2,000,000 SHARES OF COMMON STOCK
AMBASSADOR EYEWEAR GROUP, INC.
FORM OF
UNDERWRITING AGREEMENT
_____________, 1997
Hampshire Securities Corporation
As Representative of the several
Underwriters named in Schedule I
attached hereto
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
The undersigned, Ambassador Eyewear Group, Inc., a Delaware corporation
(the "Company"), and The Slucker Family Foundation (the "Selling Stockholder")
hereby confirm their agreement with Hampshire Securities Corporation
(individually, "Hampshire," and, as representative (the "Representative") of the
several underwriters named in Schedule I hereto (the "Underwriters")), and the
Underwriters as follows:
1. INTRODUCTION.
(a) The Company hereby engages the Representative as its exclusive
financial adviser for 6 months commencing May 8, 1997 in connection with the
management of the initial public offering contemplated hereby.
(b) The Company proposes to issue and sell to the Underwriters an
aggregate of 2,000,000 shares (the "Shares") of common stock, par value $.001
per share, of the Company (the "Common Stock"). Such shares of Common Stock are
hereinafter referred to as the "Firm Stock."
(c) Solely for the purpose of covering over-allotments, if any, the
Company proposes to grant to Hampshire, individually and not as Representative,
an option (the "Company Over-allotment Option") to purchase from it, in the
aggregate, up to an additional 150,000 shares of Common Stock at the public
offering price less than the underwriting discount. Such shares of Common
Stock are hereinafter referred to as the "Company Additional Stock." The Firm
Stock and the Additional Stock are hereinafter referred to as the "Company
Stock."
(d) Solely for the purpose of covering over-allotments, if any, the
Selling Stockholder propose to grant to Hampshire, individually and not as
Representative, an option (the "Stockholder Over-allotment Option") to purchase
from it, in the aggregate, up to an additional 150,000 shares of Common Stock.
Such shares of Common Stock are hereinafter referred to as the "Stockholder
Additional Stock." The Company Additional Stock and the Company Additional
Stock are hereinafter referred to as the "Additional Stock." The Firm Stock and
the Additional Stock are hereinafter referred to as the "Stock."
(e) The Company proposes to sell to Hampshire, individually and not as
Representative, 200,000 warrants (the "Underwriter's Warrants") to purchase up
to an aggregate of 200,000 shares of Common Stock (the "Warrant Shares") for a
purchase price of $.001 per warrant, or an aggregate purchase price of $200.00.
The Underwriter's Warrants shall be substantially in the form filed as an
exhibit to the Registration Statement (as hereinafter defined).
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The Underwriter's Warrants and the Warrant Shares are hereinafter referred to
collectively as the "Representative's Securities." The Stock and the
Representative's Securities are hereinafter referred to collectively as the
"Securities."
2. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(1) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form SB-2
(Registration No. 333-_______), and may have filed one or more amendments
thereto and a Rule 462(b) Registration Statement (as hereinafter defined) in
accordance with Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), including in such registration statement and each such
amendment a related preliminary prospectus, for the registration of the
Securities under the Securities Act. As used in this Agreement, the term
"Registration Statement" shall refer to such registration statement referred
to in the first sentence of this Section 2(a), as amended, on file with the
Commission at the time such registration statement is declared by the
Commission to be effective under the Securities Act (including the
prospectus, financial statements, and exhibits filed as a part thereof,
provided, however, that such registration statement, at the time it is
declared by the Commission to be effective under the Securities Act, may omit
such information as is permitted to be omitted from such registration
statement when it becomes effective under the Securities Act pursuant to Rule
430A of the General Rules and Regulations of the Commission under the
Securities Act (the "Regulations"), which information (the "Rule 430A
Information") shall be deemed to be included in such registration
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statement when a final prospectus is filed with the Commission in accordance
with Rules 430A and 424(b)(1) or (4) of the Regulations and includes any Rule
462(b) Registration Statement); the term "Preliminary Prospectus" shall refer to
each prospectus included in the Registration Statement, or any amendments
thereto, before the Registration Statement is declared by the Commission to be
effective under the Securities Act, the form of prospectus omitting Rule 430A
Information included in the Registration Statement when the Registration
Statement becomes effective under the Securities Act, if applicable (the "Rule
430A Prospectus"), and any prospectus filed by the Company with the consent of
the Representative pursuant to Rule 424(a) of the Regulations; and the term
"Prospectus" shall refer to the final prospectus forming a part of the
Registration Statement in the form first filed with the Commission pursuant to
Rule 424(b)(1) or (4) of the Regulations or, if no such filing is required, the
form of final prospectus forming a part of the Registration Statement. As used
in this Agreement, the term "Rule 462(b) Registration Statement" means the
registration statement and any amendments thereto filed pursuant to Rule 462(b)
of the Regulations relating to the offering covered by the initial Registration
Statement.
(2) When the Registration Statement becomes effective under the
Securities Act, and at all times subsequent thereto up to and including the
Closing Date (as defined in Section 3(a) hereof) and each Additional Closing
Date (as defined in Section 3(b) hereof), and during such longer period as the
Prospectus may be required to be delivered in connection with sales by the
Underwriters or a dealer, and during such longer period until any post-effective
amendment thereto shall become effective under the Securities Act, the
Registration Statement (and any post-effective amendment thereto) and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement to the Registration
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Statement or the Prospectus) will contain all statements which are required to
be stated therein in accordance with the Securities Act and the Regulations,
will comply with the Securities Act and the Regulations, and will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and no event will have occurred which should have been set forth in
an amendment or supplement to the Registration Statement or the Prospectus which
has not then been set forth in such an amendment or supplement; if a Rule 430A
Prospectus is included in the Registration Statement at the time it is declared
by the Commission to be effective under the Securities Act, the Prospectus filed
pursuant to Rules 430A and 424(b)(1) or (4) of the Regulations will contain all
Rule 430A Information and all statements which are required to be stated therein
in accordance with the Securities Act or the Regulations, will comply with the
Securities Act and the Regulations, and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and each Preliminary
Prospectus, as of the date filed with the Commission, contained all statements
required to be stated therein in accordance with the Securities Act and the
Regulations, complied with the Securities Act and the Regulations, and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; except that no representation or warranty is made in this
Section 2(a)(2) with respect to statements or omissions made in reliance upon,
and in conformity with, written information furnished to the Company as stated
in Section 8(b) with respect to any Underwriter by, or on behalf of, such
Underwriter through the Representative expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, or the Prospectus, or any
amendment or
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supplement thereto, or with respect to statements or omissions made in
reliance upon, and in conformity with, written information furnished to the
Company as stated in Section 8(c) with respect to the Selling Stockholder by,
or on behalf of, the Selling Stockholder expressly for inclusion in the
Registration Statement, any Preliminary Prospectus, or the Prospectus, or any
amendment or supplement thereto.
(3) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction has issued an order (a "Stop Order") suspending
the effectiveness of, or preventing or suspending the use of, the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the Securities nor
has any of such authorities instituted or threatened to institute any
proceedings with respect to a Stop Order.
(4) Any contract, agreement, instrument, lease, or license
required to be described in the Registration Statement or the Prospectus has
been properly described therein. Any contract, agreement, instrument, lease, or
license required to be filed as an exhibit to the Registration Statement has
been filed with the Commission as an exhibit to the Registration Statement.
(5) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and permits of and
from, and declarations and filings with, all federal, state, local, and other
governmental authorities and all courts and other tribunals, to own, lease,
license, and use its properties and assets and to conduct its business in the
manner described in the Prospectus. The
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Company is duly qualified to do business as a foreign corporation and is in good
standing as such in every jurisdiction in which its ownership, leasing,
licensing, or use of property and assets or the conduct of its business makes
such qualification necessary, except where the failure to so qualify will not
have a material adverse effect on the Company's business, properties, or
financial condition on a consolidated basis.
(6) The authorized capital stock of the Company consists of
(i) 10,000,000 shares of Common Stock, of which 3,500,000 shares are
outstanding, (ii) 1,000,000 shares of Preferred Stock, par value $.01 per
share, none of which are outstanding and (iii) 118,100 shares of Series A
Cumulative Redeemable Preferred Stock, of which 118,100 are outstanding.
Each outstanding share of Common Stock is validly authorized and issued,
fully paid, and nonassessable, without any personal liability attaching to
the ownership thereof, has not been issued and is not owned or held in
violation of any preemptive or similar rights of stockholders. There is no
commitment, plan, or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance of, any share of capital
stock of the Company or any security or other instrument which by its terms
is convertible into, or exercisable or exchangeable for, capital stock of the
Company, except as may be properly described in the Prospectus. There is
outstanding no security or other instrument which by its terms is convertible
into, or exercisable or exchangeable for, capital stock of the Company,
except as may be properly described in the Prospectus. The certificates
evidencing the Common Stock are in due and proper form.
(7) The consolidated financial statements of the Company
included in the Registration Statement and the Prospectus fairly present, with
respect to the Company, the financial position, the results of operations, the
cash flows, and the other information purported to
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be shown therein at the respective dates and for the respective periods to which
they apply. Such consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (except to the extent
that certain footnote disclosures regarding any stub period may have been
omitted in accordance with the applicable rules of the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) consistently
applied throughout the periods involved, are correct and complete in all
material respects, and are in accordance with the books and records of the
Company. Xxxxxxx X. Xxxxxx & Company, LLP, the accountants whose report on the
audited consolidated financial statements is filed with the Commission as a part
of the Registration Statement, are, and during the periods covered by their
reports included in the Registration Statement and the Prospectus were,
independent certified public accountants with respect to the Company within the
meaning of the Securities Act and the Regulations. No other financial
statements are required by Form SB-2 or otherwise to be included in the
Registration Statement or the Prospectus. There has at no time been a material
adverse change in the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of the Company on a
consolidated basis from the latest information set forth in the Registration
Statement or the Prospectus, except as may be properly described in the
Prospectus.
(8) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or,
to the best knowledge of the Company, in prospect (or any basis therefor) with
respect to the Company, or any of its operations, businesses, properties, or
assets, except as may be properly described in the Prospectus or such as
individually or in the aggregate do not now have, and will not in the future
have, a material adverse effect upon the operations, business, properties, or
assets of the Company. To the
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best knowledge of the Company, it is not in violation of, or in default with
respect to, any law, rule, regulation, order, judgment, or decree, except as may
be properly described in the Prospectus or such as in the aggregate do not now
have, and will not in the future have, a material adverse effect upon the
operations, business, properties, or assets of the Company; nor is the Company
currently required to take any action in order to avoid any such violation or
default.
(9) The Company has good and marketable title to all properties
and assets which the Prospectus indicates are owned by it, free and clear of all
liens, security interests, pledges, charges, encumbrances, and mortgages, except
as may be properly described in the Prospectus or as are not material to the
Company. No real property owned, leased, licensed, or used by the Company lies
in an area which is, or to the knowledge of the Company will be, subject to
zoning, use, or building code restrictions which would prohibit, and no state of
facts relating to the actions or inaction of another person or entity or his or
its ownership, leasing, licensing, or use of any real or personal property
exists or will exist which would prevent, the continued effective ownership,
leasing, licensing, or use of such real property in the business of the Company,
each as presently conducted or as the Prospectus indicates it contemplates
conducting, except as may be properly described in the Prospectus.
(10) Neither the Company nor, to the knowledge of the Company,
any other party, is now, or is expected by the Company to be, in violation or
breach of, or in default with respect to, any provision of any contract,
agreement, instrument, lease, license, arrangement, or understanding which is
material to the Company, and each such contract, agreement, instrument, lease,
license, arrangement, and understanding is in full force and effect and is the
legal, valid, and binding obligation of the parties thereto and is enforceable
as to them in accordance with its
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respective terms. The Company enjoys peaceful and undisturbed possession under
all leases and licenses under which it is operating. Except as described in the
Prospectus, the Company is not a party to, or bound by, any contract,
agreement, instrument, lease, license, arrangement, or understanding, or subject
to any charter or other restriction, which has had, or may in the future have, a
material adverse effect on the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company.
The Company is not in violation or breach of, or in default with respect to, any
term of its respective certificate of incorporation (or other charter document)
or by-laws.
(11) The Company owns or possesses adequate rights to use all
patents, patent rights, inventions, trade secrets, licenses, know-how,
proprietary techniques, including processes and substances, trademarks, service
marks, trade names, and copyrights described or referred to in the Prospectus as
owned or used by it or which are necessary for the conduct of its business as
currently conducted as described in the Prospectus and, to the best knowledge of
the Company, its business as contemplated as described in the Prospectus. To
the best knowledge of the Company, all such patents, patent rights, licenses,
trademarks, service marks, and copyrights are (i) valid and enforceable, (ii)
not being infringed by any third parties which infringement could, singly or in
the aggregate, materially and adversely affect the business, properties,
operations, condition (financial or otherwise), results of operations, income,
or business prospects of the Company, as presently being conducted or as
proposed to be conducted as described in the Prospectus, and (iii) are
uncontested by any third party. The Company has no knowledge of, nor has it
received any notice of, infringement of, or conflict with, asserted rights of
others with respect to any patents, patent rights, inventions, trade secrets,
licenses, know-how, proprietary techniques,
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including processes and substances, trademarks, service marks, trade names, or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling, or finding could materially and adversely affect the business,
properties, operations, condition (financial or otherwise), results of
operations, income, or business prospects of the Company, as presently being
conducted or as proposed to be conducted as described in the Prospectus.
(12) Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee, or other person associated
with, or acting on behalf of, the Company has, directly or indirectly (i) used
any corporate funds for unlawful contributions, gifts, entertainment, or other
unlawful expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any bribe, rebate, payoff, influence payment, kickback, or other unlawful
payment. The Company's internal accounting controls and procedures are
sufficient to cause the Company to comply in all respects with the Foreign
Corrupt Practices Act of 1977, as amended.
(13) The Company has all requisite power and authority to
execute, deliver, and perform each of this Agreement and the Underwriter's
Warrants. All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery, and performance by the Company of
this Agreement and the Underwriter's Warrants. This Agreement has been duly
authorized, executed, and delivered by the Company, is the legal, valid, and
binding obligation of the Company. The Underwriter's Warrants have been duly
authorized by the Company and, when executed and delivered by the Company, will
be legal, valid, and
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binding obligations of the Company, each enforceable as to the Company in
accordance with its terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal is
required by the Company for the execution, delivery, or performance by the
Company of this Agreement or the Underwriter's Warrants, except filings under
the Securities Act which have been or will be made before the Closing Date, and
consents consisting only of consents under "blue sky" or securities laws which
have been obtained at or prior to the date of this Agreement. No consent of any
party to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Company is a party, or to which any of its properties
or assets are subject, is required for the execution, delivery, or performance
of this Agreement and the Underwriter's Warrants; and the execution, delivery,
and performance of this Agreement and the Underwriter's Warrants will not
violate, result in a breach of, conflict with, result in the creation or
imposition of any lien, charge, or encumbrance upon any properties or assets of
the Company pursuant to the terms of, or, with or without the giving of notice
or the passage of time or both, entitle any party to terminate or call a default
under, any such contract, agreement, instrument, lease, license, arrangement, or
understanding, or violate, result in a breach of, or conflict with any term of
the certificate of incorporation (or other charter document) or by-laws of the
Company, or violate, result in a breach of, or conflict with, any law, rule,
regulation, order, judgment, or decree binding on the Company or to which any of
its operations, businesses, properties, or assets are subject.
(14) The Firm Stock is validly authorized and, when issued and
delivered in accordance with this Agreement, will be validly issued, fully paid,
and nonassessable, without
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any personal liability attaching to the ownership thereof, and will not be
issued in violation of any preemptive or similar rights of stockholders, and
the Underwriters will receive good title to the shares of Firm Stock
purchased by them, respectively, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements, and
voting trusts. The Company Additional Stock is validly authorized and, when
issued in accordance with the terms hereof, will be validly issued, fully
paid, and nonassessable, without any personal liability attaching to the
ownership thereof, and will not be issued in violation of any preemptive or
similar rights of stockholders. The Stockholder Additional Stock is validly
authorized and issued, fully paid, and nonassessable, without any personal
liability attaching to the ownership thereof, and was not issued in violation
of any preemptive or similar rights of stockholders. The Company Additional
Stock has been duly and validly reserved for issuance. The Stock conforms to
all statements relating thereto contained in the Registration Statement and
the Prospectus.
(15) The Warrant Stock is validly authorized and has been duly
and validly reserved for issuance and, when issued and delivered upon exercise
of the Underwriter's Warrants in accordance with the terms thereof, will be
validly issued, fully paid, and nonassessable, without any personal liability
attaching to the ownership thereof, and will not be issued in violation of any
preemptive or similar rights of stockholders; and the holders of the
Underwriter's Warrants will receive good title to the securities purchased by
them upon the exercise of the Underwriter's Warrants, free and clear of all
liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts. The Representative's Securities conform to all
statements relating thereto contained in the Registration Statement and the
Prospectus.
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(16) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, and except as may
otherwise be properly described in the Prospectus, the Company has not (i)
issued any securities or incurred any material liability or material obligation,
primary or contingent, for borrowed money, (ii) entered into any material
transaction not in the ordinary course of business, (iii) declared or paid any
dividend on its capital stock or (iv) experienced any adverse changes or any
development which may materially adversely effect the condition (financial or
otherwise), net assets or stockholders' equity, results of operations, business,
key personnel, assets, or properties of the Company and the Subsidiaries taken
as a whole.
(17) Neither the Company nor any of its officers, directors, or
affiliates (as defined in the Regulations), has taken or will take, directly or
indirectly, prior to the termination of the offering contemplated by this
Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Firm Stock or the Additional Stock.
(18) The Company has obtained from each of its directors,
officers, and stockholders, other than the Selling Stockholder with respect to
the Stockholder Additional Stock, a written agreement, in form and substance
satisfactory to counsel for the Underwriters, that, for a period of 18 months
from the date on which the Registration Statement is declared by the Commission
to be effective under the Securities Act, he, she, or it will not, without the
prior written consent of the Representative, publicly offer, pledge, sell,
hypothecate, contract to sell, grant any
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option for the sale of, or otherwise dispose of, directly or indirectly, any
shares of Common Stock or any security or other instrument which by its terms is
convertible into, or exercisable or exchangeable for, shares of Common Stock or
other securities of the Company, including, without limitation, any shares of
Common Stock issuable pursuant to the terms of any employee stock options;
provided, however, that such persons may offer, sell, contract to sell, grant an
option for the sale of, or otherwise dispose of all or any part of his, her, or
its shares of Common Stock or other such security or instrument of the Company
during such period if such transaction is private in nature and the transferee
of such shares of Common Stock or other securities or instruments agrees, prior
to such transaction, to be bound by all of the provisions of such agreement.
(19) During the two-year period commencing on the effective date
of the of the Registration Statement, the Representative shall have the right
of first refusal to act as underwriter, placement agent or investment banker, as
the case may be, for any and all public offerings or private placements of the
Company's securities, or any merger, acquisition, or disposition of assets of
the Company, if the Company uses a lead manager, placement agent or investment
banker performing such functions for a fee. The Representative shall advise the
Company no later than seven days following the submission to the Representative
in writing of such proposed transaction(s) of its election to exercise said
right. If any such proposal is not accepted by the Representative, but later
modified, the Company will resubmit such proposal to the Representative. Should
the Representative elect, at any time, not to exercise said right, the
Representative's right of first refusal regarding future financings shall be
unaffected.
(20) The Company is not, and does not intend to conduct its
business in a manner in which it would be required to register as, an
"investment company" as defined in the
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Investment Company Act of 1940, as amended (the "Investment Company Act"), and
the rules and regulations promulgated thereunder.
(21) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement, which right has not been waived.
(22) Except as may be set forth in the Prospectus, the Company
has not incurred any liability for a fee, commission, or other compensation on
account of the employment of a broker or finder in connection with the
transactions contemplated by this Agreement.
(23) Neither the Company, nor any of their respective affiliates,
is presently doing business with the government of Cuba or with any person or
affiliate located in Cuba. If, at any time after the date on which the
Registration Statement is declared by the Commission to be effective under the
Securities Act or with the Florida Department of Banking and Finance (the
"Florida Department"), whichever is later, and prior to the end of the period
referred to in the first clause of Section 2(a)(2) hereof, the Company and any
Subsidiary commences engaging in business with the government of Cuba or with
any person or affiliate located in Cuba, the Company will so inform the Florida
Department within 90 days after such commencement of business in Cuba, and,
during the period referred to in Section 2(a)(2) hereof, will inform the Florida
Department within 90 days after any change occurs with respect to previously
reported information.
(24) No officer, director, or stockholder of the Company has any
affiliation or association with the National Association of Securities Dealers,
Inc. (the "NASD") or any member thereof.
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(25) Except as disclosed in the Prospectus, the Company has filed
all necessary federal, state, local, and foreign income and franchise tax
returns and other reports required to be filed and has paid all taxes shown as
due thereon; and there is no tax deficiency which has been, or, to the knowledge
of the Company, might be, asserted against the Company.
(26) To the best knowledge of the Company, none of the activities
or business of the Company is in violation of, or will cause the Company to
violate, any law, rule, regulation, or order of the United States, any state,
county, or locality, or of any agency or body of the United States or of any
state, county, or locality, the violation of which would have a material adverse
effect upon the condition (financial or otherwise), business, property,
prospective results of operations, or net worth of the Company.
(27) The Common Stock has been approved for quotation on the
Nasdaq National Market.
(b) The Selling Stockholder represents and warrants to, and agrees
with, the several Underwriters that:
(1) The Selling Stockholder has (i) caused a negotiated
certificate or negotiated certificates representing the number of shares of
Stockholder Additional Stock to be delivered to ___________, attorney-at-law
(the "Custodian"), duly endorsed in blank or together with blank stock powers
duly executed, with the Selling Stockholder's signature appropriately guaranteed
by medallion guarantee, such certificate or certificates to be held by the
Custodian pursuant to a letter of transmittal and custody agreement for
delivery, pursuant to the provisions hereof, one or more Additional Closing
Dates and (ii) granted an irrevocable power of attorney to ___________ (the
"Attorneys") to purchase all requisite stock transfer tax stamps, to execute
this
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Agreement (including agreeing on the price at which the Stockholder Additional
Stock is to be sold to the Representative) and thereafter to modify and amend
this Agreement, to settle any dispute relating to the terms of this Agreement,
to waive any condition to the obligations of the Selling Stockholder, and to
execute all other instruments and documents and to perform all other acts
necessary or desirable to carry out the provisions of this Agreement on behalf
of the Selling Stockholder. Such letter of transmittal and custody agreement,
together with such irrevocable power of attorney, are hereinafter referred to as
the "Custodial Agreement."
(2) There is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or, to the best knowledge of the Selling
Stockholder, investigation pending, threatened, or in prospect (or any basis
therefor) with respect to the Selling Stockholder or any of the Selling
Stockholder's business, properties, or assets, except as otherwise disclosed in
the Registration Statement. The Selling Stockholder is not in violation of, or
in default with respect to, any law, rule, regulation, order, judgment, or
decree; nor is the Selling Stockholder required to take any action in order to
avoid such violation or default.
(3) The Selling Stockholder has all requisite power and
authority to execute, deliver, and perform this Agreement and the Custodial
Agreement. This Agreement and the Custodial Agreement have been duly executed
and delivered by the Selling Stockholder, are the legal, valid, and binding
obligations of the Selling Stockholder, and are enforceable as to the Selling
Stockholder in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, or other laws affecting
the rights of creditors generally. To the Selling Stockholder's best knowledge,
no consent, authorization, approval, order, license, certificate, or permit of
or from, or declaration or filing with, any federal, state, local, or other
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governmental authority or any court or other tribunal is required by the Selling
Stockholder for the execution, delivery, or performance of this Agreement or the
Custodial Agreement, except filings under the Securities Act which have been or
will be made before the Closing Date and such consents consisting only of
consents under "blue sky" or securities laws which have been obtained at or
prior to the date of this Agreement by the Selling Stockholder. No consent of
any party to any contract, agreement, instrument, lease, license, arrangement,
or understanding to which the Selling Stockholder is a party, or to which any of
the Selling Stockholder's properties or assets are subject, is required for the
execution, delivery, or performance of this Agreement or the Custodial
Agreement; and the execution, delivery, and performance of this Agreement and
the Custodial Agreement will not violate, result in a breach of, conflict with,
or result in the creation or imposition of any lien, charge, or encumbrance upon
any properties or assets of the Selling Stockholder pursuant to the terms of,
or, with or without the giving of notice or the passage of time or both, entitle
any party to terminate or call a default under, any such contract, agreement,
instrument, lease, license, arrangement, or understanding, or, to the Selling
Stockholder's best knowledge, violate, result in a breach of, or conflict with,
any law, rule, regulation, order, judgment, or decree binding on the Selling
Stockholder or to which any of the Selling Stockholder's business, properties,
or assets are subject.
(4) The Selling Stockholder has good title to the shares of
Stockholder Additional Stock to be sold by the Selling Stockholder pursuant to
this Agreement, free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts (except those
created by this Agreement and the Custodial Agreement and those which have been
terminated prior to the execution hereof), and, when and if delivered in
accordance with this
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Agreement, the Underwriters will receive good title to the shares of Stockholder
Additional Stock purchased by them from the Selling Stockholder, free and clear
of all liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts. The Stockholder Additional Stock conforms to all
statements relating thereto contained in the Registration Statement or the
Prospectus.
(5) Neither the Selling Stockholder nor any of the Selling
Stockholder's affiliates (as defined in the Regulations) has taken or will take,
directly or indirectly, prior to the termination of the offering contemplated by
this Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which has caused or resulted in, or which might in
the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Stock or the Additional Stock.
(6) The Selling Stockholder has reviewed, and is familiar with,
the Registration Statement and all amendments and supplements thereto, if any,
filed with the Commission prior to the date hereof, and with each Preliminary
Prospectus and the Prospectus contained therein, as supplemented, if applicable,
to the date hereof, and all information relating to the Selling Stockholder, the
Selling Stockholder's shares of Common Stock, and any contractual or other
business relationship between the Selling Stockholder and the Company that is
set forth in the Registration Statement, any such amendment or supplement
thereto, each Preliminary Prospectus, and the Prospectus, or any such supplement
thereof, and all other information furnished or to be furnished by, or on behalf
of, the Selling Stockholder for use in the Registration Statement, any such
amendment or supplement thereto, any Preliminary Prospectus, and the Prospectus,
or any
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such supplement thereto, is and, at the Closing Date and each Additional Closing
Date, will be, true, correct, and complete and does not, and at the Closing Date
and each Additional Closing Date, will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make such information not misleading.
(7) The Selling Stockholder has not incurred any liability for a
fee, commission, or other compensation on account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement.
(8) The Selling Stockholder's decision to sell the Stockholder
Additional Stock has not been based upon any negative or otherwise material
information with respect to the Company which is not set forth in the
Prospectus.
3. PURCHASE, SALE, AND DELIVERY OF THE STOCK AND THE UNDERWRITER'S
WARRANTS.
(a) On the basis of the representations, warranties, covenants, and
agreements of the Company herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the
Underwriters and the Underwriters, severally and not jointly, agree to purchase
from the Company, the numbers of shares of Firm Stock set forth opposite the
respective names of the Underwriters in Schedule I hereto.
The purchase price per share of the Firm Stock to be paid by the
several Underwriters shall be $__________. The initial public offering price
per share of the Firm Stock shall be $_________.
Payment for the Firm Stock by the Underwriters shall be made by
certified or official bank check in New York Clearing House (next day) funds or
by electronic wire transfer of next day funds, payable to the order of the
Company, at the offices of Hampshire Securities
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Corporation, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place
in the New York City metropolitan area as the Representative shall determine and
advise the Company by at least two full days' notice in writing, upon delivery
of the Firm Stock to the Representative for the respective accounts of the
Underwriters. Such delivery and payment shall be made at 9:00 a.m., New York
City local time, on the third business day following the time of the initial
public offering, as defined in Section 11(a) hereof (unless such time and date
is postponed in accordance with the provisions of Section 9(c) hereof), or at
such other time as shall be agreed upon between the Representative and the
Company. The time and date of such delivery and payment are hereinafter
referred to as the "Closing Date."
Certificates representing the Firm Stock shall be registered in such
name or names and in such authorized denominations as the Representative may
request in writing at least two full business days prior to the Closing Date.
The Company shall permit the Representative to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(b) The Selling Stockholder hereby grants to Hampshire the
Stockholder Over-allotment Option to purchase up to 150,000 shares of Common
Stock, as may be necessary to cover over-allotments, at the same purchase price
per share to be paid by the several Underwriters to the Company for the Firm
Stock as provided for in this Section 3 hereof. The Company hereby grants to
Hampshire the Company Over-allotment Option to purchase up to 150,000 shares of
Common Stock, as may be necessary to cover over-allotments, at the same purchase
price per share to be paid by the several Underwriters to the Company for the
Firm Stock as provided for in this Section 3 hereof. The Over-allotment Options
may be exercised only to cover over-allotments in the sale of shares by
Hampshire. The Company Over-allotment Option and the Stockholder Over-allotment
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Option shall be exercised pro rata to one another. The Over-allotment Options
may be exercised by Hampshire on the basis of the representations, warranties,
covenants, and agreements of the Company and the Selling Stockholder herein
contained, but subject to the terms and conditions herein set forth, at any time
and from time to time on or before the forty-fifth day following the date on
which the Registration Statement becomes effective under the Securities Act, by
written notice by Hampshire to the Company and Custodian. Such notice shall set
forth the aggregate number of shares of Additional Stock as to which the
Over-allotment Options are being exercised, the name or names in which the
certificates representing the Additional Stock are to be registered, the
authorized denominations in which the Additional Stock is to be registered, and
the time and date, as determined by Hampshire, when such shares of Additional
Stock are to be delivered (each such time and date are hereinafter referred to
as an "Additional Closing Date"); provided, however, that no Additional Closing
Date shall be earlier than the Closing Date nor earlier than the second business
day after the date on which the notice of the exercise of the Stockholder
Over-allotment Option and the Company Over-allotment Option shall have been
given nor later than the eighth business day after the date on which such notice
shall have been given.
In the event the Company declares or pays a dividend or a distribution
on the Common Stock, whether in the form of cash, shares of Common Stock, or
other consideration, prior to the Additional Closing Date, such dividend or
distribution shall also be paid on the Additional Stock on the later of the
Additional Closing Date and the date on which such dividend or distribution is
payable.
Payment for the shares of Additional Stock by Hampshire shall be made
by certified or official bank check in New York Clearing House (next day) funds
or by electronic wire transfer
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of next day funds payable to the order of the Custodian and the Company (pro
rata as described above) at the offices of Hampshire Securities Corporation, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place in the New York
City metropolitan area as Hampshire shall determine and advise the Company by at
least two full days' notice in writing, upon delivery of the shares of
Additional Stock to Hampshire for its account.
Certificates for the shares of Additional Stock shall be registered
in such name or names and in such authorized denominations as Hampshire may
request in writing at least two full business days prior to the Additional
Closing Date with respect thereto. The Company shall permit Hampshire to
examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date with respect thereto.
(c) The Company hereby agrees to issue and sell to Hampshire and/or
its designees on the Closing Date the Underwriter's Warrants to purchase the
Warrant Shares for an aggregate purchase price of $200.00.
(d) During the four-year period commending one year from the
effective date of the Registration Statement, the Company will agree to use
its best efforts to register the Underwriter's Warrants and the Warrant
Shares when and if requested by the Representative. These best efforts shall
include the preparation and filing of one demand registration statement with
respect to the Warrant Shares during such four-year period and maintaining
the effectiveness thereof, for nine months or such shorter period as may be
required for the sale of the Warrant Shares in the open market, at the
Company's sole expense (other than underwriter or selling broker costs),
including "blue sky" fees and expenses. The Company agrees that for the
period starting at the beginning of the second year and concluding at the end
of the seventh year after the effective
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date of the Registration Statement, the Company will notify all holders of
the Underwriter's Warrants and Warrant Shares of the Company's intention to
engage in another public offering of the Company's securities (whether by the
Company or by any security holder of the Company), and, if requested by the
Representative, include any Underwriter's Warrants and Warrant Shares in such
offering at the Company's sole expense and maintain the effectiveness thereof
for at least 12 months ("Piggyback Registration Rights").
Delivery and payment for the Underwriter's Warrants shall be made on
the Closing Date. The Company shall deliver to Hampshire, upon payment
therefor, certificates representing the Underwriter's Warrants in the name or
names and in such authorized denominations as Hampshire may request. The
Underwriter's Warrants shall be exercisable for a period of four years
commencing one year from the date on which the Registration Statement was
declared effective under the Securities Act at an initial exercise price per
Warrant Share equal to $_____________.
(d) It is understood that the Hampshire may (but shall not be
obligated to) make any and all the payments required pursuant to this Section 3
on behalf of any Underwriters whose check or checks shall not have been received
by the Representative at the time of delivery of the Stock to be purchased by
such Underwriter or Underwriters. Any such payment by the Representative shall
not relieve any such Underwriter or Underwriters of any of its or their
obligations hereunder.
4. OFFERING. The Underwriters are to make a public offering of the Firm
Stock as soon, on or after the date on which the Registration Statement becomes
effective under the Securities Act, as the Representative deems it advisable so
to do. The Firm Stock is to be initially offered to the public at the initial
public offering price as provided for in Section 3(a) (such price being
-25-
hereinafter referred to as the "public offering price"). After the initial
public offering, the Representative may from time to time increase or decrease
the public offering price, in the sole discretion of the Representative, by
reason of changes in general market conditions or otherwise.
5. COVENANTS.
(a) The Company covenants that it will:
(1) To use its best efforts to cause at least two persons to be
elected to the Company's Board of Directors who are deemed to be independent of
the Company's Management.
(2) Use its best efforts to cause the Registration Statement to
become effective under the Securities Act as promptly as possible and notify the
Representative and counsel to the Underwriters immediately, and confirm such
notice in writing, (i) when the Registration Statement and any post-effective
amendment thereto become effective under the Securities Act, (ii) of the receipt
of any comments from the Commission or the "blue sky" or securities authority of
any jurisdiction regarding the Registration Statement, any post-effective
amendment thereto, the Prospectus, or any amendment or supplement thereto,
(iii) of the filing with the Commission of any supplement to the Prospectus, and
(iv) of the receipt of any notification with respect to a Stop Order or the
initiation or threatening of any proceeding with respect to a Stop Order. The
Company will use its best efforts to prevent the issuance of any Stop Order and,
if any Stop Order is issued, to obtain the lifting thereof as promptly as
possible. If the Registration Statement has become or becomes effective under
the Securities Act with a form of prospectus omitting Rule 430A Information, or
filing of the Prospectus with the Commission is otherwise required under Rule
424(b) of the Regulations, the Company will file with the Commission the
Prospectus, properly
-26-
completed, pursuant to Rule 424(b) of the Regulations within the time period
prescribed and will provide evidence satisfactory to the Representative of such
timely filing.
(3) During the time when a prospectus relating to the Firm
Stock or the Additional Stock is required to be delivered hereunder or under
the Securities Act or the Regulations, comply with all requirements imposed
upon it by the Securities Act, as now existing and as hereafter amended, and
by the Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of, or dealings in, the Stock in accordance
with the provisions hereof and the Prospectus. If, at any time when a
prospectus relating to the Firm Stock or the Additional Stock is required to
be delivered hereunder or under the Securities Act or the Regulations, any
event shall have occurred as a result of which, in the reasonable opinion of
counsel for the Company or counsel for the Underwriters, the Registration
Statement or the Prospectus as then amended or supplemented contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if, in the opinion of either of such counsel, it is necessary
at any time to amend or supplement the Registration Statement or the
Prospectus to comply with the Securities Act or the Regulations, the Company
will immediately notify the Representative and promptly prepare and file with
the Commission an appropriate amendment or supplement (in form and substance
satisfactory to the Representative and counsel to the Underwriters) which
will correct such statement or omission or which will effect such compliance
and will use its best efforts to have any such amendment declared effective
under the Securities Act as soon as possible.
(4) Deliver without charge to each of the several Underwriters
such number of copies of each Preliminary Prospectus as may reasonably be
requested by the
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Underwriters and, as soon as the Registration Statement, or any amendment
thereto, becomes effective under the Securities Act or a supplement is filed
with the Commission, deliver without charge to the Representative two signed
copies of the Registration Statement, including exhibits, or such amendment
thereto, as the case may be, and two copies of any supplement thereto, and
deliver without charge to each of the several Underwriters such number of copies
of the Prospectus, the Registration Statement, and amendments and supplements
thereto, if any, without exhibits, as the Representative may request for the
purposes contemplated by the Securities Act.
(5) Endeavor in good faith, in cooperation with the
Representative, at or prior to the time the Registration Statement becomes
effective under the Securities Act, to qualify the Securities for offering and
sale under the "blue sky" or securities laws of such jurisdictions as may be
designated by the Representative; provided, however, that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Company
would be subject to service of general process or to taxation as a foreign
corporation doing business in such jurisdiction to which it is not then subject.
In each jurisdiction where such qualification shall be effected, the Company
will, unless the Representative agrees in writing that such action is not at the
time necessary or advisable, file and make such statements or reports at such
times as are or may be required by the laws of such jurisdiction.
(6) Make generally available, within the meaning of Section
11(a) of the Securities Act and the Regulations, to its security holders as soon
as practicable, but not later than ________________, an earnings statement,
which need not be certified by independent certified public accountants unless
required by the Securities Act or the Regulations, but which shall satisfy the
provisions of Section 11(a) of the Securities Act and the Regulations, covering
a period of at
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least 12 months beginning after the date on which the Registration Statement was
declared effective under the Securities Act.
(7) For a period of 18 months after the date of the
Prospectus, not, without the prior written consent of the Representative,
offer, issue, sell, hypothecate, contract to sell, grant any option for the
sale of, or otherwise dispose of, directly or indirectly, any shares of
Common Stock or other securities of the Company, or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, shares of Common Stock, except as contemplated by Section 3
hereof and except for (i) the issuance of stock options, or shares of Common
Stock issuable upon the exercise thereof, which have been or may be granted
pursuant to the Company's current incentive stock option plan, up to an
aggregate of _______ shares of Common Stock, all as properly described in the
Prospectus, (ii) upon the exercise of warrants outstanding on the date
hereof, as properly described in the Prospectus, (iii) the issuance of shares
of Warrant Stock issuable upon exercise of the Underwriter's Warrants, and
(iv) the issuance of shares of Common Stock in connection with an acquisition
by the Company.
(8) For a period of five years after the date on which the
Registration Statement was declared effective under the Securities Act furnish
you, without charge, the following:
(i) within 90 days after the end of each fiscal year, one
copy of financial statements certified by independent certified public
accountants, including a balance sheet, statement of income, and statement of
changes in cash flows of the Company and its then existing subsidiaries, if any,
with supporting schedules, prepared in accordance with generally accepted
-29-
accounting principles, as at the end of such fiscal year and for the 12 months
then ended, which may be on a consolidated basis;
(ii) as soon as practicable after they have been sent to
stockholders of the Company or filed with, or furnished to, the Commission or
the NASD, one copy of each annual and interim financial and other report or
communication sent by the Company to its stockholders or filed with, or
furnished to, the Commission or the NASD;
(iii) as soon as practicable, one copy of every press
release and every material news item and article in respect of the Company or
its affairs which was released by the Company; and
(iv) such additional documents and information with respect
to the Company and its affairs, as the Representative may from time to time
reasonably request; provided, however, that such additional documents and
information shall be received by the Representative on a confidential basis,
unless otherwise disclosed to the public, and shall not be used in violation of
the federal securities laws and the rules and regulations promulgated
thereunder.
(9) Apply the net proceeds received by the Company from the
offering contemplated by this Agreement in the manner set forth under the
heading "Use of Proceeds" in the Prospectus.
(10) Furnish to the Representative as early as practicable prior
to the Closing Date and each Additional Closing Date, if any, as the case may
be, but not less than two full business days prior thereto, a copy of the latest
available unaudited interim financial statements
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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 7(f) hereof.
(11) File no amendment or supplement to the Registration
Statement or Prospectus at any time, whether before or after the date on which
the Registration Statement was declared effective under the Securities Act,
unless such filing shall comply with the Securities Act and the Regulations and
unless the Representative shall previously have been advised of such filing and
furnished with a copy thereof, and the Representative shall have approved such
filing in writing. Until the later of (i) the completion by the Underwriters of
the distribution of the Stock (but in no event more than nine months after the
date on which the Registration Statement shall have been declared effective
under the Securities Act) and (ii) 25 days after the date on which the
Registration Statement shall have been declared effective under the Securities
Act, the Company will prepare and file with the Commission, promptly upon the
Representative's request, any amendments or supplements to the Registration
Statement or the Prospectus which, in the sole opinion of the Representative,
may be necessary or advisable in connection with the distribution of the Stock.
(12) File timely with the Commission an appropriate form to
register the Common Stock, including the Stock, pursuant to Section 12(g) of the
Exchange Act and comply with all registration, filing, and reporting
requirements of the Exchange Act, which may from time to time be applicable to
the Company.
(13) Comply with all provisions of all undertakings contained in
the Registration Statement.
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(14) Prior to the later of (A) the date referred to in the second
sentence of clause (10) of this paragraph (a) of this Section 5, and (B) any
Additional Closing Date, issue no press release or other communication, directly
or indirectly, and hold no press conference with respect to the Company, the
financial condition, results of operations, business, properties, assets,
liabilities of any the Company or any Subsidiary, or this offering, without the
prior written consent of the Representative.
(15) Make all filings required to maintain the inclusion of the
Common Stock on the Nasdaq National Market for a least four years from the date
of this Agreement.
(16) On the Closing Date, sell to the Hampshire, individually and
not as Representative of the several Underwriters, at the price of $.001 per
warrant, warrants to purchase the Warrant Stock, which Underwriter's Warrants
shall be substantially in the form set forth as an exhibit to the Registration
Statement.
(17) Until expiration of the Underwriter's Warrants, keep
reserved sufficient shares of Common Stock for issuance upon exercise of the
Underwriter's Warrants.
(18) Deliver to the Representative, without charge, within a
reasonable period after the last Additional Closing Date or the expiration of
the period during which the Representative may exercise the Over-allotment
Options, five sets of bound volumes of the Registration Statement and all
related materials to the individuals designated by the Representative or counsel
to the Underwriters.
(19) For a period of three years after the effective date on
which the Registration Statement is declared effective under the Securities Act,
provide, at its sole expense,
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to the Representative copies of the Company's daily transfer sheets, if so
requested by the Representative.
(20) Maintain key-person life insurance payable to the Company on
the life of Xx. Xxxxx Xxxxxxx, President and Chief Executive Officer of the
Company, in the amount of at least $1,000,000, for the period of time equal to
the longer of three years from the date on which the Registration Statement
becomes effective under the Securities Act and the term of the employment
agreement between the Company and such officer.
(21) For a period of three years from the date on which the
Registration Statement becomes effective under the Securities Act, the
Representative shall have the right to appoint a designee as an observer of the
Company's Board of Directors. Such observer will have the right to attend all
meetings of the Board of Directors. Such observer shall be entitled to receive
reimbursement for all out-of-pocket expenses incurred in attending such
meetings, including, but not limited to, food, lodging, transportation, and any
fees paid to directors for attending meetings. The Representative shall be
given notice of such meetings at the same time and in the same manner as
directors of the Company are informed. The Representative and such observer
shall be indemnified to the same extent as the other directors. The Company
will purchase directors and officers insurance in an amount of not less than
$2,000,000, provided, however, that the Company shall not be required to pay
more than $50,000 per year in order to maintain such insurance, and if insurance
in such amount is not available at such cost, the Company shall purchase that
amount of such insurance which is available at a cost of $50,000 per year.
(b) The Selling Stockholder covenants that it will not:
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(1) For a period of 18 months from the date on which the
Registration Statement shall become effective under the Securities Act, without
the prior written consent of Hampshire, offer, sell, contract to sell, grant any
option for the sale of, or otherwise dispose of, directly or indirectly, any
shares of Common Stock (other than the Stockholder Additional Stock upon
exercise of the Stockholder Over-allotment Option) or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, shares of Common Stock or other securities of the Company,
including, without limitation, any shares of Common Stock issuable pursuant to
the terms of any employee stock options.
(2) Take, directly or indirectly, prior to the termination of
the offering contemplated by this Agreement, any action designed to stabilize or
manipulate the price of any security of the Company, or which might in the
future reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Stock.
6. PAYMENT OF EXPENSES. The Company hereby agrees to pay all expenses
(other than fees of counsel for the Underwriters, except as provided in Section
6(c)) in connection with (a) the preparation, printing, filing, distribution,
and mailing of the Registration Statement and the Prospectus and the printing,
filing, distribution, and mailing of this Agreement and the Master Agreement
Among Underwriters, any Master Selected Dealer Agreement and related documents,
including the cost of all copies thereof and of the Preliminary Prospectuses and
of the Prospectus and any amendments or supplements thereto supplied to the
Underwriters in quantities as hereinabove stated; (b) the issuance, sale,
transfer, and delivery (as applicable) of the Securities, including any transfer
or other taxes payable thereon; (c) the qualification of the Securities under
-34-
state or foreign "blue sky" or securities laws, including the costs of printing
and mailing the preliminary and final "Blue Sky Survey" and the fees of counsel
for the Underwriters of $25,000 ($35,000 if Nasdaq National Market listing is
not obtained) plus disbursements in connection therewith, payable as follows:
(i) $10,000 of the fee upon the engagement by Hampshire, (ii) $10,000 of the fee
upon the filing of the Registration Statement and (iii) the balance of the fee
on the Closing Date; (d) the filing fees payable to the Commission, the NASD,
and the jurisdictions in which such qualification is sought; (e) any fees
relating to the listing of the Common Stock on the Nasdaq National Market and
any other stock market or exchange; (f) the cost of printing certificates
representing the shares of Common Stock; (g) the fees of the transfer agent for
the Common Stock, (h) the cost of publication of "tombstone" advertisements with
respect to offerings, not to exceed $25,000; and (i) a non-accountable expense
allowance equal to three percent of the gross proceeds of the sale of the Firm
Stock and the Company Additional Stock (less amounts, if any, previously paid to
the Representative by the Company in respect of such non-accountable expense
allowance) to the Representative on the Closing Date. Notwithstanding the
foregoing, if the offering contemplated hereby should be terminated, the Company
agrees to pay the Representative only the out-of-pocket expenses incurred by the
Underwriters in connection with this Agreement or the proposed offer, sale, and
delivery of the Securities.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Firm Stock and the Additional
Stock, as provided herein, and the obligation of Hampshire to purchase and pay
for the Underwriter's Warrants, each as provided herein, shall be subject, in
the discretion of the Representative, to the continuing accuracy
-35-
of the representations and warranties of the Company contained herein and in
each certificate and document contemplated under this Agreement to be delivered
to the Underwriters, as of the date hereof and as of the Closing Date (or any
Additional Closing Date, as the case may be), to the performance by the Company
and the Selling Stockholder, as applicable, of their respective obligations
hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective under the
Securities Act not later than 6:00 P.M., New York City local time, on the date
of this Agreement or such later date and time as shall be consented to in
writing by the Representative; on or prior to the Closing Date, or any
Additional Closing Date, as the case may be, no Stop Order shall have been
issued and no proceeding shall have been initiated or threatened with respect to
a Stop Order; and any request by the Commission for additional information shall
have been complied with by the Company to the reasonable satisfaction of counsel
for the Underwriters. If required, the Prospectus shall have been filed with
the Commission in the manner and within the time period required by Rule 424(b)
under the Securities Act.
(b) (1) At the Closing Date and any Additional Closing Date, as
the case may be, the Underwriters shall have received the opinion of Crummy,
Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C., counsel for the Company, dated
the date of delivery, addressed to the Underwriters, and in form and scope
satisfactory to counsel for the Underwriters, with reproduced copies or
signed counterparts thereof for each of the Underwriters, to the effect that:
(i) the Company is a corporation duly organized, validly
existing, and in good standing under the laws of its jurisdiction of
incorporation, with full power and authority, and all necessary consents,
authorizations, approvals, orders, licenses, certificates, and
-36-
permits of and from, and declarations and filings with, all federal, state,
local, and other governmental authorities and all courts and other tribunals,
to own, lease, license, and use its properties and assets and to conduct its
business in the manner described in the Prospectus. The Company is duly
qualified to do business as a foreign corporation and is in good standing as
such in every jurisdiction in which its ownership, leasing, licensing, or use
of property and assets or the conduct of its business makes such
qualification necessary;
(ii) the authorized capital stock of the Company consists of
(i) 10,000,000 shares of Common Stock, of which 3,500,000 shares are
outstanding, (ii) 1,000,000 shares of Preferred Stock, par value $.01 per share,
none of which is outstanding, and (iii) 118,100 shares of Series A Cumulative
Redeemable Preferred Stock, of which 118,100 is outstanding. Except as
otherwise disclosed in the Prospectus, each outstanding share of capital stock
of the Company is free and clear of all liens, security interests, pledges,
charges, encumbrances, stockholders' agreements, and voting trusts. Except as
disclosed in the Prospectus, each outstanding share of Common Stock is validly
authorized and issued, fully paid, and nonassessable, without any personal
liability attaching to the ownership thereof, has not been issued and is not
owned or held in violation of any preemptive or similar rights of stockholders.
To the knowledge of such counsel, there is no commitment, plan, or arrangement
to issue, and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of the Company or any security or other
instrument which by its terms is convertible into, or exercisable or
exchangeable for, capital stock of the Company except as may be properly
described in the Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into, or exercisable
-37-
or exchangeable for, capital stock of the Company. The certificates evidencing
the Common Stock are in due and proper form;
(iii) to the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect (or any basis
therefor) with respect to the Company or any of its operations, businesses,
properties, or assets, except as may be properly described in the Prospectus or
such as individually or in the aggregate do not now have, and will not in the
future have, a material adverse effect upon the operations, business,
properties, or assets of the Company. To the knowledge of such counsel, the
Company is not in violation of, or in default with respect to, any law, rule,
regulation, order, judgment, or decree, except as may be properly described in
the Prospectus or such as in the aggregate do not now have and will not in the
future have a material adverse effect upon the operations, business, properties,
or assets of the Company; nor is the Company required to take any action in
order to avoid any such violation or default;
(iv) to the knowledge of such counsel, neither the Company
nor any other party is now, or is expected by the Company to be, in violation or
breach of, or in default with respect to, any provision of any contract,
agreement, instrument, lease, license, arrangement, or understanding which is
material to the Company, and, to the knowledge of such counsel, each such
contract, agreement, instrument, lease, license, arrangement, or understanding
is in full force and effect and is the valid, legal, and binding obligation of
the parties thereto and is enforceable in accordance with its terms;
-38-
(v) the Company is not in violation or breach of, or in
default with respect to, any term of its respective certificate of incorporation
(or other charter document) or by-laws;
(vi) the Company has all requisite power and authority to
execute, deliver, and perform this Agreement and the Underwriter's Warrants.
All necessary corporate proceedings of the Company have been taken to authorize
the execution, delivery, and performance by the Company of this Agreement and
the Underwriter's Warrants. This Agreement has been duly authorized, executed,
and delivered by the Company, is the legal, valid, and binding obligation of the
Company, and, subject to applicable bankruptcy, insolvency, and other laws
affecting the enforceability of creditors' rights generally, is enforceable as
to the Company in accordance with its terms. The Underwriter's Warrants have
been duly authorized by the Company and, when executed and delivered by the
Company, will be legal, valid, and binding obligations of the Company, each
enforceable as to the Company in accordance with its terms. No consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by the Company for the
execution, delivery, or performance by the Company of this Agreement or the
Underwriter's Warrants, except filings under the Securities Act which have been
made prior to the Closing Date or Additional Closing Date, as the case may be,
and consents consisting only of consents under "blue sky" or securities laws,
which have been obtained. No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding known to such counsel
to which the Company is a party, or to which any of its properties or assets are
subject, is required for the execution, delivery, or performance of this
Agreement and the Underwriter's
-39-
Warrants; and the execution, delivery, and performance of this Agreement and the
Underwriter's Warrants will not violate, result in a breach of, conflict with,
result in the creation or imposition of any lien, charge, or encumbrance upon
any properties or assets of the Company pursuant to the terms of, or, with or
without the giving of notice or the passage of time or both, entitle any party
to terminate or call a default under, any such contract, agreement, instrument,
lease, license, arrangement, or understanding known to such counsel, violate or
result in a breach of, or conflict with any term of the certificate of
incorporation (or other charter document) or by-laws of the Company, or violate,
result in a breach of, or conflict with any law, rule, regulation, order,
judgment, or decree binding on the Company to which any of its operations,
businesses, properties, or assets are subject;
(vii) each share of Firm Stock to be delivered on the
Closing Date is validly authorized and, when issued and delivered in accordance
with the terms hereof, will be validly issued, fully paid, and nonassessable,
without any personal liability attaching to the ownership thereof, and will not
be issued in violation of any preemptive or similar rights of stockholders.
Each share of Company Additional Stock to be delivered on the Closing Date or
any Additional Closing Date, as applicable, is validly authorized and, when
issued and delivered in accordance with the terms hereof, will be validly
issued, fully paid, and nonassessable, without any personal liability attaching
to the ownership thereof, and will not issued in violation of any preemptive or
similar rights of stockholders. The Underwriters will receive good title to the
shares of Firm Stock and Company Additional Stock purchased by them,
respectively, free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts. The Company
Additional Stock has been duly and validly reserved for issuance. The Stock
-40-
conforms to all statements relating thereto contained in the Registration
Statement or the Prospectus;
(viii) the Warrant Stock is validly authorized and has been
duly and validly reserved for issuance pursuant to the terms of the
Underwriter's Warrants. The Underwriter's Warrants have been duly and validly
issued and delivered. The Warrant Stock, when issued and delivered in
accordance with the Underwriter's Warrants, will be validly issued, fully paid,
and nonassessable, without any personal liability attaching to the ownership
thereof, and will not have been issued in violation of any preemptive rights of
stockholders. The Representative, and any other holders of the Underwriter's
Warrants, will receive good title to the securities purchased by them upon
exercise of the Underwriter's Warrants, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements, and voting
trusts. The Representative's Securities conform to all statements relating
thereto contained in the Registration Statement or the Prospectus;
(ix) to the knowledge of such counsel, each contract,
agreement, instrument, lease, or license required to be described in the
Registration Statement or the Prospectus has been properly described therein,
and each contract, agreement, instrument, lease, or license required to be filed
as an exhibit to the Registration Statement has been filed with the Commission
as an exhibit to the Registration Statement;
(x) insofar as statements in the Prospectus purport to
summarize the status of litigation or the provisions of laws, rules,
regulations, orders, judgments, decrees, contracts, agreements, instruments,
leases, or licenses, such statements have been prepared or
-41-
reviewed by such counsel and accurately reflect the status of such litigation
and provisions purported to be summarized and are correct in all respects;
(xi) the Company is not an "investment company" as defined
in the Investment Company Act and the rules and regulations thereunder and, if
the Company conducts its business as set forth in the Prospectus, will not
become an "investment company", and will not be required to be registered under
the Investment Company Act;
(xii) to the knowledge of such counsel, no person or entity
has the right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statement, except by entities which have waived such rights as
described in the Registration Statement and the Prospectus;
(xiii) there is no stamp duty, value-added tax or any
similar tax or duty, payable by or on behalf of the Underwriters or the
Company in Hong Kong in connection with the authorization, issuance, sale and
delivery of the Securities to the Underwriters in the manner contemplated by
this Agreement; and
(xiv) the Registration Statement has become effective under
the Securities Act, the Prospectus has been filed in accordance with Rule 424(b)
of the Regulations, including the applicable time periods set forth therein, or
such filing is not required. To the knowledge of such counsel, no Stop Order
has been issued and no proceeding for that purpose has been instituted or
threatened. On the basis of the participation of such counsel in conferences at
which the contents of the Registration Statement and the Prospectus and related
matters were discussed, but without independent verification by such counsel of
the accuracy, completeness, or fairness of the statements contained in the
Registration Statement, the Prospectus, or any
-42-
amendment or supplement thereto, such counsel have no knowledge that (other than
financial statements and other financial data and schedules which are or should
be contained therein, as to which such counsel need express no opinion): (A) the
Registration Statement, any Rule 430A Prospectus, and the Prospectus, and any
amendment or supplement thereto, does not appear on its face to comply as to
form in all material respects with the requirements of the Securities Act and
the Regulations; (B) any of the Registration Statement, any Rule 430A
Prospectus, or the Prospectus, or any amendment or supplement 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 not
misleading; or (C) since the date of effectiveness under the Securities Act of
the Registration Statement, any event has occurred which should have been set
forth in an amendment or supplement to the Registration Statement or the
Prospectus which has not been set forth in such an amendment or supplement.
In rendering such opinion, counsel for the Company may rely (A) as to
matters involving the application of laws other than the laws of the United
States and the laws of the State of Delaware, to the extent counsel for the
Company deems proper and to the extent specified in such opinion, upon an
opinion or opinions (in form and substance satisfactory to counsel for the
Underwriters) of other counsel, acceptable to counsel for the Underwriters,
familiar with the applicable laws, in which case the opinion of counsel for the
Company shall state that the opinion or opinions of such other counsel are
satisfactory in scope, form, and substance to counsel for the Company and that
reliance thereon by counsel for the Company and the Underwriters is reasonable;
(B) as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company; and (C) to the extent they deem proper,
upon written statements or certificates of
-43-
officers of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company; provided
that copies of any such opinions, certificates, or statements shall be annexed
as exhibits to the opinion of counsel for the Company.
(2) At any Additional Closing Date, the Representative
shall have received the favorable opinion of Crummy, Del Deo, Griffinger &
Xxxxxxxxx, P.C., counsel for the Selling Stockholder, dated the date of
delivery, addressed to the Underwriters, and in form and scope satisfactory
to counsel for the Underwriters, with reproduced copies or signed
counterparts thereof for each of the Underwriters, to the effect that:
(i) The Selling Stockholder has all requisite power and
authority to execute, deliver, and perform this Agreement its respective
Custodial Agreement. This Agreement and the Custodial Agreement have each
been duly executed and delivered by the Selling Stockholder, are the legal,
valid, and binding obligation of the Selling Stockholder, and are each
enforceable as to the Selling Stockholder in accordance with its respective
terms.
(ii) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect (or any basis
therefor) with respect to the Selling Stockholder or any of the Selling
Stockholder's business, properties, or assets, which, if determined adversely to
the Selling Stockholder, would have a material adverse effect on the Selling
Stockholder's business, properties or assets of the Selling Stockholder. The
Selling Stockholder is not in violation of, or in default with respect to, any
law, rule, regulation, order, judgment, or decree; nor is the Selling
Stockholder required to take any action in order to avoid such violation or
default.
-44-
(iii) Each share of Stockholder Additional Stock is validly
authorized and issued, fully paid, and nonassessable, without any personal
liability attaching to the ownership thereof, and has not been issued and is not
owned or held in violation of any preemptive or similar rights of stockholders.
The Selling Stockholder has good title to the shares of Stockholder Additional
Stock to be sold thereby pursuant to this Agreement, free and clear of all
liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts. When delivered in accordance with the terms of
this Agreement, the Underwriters shall receive good title to the Stockholder
Additional Stock purchased by them from the Selling Stockholder, free and clear
of all liens, security interests, pledges, charges, encumbrances, stockholders'
agreements, and voting trusts.
In rendering such opinion, counsel for the Selling Stockholder may rely (A)
as to matters involving the application of laws other than the laws of the
United States and the laws of the State of Delaware, to the extent counsel for
the Selling Stockholder deems proper and to the extent specified in such
opinion, upon an opinion or opinions (in form and substance satisfactory to
counsel for the Underwriters) of other counsel, acceptable to counsel for the
Underwriters, familiar with the applicable laws, in which case the opinion of
counsel for the Selling Stockholder shall state that the opinion or opinions of
such other counsel are satisfactory in scope, form, and substance to counsel for
the Selling Stockholder and that reliance thereon by counsel for the Selling
Stockholder and counsel for the Underwriters is reasonable; and (B) as to
matters of fact, to the extent proper, on certificates of responsible officers
of the Company; provided, that copies of any such opinions, certificates, or
statements shall be annexed as exhibits to the opinion of counsel for the
Selling Stockholder.
-45-
(c) On or prior to the Closing Date and any Additional Closing Date,
as the case may be, the Underwriters shall have been furnished such information,
documents, certificates, and opinions as they may reasonably require for the
purpose of enabling them to review the matters referred to in Section 7(b), and
in order to evidence the accuracy, completeness, or satisfaction of any of the
representations, warranties, covenants, agreements, or conditions herein
contained, or as the Representative may reasonably request.
(d) At the Closing Date or any Additional Closing Date, as the case
may be, (i) the Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are required to be stated
therein in accordance with the Securities Act and the Regulations, and in all
material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) there shall have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, no material adverse change, or any development involving a
prospective material adverse change, in the business, properties, or condition
(financial or otherwise), results of operations, capital stock, long-term or
short-term debt, or general affairs of the Company from that set forth in the
Registration Statement and the Prospectus, except changes which the Registration
Statement and Prospectus indicate might occur after the date on which the
Registration Statement becomes effective under the Securities Act, and the
Company shall not have incurred any material liabilities or entered into any
agreements not in the ordinary course of business other than as referred to in
the Registration Statement and Prospectus, (iii) except as set forth in the
Prospectus,
-46-
no litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation shall be pending, threatened, or in prospect (or any
basis therefor) with respect to the Company or any of its operations,
businesses, properties, or assets which would be required to be set forth in the
Registration Statement, wherein an unfavorable decision, ruling, or finding
would materially adversely affect the business, property, condition (financial
or otherwise), results of operations, or general affairs of the Company and (iv)
the Stock be quoted upon the Nasdaq National Market.
(e) At the Closing Date and any Additional Closing Date, as the case
may be, the Representative shall have received a certificate of the chief
executive officer, the chief financial officer, and the chief accounting officer
of the Company, dated the Closing Date or such Additional Closing Date, as the
case may be, to the effect, among other things, that (i) the conditions set
forth in Sections 7(a) and 7(d) have been satisfied, (ii) as of the date of this
Agreement and as of the Closing Date or such Additional Closing Date, as the
case may be, the representations and warranties of the Company contained herein
were and are accurate and correct in all materials respects, and (iii) as of the
Closing Date or such Additional Closing Date, as the case may be, the
obligations to be performed by the Company hereunder on or prior to such time
have been fully performed. At each Additional Closing Date, the Representative
shall have received a certificate of a duly appointed attorney-in-fact for the
Selling Stockholder, dated such Additional Closing Date, that, as of the date of
this Agreement and such Additional Closing Date, the representations and
warranties of the Selling Stockholder contained herein were and are accurate and
correct in all material respects, and that as of such Additional Closing Date,
the obligations to be performed by the Selling Stockholder hereunder on or prior
thereto have been fully performed.
-47-
(f) At the time this Agreement is executed and at the Closing Date
and any Additional Closing Date, as the case may be, the Representative shall
have received a letter, addressed to the Underwriters, and in form and substance
satisfactory to the Representative, with reproduced copies or signed
counterparts thereof for each of the Underwriters, from Xxxxxxx X. Xxxxxx &
Company, LLP, independent certified public accountants for the Company, dated
the date of delivery:
(i) confirming that they are, and during the period covered by
their report(s) included in the Registration Statement and the Prospectus were,
independent certified public accountants with respect to the Company within the
meaning of the Securities Act and the published Regulations and stating that the
answer to Item 10 of the Registration Statement is correct insofar as it relates
to them;
(ii) stating that, in their opinion, the financial statements and
schedules of the Company included in the Registration Statement examined by them
comply in form in all material respects with the applicable accounting
requirements of the Securities Act and the related published rules and
regulations;
(iii) stating that, on the basis of procedures (but not an
examination made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim financial
statements of the Company (with an indication of the date of the latest
available unaudited interim financial statements), a reading of the latest
available minutes of the stockholders and Boards of Directors of the Company and
committees of such Board of Directors, inquiries to certain officers and other
employees of the Company responsible for financial and accounting matters, and
other specified procedures and inquiries, nothing has come
-48-
to their attention that caused them to believe that: (A) the unaudited financial
statements and schedules of the Company included in the Registration Statement
and Prospectus do not comply in form in all material respects with the
applicable accounting requirements of the Securities Act and the Exchange Act
and the related published rules and regulations under the Securities Act or the
Exchange Act or are not fairly presented in conformity with generally accepted
accounting principles (except to the extent that certain footnote disclosures
regarding any stub period may have been omitted in accordance with the
applicable rules of the Commission under the Exchange Act) applied on a basis
consistent with that of the audited financial statements appearing therein; (B)
there was any change in the capital stock or long-term debt of the Company or
any decrease in the net current assets or stockholders' equity of the Company as
of the date of the latest available monthly financial statements of the Company
as of a specified date not more than five business days prior to the date of
such letter, each as compared with the amounts shown in the June 30, 1996 and
December 31, 1996 balance sheets included in the Registration Statement and
Prospectus, other than as properly described in the Registration Statement and
Prospectus or any change or decrease (which shall be set forth therein) which,
in the sole discretion of the Representative, the Representative shall accept,
or (C) there was any decrease in net sales, net earnings, or net earnings per
share of Common Stock during the period from June 30, 1996 and December 31, 1996
and to the date of the latest available monthly financial statements of the
Company or to a specified date not more than five business days prior to the
date of such letter, each as compared with the corresponding period in 1996,
other than as properly described in the Registration Statement and Prospectus or
any decrease (which shall be set forth therein) which, the sole discretion of
the Representative, the Representative shall accept; and
-49-
(iv) stating that they have compared specific numerical data and
financial information pertaining to the Company set forth in the Registration
Statement, which have been specified by the Representative prior to the date of
this Agreement, to the extent that such data and information may be derived from
the general accounting records of the Company, and excluding any questions
requiring an interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
(which procedures do not constitute an examination in accordance with generally
accepted auditing standards) set forth in the letter, and found them to be in
agreement.
(g) All proceedings taken in connection with the issuance, sale,
transfer, and delivery of the Securities shall be satisfactory in form and
substance to the Representative and to counsel for the Underwriters, and the
Underwriters shall have received from such counsel for the Underwriters the
opinion, dated as of the Closing Date and the Additional Closing Date, as the
case may be, with respect to such of the matters set forth under Section 7(b),
and with respect to such other related matters, as the Representative may
reasonably request.
(h) The NASD, upon review of the terms of the public offering of the
Stock shall not have objected to the Underwriters' participation in such
offering.
(i) Prior to or on the Closing Date, the Company shall have entered
into the Underwriter's Warrants with the Representative.
(j) Prior to or on the Closing Date, the Company shall have provided
to the Representative copies of the agreements referred to in Section 2(a)(18).
Any certificate or other document signed by any officer of the Company and
delivered to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty
-50-
by the Company hereunder to the Underwriters as to the statements made therein.
Any certificate or other document signed by, or on behalf of, the Selling
Stockholder and delivered to the Underwriters or to counsel for the
Representative shall be deemed a representation and warranty by the Selling
Stockholder hereunder to the Underwriters as to the statement made therein. If
any condition to the Underwriters' obligations hereunder to be fulfilled prior
to or at the Closing Date or any Additional Closing Date, as the case may be, is
not so fulfilled, the Representative may, on behalf of the several Underwriters,
terminate this Agreement or, if the Representative so elects, in writing waive
any such conditions which have not been fulfilled or extend the time for their
fulfillment.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless each Underwriter, its officers, directors, partners,
employees, agents, and counsel, each of the Selling Stockholder, and each
person, if any, who controls any Underwriter or the Selling Stockholder within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, against any and all loss, liability, claim, damage, and expense whatsoever
(which shall include, for all purposes of this Section 8, but not be limited to,
attorneys' fees and any and all expense whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid in settlement of any claim or
litigation) as and when incurred arising out of, based upon, or in connection
with, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, any Preliminary Prospectus, or the
Prospectus (as from time to time amended and supplemented), or any amendment or
supplement thereto or (B) any application or other document
-51-
or communication (for purposes of this Section 8, collectively referred to as an
"application") executed by, or on behalf of, 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 "blue sky" or securities laws
thereof or filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company as stated in Section 8(b) with respect to
any Underwriter by, or on behalf of, such Underwriter through the Representative
or as stated in Section 8(c) with respect to the Selling Stockholder by, or on
behalf of, the Selling Stockholder expressly for inclusion in the Registration
Statement, any Preliminary Prospectus, or the Prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant, or agreement of the Company
contained in this Agreement. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities
arising under this Agreement.
If any action is brought against an Underwriter or any of its respective
officers, directors, partners, employees, agents, or counsel, the Selling
Stockholder, or any controlling persons of an Underwriter or the Selling
Stockholder (an "indemnified party") in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such
indemnified party or parties shall promptly notify the Company in writing of
the institution of such action (but the failure so to notify shall not
relieve the Company from any liability it may have other than pursuant to
this Section 8(a)) and the Company shall promptly assume the defense of such
action, including, without limitation, the employment of counsel satisfactory
to such indemnified party or parties and
-52-
payment of expenses. Such indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall not
have promptly employed counsel satisfactory to such indemnified party or parties
to have charge of the defense of such action or such indemnified party or
parties shall have concluded that there may be one or more legal defenses
available to it or them or to other indemnified parties which are different
from, or in addition to, those available to the Company, in any of which events
such fees and expenses shall be borne by the Company, and the Company shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties. Anything in this paragraph to the contrary notwithstanding,
the Company shall not be liable for any settlement of any such claim or action
effected without its written consent, which consent shall not be unreasonably
withheld. The Company shall not, without the prior written consent of each
indemnified party that is not released as described in this sentence, settle or
compromise any action, or permit a default or consent to the entry of judgment
or otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party is
a party thereto), unless such settlement, compromise, consent, or termination
includes an unconditional release of each indemnified party from all liability
in respect of such action. The Company agrees promptly to notify the
Underwriters and the Selling Stockholder of the commencement of any litigation
or proceedings against the Company or any of its officers or directors in
connection with the sale of the Securities, the Registration Statement, any
Preliminary Prospectus, or the Prospectus, or any amendment or supplement
thereto, or any application.
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(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, the Selling Stockholder, each director of the Company, each
officer of the Company who shall have signed the Registration Statement, and
each other person, if any, who controls the Company or the Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the several Underwriters and the Selling Stockholder in Section 8(a), but only
with respect to statements or omissions, if any, made in the Registration
Statement, any Preliminary Prospectus, or the Prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, or in any
application, in reliance upon, and in conformity with, written information
furnished to the Company as stated in this Section 8(b) with respect to any
Underwriter by, or on behalf of, such Underwriter through the Representative
expressly for inclusion in the Registration Statement, any Preliminary
Prospectus, or the Prospectus, or any amendment or supplement thereto, or on any
application, as the case may be; provided, however, that the obligation of each
Underwriter to provide indemnity under the provisions of this Section 8(b) shall
be limited to the amount which represents the product of (i) the number of
shares of Stock underwritten by such Underwriter hereunder and the (ii) the
underwriting discount per share of Common Stock set forth on the cover page of
the Prospectus. For all purposes of this Agreement, the amounts of the selling
concession and reallowance and the name of each of the Underwriters, and the
number of shares of Firm Stock purchased by each of the Underwriters set forth
in the Prospectus constitute the only information furnished in writing by, or on
behalf of, such Underwriter expressly for inclusion in the Registration
Statement, any Preliminary Prospectus, or the Prospectus (as from time to time
amended or supplemented), or any amendment or supplement
-54-
thereto, or in any application, as the case may be. If any action shall be
brought against the Company, the Selling Stockholder, or any other person so
indemnified based on the Registration Statement, any Preliminary Prospectus, or
the Prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against any Underwriter pursuant
to this Section 8(b), such Underwriter shall have the rights and duties given to
the Company, and the Company, the Selling Stockholder, and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 8(a).
(c) The Selling Stockholder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who
shall have signed the Registration Statement, each Underwriter, each officer,
director, partner, employee, agent, and counsel of each Underwriter, and each
other person, if any, who controls the Company or any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to the
several Underwriters in Section 8(a), but only with respect to (i) statements
or omissions, if any, made in the Registration Statement, any Preliminary
Prospectus, or the Prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any application
in reliance upon, and in conformity with, written information furnished to
the Company by, or on behalf of, the Selling Stockholder expressly for
inclusion in the Registration Statement, any Preliminary Prospectus, or the
Prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or (ii) any breach of any representation, warranty,
covenant, or agreement of the Selling Stockholder contained in this Agreement.
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In case any action shall be brought against the Company, any Underwriter, or
any other person so indemnified based on the Registration Statement, any
Preliminary Prospectus, or the Prospectus, or any amendment or supplement
thereto, or on any application, or with respect to any such breach, and in
respect of which indemnity may be sought against the Selling Stockholder, the
Selling Stockholder shall have the rights and duties given to the Company,
and the Company, the Underwriters, and each other person so indemnified shall
have the rights and duties given to the indemnified parties, by the
provisions of Section 8(a).
(d) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to Section 8(a),
8(b), 8(c) (subject to the limitations thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case, even though this Agreement expressly provides
for indemnification in such case or (ii) any indemnified or indemnifying party
seeks contribution under the Securities Act, the Exchange Act, or otherwise,
then the Company (including for this purpose any contribution made by, or on
behalf of, any director of the Company, any officer of the Company who signed
the Registration Statement, and any controlling person of the Company), as one
entity, the Selling Stockholder, as a second entity, and the Underwriters
(including for this purpose any contribution by, or on behalf of, an indemnified
party) as a third entity, shall contribute to the losses, liabilities, claims,
damages, and expenses whatsoever to which any of them may be
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subject, so that the Underwriters, in the aggregate, are responsible for the
proportion thereof equal to the percentage which the underwriting discount per
share of Common Stock set forth on the cover page of the Prospectus represents
of the initial public offering price per share of Common Stock set forth on the
cover page of the Prospectus and the Company and the Selling Stockholder are
responsible for the remaining portion; provided, however, that if applicable law
does not permit such allocation, then other relevant equitable considerations
such as the relative fault of the Company, the Selling Stockholder, and the
Underwriters in connection with the facts which resulted in such losses,
liabilities, claims, damages, and expenses shall also be considered. The
relative fault, in the case of an untrue statement, alleged untrue statement,
omission, or alleged omission, shall be determined by, among other things,
whether such statement, alleged statement, omission, or alleged omission relates
to information supplied by the Company, by the Selling Stockholder, or by the
Underwriters, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. The Company, the Selling Stockholder,
and the Underwriters agree that it would be unjust and inequitable if the
respective obligations of the Company, the Selling Stockholder, and the
Underwriters for contribution were determined by pro rata or per capita
allocation of the aggregate losses, liabilities, claims, damages, and expenses
(even if the Underwriters and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations referred to in this Section 8(d). No
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. For purposes of this
Section 8(d), each person, if any, who controls any
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Underwriter within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act and each officer, director, partner, employee, agent,
and counsel of any Underwriter shall have the same rights to contribution as
such Underwriter, each person, if any, who controls the Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, shall have the same rights to contribution as the Selling
Stockholder, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the provisions of this
Section 8(d). Anything in this Section 8(d) to the contrary notwithstanding, no
party shall be liable for contribution with respect to the settlement of any
claim or action effected without its written consent. This Section 8(d) is
intended to supersede any right to contribution under the Securities Act, the
Exchange Act, or otherwise.
9. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Stock or Additional Stock hereunder, and if the
number of shares of Firm Stock or Additional Stock to which the defaults of all
Underwriters in the aggregate relate does not exceed 10% of the number of shares
of Firm Stock or Additional Stock, as the case may be, which all Underwriters
have agreed to purchase hereunder, then such shares of Firm Stock or Additional
Stock to which such defaults relate shall be purchased by the non-defaulting
Underwriters in proportion to their respective commitments hereunder.
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(b) If such defaults exceed in the aggregate 10% of the number of
shares of Firm Stock or Additional Stock, as the case may be, which all
Underwriters have agreed to purchase hereunder, the Representative may, in its
discretion, arrange to purchase itself or for another party or parties to
purchase such shares of Firm Stock or Additional Stock, as the case may be, to
which such default relates on the terms contained herein. If the Representative
does not arrange for the purchase of such shares of Firm Stock or Additional
Stock, as the case may be, within one business day after the occurrence of
defaults relating to in excess of 10% of the Firm Stock or the Additional Stock,
as the case may be, then the Company (with respect to the Firm Stock and the
Company Additional Stock) and the Selling Stockholder (with respect to the
Stockholder Additional Stock) shall be entitled to a further period of one
business day within which to procure another party or parties satisfactory to
the Representative to purchase such shares of Firm Stock or Additional Stock, as
the case may be, on such terms. If the Representative or the Company (with
respect to the Firm Stock and the Company Additional Stock) or the
Representative or the Selling Stockholder (with respect to the Stockholder
Additional Stock) do not arrange for the purchase of the shares of Firm Stock or
Additional Stock, as the case may be, to which such defaults relate as provided
in this Section 9(b), this Agreement may be terminated by the Representative or
by the Company (with respect to the Firm Stock and the Company Additional Stock)
or the Representative or the Selling Stockholder (with respect to the
Stockholder Additional Stock), in each case without liability on the part of the
Company or the Selling Stockholder (except that the provisions of Sections
5(a)(1), 6, 8, 10, and 13 shall survive such termination) or the several
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter of its liability, if any, to the other several
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Underwriters and to the Company and the Selling Stockholder for any damages
occasioned by its default hereunder.
(c) If the shares of Stock or Additional Stock to which such defaults
relate are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties as aforesaid, the Representative or the
Company (with respect to the Firm Stock and the Company Additional Stock) or the
Representative or the Selling Stockholder (with respect to the Stockholder
Additional Stock) shall have the right to postpone the Closing Date or the
Additional Closing Date, as the case may be, for a reasonable period but not in
any event more than seven business days in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus or in
any other documents and arrangements with respect to the Firm Stock or the
Additional Stock, and the Company agrees to prepare and file promptly any
amendment or supplement to the Registration Statement or the Prospectus which in
the opinion of counsel for the Underwriters may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any party substituted
under this Section 9 as if such party had originally been a party to this
Agreement and had been allocated the number of shares of Firm Stock and
Additional Stock actually purchased by it as a result of its original commitment
to purchase Firm Stock and Additional Stock and its purchase of shares of Firm
Stock or Additional Stock pursuant to this Section 9.
10. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, covenants, and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants, and
agreements at the Closing Date and any Additional Closing Date, and such
representations, warranties, covenants, and agreements of the Underwriters,
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the Company, and the Selling Stockholder, including the indemnity and
contribution agreements contained in Section 8, shall remain operative and in
full force and effect regardless of any investigation made by, or on behalf of,
any Underwriter or any indemnified person, or by, or on behalf of, the Company,
the Selling Stockholder, or any person or entity which is entitled to be
indemnified under Section 8(b), and shall survive termination of this Agreement
or the delivery of the Firm Stock and the Additional Stock, if any, to the
several Underwriters. In addition, the provisions of Sections 5(a)(1), 6, 8,
10, 11, and 13 shall survive termination of this Agreement, whether such
termination occurs before or after the Closing Date or any Additional Closing
Date. Notwithstanding anything in the second sentence of Section 6 hereof to
the contrary, and in addition to the obligations assumed by the Company pursuant
to the first sentence of Section 6 hereof, if the offering should be terminated,
the Company shall be liable to the Underwriters only for out-of-pocket expenses
incurred by the Underwriters in connection with this Agreement or the proposed,
offer, sale, and delivery of the Securities.
11. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION THEREOF.
(a) This Agreement shall become effective at 9:30 A.M., New York City
local time, on the first full business day following the day on which the
Registration Statement becomes effective under the Securities Act or at the time
of the initial public offering by the Underwriters of the Firm Stock, whichever
is earlier. The time of the initial public offering shall mean the time, after
the Registration Statement becomes effective under the Securities Act, of the
release by the Representative for publication of the first newspaper
advertisement which is subsequently published relating to the Firm Stock or the
time, after the Registration Statement becomes effective under the Securities
Act, when the Firm Stock is first released by the Representative for offering
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by the Underwriters or dealers by letter or telegram, whichever shall first
occur. The Representative or the Company may prevent this Agreement from
becoming effective without liability of any party to any other party, except as
noted below in this Section 11, by giving the notice indicated in Section 11(d)
before the time this Agreement becomes effective under the Securities Act.
(b) If the purchase price of the Firm Stock has not been determined
as provided for in Section 3 prior to 4:30 p.m., New York City local time, on
the fifth full business day after the date on which the Registration Statement
becomes was declared effective under the Securities Act, this Agreement may be
terminated at any time thereafter either by the Representative or by the Company
by giving notice to the other unless before such termination the purchase price
for the Firm Stock has been so determined. If the purchase price of the Firm
Stock has not been so determined prior to 4:30 p.m., New York City local time,
on the tenth full business day after the date on which the Registration
Statement was declared effective under the Securities Act, this Agreement shall
automatically terminate forthwith.
(c) In addition to the right to terminate this Agreement pursuant to
Sections 7 and 9 hereof, the Representative shall have the right to terminate
this Agreement at any time prior to the Closing Date or any Additional Closing
Date, as the case may be, by giving notice to the Company, and, if exercised,
the Over-allotment Options, at any time prior to any Additional Closing Date, by
giving notice to the Company and the Selling Stockholder, (i) if any domestic or
international event, act, or occurrence has materially and adversely disrupted,
or, in the opinion of the Representative, will in the immediate future
materially and adversely disrupt, the securities markets; or (ii) if there shall
have been a general suspension of, or a general limitation on prices
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for, trading in securities on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market; or (iii) if there shall have been an
outbreak or increase in the level of major hostilities or other national or
international calamity; or (iv) if a banking moratorium has been declared by a
state or federal authority; or (v) if a moratorium in foreign exchange trading
by major international banks or persons has been declared; or (vi) if there
shall have been a material interruption in the mail service or other means of
communication within the United States; or (vii) if the Company shall have
sustained a material or substantial loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage, or other calamity or malicious act, whether or not
such loss shall have been insured, or from any labor dispute or court or
government action, order, or decree, which will, in the opinion of the
Representative, make it inadvisable to proceed with the offering, sale, or
delivery of the Firm Stock or the Additional Stock, as the case may be; or
(viii) if any material governmental restrictions shall have been imposed on
trading in securities in general, which restrictions are not in effect on the
date hereof; or (ix) if there shall be passed by the Congress of the United
States or by any state legislature any act or measure, or adopted by any
governmental body or authoritative accounting institute or board, or any
governmental executive, any orders, rules, or regulations, which the
Representative believes likely to have a material adverse effect on the
business, financial condition, or financial statements of the Company or the
market for the Common Stock; or (x) if there shall have been such material and
adverse change in the market for the Company's securities or securities in
general or in political, financial, or economic conditions as in the judgment of
the Representative makes it inadvisable to proceed with the offering, sale, and
delivery of the Firm Stock or the Additional Stock, as the case may be, on the
terms contemplated by the Prospectus.
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(d) If the Representative elects to prevent this Agreement from
becoming effective, as provided in this Section 11, or to terminate this
Agreement pursuant to Section 7 of this Agreement or this Section 10, the
Representative shall notify the Company and the Selling Stockholder promptly by
telephone, telex, or telegram, confirmed by letter. If, as so provided, the
Company elects to prevent this Agreement from becoming effective or to terminate
this Agreement, the Company shall notify the Representative and the Selling
Stockholder promptly by telephone, telex, or telegram, confirmed by letter.
(e) Anything in this Agreement to the contrary notwithstanding other
than Section 11(f), if this Agreement shall not become effective by reason of an
election pursuant to this Section 11 or if this Agreement shall terminate or
shall otherwise not be carried out within the time specified herein by reason of
any failure on the part of the Company or the Selling Stockholder to perform any
covenant or agreement or satisfy any condition of this Agreement by it to be
performed or satisfied, the sole liability of the Company or the Selling
Stockholder to the several Underwriters, in addition to the obligations the
Company and the Selling Stockholder assumed pursuant to the first sentence of
Section 6, will be to reimburse the several Underwriters for such out-of-pocket
expenses (including the fees and disbursements of their counsel) as shall have
been incurred by them in connection with this Agreement or the proposed offer,
sale, and delivery of the Securities, and, upon demand, the Company and the
Selling Stockholder, severally, agrees to pay promptly the full amount thereof
to the Representative for the respective accounts of the Underwriters. Anything
in this Agreement to the contrary notwithstanding other than Section 11(f), if
this Agreement shall not be carried out within the time specified herein for any
reason other than the failure on the part of the Company or the Selling
Stockholder to perform any covenant or
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agreement or satisfy any condition of this Agreement by it to be performed or
satisfied, the Company and the Selling Stockholder shall have no liability to
the several Underwriters other than for obligations assumed by the Company and
the Selling Stockholder pursuant to Section 6.
(f) Notwithstanding any election hereunder or any termination of this
Agreement, and whether or not this Agreement is otherwise carried out, the
provisions of Sections 5(a)(1), 6, 8, 10, and 13 shall not be in any way
affected by such election or termination or failure to carry out the terms of
this Agreement or any part hereof. Notwithstanding anything in the second
sentence of Section 6 hereof to the contrary, and in addition to the obligations
assumed by the Company pursuant to the first sentence of Section 6 hereof, if
the offering should be terminated, the Company shall be liable to the several
Underwriters only for out-of-pocket expenses incurred by the several
Underwriters in connection with this Agreement or the proposed, offer, sale, and
delivery of the Securities.
12. NOTICES. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and
confirmed by letter, to such Underwriter, c/o Hampshire Securities
Corporation, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx.
Xxxxxxx X. Xxxx, Managing Director, with a copy to Xxxxxxxx Xxxxx Singer &
Xxxxxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxx, Esq.; or if sent to the Company or the Selling Stockholder,
shall be mailed, delivered, or telexed or telegraphed and confirmed by
letter, to the Company, Ambassador Eyewear Group, Inc., 0000 Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxx, President, with a
copy to Crummy, Del Deo, Dolan,
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Griffinger & Xxxxxxxxx, P.C., Attention: Xxxxxxx X. Xxxxxx, Esq. All notices
hereunder shall be effective upon receipt by the party to which it is addressed.
13. PARTIES. Hampshire represents that it is authorized to act as
Representative on behalf of the several Underwriters named in Schedule I hereto,
and the Company and the Selling Stockholder shall be entitled to act and rely on
any request, notice, consent, waiver, or agreement purportedly given on behalf
of the Underwriters when the same shall have been given by Hampshire on such
behalf. The Selling Stockholder represent that each of the attorneys-in-fact
named in the power of attorney referred to in Section 2(b)(1) hereof is
authorized to act on his behalf, and the Underwriters and the Company shall be
entitled to act and rely upon any request, notice, consent, waiver, or agreement
purportedly given on behalf of the Selling Stockholder when the same shall have
been given by either of such attorneys-in-fact. This Agreement shall inure
solely to the benefit of, and shall be binding upon, the several Underwriters,
the Company, and the Selling Stockholder and the persons and entities referred
to in Section 8 who are entitled to indemnification or contribution, and their
respective successors, legal representatives, and assigns (which shall not
include any buyer, as such, of the Firm Stock or the Additional Stock), and no
other person shall have, or be construed to have, any legal or equitable right,
remedy, or claim under, in respect of, or by virtue of this Agreement or any
provision herein contained. Notwithstanding anything contained in this
Agreement to the contrary, all of the obligations of the Underwriters hereunder
are several and not joint.
14. CONSTRUCTION. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
conflict of laws. TIME IS OF THE ESSENCE IN THIS AGREEMENT.
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15. CONSENT TO JURISDICTION. The Company irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in such State in connection with any action or proceeding arising out
of, or relating to, this Agreement, any document or instrument delivered
pursuant to, in connection with, or simultaneously with this Agreement, or a
breach of this Agreement or any such document or instrument. In any such action
or proceeding, the Company waives personal service of any summons, complaint, or
other process and agrees that service thereof may be made in accordance with
Section 12. Within 30 days after such service, or such other time as may be
mutually agreed upon in writing by the attorneys for the parties to such action
or proceeding, the Company shall appear or answer such summons, complaint, or
other process. Should the Company fail to appear or answer within such 30-day
period or such extended period, as the case may be, the Company shall be deemed
in default and judgment may be entered against the Company for the amount as
demanded in any summons, complaint, or other process so served.
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If the foregoing correctly sets forth the understandings among the
Representative, the Company, and the Selling Stockholder, please so indicate in
the space provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
Very truly yours,
AMBASSADOR EYEWEAR GROUP, INC.
BY:
-----------------------------------
NAME:
TITLE:
--------------------------------------
____________, AS ATTORNEY-IN-
FACT FOR THE SELLING STOCKHOLDER
ACCEPTED AS OF THE DATE FIRST ABOVE
WRITTEN IN NEW YORK, NEW YORK
HAMPSHIRE SECURITIES CORPORATION*
BY:
-----------------------------------------
XXXXXXX X. XXXX, MANAGING DIRECTOR
*ON BEHALF OF ITSELF AND THE OTHER SEVERAL
UNDERWRITERS NAMED IN SCHEDULE I HERETO.
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SCHEDULE I
Total
Number
of Shares
to be
Underwriter Purchased
Hampshire Securities Corporation...............................................
---------
Total.............................................................2,000,000
---------
---------
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