indemnify and
hold harmless IAT, each of its directors, each nominee (if any) for
director named in the Prospectus, each of its officers who have signed the
Registration Statement, and each person, if any, who controls IAT within
the meaning of the Act, against any losses, claims, damages or liabilities
(which shall, for all purposes of this Agreement, include, but not be
limited to, all costs of defense and investigation and all attorneys' fees)
to which IAT or any such director, nominee, officer or controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, 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 each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto (i) in reliance upon and in conformity with written information
furnished to IAT by you or by any Underwriter through you specifically for
use in the preparation thereof and (ii) relates to the transactions
effected by the Underwriters in connection with the offer and sale of the
Units contemplated hereby. This indemnity agreement will be in addition to
any liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify in writing the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof,
subject to the provisions herein stated, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
-24-
defense thereof other than reasonable costs of investigation. The
indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall not be at the expense of the indemnifying
party if the indemnifying party has assumed the defense of the action with
counsel reasonably satisfactory to the indemnified party; provided that if
the indemnified party is an Underwriter or a person who controls such
Underwriter within the meaning of the Act, the fees and expenses of such
counsel shall be at the expense of the indemnifying party if (i) the
employment of such counsel has been specifically authorized in writing by
the indemnifying party or (ii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party and in the judgment of the
Representative, it is advisable for the Representative or such Underwriters
or controlling persons to be represented by separate counsel (in which case
the indemnifying party shall not have the right to assume the defense of
such action on behalf of such Underwriter or such controlling person, it
being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys for all such
Underwriters and controlling persons, which firm shall be designated in
writing by you). No settlement of any action against an indemnified party
shall be made without the consent of the indemnifying party, which shall
not be unreasonably withheld in light of all factors of importance to such
indemnifying party.
7. Contribution.
In order to provide for just and equitable contribution under the Act in
any case in which (i) any Underwriter makes claim for indemnification pursuant
to Section 6 hereof but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case, notwithstanding the fact that
the express provisions of Section 6 provide for indemnification in such case, or
(ii) contribution under the Act may be required on the part of any Underwriter,
then IAT and each person who controls IAT, in the aggregate, and any such
Underwriter shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) in either such case (after
contribution from others) in such proportions that all such Underwriters are
responsible in the aggregate for that portion of such losses, claims, damages or
liabilities represented by the percentage that the underwriting discount per
Unit appearing on the cover page of the Prospectus bears to the public offering
price appearing thereon, and IAT shall be responsible for the remaining portion,
provided, however, that (a) if such allocation is not permitted by applicable
law then the relative fault of IAT and the Underwriters and controlling persons,
in the aggregate, in connection with the statements or omissions which resulted
in such damages and other relevant equitable considerations shall also be
considered. The relative fault shall be determined by reference to, among other
things, whether in the case of an untrue statement of a material fact or the
omission to state a material fact, such statement or omission relates to
information supplied by the Company or any of the
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Subsidiaries, or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. IAT and the Underwriters agree that it would not be just
and equitable if the respective obligations of IAT and the Underwriters to
contribute pursuant to this Section 7 were to be determined by pro rata or per
capita allocation of the aggregate damages (even if the Underwriters in the
aggregate were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the first sentence of this Section 7 and (b) that the contribution of each
contributing Underwriter shall not be in excess of its proportionate share
(based on the ratio of the number of Units purchased by such Underwriter to the
number of Units purchased by all contributing Underwriters) of the portion of
such losses, claims, damages or liabilities for which the Underwriters are
responsible. No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation. As used in this
paragraph, the word "Company" includes any officer, director, or person who
controls IAT within the meaning of Section 15 of the Act. If the full amount of
the contribution specified in this paragraph is not permitted by law, then any
Underwriter and each person who controls any Underwriter shall be entitled to
contribution from IAT, its officers, directors and controlling persons to the
full extent permitted by law. The foregoing contribution agreement shall in no
way affect the contribution liabilities of any persons having liability under
Section 11 of the Act other than IAT and the Underwriters. No contribution shall
be requested with regard to the settlement of any matter from any party who did
not consent to the settlement; provided, however, that such consent shall not be
unreasonably withheld in light of all factors of importance to such party.
8. Costs and Expenses.
(a) Whether or not this Agreement becomes effective or the sale of the
Units to the Underwriters is consummated, IAT will pay all costs and
expenses incident to the performance of this Agreement by the Company
including, but not limited to, the fees and expenses of counsel to the
Company and of the Company 's accountants; the costs and expenses incident
to the preparation, printing, filing and distribution under the Act of the
Registration Statement (including the financial statements therein and all
amendments and exhibits thereto), Preliminary Prospectus and the
Prospectus, as amended or supplemented, or the Term Sheet, the fee of the
NASD in connection with the filing required by the NASD relating to the
offering of the Units contemplated hereby; the fees and expenses of
investigative reports regarding IAT, the Subsidiaries and certain officers
and directors of IAT; all expenses, including reasonable fees and
disbursements of counsel to the Underwriters, in connection with the
qualification of the Units under the state securities or blue sky laws
which the Representative shall designate; the cost of printing and
furnishing to the several Underwriters copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus, this Agreement, the
Agreement Among Underwriters, Selling Agreement, Underwriters'
Questionnaire, Underwriters' Power of Attorney and the Blue Sky Memorandum,
any fees relating to the listing of the Units, Common Stock and Warrants on
the Nasdaq National Market or any other securities exchange, the cost of
printing the certificates representing the securities comprising the Units,
the fees of the transfer agent and
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warrant agent the cost of publication of at least three "tombstones" of the
offering (at least one of which shall be in national business newspaper and
one of which shall be in a major New York newspaper) and the cost of
preparing at least four hard cover "bound volumes" relating to the
offering, in accordance with the Underwriters' request. IAT shall pay any
and all taxes (including any transfer, franchise, capital stock or other
tax imposed by any jurisdiction) on sales to the Underwriters hereunder.
IAT will also pay all costs and expenses incident to the furnishing of any
amended Prospectus or of any supplement to be attached to the Prospectus as
called for in Section 3(a) of this Agreement except as otherwise set forth
in said Section.
(b) In addition to the foregoing expenses IAT shall at the First
Closing Date pay to Royce Investment Group, Inc., in its individual rather
than representative capacity, a non-accountable expense allowance of
$_______ of which $_______ has been paid. In the event the overallotment
option is exercised, IAT shall pay to Royce Investment Group, Inc. at the
Option Closing Date an additional amount equal to 3% of the gross proceeds
received upon exercise of the overallotment option. In the event the
transactions contemplated hereby are not consummated by reason of any
action by the Representative (except if such prevention is based upon a
breach by the Company or any Subsidiary of any covenant, representation or
warranty contained herein or because any other condition to the
Underwriters' obligations hereunder required to be fulfilled by the Company
or any of the Subsidiaries is not fulfilled) IAT shall be liable for only
the amount (not less than $50,000) paid by the Company to the
Representation prior to such determination. In the event the transactions
contemplated hereby are not consummated by reason of any action of the
Company or any Subsidiary or because of a breach by the Company or any
Subsidiary of any covenant, representation or warranty herein, IAT shall be
liable for the accountable expenses of the Representative, including legal
fees, up to a maximum of $100,000.
(c) No person is entitled either directly or indirectly to
compensation from the Company, from the Representative or from any other
person for services as a finder in connection with the proposed offering,
and IAT agrees to indemnify and hold harmless the Representative and the
other Underwriters, against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this Agreement, include,
but not be limited to, all costs of defense and investigation and all
attorneys' fees), to which the Representative or such other Underwriter or
person may become subject insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
the claim of any person (other than an employee of the party claiming
indemnity) or entity that he or it is entitled to a finder's fee in
connection with the proposed offering by reason of such person's or
entity's influence or prior contact with the indemnifying party.
9. Substitution of Underwriters.
If any Underwriters shall for any reason not permitted hereunder cancel
their obligations to purchase the First Units hereunder, or shall fail to take
up and pay for the number of First Units set forth opposite their respective
names in Schedule A hereto upon tender of such First Units in accordance with
the terms hereof, then:
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(a) If the aggregate number of First Units which such Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
number of First Units, the other Underwriters shall be obligated severally,
in proportion to their respective commitments hereunder, to purchase the
First Units which such defaulting Underwriter or Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters so default and the agreed
number of First Units with respect to which such default or defaults occurs
is more than 10% of the total number of First Units, the remaining
Underwriters shall have the right to take up and pay for (in such
proportion as may be agreed upon among them) the First Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase. If
such remaining Underwriters do not, at the First Closing Date, take up and
pay for the First Units which the defaulting Underwriter or Underwriters
agreed but failed to purchase, the time for delivery of the First Units
shall be extended to the next business day to allow the several
Underwriters the privilege of substituting within twenty-four hours
(including nonbusiness hours) another underwriter or underwriters
satisfactory to IAT. If no such underwriter or underwriters shall have been
substituted as aforesaid, within such twenty-four hour period, the time of
delivery of the First Units may, at the option of IAT, be again extended to
the next following business day, if necessary, to allow IAT the privilege
of finding within twenty-four hours (including nonbusiness hours) another
underwriter or underwriters to purchase the First Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase. If it
shall be arranged for the remaining Underwriters or substituted
Underwriters to take up the First Units of the defaulting Underwriter or
Underwriters as provided in this Section, (i) IAT or the Representative
shall have the right to postpone the time of delivery for a period of not
more than seven business days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and IAT agrees promptly to file
any amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the respective
numbers of First Units to be purchased by the remaining Underwriters or
substituted Underwriters shall be taken at the basis of the underwriting
obligation for all purposes of this Agreement.
If in the event of a default by one or more Underwriters and the
remaining Underwriters shall not take up and pay for all the First Units
agreed to be purchased by the defaulting Underwriters or substitute another
underwriter or underwriters as aforesaid, IAT shall not find or shall not
elect to seek another underwriter or underwriters for such First Units as
aforesaid, then this Agreement shall terminate.
If, following exercise of the option provided in Section 2(b) hereof,
any Underwriter or Underwriters shall for any reason not permitted
hereunder cancel their obligations to purchase Option Units at the Option
Closing Date, or shall fail to take up and pay for the number of Option
Units, which they become obligated to purchase at the Option Closing Date
upon tender of such Option Units in accordance with the terms hereof, then
the remaining Underwriters or substituted Underwriters may take up and pay
for the Option Units of the defaulting Underwriters in the manner provided
in Section 9(b) hereof. If the remaining
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Underwriters or substituted Underwriters shall not take up and pay for all
such Option Units, the Underwriters shall be entitled to purchase the
number of Option Units for which there is no default or, at their election,
the option shall terminate, the exercise thereof shall be of no effect.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. In the event of
termination, there shall be no liability on the part of any nondefaulting
Underwriter to IAT, provided that the provisions of this Section 9 shall
not in any event affect the liability of any defaulting Underwriter to IAT
arising out of such default.
10. Effective Date.
The Agreement shall become effective upon its execution except that you
may, at your option, delay its effectiveness until 11:00 A.M., New York time on
the first full business day following the effective date of the Registration
Statement, or at such earlier time after the effective date of the Registration
Statement as you in your discretion shall first commence the initial public
offering by the Underwriters of any of the Units. The time of the initial public
offering shall mean the time of release by you of the first newspaper
advertisement with respect to the Units, or the time when the Units are first
generally offered by you to dealers by letter or telegram, whichever shall first
occur. This Agreement may be terminated by you at any time before it becomes
effective as provided above, except that Sections 3(c), 6, 7, 8, 13, 14, 15 and
16 shall remain in effect notwithstanding such termination.
11. Termination.
(a) This Agreement, except for Sections 3(c), 6, 7, 8, 13, 14, 15 and
16 hereof, may be terminated at any time prior to the First Closing Date,
and the option referred to in Section 2(b) hereof, if exercised, may be
cancelled at any time prior to the Option Closing Date, by you if in your
judgment it is impracticable to offer for sale or to enforce contracts made
by the Underwriters for the resale of the Units agreed to be purchased
hereunder by reason of (i) the Company or any of the Subsidiaries having
sustained a material loss, whether or not insured, by reason of fire,
earthquake, flood, accident or other calamity, or from any labor dispute or
court or government action, order or decree; (ii) trading in securities on
the New York Stock Exchange, the American Stock Exchange, the Nasdaq
SmallCap Market or the Nasdaq National Market having been suspended or
limited; (iii) material governmental restrictions having been imposed on
trading in securities generally (not in force and effect on the date
hereof); (iv) a banking moratorium having been declared by federal or New
York state authorities; (v) an outbreak of international hostilities or
other national or international calamity or crisis or change in economic or
political conditions having occurred; (vi) a pending or threatened legal or
governmental proceeding or action relating generally to IAT's or any of the
Subsidiaries' business, or a notification having been received by either
IAT or any of the Subsidiaries of the threat of any such proceeding or
action, which could materially adversely affect IAT or any of the
Subsidiaries; (vii) except as contemplated by the Prospectus, IAT or any of
the Subsidiaries is merged or consolidated into or acquired by another
company or group or there exists a binding
-29-
legal commitment for the foregoing or any other material change of
ownership or control occurs; (viii) the passage by the Congress of the
United States or by any state legislative body or federal or state agency
or other authority of any act, rule or regulation, measure, or the adoption
of any orders, rules or regulations by any governmental body or any
authoritative accounting institute or board, or any governmental executive,
which is reasonably believed likely by the Representative to have a
material impact on the business, financial condition or financial
statements of the Company or the market for the securities offered pursuant
to the Prospectus; (ix) any adverse change in the financial or securities
markets beyond normal market fluctuations having occurred since the date of
this Agreement, or (x) any material adverse change having occurred, since
the respective dates of which information is given in the Registration
Statement and Prospectus, in the earnings, business prospects or general
condition of IAT or any of its Subsidiaries, financial or otherwise,
whether or not arising in the ordinary course of business.
(b) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section 11 or in Section
10, IAT shall be promptly notified by you, by telephone or telegram,
confirmed by letter.
12. Unit Purchase Option.
At or before the First Closing Date, IAT will sell to the Underwriters, or
their designees for a consideration of $310, and upon the terms and conditions
set forth in the form of Unit Purchase Option annexed as an exhibit to the
Registration Statement, a Unit Purchase Option to purchase an aggregate of
310,000 Units. In the event of conflict in the terms of this Agreement and the
Unit Purchase Option, the language of the Unit Purchase Option shall control.
13. Representations, Warranties and Agreements to Survive Delivery.
The respective indemnities, agreements, representations, warranties and
other statements of IAT or its Principal Stockholders, where appropriate, and
the undertakings set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Underwriters, IAT or any of its officers or directors or any controlling
person and will survive delivery of and payment of the Units and the termination
of this Agreement.
14. Notice.
Any communications specifically required hereunder to be in writing, if
sent to the Underwriters, will be mailed, delivered and confirmed to them at
Royce Investment Group, Inc., 000 Xxxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000, with a copy sent to Bachner, Tally, Xxxxxxx & Xxxxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxxx Xxxxxxx, Esq., or if sent to
IAT, will be mailed, delivered and confirmed to it at Geschaftschaus
Wasserschloss, Xxxxxxxxxxx 00, XX-0000 Xxxxxxxxx-Xxxxx, Xxxxxxxxxxx, Attention:
Xx. Xxxxxx Xxxx.
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15. Parties in Interest.
The Agreement herein set forth is made solely for the benefit of the
several Underwriters, the Company and, to the extent expressed, the Principal
Stockholders, any person controlling the Company or any of the several
Underwriters, and directors of IAT, nominees for directors (if any) named in the
Prospectus, its officers who have signed the Registration Statement, and their
respective executors, administrators, successors, assigns and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from any of the several Underwriters of the Units. All of the obligations of the
Underwriters hereunder are several and not joint.
16. Applicable Law.
This Agreement will be governed by, and construed in accordance with, the
laws of the State of New York applicable to agreements made and to be entirely
performed within New York.
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return this agreement, whereupon it will become a binding
agreement between IAT and the several Underwriters in accordance with its terms.
Very truly yours,
IAT MULTIMEDIA, INC.
By:________________________
The foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
ROYCE INVESTMENT GROUP, INC.
By:________________________
For itself and as Representative of the
several Underwriters
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SCHEDULE A
Underwriter Number of Units to be Purchased
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Royal Investment Group, Inc.
Total Units: 3,100,000
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