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Exhibit 1.1
____________, 1996
1,250,000 SHARES OF COMMON STOCK
1,250,000 COMMON STOCK PURCHASE WARRANTS
XXXXXXXXX TECHNOLOGIES INC.
UNDERWRITING AGREEMENT
, 1996
XXXXXX XXXXXXXXXX XXXXX INC.
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Syndicate Department
Dear Ladies and Gentlemen:
Xxxxxxxxx Technologies Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") 1,250,000 shares of its common stock, par value $.01
per share (the "Common Stock") and 1,250,000 Common Stock Purchase Warrants.
Each such Warrant shall represent the right to acquire one quarter of a share of
Common Stock, shall expire three years from the effective date of the initial
offering unless redeemed prior thereto, shall be exercisable at a price equal to
115% of the offering price per share of Common Stock, and shall contain such
other terms and conditions as are set forth in the related exhibit to the
Registration Statement described below. The 1,250,000 shares of Common Stock to
be purchased by the Underwriters are hereinafter referred to as the "Firm
Shares" and the 1,250,000 Common Stock Purchase Warrants to be purchased by the
Underwriters as the "Firm Warrants". The Firm Shares and Firm Warrants are
hereinafter collectively referred to as the "Firm Securities". In addition, the
Company proposes to grant to the several Underwriters, solely for the purpose of
covering over-allotments in the sale of the Firm Shares, the option described in
Section 5 of this agreement (the "Agreement") to purchase up to 187,500
additional shares of Common Stock (the "Additional Shares") and 187,500
additional Common Stock Purchase Warrants (the "Additional Warrants"). The
Additional Shares and the Additional Warrants are hereinafter collectively
referred to as the "Additional Securities". The Additional Securities may only
be purchased on the basis of one Additional Warrant for each Additional Share
purchased.
The Firm Securities and the Additional Securities, and the shares of
Common Stock issuable upon exercise of the Firm Warrants and the Additional
Warrants are hereinafter
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collectively referred to as the "Offered Securities"; the Offered Securities and
the Representative's Securities (defined below in Section 6 hereof) collectively
as the "Securities"; all the warrants included in the Securities as the
"Warrants" and all of the shares of Common Stock issuable on exercise of the
Warrants as the "Warrant Shares".
You, as representative of the Underwriters (the "Representative"), have
advised the Company that you and the other Underwriters desire to purchase,
severally and not jointly, the Firm Securities and that you have been authorized
by the Underwriters to execute this Agreement on their behalf. The Company
hereby confirms the agreement made by it with respect to the purchase of the
Firm Securities 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, each of the
Underwriters that:
(a) REGISTRATION STATEMENT AND PROSPECTUS. The Company has filed
with the Securities and Exchange Commission ("Commission") a registration
statement on Form SB-2 (No. 333-13703) for the registration under the
Securities Act of 1933, as amended ("Securities Act"), of the Securities,
and may have filed one or more amendments thereto, copies of which have
heretofore been delivered to you. The registration statement, including
the prospectus, financial statements and exhibits, when it shall become
effective, and such additional information, if any, with respect to the
offering permitted to be omitted from such registration statement when it
becomes effective if subsequently filed with the Commission pursuant to
Rule 430A of the General Rules and Regulations of the Commission under the
Securities Act (the "Rules under the Securities Act"), is hereinafter
called the "Registration Statement" and the final prospectus included as
part of the Registration Statement is herein called the "Prospectus",
except that, if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Securities which differs from the Prospectus on file at the Commission at
the time the Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the Rules under the Securities Act), the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first
provided to the Underwriters for such use. The term "Preliminary
Prospectus" as used in this Agreement means a preliminary prospectus as
defined in Rule 430 of the Rules under the Securities Act. The Securities
Act, the Securities Exchange Act of 1934, as amended ("Exchange Act"), and
the rules and regulations promulgated thereunder are sometimes
collectively referred to in this Agreement as the "Acts." All contracts
and documents required by the Acts to be filed or submitted in connection
with the Registration Statement have been so filed or submitted.
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(b) COMPLIANCE WITH SECURITIES ACT, ETC. When the Registration
Statement shall become effective and at all times subsequent thereto, up
to and including the Closing Date and the Option Closing Date (as such
terms are herein defined), and during such longer period until any
post-effective amendment to the Registration Statement shall become
effective, the Registration Statement (and any post-effective amendment to
the Registration Statement) will contain all statements which are required
to be stated therein in accordance with the Securities Act and the Rules
under the Securities Act, will fully comply as to form in all material
respects with the applicable provisions of the Securities Act and the
Rules under the Securities Act, and the Registration Statement and any
post-effective amendment to the Registration Statement will not contain
any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and the Prospectus and any
amendment or supplement thereto will at all times up to and including the
Closing Date and the Option Closing Date (as hereinafter defined), and
during such longer period as the Prospectus may be required to be
delivered in connection with sales of Securities by the Underwriters or
any dealer, fully comply in all material respects with the provisions of
the Securities Act and the Rules under the Securities Act and will not
contain any untrue statement of a material fact and will not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement and any post-effective amendment
to the Registration Statement or the Prospectus or any amendment of, or
supplement to, either of them in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative specifically for use in connection
with the preparation of the Registration Statement or of the Prospectus.
It is understood that for all purposes of this Agreement the statements
set forth in the Prospectus on page 2 with respect to stabilization, the
second and third sentences of the last paragraph under "Certain
Relationships and Related Transactions" with respect to the transactions
with officers of the Representative under the section entitled
"Underwriting" and the identity of counsel for the Underwriters under the
section entitled "Legal Matters" constitute the only information furnished
in writing by or on behalf of the Underwriters for inclusion in the
Registration Statement and Prospectus.
(c) NO STOP ORDER. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus, and each
Preliminary Prospectus, at the time of filing thereof, fully complied in
all material respects with the provisions of the Securities Act and the
Rules under the Securities Act and did not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
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the information contained in or omitted from any Preliminary Prospectus in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representative
specifically for use in connection with the preparation of such
Preliminary Prospectus.
(d) ACCOUNTANTS. BDO Xxxxxxx, LLP has audited the audited financial
statements filed as part of the Registration Statement and those included
in the Prospectus, to the extent set forth in their reports in the
Registration Statement and Prospectus, and are independent certified
public accountants with respect to the Company as required by the
Securities Act and the Rules under the Securities Act.
(e) FINANCIAL STATEMENTS. The consolidated financial statements and
the notes thereto included in the Registration Statement and Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules under the Securities Act.
The consolidated financial statements present fairly the financial
condition and results of operations and combined cash flows of the Company
and its consolidated subsidiaries, at the dates and for the periods
indicated therein, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved (except as disclosed in the notes thereto). The
financial information set forth in the Prospectus under the headings
"Summary Consolidated Financial Information", "Recent Developments" and
"Selected Consolidated Financial Data" present fairly, on the basis stated
in the Prospectus, the information set forth therein and has been derived
from or compiled on a basis consistent with that of the audited
consolidated financial statements included in the Prospectus.
The Companies (as defined below) maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any difference.
(f) SUBSIDIARIES; COMMONLY CONTROLLED ENTITIES. The Company owns all
of the outstanding shares of capital stock of Xxxxxxxxx Instruments, Inc.,
a Delaware corporation ("BII"), and of Xxxxxxxxx Research Ltd., an
Ontario, Canada corporation ("BRL"; collectively, the "Subsidiaries") and
26% of the capital stock of Xxxxxxxxx Laboratories, Inc., a
corporation ("Labco"). All the outstanding shares of Capital Stock of
each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and all the shares of capital stock of
BII and BRL and shares of Labco are owned beneficially
by the Company, free and clear of any liens, encumbrances, security
interests or other restrictions, except
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restrictions created pursuant to the Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated December 1, 1995, between the Company and
Labco and the Termination Agreement (the "Termination Agreement"), dated
October 1996, between the Company and Labco, and no rights exist to
acquire any of the capital stock of any of the Subsidiaries, except those
included in the Stock Purchase Agreement and the Termination Agreement.
Neither the Company, nor any of its Subsidiaries owns any securities of
any corporation or has any equity interest in any firm, partnership,
association or other entity. The Company and the Subsidiaries are
hereinafter collectively referred to as the "Companies".
(g) NO MATERIAL ADVERSE CHANGE. Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, other than as stated therein, none of the Companies has
sustained any material loss or interference with their respective
businesses, financial condition or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree; and,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Companies has
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, not in the ordinary course of
business, and there has not been any material change in the capital stock
(including any dividend or distribution of any kind declared, paid, or
made on any class of capital stock of any of the Companies) or long-term
debt or obligations under capital leases of any of the Companies, or any
material adverse change; and there is no present intention by any of the
Companies to terminate any material supplier relationship or knowledge by
any of them of any material supplier's present intention to terminate the
supplier relationship with any of the Companies, nor any knowledge of any
development involving a prospective material adverse change in the
supplier's respective businesses, financial conditions or properties,
including any proposed legislation or regulations which, if enacted or
adopted, could have a material adverse change, in the condition (financial
or otherwise), or in the earnings, business affairs or business prospects
of the any of the Companies other than those reflected in the Registration
Statement and the Prospectus.
(h) CAPITALIZATION; DESCRIPTIONS OF SECURITIES. (i) The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus under "Capitalization"; the issued and outstanding shares of
Common Stock and Preferred Stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; the Firm Shares
and Additional Shares, upon payment of the applicable price therefor, and
when issued and delivered by the Company pursuant to this Agreement, will
be validly issued, fully paid and non-assessable. The shares of Common
Stock and Preferred Stock of the Company conform to the descriptions of
them contained in the Prospectus, and the descriptions of the Common Stock
and Preferred Stock conform to the rights set forth in the Company's
Certificate of Incorporation, as amended, defining the same. No rights
exist to acquire any of the capital stock of the Company, except as set
forth in the
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Registration Statement. The issuance of the Firm Shares and the Additional
Shares is not subject to, or in violation of, any preemptive or other
subscription rights.
(ii) The Warrants have been duly authorized and, when delivered and
paid for in accordance with this Agreement and the Warrant Agreement
related thereto, will be validly issued and will constitute valid and
binding obligations of the Company in accordance with, and will be
exercisable in accordance with, their terms; the shares of Common Stock
issuable upon exercise of the Warrants have been duly and validly reserved
for issuance pursuant to the terms of the Warrants and, when delivered and
paid for pursuant to the terms of such Warrants upon the due exercise of
the Warrants by the holders thereof, will be duly authorized, validly
issued, fully paid and nonassessable, and the holders will not be subject
to personal liability by reason of being such holders, and such shares
will not be subject to the preemptive rights of any stockholder of the
Company.
(iii) The Warrants conform in all material respects to the
description thereof contained in the Prospectus, and such description
conforms to the rights set forth in the instrument defining the same.
(i) ORGANIZATION, QUALIFICATION, ETC. The Company is a duly
organized and validly existing corporation in good standing under the laws
of the State of Delaware with corporate power and authority to own and
lease its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement, BII is a duly organized and validly existing corporation in
good standing under the laws of the State of New Jersey, BRL is a duly
organized and validly existing corporation in good standing under the laws
of Ontario, Canada, each with corporate power to own and lease its
properties and to conduct its business as described in the Prospectus, and
each is duly qualified to do business and in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect
on its condition, financial or otherwise, or on its earnings, business
affairs or business prospects (a "Material Adverse Change").
(j) REGULATORY COMPLIANCE. Each of the Companies holds all material
licenses, certificates, permits and other evidence of regulatory
compliance issued by appropriate federal, state or local or foreign
governmental agencies or bodies necessary for the conduct of its business
as described in the Prospectus except for those which the failure of the
Company to hold would not result in a Material Adverse Change, and none of
the Companies has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, permit or
other evidence of compliance which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Change.
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(k) AUTHORITY. The Company has the corporate power and authority,
and has taken all corporate action necessary, to enter into this Agreement
and to authorize, issue and sell the Securities on the terms and
conditions set forth in this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy or other laws relating to or affecting
creditors' rights generally or equitable provisions under federal or state
securities laws or public policy.
(l) COMPLIANCE WITH OTHER INSTRUMENTS; CONSENTS. None of the
Companies is in violation of its charter or bylaws or in default in the
performance or observation of any obligation, agreement, covenant or
condition contained in any distribution agreement, indenture, mortgage,
deed of trust, note, bank loan or credit agreement, or any other material
agreement or instrument to which any of the Companies is a party or by
which it is bound, or to which any of its properties or assets are
subject, other than those default or defaults, which singly or in the
aggregate would not result in a Material Adverse Change, and each such
distribution agreement, indenture, mortgage, deed of trust, note, bank
loan or credit agreement, and other material agreement or instrument, is
in full force and effect and, assuming that such agreement or instrument
is the legal, valid and binding obligation of the other party to such
agreement or instrument, is the legal, valid and binding obligation of,
and is enforceable as to, each of the Companies, as the case may be, in
accordance with its terms. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated herein will not (i) conflict with, result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give rise to the rights of termination under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Companies pursuant to, any distribution
agreement, indenture, mortgage, deed of trust, note, bank loan or credit
agreement or any other material agreement or instrument to which any of
the Companies is a party or by which any of their respective properties or
assets are bound other than such conflicts, breaches, violations or
defaults which, singly or in the aggregate, would not result in a Material
Adverse Change, nor will such action result in any violation of the
provisions of the charter or bylaws of any of the Companies, or any law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court having jurisdiction over any of the
Companies, or their respective properties or operations except for such
violations, which, singly or in the aggregate, would not result in a
Material Adverse Change, or (ii) require the consent, approval,
authorization or order of any court or governmental agency or body for the
consummation by the Company of any of the transactions contemplated
hereby, except such as have been obtained and such as may be required
under the Acts, and under state securities or "Blue Sky" laws in
connection with the issuance and distribution of the Securities or except
for those which the failure of the Company to obtain would not result in a
Material Adverse
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Change. There are no contracts or documents of the Companies that are
required to be filed as exhibits to the Registration Statement under the
Securities Act or the Rules that have not been so filed.
(m) LITIGATION. Except as set forth in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental agency
or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting any of the Companies, that is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or that might result in a Material Adverse Change or
that might materially and adversely affect the properties or assets
thereof or that might materially or adversely affect the consummation of
this Agreement; all pending legal or governmental proceedings to which any
of the Companies is a party or of which any of their respective properties
or assets are the subject, that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business of the Companies, are not material.
(n) PAYMENT OF TAXES. Each of the Companies has filed all United
States federal, state and local tax returns which are required to be filed
and all such filed returns are complete and accurate except for such
incompletions and inaccuracies as would not result in a Material Adverse
Change. All taxes and all assessments to the extent that they have become
due have been paid in full or the Company has contested such amounts
through appropriate proceedings and has established adequate reserves
therefor in accordance with generally accepted accounting principles, and
each of them has made adequate accruals for all taxes which may be owed
but have not been paid. There is no audit, examination, deficiency, or
refund litigation pending or, to the Company's knowledge, threatened, with
respect to any Taxes of the Companies that would individually or in the
aggregate result in a Material Adverse Change. All Taxes, interest,
additions, and penalties due with respect to completed and settled
examinations or concluded litigation relating to it have been paid in
full. None of the Companies has executed an extension or waiver of any
statute of limitations on the assessment or collection of any Tax that is
currently in effect. No rulings have been issued by or agreements entered
into with any Tax Authority (as defined below) with respect to the Company
or any subsidiary or affiliate. For purposes of this paragraph, "Taxes"
shall mean all taxes, charges, fees, liens, duties or other assessments,
however denominated, including any interest or penalties that may become
payable in respect thereof, imposed by the United States government, any
state, local or foreign government or any agency or political subdivision
of any such government (a "Taxing Authority"), which taxes shall include,
without limiting the generality of the foregoing, all income taxes,
payroll and employee withholding taxes, unemployment insurance taxes,
social security taxes, sales and use taxes, excise taxes, capital taxes,
franchise taxes, gross receipt taxes, occupation taxes, real or personal
property taxes, value added taxes, stamp taxes, transfer taxes, workers'
compensation taxes, and other obligations of the same or of a similar
nature.
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(o) Listing. The Securities are qualified for listing on The NASDAQ
National Market System.
(p) INVESTMENT COMPANY STATUS. None of the Companies are an
"investment company" or an "affiliated person" of, or promoter, or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940.
(q) REAL AND PERSONAL PROPERTY. Except as disclosed in the
Prospectus, each of the Companies owns outright, in fee simple, title to
the real and personal property purported to be owned by it, free and clear
of all liens, mortgages, charges or encumbrances of any nature, except
those which do not materially diminish the value of the property subject
to them or materially interfere with or materially impair the present and
continued use of that property in the usual and normal conduct of its
business (collectively "Permitted Encumbrances"). All of the leases under
which each of the Companies holds properties or assets as lessee are in
all material respects as described in the Prospectus, are valid and in
full force and effect and, to the Companies' knowledge, enforceable as to
the Companies in accordance with their terms, and none of the Companies is
in default in any respect under any of the terms or provisions of any such
leases, except for any default which would not result in a Material
Adverse Change and, to the Company's knowledge, no claim has been asserted
by anyone adverse to the rights of the Companies as lessee under any of
the leases mentioned above, or affecting or questioning the right of any
of the Companies to continued possession of the leased premises or assets
under any such lease that would result in a Material Adverse Change.
(r) INTELLECTUAL PROPERTY. Each of the Companies owns or possesses
adequate licenses or other rights to use all patents, trade secrets,
trademarks, trade names and copyrights necessary to enable it to conduct
its business as now operated (the "Intellectual Property") except for such
licenses or other rights, which the failure of the Company to own of
possess would not result in a Material Adverse Change and such
Intellectual Property (other than Intellectual Property rights acquired as
licensee) is owned free and clear of any liens, security interests,
mortgages, charges, encumbrances and adverse rights of every kind, nature
and description; and none of the Companies has any knowledge of any claim
or received any notice of infringement of or conflict with asserted rights
of others or have knowledge of infringement by others of its rights with
respect to any of the foregoing which, singly or in the aggregate, could
result in a Material Adverse Change . Except for the rights of customers
under license agreements, the Intellectual Property is not subject to any
licenses, sublicenses, royalty arrangements, or disputes, and except for
such rights, each of the Companies has the exclusive right to make, copy,
sell, exploit and provide to others the use of the Intellectual Property
pertinent to it and all derivative works thereof free and clear of any
liens, security interests, mortgages, charges, encumbrances and adverse
rights of every kind, nature and description. There are no defects in the
Intellectual Property, which defects would in any material and
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adverse respect affect the functioning thereof in accordance with the
specifications therefor, or the use or exploitation thereof. No agreement
exists which would preclude any desired change to the Intellectual
Property, excluding Permitted Encumbrances. Each of the Companies has
taken or is taking all actions necessary in its reasonable judgment to
protect the Intellectual Property pertinent to it. Except as disclosed in
the Prospectus, no third party has any interest in, or right to
compensation from any of the Companies by reason of the use, exploitation
or sale of the Intellectual Property, and none of the Companies has
received notice or knowledge of any complaint, assertion, threat or
allegation that would contradict the foregoing.
(s) INSURANCE. Each of the Companies has its property adequately
insured against loss or damage by fire, maintains adequate insurance
against liability for negligence, and maintains such other insurance in
such nature and amounts of coverage as is usually maintained by companies
engaged in the same or similar business.
(t) NO STABILIZATION OR MANIPULATION OF PRICE. Neither the Company
nor any officer or director of the Company has taken or will take,
directly or indirectly, any action designed to stabilize or manipulate the
price of any security of the Company, or which has constituted or which
might in the future reasonably be expected to constitute stabilization or
manipulation of the price of the Offered Securities in connection with the
offering contemplated by the Registration Statement.
(u) RELATED TRANSACTIONS. There are no business relationships or
related-party transactions of the nature described in Item 404 of
Regulation S-B involving any of the Companies and any other persons
referred to in said Item 404 that are required to be described in the
Prospectus and which have not been so described.
(v) NO REGISTRATION RIGHTS. Except as set forth in Schedule __
hereto, no person or entity has the right (which has not been waived) to
require registration of Common Stock or other securities of the Company
because of the filing or effectiveness of the Registration Statement or
otherwise.
(w) LOCK-UP AGREEMENTS. The Company has obtained and delivered to
the Underwriters a written agreement, in form satisfactory to Xxxxxxxx &
Xxxxx XXX, counsel for the Underwriters, by each officer and director of
the Company as of the Effective Date not to, directly or indirectly, sell,
offer to sell or agree to sell or otherwise dispose of any Common Stock of
the Company for a period of 180 days from the Effective Date without the
prior written consent of the Representative, other than pursuant to the
Registration Statement or as described in such agreement.
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(x) NO BROKER OR FINDER ENGAGED BY THE COMPANY. Except as disclosed
in the Prospectus, the Company has not incurred any liability for any
finder's fees or similar payments in connection with any of the
transactions herein contemplated.
(y) LABOR RELATIONS. None of the Companies is involved in any labor
dispute which might reasonably be expected to result in a Material Adverse
Change nor, to the knowledge of the Companies, is any such dispute
threatened.
(z) DEALINGS. None of the Companies nor any of their respective
officers, directors, employees, agents or any other person acting on their
behalf has, directly or indirectly, given or agreed to give any money,
gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or
an agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic or
foreign) or any political party or candidate for office (domestic or
foreign) or other person who was, is, or may be in a position to help or
hinder their respective businesses (or assist in connection with any
actual or proposed transaction) which (a) might subject any of them to any
damage or penalty in any civil, criminal or governmental litigation or
proceeding, (b) if not given in the past, might result in a Material
Adverse Change as reflected in any of the combined financial statements
contained in the Prospectus, or (c) if not continued in the future, would
reasonably be expected to result in a Material Adverse Change. Each of the
Companies' internal accounting controls and procedures are sufficient to
cause it to comply with the Foreign Corrupt Practices Act of 1977, as
amended.
(aa) PRIOR TRANSACTIONS. Except as set forth in the Registration
Statement, the Company has not issued, sold or offered for sale within the
last three years any of its equity securities.
2. PURCHASE AND SALE OF SHARES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby agrees to issue and sell to the Underwriters,
severally and not jointly,the number of Firm Securities to be sold by the
Company set forth opposite the name of each Underwriter on Schedule I, and each
Underwriter, severally and not jointly, hereby agrees to purchase from the
Company the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule I hereto, at a purchase price of $ per Firm Share
and $ per Firm Warrant.
3. DELIVERY AND PAYMENT. The Company shall deliver the Firm Securities at
the office of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, on
, 1996 at 10:00 A.M., New York City time, the date and time of such delivery
being hereinafter called the "Closing Date." On the Closing Date, delivery of
the Firm Securities shall be made to you, for the respective accounts of the
several Underwriters, against payment by the several Underwriters through you of
the purchase price for the Firm Securities. The purchase price for the Firm
Securities will be paid to or upon the order of the Company, in bank checks in
New York Clearing House funds. Certificates for the Firm Securities shall be
made available to you for inspection, checking and packaging at the office
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of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, not less than
one full business day prior to the Closing Date. Time shall be of the essence
and delivery at the time and place specified in this Agreement is a further
condition to the obligations of each Underwriter.
In the event the Underwriters exercise the option granted in Section 4(a)
hereof to purchase all or any portion of the Additional Securities, the Company
shall deliver the Additional Securities at the office of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M., New York City time on the
Option Closing Date (as hereinafter defined). On the Option Closing Date,
delivery of the Additional Securities shall be made to you, for the respective
accounts of the several Underwriters, against payment by the several
Underwriters through you of the purchase price for the Additional Securities.
The purchase price for the Additional Securities will be paid to or upon the
order of the Company, in bank checks in New York Clearing House funds.
Certificates for the Additional Securities shall be made available to you for
inspection, checking and packaging at the office of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, not less than one full business day prior
to the Option Closing Date. Time shall be of the essence and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of each Underwriter.
4. OPTION TO PURCHASE ADDITIONAL SHARES.
(a) For the sole purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants an option to the Underwriters to purchase
150,000 Additional Shares and 150,000 Additional Warrants from the Company, in
each case at a price identical to the price per Firm Share and Firm Warrant set
forth in Section 2 of this Agreement. The option hereby granted may be exercised
by the Underwriters as to all or any part of the Additional Securities at any
time, but only once prior to the end of the close of business on the thirtieth
day following the Closing Date; provided, however, that Additional Securities
may only be purchased on the basis of one Additional Warrant for each Additional
Share purchased. Subject to such adjustments to eliminate fractional Additional
Securities as you, as the Representative of the Underwriters, may determine, the
number of Additional Securities to be purchased by each Underwriter shall be
equal to the number of Additional Shares multiplied by a fraction, the numerator
of which is the number of Firm Shares purchased by such Underwriter and the
denominator of which is the total number of Firm Shares purchased by all
Underwriters including the Representative.
(b) The option granted hereby may be exercised by you, as the
Representative of the Underwriters, by giving written notice to the Company
setting forth the number of Additional Securities to be purchased, the date and
time for delivery of payment for the Additional Securities, and stating that the
Additional Securities being purchased are to be used solely for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Securities. If the notice is given prior to the Closing Date, the date for
delivery and payment shall not be earlier than the later of two (2) full
business days after the notice is given or the Closing Date. If the notice is
given on or after the Closing Date, the date for delivery and payment shall not
be earlier than three full business days
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after the day on which the notice is given. In either event, the date shall not
be more than fifteen (15) full business days after the day on which the notice
is given. The date and time for delivery and payment is called the "Option
Closing Date." Upon exercise of the option, the Company shall become obligated
to sell to the Underwriters and, subject to the terms and conditions set forth
in Section 4(c) of this Agreement, the Underwriters shall become obligated,
severally and not jointly, to purchase the number of Additional Shares described
in Section 4(a) above.
(c) The obligation of the Underwriters to purchase and pay for any of the
Additional Securities is subject to the accuracy in all material respects as of
the date of this Agreement, the Closing Date and the Option Closing Date of, and
the compliance by the Company in all material respects with, its representations
and warranties in this Agreement, to the accuracy in all material respects of
the statements of the officers of the Company made pursuant to this Agreement,
to the performance in all material respects by the Company of its obligations
under this Agreement, to the satisfaction by the Company as of the Option
Closing Date of the conditions set forth in Section 11 of this Agreement, and to
the delivery to you of opinions, certificates, and letters addressed to you and
dated the Option Closing Date substantially similar in scope to those specified
in Section 11 of this Agreement, but with each reference to "Firm Securities" to
be to the Additional Securities being sold, and "Closing Date" to be to the
"Option Closing Date."
5. OFFERING BY UNDERWRITERS. After the Registration Statement becomes
effective, the Underwriters propose to offer for sale to the public the Firm
Securities and any Additional Securities which may be sold at the price and upon
the terms set forth in the Prospectus. The Representative represents and
warrants that it has not incurred any liability for finder's fees or similar
payments in connection with the transactions herein contemplated.
6. REPRESENTATIVE'S WARRANTS. At the Closing, the Company shall sell to
the Representative, for $.0012 per warrant, five-year warrants (the
"Representative's Warrants") entitling the holder to purchase up to 125,000
shares of Common Stock and three-year warrants (the "Underlying Warrants")
entitling the holder to purchase up to 125,000 warrants identical in form and
substance to the Firm Warrants. The Representative's Warrants shall be
exercisable for a period of four years commencing one year after the effective
date of the Prospectus and the Underlying Warrants shall be exercisable for a
period of two years commencing one year after the effective date of the
Prospectus, in each case at a price or prices conforming to the requirements of
the National Association of Securities Dealers Inc. and shall contain the
registration rights and other terms and conditions set forth in the related
Exhibit to the Registration Statement. As used herein, "Representative's
Securities" shall mean the Representative's Warrants, the Underlying Warrants
and the shares of Common Stock issuable on exercise of all such Warrants.
7. EXPENSES.
The Company will pay all fees, taxes and expenses incident to the
performance of the obligations of the Company under this Agreement and under any
other agreement in connection with the offer, sale and issuance of the Firm
Securities and Additional Securities,
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and any fees, taxes and expenses, including transfer taxes incident to the
issuance and delivery of the Firm Securities and Additional Securities to the
Underwriters as may be required by this Agreement, including, without
limitation, accounting, legal (other than the fees and disbursements of the
Underwriters' counsel, except as provided below), printing, any state or local
transfer or other taxes, advertising and other costs incurred in connection with
the preparation, printing, filing and delivery to the Representative of the
Registration Statement, the Preliminary Prospectus, the Prospectus, and all
amendments or supplements to them, preliminary and final Blue Sky Memoranda,
this Agreement, the Agreement Among Underwriters and Selected Dealer Agreement,
Underwriters' Questionnaires, powers of attorney, the listing of the Securities
on The Nasdaq National Market System and any other agreements or similar items
of expense, including postage, printing, advertising costs, the expenses of
"road shows" and other marketing expenses reasonably incurred by you or
reasonably required or desirable in connection with the offering and sale of the
Firm Securities and Additional Securities, and in connection with furnishing
copies of the Preliminary Prospectus, the Prospectus and all supplements and
amendments to them to the several Underwriters and all filing fees to the
Commission and the National Association of Securities Dealers, Inc. ("NASD")
payable in connection with this offering. The Company will pay all legal fees
(including the reasonable fees of Xxxxxxxx and Xxxxx XXX, Blue Sky counsel to
the Company), disbursements, filing fees and other costs of compliance with or
registration and qualification under applicable state securities or Blue Sky
laws and all reasonable expenses incident thereto. The Company shall also pay
the fees and expenses of the transfer agent and warrant agent. At the Closing,
the Company shall pay to the Representative a non-accountable expense allowance
of 2% of the gross proceeds of the offering of the Firm Securities, of which the
Representative acknowledges having received a non-refundable advance of $20,000,
and at any Option Closing shall pay to the Representative a further
non-accountable expense allowance of 2% of the gross proceeds of the offering of
Additional Securities.
8. FURTHER COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters contained in this Agreement, the Company
covenants and agrees with each of the several Underwriters as follows:
(a) The Company will not at any time submit or make any amendment or
supplement to the Prospectus or Registration Statement which shall not
have been submitted to you within a reasonable time prior to the proposed
submission thereof, or to which you shall reasonably object in writing, or
which is not in compliance with the Acts.
(b) The Company will use its best efforts to cause the Registration
Statement and any post-effective amendments thereto to comply with the
requirements of the Securities Act and the Rules under the Securities Act
and to become effective, and will promptly advise you and confirm in
writing upon your request (i) when the Registration Statement and any
amendment thereto shall become effective, (ii) when any post-effective
amendment to the Registration Statement becomes effective, (iii) of the
receipt of any comments from the Commission, (iv) when the Commission
shall request any amendment to the Registration Statement or Prospectus,
or request any additional information, (v) of the necessity
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of amending or supplementing the Registration Statement or any
post-effective amendment in order to then meet the requirements of the
Securities Act and the Rules under the Securities Act, and (vi) of the
issuance by the Commission, any "Blue Sky" authority or any other
governmental agency with jurisdiction over the Company or its securities,
of any stop order or similar order with regard to the Registration
Statement or the Prospectus, or any order preventing or suspending the use
of any Preliminary Prospectus or the Registration Statement or Prospectus,
or of the suspension of the qualification of the Securities for offer or
sale in any jurisdiction, or of the institution of any proceedings for any
such purpose. The Company will use its best efforts to prevent the
issuance of any stop order or of any order preventing or suspending such
use and if such an order shall be issued, the Company will use its best
efforts to obtain its withdrawal as soon as possible.
(c) The Company will prepare and file with the Commission, upon your
reasonable request, any amendments or supplements to the Registration
Statement or Prospectus, in form and substance reasonably satisfactory to
counsel for the Company, as in the opinion of Xxxxxxxx & Xxxxx XXX,
counsel for the Underwriters, may be necessary or advisable in connection
with the distribution of the Offered Securities and the exercise of the
Warrants included therein, and will use its best efforts to cause the same
to become effective as promptly as possible and to remain effective for
the term of the Warrants included in the Offered Securities.
(d) The Company consents to the use of any Preliminary Prospectus by
the several Underwriters and by dealers for the purposes contemplated by
this Agreement and in accordance with the Acts. The Company will deliver
to you, at or before the Closing Date, three copies of the Registration
Statement and all amendments thereto, including all financial statements
and exhibits filed with it, and copies of all written communications
between the Company, its representatives and agents and the Commission,
and will deliver to you such number of copies of the Registration
Statement, including such financial statements, but without exhibits, and
all amendments thereto as you may reasonably request. The Company will
deliver or mail to you and, upon your request, to the Underwriters, from
time to time, during the period when delivery of the Prospectus relating
to the Offered Securities shall be required under the Acts, as many copies
of the Prospectus (as amended or supplemented) as you may reasonably
request.
(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the Rules under the Securities Act, then, at the times
specified in Rule 430A and Rule 424(b), the Company will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) of the Rules under the Securities Act copies of the
amended Prospectus, or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended Prospectus)
containing all information so omitted.
(f) The Company will comply with the requirements of the Acts and
any other applicable rules and regulations of any governmental authority
having
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jurisdiction over this offering so as to permit the completion of the
public distribution of the Offered Securities. Subject to the provisions
of Subsection (a) of this Section 8, if, at any time when a Prospectus is
required to be delivered under the Acts, (i) an event relating to or
affecting the Company shall have occurred which, in the judgment of the
Company and its counsel, or in the opinion of counsel for the
Underwriters, would cause the Registration Statement as then in effect to
include an untrue statement of a material fact or to omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading, or in order to make the
Registration Statement comply with the Acts and the Rules under the
Securities Act, or (ii) it is necessary to amend or supplement the
Registration Statement or Prospectus, the Company will promptly notify you
of the occurrence and will promptly prepare, file and deliver to you
without charge such number of copies of the amended or supplemented
Registration Statement or Prospectus as you shall reasonably request, and
will use its best efforts to cause the Commission and appropriate "Blue
Sky" authorities to take all required action with regard to any such
amendment as may be necessary to permit the lawful use of the Registration
Statement and Prospectus in connection with the distribution of the
Offered Securities.
(g) The Company will supply all necessary documents, exhibits and
information and execute all applications, instruments and papers as may be
necessary or desirable in the opinion of Xxxxxxxx & Xxxxx XXX, Blue Sky
counsel, and as requested by you, to qualify the Offered Securities for
sale under the Blue Sky or other securities laws in such jurisdictions as
the Underwriters may reasonably request, provided the Company shall not
have to qualify as a foreign corporation and shall not be required to
consent to service of process generally. The Company will take any
reasonable measures requested by you and such action, if any, which is
necessary under such laws in order to qualify the Offered Securities for
sale and to continue such registration or qualification so long as
necessary to permit the completion of the public distribution with respect
to such Securities.
(h) The Company will make generally available to its security
holders as soon as practicable after the expiration of one year after the
date the Registration Statement becomes effective, and in all events not
later than , 1997, an earnings statement of the Company (which will
be in such detail and form as you may reasonably request and which need
not be audited) covering a period of at least 12 months beginning not
later than the first day of the Company's fiscal quarter next following
the date the Registration Statement becomes effective, which earnings
statement shall satisfy the provision of Section 11(a) of the Securities
Act including Rule 158 promulgated thereunder.
(i) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company shall furnish to its
stockholders and warrantholders annual reports containing financial
statements of the Company audited by its independent certified public
accountants and quarterly reports for the first three quarters of its
fiscal year containing financial information which may be unaudited.
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(j) So long as the Company shall be subject to the reporting
requirements of the Exchange Act, the Company will, from time to time,
after the date the Registration Statement becomes effective, file with the
Commission such reports as are required by the Acts and with state
securities commissions in states where the Offered Securities have been
sold by the Representative (as the Representative shall have advised the
Company in writing) such reports as are required to be filed by the
securities acts and the regulations of those states.
(k) The Company will apply the net proceeds from the sale of the
Offered Securities for the purposes set forth under "Use of Proceeds" in
the Prospectus.
(l) The Company shall furnish to you as early as practicable prior
to the Closing Date, but no later than three (3) full business days prior
thereto, a copy of the latest available unaudited interim financial
statements of the Company which have been read by the Company's
independent certified public accountants, as stated in their letters to be
furnished pursuant to Section 11(i) of this Agreement.
(m) During the period of five (5) years from the date the
Registration Statement becomes effective, the Company will furnish to the
Representative copies of all reports and other communications (financial
or other) furnished by the Company to its shareholders and, as soon as
reasonably practicable, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission, NASDAQ, or
any national exchange on which any class of securities of the Company may
be listed.
(n) During a period of 180 days after the date the Registration
Statement becomes effective, the Company will not, directly or indirectly,
without the prior written consent of the Representative, offer, sell,
grant any option to purchase or otherwise dispose of any Common Stock or
any securities convertible into or exchangeable for Common Stock except
pursuant to this Agreement, and except (i) in connection with a merger or
asset acquisition, (ii) upon exercise or conversion of securities
(including stock options) of the Company outstanding prior to the
effective date of the Registration Statement (iii) the creation and
adoption of an employee stock compensation program (a "Program"), or (iv)
the grant of options, SARs, restricted stock and other securities under
such Program, not to exceed 200,000 shares of Common Stock.
(o) The Company will reasonably enforce, for your benefit, the
written agreements (copies of which have been furnished to you) by all of
the executive officers and directors of the Company pursuant to Section
1(w) hereof.
(p) The Company will cause the officers and directors of the Company
(enumerate) to enter into an agreement with the Representative to the
effect that, for a period of 180 days from the date hereof, he or she will
not, without the prior consent of the Representative, directly or
indirectly, offer, sell, offer to sell, grant any option to purchase or
otherwise sell or dispose of any shares of the Common Stock of the Company
or any securities convertible into or exercisable or exchangeable
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therefor or with respect to which such person has the power of
disposition, except for the exercise of stock options.
(q) The Prospectus and any amendment or supplement thereto will at
all times up to and including the Closing Date and the Option Closing Date
(as hereinafter defined), and during such longer period as the Prospectus
may be required to be delivered in connection with the issuance and sale
by the Company of shares of Common Stock or exercise of any of the
Warrants fully comply in all material respects with the provisions of the
Securities Act and the Rules under the Securities Act and will not contain
any untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, and, subject to
Section 9(c) to indemnify and hold harmless, each Underwriter (including
specifically each person who may be substituted for an Underwriter as provided
in Section 13 of this Agreement) and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act, from and
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Act, state
securities laws or under any other statute or at common law or otherwise, and,
except as hereinafter provided, will reimburse each of the Underwriters and each
such controlling person, if any, for any legal or other out-of-pocket expenses
reasonably incurred by them or any of them in connection with investigating or
defending any claim or action whether or not resulting in any liability, insofar
as such losses, claims, damages, expenses, liabilities or actions arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, in any Preliminary Prospectus or
in the Prospectus (or the Registration Statement or Prospectus as from time to
time amended or supplemented by the Company) or in any application or other
document (hereinafter "Application") executed by the Company or based upon
written information furnished by or on behalf of the Company, filed in any
jurisdiction in order to qualify the Securities under the securities laws of
that jurisdiction, or which arise out of or are based upon the omission or
alleged omission to state in any of the foregoing any material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnity agreement contained in this Subsection shall not
apply to any loss, claim, damage, expense or liability to the extent arising out
of any untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, Preliminary Prospectus or
Prospectus (or the Registration Statement or Prospectus as from time to time
amended or supplemented by the Company) or, Application in reliance upon and in
conformity with information furnished in writing to the Company in connection
therewith by the Representative or any Underwriter directly or through you
expressly for use therein; provided, further that the indemnity agreement
contained in this Subsection is subject to the condition that, insofar as it
relates to any such untrue statement or alleged untrue statement or omission or
alleged omission in any Preliminary Prospectus but
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eliminated or remedied in the Prospectus, such indemnity agreement shall not
inure to the benefit of any Underwriter or any person controlling such
Underwriter from whom the person asserting any such loss, claim, damage,
expense, liability or action purchased the Securities if (i) prior to the time
such Prospectus was required under the Securities Act to be furnished to such
person the Company had furnished copies of the properly corrected or
supplemental Prospectus to such Underwriter, (ii) a copy of such Prospectus, as
then corrected or supplemented, was not furnished to such person at or prior to
the time required under the Securities Act, and (iii) the delivery of such
Prospectus would have constituted a complete defense to the claim asserted by
such person. Promptly after receipt by any Underwriter or any person controlling
such Underwriter of notice of the commencement of any action in respect of which
indemnity may be sought against the Company under this Subsection (a), such
Underwriter or controlling person shall notify the Company in writing of the
commencement of the action and, subject to the provisions hereinafter stated,
the Company shall assume the defense of that action (including the employment of
counsel who shall be reasonably satisfactory to the Representative (who may be
Company counsel)) and the payment of reasonable out-of-pocket expenses insofar
as such action shall relate to any alleged liability in respect of which
indemnity may be sought against the Company. Any Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense, but the fees and expenses of such counsel
shall not be at the expense of the Company unless the employment of such counsel
has been specifically authorized by the Company or unless the indemnified party
or parties reasonably conclude there may be defenses available to it or them
which were not available to the Company (in which case the Company will not have
the right to direct the defense of the action on behalf of the indemnified
parties), in which event the reasonable expenses of one additional counsel for
the Underwriters will be borne by the Company. The Company shall not be liable
to indemnify any person for any settlement of any such action effected without
the written consent of the Company. The obligations of the Company under the
indemnity agreement set forth in this Subsection (a) shall be in addition to any
liability the Company may otherwise have under this Agreement.
(b) Each Underwriter (including specifically each person who may be
substituted for an Underwriter as provided in Section 13 of this Agreement)
severally agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages, expenses, or liabilities, joint or several,
to which they or any of them may become subject under the Acts or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Company and each such director, officer or
controlling person for any legal or other out-of-pocket expenses reasonably
incurred by them or any of them in connection with investigating or defending
any claim or action whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, in any Preliminary Prospectus or in the
Prospectus (or the Registration Statement or Prospectus as from time to time
amended or supplemented) or in any Application, or arise out of or are based
upon the omission or alleged omission to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
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misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by the Representative or such Underwriter
directly or through the Representative expressly for use therein. Promptly after
receipt of notice of the commencement of any action in respect of which
indemnity may be sought against one or more Underwriters under this Subsection
(b), the indemnified party shall notify the Representative Underwriters in
writing of the commencement of the action and the Underwriter or Underwriters
against whom indemnity may be sought shall, subject to the provisions
hereinafter stated, assume the defense of such action (including the employment
of counsel who shall be reasonably satisfactory to the Company, and the payment
of expenses) and the payment of reasonable out-of-pocket expenses insofar as
such action shall relate to an alleged liability in respect of which indemnity
may be sought against such Underwriter or Underwriters. The Company and each
such director, officer or controlling person shall have the right to employ
separate counsel in any such action and participate in the defense, but the fees
and expenses of such counsel shall not be at the expense of any Underwriter
unless the employment of such counsel has been specifically authorized by the
Underwriters obligated to defend such action, unless the indemnified party or
parties reasonably conclude there may be defenses available to it or them which
are not available to the Underwriters against whom indemnification is sought (in
which case those Underwriters will not have the right to direct the defense of
the action on behalf of the indemnified party or parties), in which event the
reasonable out-of-pocket expenses of one additional counsel for all the
indemnified parties will be borne by the indemnifying Underwriters. The
Underwriter against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any action effected without such
Underwriter's written consent. The obligations of each Underwriter under the
indemnity agreement set forth in this Subsection (b) shall be in addition to any
liability each of them may otherwise have under this Agreement.
10. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in Section 9 is
for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages, liabilities and expenses of
the nature contemplated by said indemnity agreement incurred by the Company, and
one or more of the Underwriters, as incurred, in such proportions that the
Underwriters are responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing thereon, and the Company shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions of
this Section 10, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Firm Securities and
Additional Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages of the kind described in
Section 9(a) which such Underwriter has otherwise paid in respect of such
losses, claims, damages, liabilities and expenses. For purposes of this Section,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
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signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act shall have the
same rights to contribution as the Company.
11. CONDITIONS OF OBLIGATIONS OF UNDERWRITERS. The obligations of the
Underwriters to purchase and pay for the Firm Securities and Additional
Securities are subject (as of the date hereof and the Closing Date) to the
accuracy in all material respects of the representations and warranties of the
Company, the accuracy in all material respects of the statements of officers and
directors of the Company made pursuant to the provisions of this Agreement, the
performance in all material respects by the Company of its obligations under
this Agreement and to the following additional conditions:
(a) The Registration Statement shall become effective with the
Commission no later than 10:00 A.M., New York City time, on the day
following the date of this Agreement, or such later time and date as shall
have been consented to by the Underwriters (including you) who are
obligated to purchase a majority of the Firm Securities to be purchased by
all of the Underwriters pursuant to this Agreement; the Commission shall
have taken all required action, if any, with regard to the Registration
Statement, and, prior to the Closing Date, no stop order or similar order
with regard to the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be
pending or, to the knowledge of the Underwriters or the Company, shall be
contemplated by the Commission or by any securities, Blue Sky or other
regulatory authority of any jurisdiction, and any request on the part of
the Commission or such other securities, Blue Sky or regulatory
authorities for additional information shall have been complied with to
the reasonable satisfaction of Xxxxxxxx & Xxxxx XXX, counsel for the
Underwriters.
(b) Prior to the date of this Agreement, the issuance and sale of
the Securities shall have been approved by all requisite corporate action
of the Company.
(c) The NASD shall have indicated that it had no objection to the
underwriting arrangements pertaining to the sale of the Firm Securities
and the Additional Securities and the participation by the Underwriters in
the sale thereof.
(d) 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 any of the Securities, and no proceedings for the
taking of such action shall have been instituted or shall be pending or,
to the knowledge of the Underwriters or the Company, shall be contemplated
by the Commission or the NASD. The Company represents that at the date
hereof it has no knowledge that any such action is in fact contemplated by
the Commission or the NASD.
(e) Between the date of this Agreement and the Closing Date, none of
the Companies shall have sustained any material loss outside the ordinary
course of its
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business or of such character as would result in a Material Adverse
Change, whether or not that loss is covered by insurance.
(f) Between the date of this Agreement and the Closing Date, each of
the Companies shall have conducted its business in the usual and ordinary
manner, and, except as disclosed in the Prospectus or except in the
ordinary course of its business, shall not have incurred any material
liabilities or obligations, direct or contingent, or altered in any
material respect any material supplier relationship, or disposed of a
material amount of its assets, or entered into any material transactions,
and shall not have suffered or experienced any Material Adverse Change. At
the Closing Date, the capital stock of the Company shall be substantially
as set forth in the Registration Statement, except with respect to the
Firm Securities to be sold by the Company.
(g) At the Closing Date, there shall have been delivered to you a
signed opinion of Xxxxxxxxxx, Xxxxxxx, Xxxx, Xxxxxx & Xxxxxx, P.A.
addressed to the Underwriters, dated as of the Closing Date, in form and
substance reasonably satisfactory to Xxxxxxxx & Xxxxx XXX, counsel for the
Underwriters, together with a signed or photostatic copy of that opinion
for each of the other Underwriters, substantially to the effect that:
(i) Each of the Company and BII has been duly incorporated and
is validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority to own and lease its properties and to conduct its
business as described in the Registration Statement and Prospectus
and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where, to such counsel's
knowledge, it owns or leases properties and where the failure to so
qualify would have a material adverse effect on its earnings,
business affairs or business prospects.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company. All corporate action required to be taken
by the Board of Directors of the Company and all action required to
be taken by the stockholders of the Company, if any, in connection
with the authorization, issuance and sale of the Securities to be
sold by the Company as contemplated in the Registration Statement
and the Prospectus have been duly taken. The Company has the
requisite power and authority to enter into and consummate this
Agreement.
(iii) Neither the issuance by the Company of the Securities to
be sold by it under this Agreement, the execution and delivery of
this Agreement, the undertakings contained in the Registration
Statement or the Prospectus, the consummation of the transactions
contemplated in this Agreement or compliance with the terms of this
Agreement, will conflict with or result in a breach of any of the
terms or provisions of the Certificate of Incorporation, as amended,
or the By-laws of the Company, or any material indenture, mortgage,
deed of trust, note, bank loan or credit agreement or any other
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agreement or instrument filed as an exhibit to the Registration
Statement or to any other filing heretofore made by the Company
under the Acts, any applicable federal or State law (other than Blue
Sky laws), rule or regulation, or (without search of any court
dockets) any judgment, order or decree of any government,
governmental agency or instrumentality or court having jurisdiction
over any of the Companies or their respective properties or assets,
of which such counsel is aware.
(iv) To such counsel's knowledge, there are no contracts,
indentures, mortgages, notes, leases or other instruments or
agreements required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto;
the descriptions thereof or references thereto in the Prospectus are
correct in all material respects and no default exists in the due
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, note,
lease or other instrument or agreement so described, referred to or
filed.
(v) To such counsel's knowledge, the Company has no
subsidiaries other than as set forth in Section 1(f) hereof. All of
the outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued, are fully paid and non
assessable and, as of the Closing Date, are owned beneficially by
the Company, free and clear of any liens, encumbrances, security
interests or other restrictions, and no person, firm or corporation
has the right, upon the passage of time or otherwise, to acquire any
of the stock of any such Subsidiary.
(vi) Except as described in the Prospectus, to such counsel's
knowledge, the Company and the Subsidiaries hold all material
licenses, certificates, permits and other evidence of regulatory
compliance issued by appropriate federal, state or local
governmental agencies or bodies necessary for the conduct of its
business as described in the Prospectus.
(vii) The Company's authorized capital stock consists of
7,000,000 shares of Common Stock, par value $.01 per share,
1,000,000 shares of Convertible Preferred Stock, par value $1.25 per
share, and 4,000,000 shares of Preferred Stock, par value $2.00 per
share.
(viii) The outstanding stock options and warrants relating to
the Common Stock have been duly authorized and validly issued.
(ix) The certificates for the Securities are in proper form
and comply with Delaware law.
(x) The Firm Shares and Additional Shares to be sold by the
Company as contemplated by this Agreement have been duly authorized,
and, when issued as provided in this Agreement and any warrant
agreement relating
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thereto upon the due exercise of the Warrants, including the payment
of the exercise price therefor, will be validly issued, fully paid
and non-assessable. The holders of any of the Firm Shares and
Additional Shares when issued as contemplated pursuant to this
Agreement and any warrant agreement relating thereto upon the due
exercise of the Warrants, including the payment of the exercise
price therefor, will not be subject to personal liability solely by
reason of being such holders and, to such counsel's knowledge, there
is no preemptive right of any holder of any securities of the
Company applicable to [any outstanding share of Common Stock] and no
preemptive right will be applicable to any of the Firm Shares and
the Additional Shares to be sold by the Company under this Agreement
when issued and sold as contemplated in this Agreement and in the
Registration Statement and the Prospectus.
(xi) The Warrants have been duly authorized and, when
delivered and paid for in accordance with this Agreement will be
validly issued and will constitute valid and binding obligations of
the Company in accordance with, and will be exercisable in
accordance with, their terms; the shares of Common Stock issuable on
exercise of the Warrants have been duly and validly reserved for
issuance pursuant to the terms of the Warrants and when duly issued
and paid for in accordance with the terms of such Warrants, will be
duly authorized, validly issued, fully paid and nonassessable, and
the holders will not be subject to personal liability by reason of
being such holders and such shares will not be subject to the
preemptive rights of any stockholder of the Company.
(xii) Except for registration or qualification under the
Securities Act or under state securities or Blue Sky laws, no
authorization, approval, consent or license of any federal, New
Jersey or Delaware regulatory body or authority is required for the
valid authorization, issuance, sale and delivery of any of the
Securities, or, if required, all such authorizations, approvals,
consents and licenses have been obtained and are in force and
effect.
(xiii) The Registration Statement has become effective, and,
to such counsel's knowledge, no stop order or similar order has been
issued with regard to the Registration Statement or the Prospectus,
and no proceedings for that purpose have been instituted or are
pending and such counsel has not been notified that any such
proceedings are contemplated under the Acts or under any Blue Sky or
other securities laws of any jurisdiction.
(xiv) The Registration Statement, the Prospectus and each
post-effective amendment or supplement thereto complies as to form
in all material respects with the requirements of the Securities Act
(except that no opinion shall be expressed as to the financial
statements, notes related thereto, and other financial or
statistical data included therein and information supplied by you as
set forth in Section 1(b) hereof).
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(xv) Such counsel has acted as counsel for the Company and has
participated in the preparation of the Registration Statement and
Prospectus and any post-effective amendments or supplements thereto
to the date of such opinion and, during the course of such
representation, no facts have come to the attention of such counsel
which would lead such counsel to believe that either the
Registration Statement or the Prospectus or any post-effective
amendment thereto contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except no
opinions need be expressed as to the financial statements and notes
thereto and other financial or statistical data included therein and
information supplied by you as set forth in Section 1(b) hereof).
(xvi) To such counsel's knowledge, all statutes or regulations
or legal or governmental proceedings required to be described in the
Registration Statement or Prospectus are described therein as
required, and all such descriptions in the Registration Statement or
Prospectus are accurate in all material respects and present fairly
the information purported to be shown.
(xvii) To such counsel's knowledge, none of the Companies has
any outstanding options, warrants or other rights to purchase or
acquire any shares of capital stock of any of them except set forth
in the Registration Statement or the Prospectus.
(xviii) The Common Stock conforms as to legal matters in all
material respects with the statements concerning such shares made in
the Registration Statement and the Prospectus under the section
entitled "Description of Capital Stock", and such statements present
fairly the matters respecting such shares required to be set forth
in the Registration Statement or the Prospectus.
(xix) The Warrants conform as to legal matters in all material
respects with the statements concerning such Warrants made in the
Registration Statement and the Prospectus under the section entitled
"Description of Common Stock Purchase Warrants", and such statements
present fairly the matters respecting such Warrants required to be
set forth in the Registration Statement or the Prospectus.
(xx) Except as set forth in the Registration Statement and
Prospectus, to such counsel's knowledge, there is no pending or
threatened action, suit or proceeding before any court or before or
by any governmental agency or body to which any of the Companies is
a party, or of which any of their respective properties or assets
are the subject, which is required to be disclosed in the
Registration Statement or Prospectus.
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(xxi) The contracts filed as Exhibit Nos. 10.1, 10.2, 10.3,
10.4, 10.10, 10.11, 10.12 and 10.33 to the Registration Statement
have been duly authorized, executed and delivered by the Company,
and such counsel has not been advised of any assertion that such
contracts do not constitute the valid and binding obligation of the
other parties thereto. The Forms of Contracts filed as Exhibit Nos.
10.6, 10.7, 10.13, 10.14, 10.31 and 10.34 to the Registration
Statement have been duly authorized by the Company.
(xxii) Such other legal matters relating to this Agreement,
the Companies and the Securities as you and such counsel shall
reasonably agree upon.
In rendering such opinion, such counsel may rely (a) as to matters
involving the application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon
an opinion or opinions (in form and substance reasonably satisfactory to
counsel for Underwriters) of other counsel reasonably acceptable to
counsel for the Underwriters, familiar with the applicable laws; and (b)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having
custody of documents respecting the corporate existence or good standing
of the Companies, provided that copies of any such statements or
certificates shall be delivered to counsel for the Underwriters, and on
the representations and warranties of the Company contained in this
Agreement. The opinion of such counsel for the Company shall state, in
their opinion, you and they are justified in relying on the opinion of
such other counsel.
(h) At the Closing Date, there shall have been delivered to you a
signed opinion of _____________, addressed to the Underwriters, dated as
of the Closing Date, in form and substance reasonably satisfactory to
Xxxxxxxx & Xxxxx XXX, counsel for the Underwriters, together with a signed
or photostatic copy of that opinion for each of the other Underwriters,
substantially to the effect that:
(1) BRL has been duly incorporated and is validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to own and
lease its properties and to conduct its business as described in the
Registration Statement and Prospectus;
(2) all of the outstanding shares of capital stock of BRL have
been duly authorized and validly issued, are fully paid and
nonassessable and, as of the Closing Date, all such shares of
capital stock of BRL are owned beneficially by the Company, free and
clear of any liens, encumbrances, security interests or other
restrictions;
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(3) neither the issuance and sale by the Company of the
Securities to be sold by it under this Agreement, the execution and
delivery of this Agreement, the undertakings contained in the
Registration Statement or the Prospectus, the consummation of the
transactions contemplated in this Agreement nor compliance with the
terms of this Agreement will conflict with or result in a breach of
any of the terms or provisions of BRL's charter or by-laws, or any
material indenture, mortgage, deed of trust, note, bank loan or
credit agreement or any other agreement or instrument known to such
counsel and to which BRL is a party or by which BRL is bound or
affected, any applicable law, rule or regulation or (without search
of any court dockets) any judgment, order or decree of any
government, governmental agency or instrumentality or court having
jurisdiction over BRL or any of its property; and
(4) The contract filed as Exhibit No. 10.10 to the
Registration Statement has been duly authorized, executed and
delivered by BRL and such counsel has not been advised of any
assertion that such contract does not constitute the valid and
binding obligation of the other parties thereto.
(i) At the Closing Date, you shall have received a Certificate
signed by the President and the Vice President-Finance of the Company,
dated as of the Closing Date, to the effect that:
Each officer signing the Certificate has carefully examined
the Registration Statement and the Prospectus, and, in his opinion,
as of the date of the Prospectus, and as of the date of the
Certificate, neither the Registration Statement nor the Prospectus,
nor any amendment or supplement, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, and, since the date of the Prospectus, no event has
occurred which should have been set forth in an amendment or a
supplement to the Registration Statement or Prospectus which has not
been so set forth, and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change in the
condition of any of the Companies, financial or otherwise, or, as
compared with the comparable period in the prior fiscal year, in the
earnings of any of the Companies from that set forth in the
Registration Statement, whether or not arising in the ordinary
course of business.
(j) At the Closing Date, you shall have received a Certificate
signed by the President of the Company, dated as of the Closing Date, to
the effect that:
No stop order or similar order with regard to the Registration
Statement or Prospectus has been issued and no proceedings for that
purpose have been taken or are, to the knowledge of such officer,
contemplated by the Commission.
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The Company has complied in all material respects with its obligations
under this Agreement, and the representations and warranties set forth in
Section 1 of this Agreement are true and correct in all material respects as of
the date of the Certificate with the same force and effect as though made on
that date (except any such representations and warranties which relate
specifically to an earlier date, which shall be true and correct in all material
respects as of such earlier date).
(k) On the date of this Agreement, you shall have received letters
addressed to the Underwriters, the Board of Directors of the Company and
the officers signing the Registration Statement, with a signed or
photostatic copy for each of the several Underwriters, dated the date it
is delivered, in form and substance satisfactory to you and Xxxxxxxx &
Xxxxx XXX (and substantially in the form of the drafts dated ,
1996, previously submitted to Xxxxxxxx & Xxxxx LLP), from BDO Xxxxxxx, LLP
concerning their examination and review of financial statements and
various other data contained in the Registration Statement. At the Closing
Date, you shall have received a letter addressed to you, the Board of
Directors of the Company and the officers signing the Registration
Statement, dated as of the Closing Date, with a signed or photostatic copy
for each of the several Underwriters from BDO Xxxxxxx, LLP confirming, as
of the Closing Date, the statements made in the letters furnished by them
at the date of this Agreement and advising that as of a date no earlier
than three business days prior to the Closing Date they have no reason to
believe that there has been any change in the matters described in the
prior letters.
(l) At the Closing Date there shall have been delivered to you, with
a photostatic copy for each of the several Underwriters, a signed opinion
of Xxxxxxxx & Xxxxx XXX, counsel for the Underwriters, dated as of the
Closing Date, with respect to the sufficiency of corporate proceedings and
other legal matters in connection with this Agreement, the Securities,
Registration Statement, Prospectus and related matters as the
Representative may request, and the Company shall have furnished to such
counsel all documents such counsel may have reasonably requested for the
purpose of enabling them to pass upon those matters. In rendering such
opinion, Xxxxxxxx & Xxxxx XXX may rely, as to incorporation of the Company
and all matters of law governed by the laws of states other than New York
and Delaware and as to factual matters, upon the opinion referred to in
(g) above.
(m) The Representative shall have received the Representative's
Warrants described in Section 6 hereof and the Company shall have paid to
the Representative a non-accountable expense allowance of 2% of the gross
proceeds of the offering of the Firm Securities pursuant to Section 7
hereof, less the sum of $20,000 heretofore advanced to the Representative
pursuant to such Section 7.
(n) In the event the Underwriters exercise the option granted in
Section 4(a) hereof to purchase all or any portion of the Additional
Securities, the representations and warranties of the Companies contained
in Section 11(a) - (f) herein and the Statements in any certificates
furnished by the Companies shall be
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true and correct as of the Option Closing Date and the Representative
shall have received:
(i) A certificate, dated the Option Closing date, of the
Chairman or President of the Company and of the chief financial or
chief accounting officer of the Company confirming that the
Certificate delivered on the Closing Date pursuant to Section 11(i)
remains true as of the Option Closing Date;
(ii) A certificate of the Chairman or President of the Company
confirming that the Certificate delivered on the Closing Date
pursuant to Section 11(j) remains true as of the Option Closing
Date;
(iii) The favorable opinion of Xxxxxxxxxx, Xxxxxxx, Xxxx,
Xxxxxx & Xxxxxx, P.A., counsel for the Company, dated the Option
Closing Date, relating to the Additional Securities and otherwise to
the same effect as the opinion required by Section 11(g), to the
extent applicable;
(iv) The favorable opinion of Xxxxxxxx & Xxxxx XXX, counsel to
the Underwriters, dated the Option Closing Date, relating to the
Additional Securities and otherwise to the same effect as the
opinion required by Section 11(k), to the extent applicable;
(v) The favorable opinion of [Canadian counsel], counsel to
the company, dated the Option Closing Date, relating to the
Additional Securities and otherwise to the same effect as the
opinion required by Section 11(h), to the extent applicable;
(vi) A letter from BDO Xxxxxxx, LLP, in form and substance
satisfaction to the Underwriters and dated the Option Closing Date,
substantially the same in scope and substance as the letter
furnished to the Representative pursuant to Section 11(k), dated not
more than five days prior to the Option Closing Date; and
(vii) A non-accountable expense allowance of 2% of the gross
proceeds of the Additional Securities pursuant to Section 7 hereof.
(o) All proceedings in connection with the authorization, issuance
and sale of the Securities on the Closing Date and the Option Closing Date
shall be reasonably satisfactory in form and substance to you and to your
counsel, and your counsel shall have been furnished with all documents,
certificates and opinions, including resolutions of the Board of Directors
of the Company and minutes of any stockholders' meetings, as may have been
reasonably requested in order to evidence the accuracy and completeness of
any of the representations, warranties or statements of the Company and
the performance of any of the covenants of the Company or the compliance
with any of the conditions contained in this Agreement.
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12. CONDITIONS OF OBLIGATIONS OF COMPANY. The obligations of the Company
to sell and deliver the Firm Securities to the several Underwriters are subject
to the condition that the Registration Statement shall become effective with the
Commission not later than 10:00 A.M., New York City time, on the day following
the date of this Agreement, or such later date as shall have been consented to
by the Underwriters (including you) who are obligated to purchase a majority of
the Firm Securities to be purchased by all of the Underwriters pursuant to this
Agreement, and that prior to the Closing Date (and, with respect to the
Additional Securities, prior the Option Closing Date), no stop order or similar
order with regard to the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to your knowledge or to the knowledge of the Company, shall be contemplated by
the Commission or any other regulatory agency having jurisdiction with respect
to the offer and sales of the Offered Securities.
13. SUBSTITUTION OF UNDERWRITERS.
(a) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Firm Securities which all Underwriters so defaulting shall have
agreed to purchase does not exceed 10% of the Firm Securities, each
nondefaulting Underwriter shall have the right and is obligated, severally, to
purchase and pay for (in addition to the number of Firm Securities set forth
opposite its name in Schedule I) the number of Remaining Firm Securities
multiplied by a fraction, the numerator of which is the total number of Firm
Securities purchased by such Underwriter and the denominator of which is the
total number of Firm Securities purchased by all non-defaulting Underwriters. In
that event, the Representative, for the accounts of the several nondefaulting
Underwriters, may take up and pay for all or any part of the Remaining Firm
Securities to be purchased by each nondefaulting Underwriter under this
Subsection (a), and may postpone the Closing Date to a time not exceeding three
full business days after the Closing Date determined as provided in Section 3 of
this Agreement; or
(b) If one or more Underwriters default in its or their obligations to
purchase and pay for Firm Securities under this Agreement and if the aggregate
amount of the Remaining Firm Securities exceeds 10% of the Firm Securities, or
if one or more Underwriters for any reason permitted under this Agreement cancel
its or their obligations to purchase and pay for Firm Securities under this
Agreement, the noncancelling and nondefaulting Underwriters (hereinafter called
the "Remaining Underwriters") shall have the right to purchase such Firm
Securities on the Closing Date in the proportion as may be agreed among them. If
the Remaining Underwriters do not purchase and pay for all such Firm Securities
at the Closing Date, the Closing Date shall be postponed by two business days
and the Remaining Underwriters shall have the right to purchase the Firm
Securities, or to substitute another person or persons to purchase them, or
both, at the postponed Closing Date. If purchasers are not found for such Firm
Securities by the postponed Closing Date, the Closing Date shall be postponed
for a further five business days and the Company shall have the right to
substitute another person or persons, satisfactory to the Representative, to
purchase those Firm Securities at the second postponed Closing Date. If the
Company does not find the purchasers for those Firm Securities by the second
postponed Closing Date, then this
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Agreement shall automatically terminate and neither the Company nor the
Remaining Underwriters shall be under any obligation under this Agreement
(except that the Company shall remain liable to the extent provided in Sections
7 and 9(a) and the Underwriters shall remain liable to the extent provided in
Section 9(b)). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 13. Nothing in this
Section will relieve a defaulting Underwriter from liability for its default or
obligate any Underwriter to purchase or find purchasers for any Firm Securities
in excess of those agreed to be purchased by the Underwriter in Sections 2 and
13(a) of this Agreement. If the Representative is the defaulting Underwriter,
the right of first refusal set forth in Section 16 hereof shall terminate.
14. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 10:00 A.M., New York
City time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective and the Underwriters shall release
the Firm Securities for sale to the public; provided, however, that the
provisions of Sections 7, 9, 10, 14 and 19 hereof shall at all times be
effective. For purposes of this Section 14, the Firm Securities shall be deemed
to have been so released upon the release by the Underwriters for publication,
at any time after the Registration Statement has become effective, of any
newspaper advertisement relating to the Firm Securities or upon the release by
the Underwriters of telegrams offering the Firm Securities for sale to
securities dealers, whichever may occur first.
15. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Closing Date
by you by giving written notice to the Company upon the occurrence of any of the
following events:
(i) any of the Companies shall have sustained a loss, by reason of
fire, flood, accident or other calamity, which in your reasonable
judgment, materially affects the aggregate value of the property owned or
leased by the Companies taken as a whole or which materially interferes
with the operation of the business of the Companies taken as a whole,
regardless of whether or not that loss shall have been insured;
(ii) any of the Companies has encountered or been threatened with a
strike (including but not limited to strikes of stevedores and other
transporters of goods) or other labor dispute or been subjected to
governmental action or fluctuations in currency or major political
upheaval which materially affects the aggregate value of the property
owned or leased or which materially interferes with the operation of its
business taken as a whole or which in your reasonable judgment makes it
impracticable or inadvisable to offer for sale or to enforce contracts
made by the Underwriters for the resale of the Firm Securities;
(iii) except as set forth in the Prospectus, there shall be pending
or threatened against any of the Companies or notification has been
received by any of the Companies of the threat of any material legal or
governmental proceeding or
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action relating generally to the business or prospects of any of the
Companies which could materially adversely affect any of the Companies
taken as a whole (including action with respect to credit or interest
rates) or which in your reasonable opinion makes it impracticable or
inadvisable to proceed with the offering;
(iv) any of the certificates, opinions or other documents to be
delivered on the date of this Agreement or at the Closing Date are not in
form reasonably satisfactory to counsel to the Underwriters;
(v) any conditions set forth in Section 11 of this Agreement shall
not have been satisfied;
(vi) the Company is merged or consolidated or all or substantially
all of the capital stock or assets of the Company are acquired by another
company or group, or there exists a binding legal commitment for the
foregoing or any other material change of ownership or control occurs;
(vii) if there has occurred any outbreak of hostilities or
escalation of any existing hostilities or other calamity or crisis, the
effect of which on the financial markets of the United States is such as
to make it impracticable, in the Representative's reasonable judgment, to
market any of the Firm Securities or the Additional Securities or to
enforce contracts for the sale of any of the Firm Securities or the
Additional Securities;
(viii) a banking moratorium shall have been declared by either
federal or state authorities;
(ix) if trading generally on the American Stock Exchange, the New
York Stock Exchange or NASDAQ has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said Exchanges or the NASD or
by order of the Commission or any other governmental authority;
(x) there shall have been a change in the general market, political
or economic conditions in the United States, such that in any such case,
in the Representative's reasonable judgment, it would be inadvisable to
proceed with the offering of the Firm Securities; or
(xi) any law shall be enacted or any regulation promulgated relating
to the business of any of the Companies which could materially adversely
affect any of the Companies.
(b) This Agreement may be terminated by the Company by giving written
notice to you (i) at any time before this Agreement becomes effective in
accordance with Section 14 hereof, or (ii) prior to the Closing Date if the
conditions set forth in Section 12 shall not have been satisfied at or prior to
such date.
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(c) If this Agreement shall be terminated by the Company pursuant to
preceding clause (b)(i) because (x) the Company has made, or proposes to make, a
private placement which will provide it with substantial alternative funding
through another investment banking agent, the Representative shall be entitled
to a cash fee equal to 2% of the gross amount of such funding, whether
effectuated by the Company before or after such termination of this Agreement or
(y) because the Company is to be sold, whether by merger, sale of stock, sale of
assets or otherwise, the Representative shall be paid a cash fee of $200,000
should the acquisition or merger close; provided, however, that if in such event
the Company shall choose the Representative as its investment banker in
connection therewith, such $200,000 shall be a credit against any services
rendered by the Representative in such transaction.
(d) If this Agreement shall be terminated pursuant to this Section 15
other than by reason of the fault of the Representative, the Company, in
addition to the advance provided for in Section 7 hereof, shall pay to you your
accountable expenses, including the reasonable fees and out-of-pocket expenses
of your counsel, in an amount not to exceed $30,000.
16. RIGHT OF FIRST REFUSAL. Until January 1, 1998, the Company shall
notify you in writing at least thirty (30) days before a proposed public
offering by the Company of any of its securities (other than bank debt or
similar financing, securities offered solely to Company employees, consultants
or representatives, shares issuable pursuant to any dividend reinvestment plan
or securities issuable in transactions enumerated in Rule 145(a) under the
Securities Act) so that you, or, at your option, together with a group of
investment bankers associated with you, shall have the right of first refusal to
effect the public offering on terms at least as favorable to the Company as
those set forth in such notice (which notice will specify the price to the
underwriter or other method of determining the underwriting discount or fee).
You will notify the Company if you intend to exercise your right of first
refusal within thirty (30) days of receipt by you of such notice from the
Company. If you fail to exercise the right of first refusal within the thirty
(30) day period and the terms of the proposed subsequent financing thereafter
are altered in any material respect less favorable to the Company, the Company
shall again offer to you the right of first refusal to effect a subsequent
financing upon such terms and you shall have ten (10) days from the date of
receipt of such notice to notify the Company of your acceptance.
17. NOTICES. All communications under this Agreement shall be in writing
and, except as otherwise provided shall be delivered at or mailed, registered or
certified, return receipt requested, or telegraphed to the following addresses:
If to you or any other Underwriter:
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
Attention: Xxx Xxxxx
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Copies to:
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
As Representative of the Several Underwriters
Attention: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
and
Xxxxxx X. Xxxxxx, Esq.
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company:
Xxxxxxxxx Technologies Inc.
Attention: Xxxxxxx X. Xxxxxx, President
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxxx, X. X. 07974
Copy to:
Xxxx X. Xxxxxxxx, Esq.
Lowenstein, Sandler, Xxxx, Xxxxxx & Xxxxxx, P.A.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Any party may change its address by giving notice in accordance with this
Section .
18. PARTIES IN INTEREST. This Agreement is made solely for the benefit of
the Underwriters, the Company, directors and officers of the Company, and their
respective executors, administrators, successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successor" and "successor and assigns" shall not include any purchaser
from the Company or any of the several Underwriters of the Firm Securities or
the Additional Securities. All of the obligations of the Underwriters under this
Agreement are several and not joint.
19. SURVIVAL CLAUSE. The representations, warranties, indemnities,
agreements and other statements of the Underwriters and the Company and its
officers set forth in this Agreement and made pursuant to this Agreement will
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or controlling person
thereof or by or on behalf of the Company or any of its officers and directors
or (ii) any termination of this Agreement and (iii) delivery of and payment for
the Firm Securities and the Additional Securities.
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20. REPRESENTATION OF UNDERWRITERS. You will act for the several
Underwriters in connection with this financing, and any action under or in
respect of this Agreement taken by you as Representative on behalf of the
Underwriters will be binding upon all of the Underwriters.
21. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflicts of law.
22. COUNTERPARTS. This Agreement may be signed in one or more counterparts
and shall be deemed effective when each party hereto has signed a counterpart.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXX TECHNOLOGIES INC.
By:______________________
The foregoing Agreement is hereby
confirmed and delivered as of the
date first above written.
XXXXXX XXXXXXXXXX XXXXX INC.
By:__________________________________
(Authorized Signature)
Acting on their own behalf and as
Representative of the several Underwriters
named in Schedule I attached hereto.
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SCHEDULE I
LIST OF UNDERWRITERS
Number of
Underwriters Firm Securities
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