Exhibit 1.1
4,050,000 SHARES
SUPREMA SPECIALTIES, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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October ___, 2001
XXXXXX XXXXXXXXXX XXXXX LLC
PACIFIC GROWTH EQUITIES, INC.
XXXX CAPITAL PARTNERS, LLC
Representatives of the Several
Underwriters Named in Schedule I hereto
c/o Janney Xxxxxxxxxx Xxxxx LLC
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Suprema Specialties, Inc., a New York corporation (the "Company"),
proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx LLC, Pacific Growth Equities, Inc.
and Xxxx Capital Partners, LLC (the "Representatives") and the several other
underwriters named in Schedule I hereto (together with the Representatives, the
"Underwriters") 3,500,000 shares (the "Company Firm Shares") of common stock,
$0.01 par value, of the Company (the "Common Stock"); and each of the persons
named in Schedule II hereto (each a "Selling Shareholder" and collectively, the
"Selling Shareholders") proposes to sell to the Underwriters the number of
shares of Common Stock set forth opposite his name on such schedule, for an
aggregate of 550,000 shares of Common Stock to be sold by the Selling
Shareholders (the "Selling Shareholder Firm Shares"). The Company Firm Shares
and the Selling Shareholder Firm Shares to be sold to the Underwriters by the
Company and the Selling Shareholders, respectively, are referred to herein
collectively as the "Firm Shares." The respective amounts of the Firm Shares to
be purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Firm Shares shall be offered to the public at a public
offering price of $[____] per Firm Share (the "Offering Price").
In order to cover over-allotments in the sale of the Firm Shares, the
Underwriters may purchase for the Underwriters' own accounts, ratably in
proportion to the amounts set forth opposite their respective names in Schedule
I hereto, up to (i) 357,500 additional shares (the "Company Optional Shares") of
Common Stock from the Company and (ii) such number of shares of Common Stock set
forth opposite each Selling Shareholder's name on Schedule II hereto, for an
aggregate of 250,000 additional shares (the "Selling Shareholder Optional
Shares" and, together with the Company Optional Shares, the "Optional Shares")
of Common Stock to be sold by the Selling Shareholders. The Firm Shares and the
Optional Shares are referred to herein collectively as the "Offered Shares." If
any Optional Shares are purchased, the Optional Shares shall be purchased for
offering to the public at the Offering Price and in accordance with the terms
and conditions set forth herein.
The Company and the Selling Shareholders, intending to be legally
bound, hereby confirm their agreement with the Underwriters as follows:
1. Representations and Warranties of the Company. The Company and each
of the Subsidiaries (as defined below) jointly and severally represents and
warrants to, and agrees with, the several Underwriters that:
(a) The Company has prepared, in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Regulations") of the Securities and Exchange Commission (the
"SEC") under the Act in effect at all applicable times, and has filed with the
SEC a registration statement on Form S-2 (File No. 333-69514) and one or more
amendments thereto for the purpose of registering the Offered Shares (or a
portion of the Offered Shares if a "Rule 462(b) Registration Statement," as
defined below, has been or is to be filed) under the Act. The Company similarly
may have prepared or may prepare an additional registration statement on Form
S-2 with respect to a portion of the Offered Shares pursuant to Rule 462(b) of
the Regulations, and if so prepared or if to be so prepared, such additional
registration statement has been or will be filed pursuant to Rule 462(b) of the
Regulations. The term "Rule 462(b) Registration Statement" means such additional
registration statement, if any, filed pursuant to Rule 462(b) of the
Regulations, including, without limitation, all exhibits thereto, the contents
of the earlier registration statement incorporated therein by reference, and any
price-related information included therein, but omitted from the earlier
registration statement in reliance on Rule 430A of the Regulations. Copies of
all such registration statements (or the form thereof in the case of a Rule
462(b) Registration Statement that has not yet been filed) and any amendments
thereto, and all forms of the related prospectus contained therein, will be
delivered to the Representatives. Any preliminary prospectus included in such
registration statement or filed with the SEC pursuant to Rule 424(a) of the
Regulations is hereinafter called a "Preliminary Prospectus." The various parts
of such registration statement, including all exhibits thereto and the
information contained in the form of final prospectus filed with the SEC
pursuant to Rule 424(b) of the Regulations in accordance with Section 6(a) of
this Agreement and deemed by virtue of Rule 424 of the Regulations to be part of
the registration statement at the time it was declared effective, each as
amended at the time the registration statement became effective, including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A of the Regulations, are hereinafter
collectively called the "Registration Statement." The final prospectus in the
form included in the Registration Statement or first filed with the SEC pursuant
to Rule 424(b) of the Regulations and any amendments or supplements thereto,
including the information (if any) deemed to be part of that prospectus at the
time of effectiveness pursuant to Rule 430A of the Regulations, is hereinafter
called the "Prospectus." All references to the Registration Statement, the
Preliminary Prospectus and the Prospectus include all documents incorporated
therein by reference. If the Company files a Rule 462(b) Registration Statement,
then any reference herein to the term "Registration Statement" shall be deemed
to include such Rule 462(b) Registration Statement.
(b) The Registration Statement has become effective under the Act,
and the SEC has not issued any stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Preliminary
Prospectus, nor has the SEC instituted or threatened to institute proceedings
with respect to such an order. No stop order suspending the sale of the Offered
Shares in any jurisdiction designated by the Representatives as provided for in
Section 6(f) hereof has been issued, and no proceedings for that purpose have
been instituted or threatened. The Company has complied with all requests of the
SEC, or requests of which the Company has been advised of any state or foreign
securities commission in a state or foreign jurisdiction designated by the
Representatives as provided for in Section 6(f) hereof, for additional
information to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus. Each Preliminary Prospectus conformed to all the
requirements of the Act and the Regulations as of its date and did not as of its
date contain any untrue statement of material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except
the foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon and in conformity with information supplied to the
Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein. The Registration Statement, on the
date on which it was declared effective by the SEC (the "Effective Date") and
when any post-effective amendment thereof shall become effective, and the
Prospectus, at the time it is filed with the SEC including, if applicable,
pursuant to Rule 424(b), and on the Closing Date (as defined in Section 4
hereof) and any Option Closing Date (as defined in Section 5(b) hereof),
conformed and will conform to all the requirements of the Act and the
Regulations, and did not and will not, on any of such dates, include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
except that this representation and warranty does not apply to statements in or
omissions from the Registration Statement or the Prospectus made in reliance
upon and
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in conformity with information furnished to the Company in writing by
or on behalf of any Underwriter through the Representatives expressly for use
therein.
(c) There is no document or contract of a character required to be
described in the Prospectus or to be filed as an exhibit to the Registration
Statement which is not so described or filed as required. The documents
incorporated by reference into the Prospectus pursuant to Item 12 of Form S-2
under the Act, at the time they were filed with the SEC, complied in all
material respects with the requirements of the Act or the Securities Exchange
Act of 1934, as amended ("Exchange Act"), as the case may be, and the Rules and
Regulations of the Act and the Exchange Act. In addition, any documents filed
with the SEC and incorporated by reference subsequent to the Effective Date of
the Registration Statement shall, when so filed, conform with the requirements
of the Act and the Exchange Act, as applicable, and the rules and regulations
thereof. No documents when filed (or if amendments to such documents, when such
amendment was filed) contained any untrue statement of material fact or omitted
to state any material fact required to be stated therein, or necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading.
(d) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York, with all necessary
power and authority, corporate and otherwise, and all required licenses,
permits, certifications, registrations, approvals, consents and franchises to
own or lease and operate its properties and to conduct its current business as
described in the Prospectus, and to execute, deliver and perform this Agreement.
Each of Suprema Specialties West, Inc., a California corporation ("Suprema
West"), Suprema Specialties Northwest Inc., a Delaware corporation ("Suprema
Northwest") and Suprema Specialties Northeast, Inc., a New York corporation
("Suprema Northeast" and, together with Suprema West and Suprema Northwest, the
"Subsidiaries"), is a wholly-owned subsidiary of the Company. The Company does
not have any subsidiaries other than the Subsidiaries and does not own any
interest in any entity other than the Subsidiaries. Each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it was incorporated, with all necessary power and
authority, corporate and otherwise, and all required licenses, permits,
certifications, registrations, approvals, consent and franchises to own or lease
and operate its properties and conduct its current business. The Company and
each Subsidiary is duly qualified to do business as foreign corporations, and
are in good standing, in all jurisdictions in which such qualification is
required.
(e) The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all liens,
encumbrances and security interests; and no options, warrants or other rights to
purchase, agreements or other obligations to issue, or other rights to convert
any obligations into, shares of capital stock or ownership interests in the
Subsidiaries or securities convertible into or exchangeable for capital stock
of, or other ownership interests in, the Subsidiaries are outstanding except as
disclosed in the Prospectus. Neither the Company nor any of the Subsidiaries
owns any stock or other interest whatsoever, whether equity or debt, in any
corporation, partnership or other entity other than the Company's ownership of
the Subsidiaries.
(f) This Agreement has been duly authorized, executed and delivered
by the Company and each of the Subsidiaries and constitutes, with respect to
each, its legal, valid and binding obligation, enforceable against the Company
and each of the Subsidiaries in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and subject to applicability of
general principles of equity and except, as to this Agreement, as rights to
indemnity and contribution may be limited by federal and state securities laws
or principles of public policy.
(g) The execution, delivery and performance of this Agreement by the
Company and each of the Subsidiaries and the consummation of the transactions
contemplated herein, do not and will not, with or without the giving of notice
or the lapse of time, or both, (i) conflict with any term or provision of the
Company's and each of the Subsidiaries' Articles of Incorporation or Bylaws;
(ii) result in a breach of, constitute a default under, result in the
termination or modification of, result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the properties of the
Company or the Subsidiaries or require any payment by the Company or the
Subsidiaries or impose any liability on the Company or the Subsidiaries pursuant
to, any contract, indenture, mortgage, deed of trust, commitment or other
agreement or instrument to which the Company or the Subsidiaries is a party or
by which any of their properties are bound or affected other than this
Agreement; (iii)
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assuming compliance with Blue Sky laws and the rules of the National Association
of Securities Dealers, Inc. (the "NASD") applicable to the offer and sale of the
Offered Shares, violate any law, rule, regulation, judgment, order or decree of
any government or governmental agency, instrumentality or court, domestic or
foreign, having jurisdiction over the Company or the Subsidiaries or any of its
respective properties or businesses; or (iv) result in a breach, termination or
lapse of the Company's or the Subsidiaries' corporate power and authority to own
or lease and operate its respective properties and conduct their respective
businesses.
(h) At the date or dates indicated in the Prospectus, the Company
had the duly authorized and outstanding capitalization set forth in the
Prospectus under the heading "Capitalization" and will have, upon the issuance
of the Firm Shares on the Closing Date, the as adjusted capitalization set forth
therein as of the date indicated in the Prospectus. On the Effective Date, the
Closing Date and any Option Closing Date, there will be no options or warrants
or other outstanding rights to purchase, agreements or obligations to issue or
agreements or other rights to convert or exchange any obligation or security
into, capital stock of the Company or securities convertible into or
exchangeable for capital stock of the Company, except as described in the
Prospectus. The information in the Prospectus, insofar as it relates to all
outstanding options and other rights to acquire securities of the Company as of
the Effective Date and immediately prior to the Closing Date and any Option
Closing Date, is true and correct.
(i) The currently outstanding shares of the Company's capital stock,
including the Offered Shares to be purchased by the Underwriters from the
Selling Shareholders, have been duly authorized and are validly issued, fully
paid and non-assessable, and none of such outstanding shares of the Company's
capital stock has been issued in violation of any preemptive rights of any
security holder of the Company. The holders of the outstanding shares of the
Company's capital stock are not subject to personal liability solely by reason
of being such holders. All previous offers and sales of the outstanding shares
of the Company's capital stock, whether described in the Registration Statement
or otherwise, were made in conformity with applicable federal, state and foreign
securities laws. The authorized capital stock of the Company, including, without
limitation, the outstanding Common Stock, the Offered Shares being issued, and
the outstanding options to purchase shares of Common Stock and the outstanding
warrants to purchase Common Stock conform with the descriptions thereof in the
Prospectus, and such descriptions conform with the instruments defining the
same.
(j) When the Offered Shares have been duly delivered against payment
therefor as contemplated by this Agreement, the Offered Shares will be validly
issued, fully paid and non-assessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. The
certificates representing the Offered Shares (to the extent certificates are
issued) and when duly delivered against payment therefor as contemplated herein,
will be in proper legal form under, and conform in all respects to the
requirements of, the New York Business Corporation law, as amended (the
"NYBCL"). Neither the filing of the Registration Statement nor the offering or
sale of Offered Shares as contemplated by this Agreement gives any security
holder of the Company any rights for or relating to the registration of any
Common Stock or any other capital stock of the Company (except as to rights
which have been exercised or waived) or any rights to convert or have redeemed
or otherwise receive anything of value with respect to any other security of the
Company.
(k) No consent, approval, authorization, order, registration,
license or permit of, or filing or registration with, any court, government,
governmental agency, instrumentality or other regulatory body or official is
required for the valid and legal execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby or described in the Prospectus, except such as may be required for the
registration of the Offered Shares under the Act, the Exchange Act, and for
compliance with the applicable state securities or Blue Sky laws or the Bylaws,
rules and other pronouncements of the NASD.
(l) The Common Stock (including the Offered Shares) is registered
pursuant to Section 12(g) of the Exchange Act. The issued and outstanding shares
of Common Stock are included for quotation on the Nasdaq National Market.
Neither the Company nor, to the Company's knowledge, any other person has taken
any action designed to cause, or likely to result in, the termination of the
registration of the Common Stock under the Exchange Act. The Company has not
received any notification that the SEC or the Nasdaq National Market is
contemplating terminating such registration or inclusion.
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(m) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions of or references to contracts, agreements or
other documents, are accurate and present or summarize fairly the information
required to be disclosed under the Act or the Regulations, and there are no
contracts, agreements or other documents, instruments or transactions of any
character required to be described or referred to in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement under the
Act or the Regulations that have not been so described, referred to or filed, as
required.
(n) Each contract or other instrument (however characterized or
described) to which the Company or the Subsidiaries is a party or by which any
of its respective properties or businesses is bound or affected has been duly
and validly executed by the Company and, to the Company's knowledge, by the
other parties thereto. Each such contract or other instrument is in full force
and effect and is enforceable against the parties thereto in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and
subject to applicability of general principles of equity, and neither the
Company nor the Subsidiaries are, and to the knowledge of the Company, no other
party is, in default thereunder, and no event has occurred that, with the lapse
of time or the giving of notice, or both, would constitute a default under any
such contract or other instrument. All necessary consents under such contracts
or other instruments to the disclosure in the Prospectus with respect thereto
have been obtained.
(o) The consolidated financial statements of the Company (including
the notes thereto) filed as part of any Preliminary Prospectus, the Prospectus
and the Registration Statement present fairly the financial position of the
Company as of the respective dates thereof, and the results of operations and
cash flows of the Company for the periods indicated therein, all in conformity
with generally accepted accounting principles consistently applied ("GAAP"). The
supporting notes and schedules included in the Registration Statement fairly
state the information required to be stated therein in relation to the financial
statements taken as a whole. The financial information included in the
Prospectus under the captions "Summary Financial Information" and "Selected
Consolidated Financial Information" presents fairly the information shown
therein and has been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement. The adjustments to
financial information included in the Registration Statement have been properly
applied to the historical amounts in the compilation of that information to
reflect the sale by the Company and the Selling Shareholders of 4,050,000 shares
of Common Stock offered thereby at an assumed offering or actual price set forth
in the Preliminary Prospectus or the Prospectus, as the case may be, and the
application of the estimated net proceeds therefrom.
(p) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has not been (i) any material adverse change (including, whether
or not insured against, any loss or damage to any material assets), or
development involving a prospective material adverse change, in the general
affairs, properties, condition (financial or otherwise), results of operations,
shareholders' equity, business or prospects (collectively, the "Business
Condition") of either the Company or the Subsidiaries; (ii) any material adverse
change, loss, reduction, termination or non-renewal of any contract to which the
Company or the Subsidiaries is a party; (iii) any transaction entered into by
the Company or any of the Subsidiaries not in the ordinary course of its
business; (iv) any dividend or distribution of any kind declared, paid or made
by the Company or the Subsidiaries on its capital stock, except for and to the
extent described in the Prospectus; (v) any liabilities or obligations, direct
or indirect, incurred by the Company or the Subsidiaries that are material to
the Company or the Subsidiaries; (vi) any change in the capitalization of the
Company or the Subsidiaries; or (vii) any change in the indebtedness of the
Company or the Subsidiaries that is material to the Company or the Subsidiaries.
Neither the Company nor any of the Subsidiaries have any contingent liabilities
or obligations that are material and that are not expressly disclosed in the
Prospectus.
(q) The Company has not distributed, and will not distribute, any
offering material in connection with the offering and sale of the Offered Shares
other than the Registration Statement, a Preliminary Prospectus, the Prospectus
and other material, if any, permitted by the Act and the Regulations. Neither
the Company nor any of its officers, directors or affiliates has taken, nor
shall the Company or any such persons take, any action designed to, or that
might be reasonably expected to, cause or result in stabilization or
manipulation of the price of the Common Stock.
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(r) The Company and the Subsidiaries have filed with the appropriate
federal, state and local governmental agencies, and all foreign countries and
political subdivisions thereof, all tax returns that are required to be filed or
have duly obtained extensions of time for the filing thereof and have paid all
taxes shown on such returns or otherwise due and all material assessments
received by them to the extent that the same have become due. Neither the
Company nor any of the Subsidiaries have executed or filed with any taxing
authority, foreign or domestic, any agreement extending the period for
assessment or collection of any income or other tax, and neither the Company nor
any of the Subsidiaries is a party to any pending action or proceeding by any
foreign or domestic governmental agency for the assessment or collection of
taxes, and no claims for assessment or collection of taxes have been asserted
against the Company or the Subsidiaries that might materially adversely affect
the Business Conditions of the Company or the Subsidiaries.
(s) BDO Xxxxxxx, LLP, which has given its report(s) on certain
financial statements included as part of the Registration Statement, is a firm
of independent certified public accountants as required by the Act and the
Regulations with respect to the Company.
(t) Neither the Company nor any of the Subsidiaries are in violation
of, or in default under, any of the terms or provisions of (i) its Articles or
Certificate of Incorporation or Bylaws or similar governing instruments, (ii)
any indenture, mortgage, deed of trust, contract, commitment or other agreement
or instrument to which it is a party or by which it or any of its assets or
properties is bound or affected, (iii) any law, rule, regulation, judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over it or any of its properties
or business, or (iv) any applicable license, permit, certification,
registration, approval, consent or franchise.
(u) There are no claims, actions, suits, protests, proceedings,
arbitrations, investigations or inquiries pending before, or threatened or
contemplated by, any governmental agency, instrumentality, court or tribunal,
domestic or foreign, or before any private arbitration tribunal to which the
Company or the Subsidiaries are or may be made a party that could reasonably be
expected to affect the validity of any of the outstanding Common Stock or the
Subsidiaries, or that, if determined adversely to the Company or the
Subsidiaries would, in any case or in the aggregate, result in any material
adverse effect on the Business Conditions of the Company or the Subsidiaries,
nor, to the Company's knowledge, is there any reasonable basis for any such
claim, action, suit, protest, proceeding, arbitration, investigation or inquiry.
There are no outstanding orders, judgments or decrees of any court, governmental
agency, instrumentality or other tribunal enjoining the Company or the
Subsidiaries from, or requiring the Company or the Subsidiaries to, take or
refrain from taking, any action, or to which the Company or the Subsidiaries or
their properties, assets or businesses are bound or subject.
(v) The Company and each Subsidiary owns, or possesses adequate
rights to use, all patents, patent applications, trademarks, trademark
registrations, applications for trademark registration, trade names, service
marks, licenses, inventions, copyrights, know-how (including any unpatented
and/or unpatentable proprietary or confidential technology, information,
systems, design methodologies and devices or procedures developed or derived
from or for the Company's business), trade secrets, confidential information,
processes and formulations and other proprietary information necessary for, used
in, or proposed to be used in, the conduct of the business of the Company and
the Subsidiaries as described in the Prospectus (collectively, the "Intellectual
Property"). Neither the Company nor any of the Subsidiaries have infringed, are
infringing or have received any notice of conflict with, the asserted rights of
others with respect to the Intellectual Property that, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
materially adversely affect the Business Conditions of the Company or the
Subsidiaries, and the Company knows of no reasonable basis therefor. To the
knowledge of the Company, no other parties have infringed upon or are in
conflict with any Intellectual Property. Neither the Company nor any of the
Subsidiaries is a party to, or bound by, any agreement, material to the conduct
of the Company's and the Subsidiaries' business, pursuant to which royalties,
honorariums or fees are payable by the Company or the Subsidiaries to any person
by reason of the ownership or use of any Intellectual Property.
(w) The Company and each Subsidiary has good and marketable title to
all property described in the Prospectus as being owned by it, free and clear of
all liens, security interests, charges or encumbrances and the like, except such
as are expressly described or referred to in the Prospectus. The Company and
each Subsidiary, as applicable, has insured its property against loss or damage
by fire or other casualty, in
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amounts reasonably believed by the Company to be adequate, and maintains
insurance against such other risks as management of the Company deems
appropriate. All real and personal property leased by the Company as described
or referred to in the Prospectus, is held by the Company under valid leases. The
executive offices and other facilities of the Company or the Subsidiaries (the
"Premises"), and all operations presently or formerly conducted thereon by the
Company or the Subsidiaries or any predecessors thereof, are now and, since the
Company or one of the Subsidiaries began to use such Premises, always have been
and, to the knowledge of the Company prior to when the Company or one of the
Subsidiaries began to use such Premises, always had been, in compliance with all
foreign or domestic, federal, state and local statutes, ordinances, regulations,
rules, standards and requirements of common law concerning or relating to
industrial hygiene and the protection of health and the environment
(collectively, the "Environmental Laws"). There are no conditions on, about,
beneath or arising from the Premises, in close proximity to the Premises or at
any other location that might give rise to liability, the imposition of a
statutory lien or require a "Response," "Removal" or "Remedial Action," each as
defined herein, under any of the Environmental laws, except as described in the
Prospectus. Except as expressly disclosed in the Prospectus, (i) neither the
Company nor any of the Subsidiaries has received notice or has knowledge of any
claim, demand, investigation, regulatory action, suit or other action instituted
or threatened against the Company or the Subsidiaries or any portion of the
Premises or any parcel in close proximity to the Premises relating to any of the
Environmental Laws and (ii) neither the Company nor any of the Subsidiaries has
received any notice of violation, citation, complaint, order, directive, request
for information or response thereto, notice letter, demand letter or compliance
schedule to or from any governmental or regulatory agency arising out of or in
connection with "hazardous substances" (as defined by applicable Environmental
Laws) on, about, beneath, arising from or generated at the Premises, near the
Premises or at any other location. As used in this subsection, the terms
"Response," "Removal" and "Remedial Action" shall have the respective meanings
assigned to such terms under Sections 101 (23)-101(25) of the Comprehensive
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. 9601(23)-9601(25).
(x) The Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary in order to
permit preparation of financial statements in accordance with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) Except for the plans that are expressly disclosed in the
Prospectus, neither the Company nor any of the Subsidiaries has any employee
benefit plan, profit sharing plan, employee pension benefit plan or employee
welfare benefit plan or deferred compensation arrangements ("Plans") that are
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations thereunder ("ERISA"). All Plans
that are subject to ERISA are in compliance with ERISA, and, to the extent
required by the Internal Revenue Code of 1986, as amended (the "Code"), in
compliance with the Code. Neither the Company nor any of the Subsidiaries has
any employee pension benefit plan that is subject to Part 3 of Subtitle B of
Title I of ERISA or any defined benefit plan or multi-employer plan. Neither the
Company nor any of the Subsidiaries has maintained retiree life or retiree
health insurance plans that are employee welfare benefit plans providing for
continuing benefits or coverage for any employee or any beneficiary of any
employee after such employee's termination of employment, except as required by
Section 4980B of the Code and except as disclosed in the Prospectus and except
as would not be required to be disclosed in the Prospectus. No fiduciary or
other party in interest with respect to any of the Plans has caused any of such
Plans to engage in a prohibited transaction as defined in Section 406 of ERISA.
As used in this subsection, the terms "defined benefit plan," "employee benefit
plan," "employee pension benefit plan," "employee welfare benefit plan,"
"fiduciary" and "multiemployer plan" shall have the respective meanings assigned
to such terms in Section 3 of ERISA.
(z) No labor dispute exists with any of the Company's or any of the
Subsidiaries' employees, and to the Company's knowledge, no such labor dispute
is threatened. Except as disclosed in the Prospectus, the Company has no
knowledge of any existing or threatened labor disturbance by the employees of
any of the principal suppliers, contractors or customers of the Company or the
Subsidiaries that would materially adversely affect the Business Conditions of
the Company and the Subsidiaries. Except as disclosed in the Prospectus, none of
the
7
Company's employees is covered by a collective bargaining agreement and, to
the knowledge of the Company, no union organizing activity exists with respect
to any of such employees.
(aa) The Company has not incurred any liability for any finder's
fees or similar payments in connection with the transactions contemplated herein
other than as disclosed in the Prospectus.
(bb) The conditions for use of Form S-2, set forth in the General
Instructions thereto, have been satisfied.
(cc) The Company is familiar with the Investment Company Act of
1940, as amended (the "1940 Act"), and the rules and regulations thereunder, and
has in the past conducted, and the Company intends to conduct, its affairs in
such a manner as to ensure that it will not be an "investment company" within
the meaning of the 1940 Act and the rules and regulations thereunder.
(dd) No statement, representation, warranty or covenant made by the
Company in this Agreement or in any certificate or document required by this
Agreement to be delivered to the Representatives is, or as of the Closing Date
or any Option Closing Date will be, inaccurate, untrue or incorrect in any
material respect. No transaction has occurred or is proposed between or among
the Company and any of its respective officers, directors or shareholders or any
affiliate of the foregoing that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(ee) Except as disclosed in the Prospectus, neither the Company nor
any of the Subsidiaries have engaged in any transactions involving the purchase
or disposition of property, the payment or distribution of cash or other
property, the lending or borrowing of money, the guarantying of obligations, the
provision of services or any similar transaction with (i) any shareholder,
employee, director or any advisor or consultant of the Company or the
Subsidiaries, (ii) any entity in or for which any of such persons is an
employee, director, advisor, consultant or interest holder or (iii) any family
member of any of such persons.
(ff) The Company and each Subsidiary maintains statements of
corporate policy regarding ethics, compliance programs, conflicts of interests,
bribery, foreign corrupt practices, securities trading and the like. To the
knowledge of the Company, there has not occurred any material violation of any
of such policies by the Company, a Subsidiary or any officers, directors,
shareholders, employees, representatives or agents thereof. None of the Company,
the Subsidiaries or any officer, director, employee, partner, agent or other
person acting on behalf of the Company or the Subsidiaries has, directly or
indirectly, given or agreed to give any money, property or similar benefit or
consideration to any customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any agency or
instrumentality of any government (foreign or domestic) or political party or
candidate for office (foreign or domestic) or any other person who was, is or in
the future may be in a position to affect the Business Conditions of the Company
and the Subsidiaries or any actual or proposed business transaction of the
Company or the Subsidiaries that (i) could subject the Company or the
Subsidiaries to any liability (including, but not limited to, the payment of
monetary damages) or penalty in any civil, criminal or governmental action or
proceeding or (ii) with respect to the Company or the Subsidiaries or any
officer or director thereof, violates any law, rule or regulation to which the
Company or the Subsidiaries is subject.
(gg) No unregistered securities of the Company have been sold by the
Company or on behalf of the Company by any person or persons controlling,
controlled by or under common control with the Company within the three years
prior to the date hereof, except as expressly disclosed in the Registration
Statements.
(hh) Any certificate signed by any officer of the Company in such
capacity and delivered to the Representatives or to counsel for the Underwriters
pursuant to this Agreement shall be deemed a representation and warranty by the
Company to the several Underwriters as to the matters covered thereby.
2. Representations and Warranties of the Selling Shareholders. Each
of the Selling Shareholders severally represent and warrant to, and agree with,
each Underwriter that:
8
(a) Such Selling Shareholder has duly executed and delivered a
Custody Agreement (the "Custody Agreement"), in the form heretofore delivered to
the Representatives, with Continental Stock Transfer & Trust Company as
custodian (the "Custodian"). Such Selling Shareholder has duly executed and
delivered a power of attorney as provided for in the Custody Agreement and in
the form heretofore delivered to the Representatives, (the "Power of Attorney")
appointing Xxxx Xxxxxxxxx and Xxxxxx Xxxxxxxxxx as such Selling Shareholder's
attorneys-in- fact (the "Attorneys-in-Fact"). The Attorneys-in-Fact are
authorized to execute, deliver and perform this Agreement on behalf of such
Selling Shareholder, including, without limitation, the authority to determine
the purchase price to be paid to each Selling Shareholder by the Underwriters as
set forth in Section 3 of this Agreement. Certificates in negotiable form
representing the Offered Shares to be sold by each Selling Shareholder hereunder
shall be, following exercise of the warrant pursuant to which such Offered
Shares are issued, deposited with the Custodian pursuant to the Custody
Agreement for the purpose of delivery pursuant to this Agreement. Such Selling
Shareholder agrees that the Offered Shares represented by the certificates to be
on deposit with the Custodian pursuant to the Custody Agreement are held for the
purpose of delivery pursuant to this Agreement. Such Selling Shareholder agrees
that the Offered Shares represented by the certificates to be deposited with the
Custodian are subject to the interests of the Underwriters hereunder, that the
arrangements made for such custody and the appointment of the Attorneys-in-Fact
are to that extent irrevocable, and that the obligations of such Selling
Shareholder hereunder shall not be terminated, except as provided in this
Agreement, by any act of such Selling Shareholder, by operation of law or
otherwise, whether by the dissolution, reorganization, death, incapacity or
other such event should occur before the delivery of the Offered Shares to be
sold by the affected Selling Shareholder hereunder, the certificates for such
Offered Shares shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement, as if such dissolution, reorganization, death,
incapacity, or other event had not occurred, regardless of whether or not the
Custodian or Attorneys-in-Fact shall have received notice thereof.
(b) Such Selling Shareholder has all requisite right, power and
authority to enter into this Agreement, the Custody Agreement and the Power of
Attorney and has, or, in the case of shares of Common Stock to be issued upon
exercise of Common Stock options, will have, all requisite right, power and
authority to sell, transfer and deliver the Offered Shares to be sold by such
Selling Shareholder hereunder, and this Agreement, the Custody Agreement and the
Power of Attorney have been duly authorized, executed and delivered by such
Selling Shareholder and constitute the legal, valid and binding obligations of
such Selling Shareholder enforceable in accordance with their respective terms.
(c) The execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby and by the Prospectus,
the Custody Agreement and the Power of Attorney do not and shall not, with or
without the giving of notice or lapse of time or both, (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage or other agreement or
instrument to which such Selling Shareholder is a party or by which such Selling
Shareholder or any of the Offered Shares to be sold by such Selling Shareholder
is bound, (ii) any organizational document relating to such Selling Shareholder
(including without limitation, any partnership agreement, articles of
incorporation, bylaws or other governing instruments) or (iii) violate any
existing, applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of the Offered Shares to be
sold by such Selling Shareholder.
(d) All authorizations, approvals and consents necessary for the
valid execution and delivery by such Selling Shareholder of the Custody
Agreement and the Power of Attorney, the execution and delivery by or on behalf
of such Selling Shareholder of this Agreement, and the sale and delivery of the
shares to be sold by such Selling Shareholder hereunder (other than, at the time
of the execution thereof, the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations, approvals or
consents as may be necessary under the state securities or Blue Sky laws and the
bylaws, rules and pronouncements of the NASD), have been obtained and are in
full force and effect.
(e) On the Closing Date and any Option Closing Date, such Selling
Shareholder will be the lawful owner of the Offered Shares to be sold by such
Selling Shareholder pursuant to this Agreement. On the Closing Date and any
Option Closing Date, such Selling Shareholder will have good and marketable
title to such Offered Shares, free and clear of all liens, encumbrances,
security interests or other restrictions (other than those created under the
Custody Agreement).
9
(f) On the Closing Date and any Option Closing Date, such Selling
Shareholder will have full legal right, power and authorization, and any
approval required by law, to sell, assign, transfer and deliver such Offered
Shares in the manner provided in this Agreement, the Power of Attorney and the
Custody Agreement, and upon delivery of and payment for such Offered Shares
hereunder, the several Underwriters will acquire good and marketable title to
such Offered Shares free and clear of any lien, claim, security interest or
other encumbrance.
(g) Such Selling Shareholder is not prompted to sell the Offered
Shares to be sold by such Selling Shareholder hereunder by any information
concerning the Company or the Subsidiaries that is not set forth in the
Prospectus.
(h) To the knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 1 hereof are
true and correct. Such Selling Shareholder has examined the Registration
Statement and the Prospectus and the information relating to such Selling
Shareholder set forth therein and, as to such information, neither the
Registration Statement nor the Prospectus 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, in the light of the circumstances
under which they were made, not misleading.
(i) Such Selling Shareholder has not incurred any liability for any
finder's fee or similar payment in connection with the sale of such Selling
Shareholder's Offered Shares hereunder.
(j) Such Selling Shareholder has not distributed and will not
distribute any offering material in connection with the offering and sale of the
Offered Shares other than the Registration Statement, a Preliminary Prospectus,
the Prospectus and other material, if any, permitted by the Act and the
Regulations. Neither such Selling Shareholder nor any affiliate of such Selling
Shareholder has taken or shall take any action designed, or that might be
reasonably expected, to cause or result in stabilization or manipulation of the
price of the Offered Shares.
3. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein: (a) the Company shall sell
the Company Firm Shares to the several Underwriters at the Offering Price, less
the underwriting discount shown on the cover page of the Prospectus, and the
Underwriters, severally and not jointly, shall purchase from the Company on a
firm commitment basis, at the Offering Price less the underwriting discount
shown on the cover page of the Prospectus, the respective amounts of the Company
Firm Shares set forth opposite their names on Schedule I hereto; and (b) the
Selling Shareholders shall sell to the several Underwriters at the Offering
Price, less the underwriting discount shown on the cover page of the Prospectus,
the respective amounts of the Selling Shareholder Firm Shares set forth opposite
their names on Schedule II hereto, and the Underwriters, severally and not
jointly, shall purchase from the Selling Shareholders on a firm commitment
basis, at the Offering Price less the underwriting discount shown on the cover
page of the Prospectus, the respective amounts of the Selling Shareholder Firm
Shares set forth opposite their names on Schedule I hereto. In making this
Agreement, each Underwriter is contracting severally and not jointly, and except
as provided in Sections 5 and 13 hereof, the agreement of each Underwriter is to
purchase only that number of Offered Shares specified with respect to that
Underwriter in Schedule I hereto. The Underwriters shall offer the Offered
Shares to the public as set forth in the Prospectus.
4. Payment and Delivery. Payment for the Firm Shares shall be made
by certified or official bank check or checks payable to the order of the
Company, with respect to the Company Firm Shares sold by it, and the Custodian,
with respect to the Selling Shareholder Firm Shares sold by the Selling
Shareholders, in New York Clearing House (next day) funds, at the offices of
Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or
in immediately available funds wired to such accounts as the Company or the
Custodian may specify (with all costs and expenses incurred by the Underwriters
in connection with such settlement in immediately available funds, including,
but not limited to, interest or cost of funds and expenses, to be borne by the
Company), against delivery of the Firm Shares to the Representatives at the
offices of Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx for the respective accounts of the Underwriters. Such payment and
delivery will be made at 10:00 a.m., Philadelphia, Pennsylvania time, on the
third business day after the date of this Agreement, or at such other time on
the same or such other date, not later than seven business days thereafter as
shall be designated in writing by the Representatives. Such time and date are
referred to herein as the "Closing
10
Date." The certificates representing the Firm Shares to be sold and delivered
will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and, if certificated, will be made available to the
Representatives for inspection, checking and packaging at the Philadelphia
correspondent office of the Company's transfer agent not less than one full
business day prior to the Closing Date.
5. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments in connection
with the distribution and sale of the Firm Shares as contemplated by the
Prospectus, on the basis of the representations, warranties, covenants and
agreements contained herein, but subject to the terms and conditions set forth
herein, the several Underwriters are hereby granted an option, to be exercised
pro rata, (i) by the Company to purchase all or any part of the Company Optional
Shares and (ii) by the Selling Shareholders to purchase all or any portion of
the Selling Shareholders Optional Shares, pro rata as among the Selling
Shareholder Optional Shares from each Selling Shareholder as set forth on
Schedule II hereto (collectively, the "Over-allotment Option"). The purchase
price to be paid for the Optional Shares shall be the Offering Price less the
underwriting discount shown on the cover page of the Prospectus. The
Over-allotment Option granted hereby may be exercised by the Representatives on
behalf of the several Underwriters as to all or any part of the Optional Shares
at any time and from time to time within 30 days after the date of the
Prospectus. No Underwriter shall be under any obligation to purchase any
Optional Shares prior to an exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters by giving notice to the
Company by a letter sent by registered or certified mail, postage prepaid,
telex, telegraph, telegram or facsimile (such notice to be effective when
received), addressed as provided in Section 15 hereof, setting forth the number
of Optional Shares to be purchased, the date and time for delivery of and
payment for the Optional Shares and stating that the Optional Shares referred to
therein are to be used for the purpose of covering over-allotments in connection
with the distribution and sale of the Firm Shares. If such notice is given on or
at least two full business days prior to the Closing Date, the date set forth
therein for such delivery and payment shall be not earlier than the Closing
Date. If such notice is given after two full business days prior to the Closing
Date, the date set forth therein for such delivery and payment shall be a date
selected by the Representatives that is within three full business days after
the exercise of the Over-allotment Option. The date and time set forth in such a
notice is referred to herein as an "Option Closing Date," and a closing held
pursuant to such a notice is referred to herein as an "Option Closing." Upon
each exercise of the Over-allotment Option, and on the basis of the
representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth, the several Underwriters
shall become severally, but not jointly, obligated to purchase from the Company
and the Selling Shareholders the number of Optional Shares specified in each
notice of exercise of the Over-allotment Option (allocated among them in
accordance with Section 5(c) hereof).
(c) The number of Optional Shares to be purchased by each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule I hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters").
(d) Payment for the Optional Shares shall be made to the Company
with respect to the Company Optional Shares sold by the Company and to the
Custodian with respect to the Selling Shareholder Optional Shares sold by the
Selling Shareholders by certified or official bank check payable to the order of
the Company or the Custodian, as applicable, in New York Clearing House (next
day) funds, at the offices of Xxxxxx Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be agreed upon by the
Company and the Representatives, or in immediately available funds wired to such
accounts as the Company and the Custodian may specify (with all costs and
expenses incurred by the Underwriters in connection
11
with such settlement in immediately available funds, including, but not limited
to, interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Optional Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, for the
respective accounts of the Underwriters. The certificates representing the
Optional Shares to be issued and delivered will be in such denominations and
registered in such names as the Representatives request upon reasonable notice
prior to such Option Closing Date, and, if certificated, will be made available
to the Representatives for inspection, checking and packaging at a reasonable
time in advance of such Option Closing Date.
6. Certain Covenants and Agreements of the Company. The Company
covenants and agrees with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, the Company will
timely file the Prospectus pursuant to and in compliance with Rule 424(b) of the
Regulations and will advise the Representatives of the time and manner of such
filing.
(b) The Company will not file or publish any amendment or supplement
to the Registration Statement, Preliminary Prospectus or Prospectus at any time
before the completion (in the opinion of the Underwriters' counsel) of the
distribution of the Offered Shares by the Underwriters that is not (i) in
compliance with the Regulations and (ii) approved by the Representatives (such
approval not to be unreasonably withheld or delayed).
(c) The Company will advise the Representatives immediately, and
confirm such advice in writing, (i) when any post-effective amendment to the
Registration Statement is filed with the SEC under Rule 462(c) under the Act or
otherwise, (ii) any Rule 462(b) Registration Statement is filed, (iii) of the
receipt of any comments from the SEC concerning the Registration Statement, (iv)
when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (v) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (vi)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vii) during the period noted in clause (vi) above, of
the need to amend the Registration Statement or supplement the Prospectus to
comply with the Act, (viii) of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
and (ix) of the suspension of the qualification of any of the Offered Shares for
offering or sale in any jurisdiction in which the Underwriters intend to make
such offers or sales, or the initiation or threatening of any proceedings for
any of such purposes known to the Company. The Company will use its best efforts
to prevent the issuance of any such stop order or of any order preventing or
suspending such use, and if any such order is issued, to obtain as soon as
possible the lifting thereof.
(d) The Company has delivered to the Representatives, without
charge, as many copies of each Preliminary Prospectus as the Representatives
have reasonably requested. The Company will deliver to the Representatives,
without charge, from time to time during the period when delivery of the
Prospectus is required under the Act, such number of copies of the Prospectus
(as supplemented or amended) as the Representatives may reasonably request. The
Company hereby consents to the use of such copies of the Preliminary Prospectus
and the Prospectus for purposes permitted by the Act, the Regulations and the
securities or Blue Sky laws of the states or foreign jurisdictions in which the
Offered Shares are offered by the several Underwriters and by all dealers to
whom Offered Shares may be sold, both in connection with the offering and sale
of the Offered Shares and for such period of time thereafter as the Prospectus
is required by the Act to be delivered in connection with sales by any
Underwriter or dealer. The Company has furnished or will furnish to the
Representatives at least three original signed copies of the Registration
Statement as originally filed and of all amendments and supplements thereto,
whether filed before or after the Effective Date, at least three copies of all
exhibits filed therewith and of all consents and certificates of experts, and
will deliver to the Representatives such number of conformed copies of the
Registration Statement, including financial statements and exhibits, and all
amendments thereto, as the Representatives may reasonably request.
12
(e) The Company will comply with the Act, the Regulations, the
Exchange Act and the rules and regulations thereunder so as to permit the
continuance of sales of and dealings in the Offered Shares for as long as may be
necessary to complete the distribution of the Offered Shares as contemplated
hereby.
(f) The Company will furnish such information and pay such filing
fees and other expenses as may be required, and otherwise cooperate in the
registration or qualification of the Offered Shares, or exemption therefrom, for
offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions in which the Representatives
determine to offer the Offered Shares, after consultation with the Company, and
will file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided,
however, that no such qualification shall be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to taxation or
qualification as a foreign corporation doing business in such jurisdiction where
it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Offered Shares, in any jurisdiction where it is not now so subject.
The Company will, from time to time, prepare and file such statements and
reports as are or may be required to continue such qualification in effect for
so long a period as is required under the laws of such jurisdictions for such
offering and sale. The Company will furnish such information and pay such filing
fees and other expenses as may be required, and otherwise cooperate in the
listing of the Offered Shares on the Nasdaq National Market.
(g) Subject to Section 6(b) hereof, in case of any event (occurring
at any time within the period during which, in the opinion of counsel for the
Underwriters, a prospectus is required to be delivered under the Act or the
Regulations), as a result of which any Preliminary Prospectus or the Prospectus,
as then amended or supplemented, would contain, in the opinion of counsel for
the Underwriters, an untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, if it is necessary
at any time to amend any Preliminary Prospectus or the Prospectus to comply with
the Act or the Regulations or any applicable securities or Blue Sky laws, the
Company promptly will prepare and file with the SEC, and any applicable state
and foreign securities commission, an amendment, supplement or document that
will correct such statement or omission or effect such compliance and will
furnish to the several Underwriters such number of copies of such amendments,
supplements or documents (in form and substance satisfactory to the
Representatives and counsel for the Underwriters) as the Representatives may
reasonably request. For purposes of this Section 6(g), the Company will provide
such information to the Representatives, the Underwriters' counsel and counsel
to the Company as shall be necessary to enable such persons to consult with the
Company with respect to the need to amend or supplement the Registration
Statement, Preliminary Prospectus or Prospectus or file any document, and shall
furnish to the Representatives and the Underwriters' counsel such further
information as each may from time to time reasonably request.
(h) The Company will make generally available to its security
holders not later than 45 days after the end of the period covered thereby, an
earnings statement of the Company (which need not be audited unless required by
the Act or the Regulations) that shall comply with Section 11(a) of the Act and
Rule 158 thereunder and cover a period of at least 12 consecutive months
beginning not later than the first day of the Company's fiscal quarter next
following the Effective Date (or, if later, the effective date of the Rule
462(b) Registration Statement).
(i) For a period of five years from the Effective Date, the Company
will deliver to the Representatives and, upon request, to each of the
Underwriters: (i) a copy of each report or document, including, without
limitation, reports on Forms 8-K, 10-K and 10-Q filed with the SEC on the dates
required and (or such similar forms as may be designated by the SEC),
registration statements and any exhibits thereto, filed or furnished to the SEC
or any securities exchange or the NASD, on the date each such report or document
is so filed or furnished; (ii) as soon as practicable, copies of any reports or
communications (financial or other) of the Company mailed to its security
holders; and (iii) every material press release in respect of the Company or its
affairs that is released or prepared by the Company.
(j) For a period of five years from the Effective Date, the Company
will deliver to the Representatives, subject to execution of an appropriate
confidentiality agreement, such additional information concerning the business
and financial condition of the Company as the Representatives may from time to
time
13
reasonably request in writing, and which can be prepared or obtained by the
Company without unreasonable effort or expense.
(k) During the course of the distribution of the Offered Shares, the
Company will not take, directly or indirectly, any action designed to, or that
could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Common Stock.
(l) The Company has caused each person listed on Schedule III hereto
to execute an agreement (a "Lock-up Agreement") in form and substance
satisfactory to the Representatives and the Underwriters' counsel which provides
that for a period of 90 days after the Effective Date such persons will not,
without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx LLC, directly or
indirectly, sell, offer or contract to sell or grant any option to purchase or
otherwise dispose of any shares of Common Stock (or any securities convertible
into or exercisable or exchangeable for any shares of Common Stock). The Company
has delivered such agreements to the Representatives prior to the date of this
Agreement. Appropriate stop transfer instructions will be issued by the Company
to the transfer agent for the Common Stock, and a copy of such instructions will
be delivered to the Representatives.
(m) For a period of 90 days after the Effective Date, the Company
will not, without the prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx LLC,
offer, sell, contract to sell or otherwise dispose of any Common Stock or any
securities convertible into or exercisable for any Common Stock or grant options
to purchase any Common Stock, except (i) the issuance of Common Stock upon the
exercise of currently outstanding options and warrants as described in the
Prospectus and (ii) the grant of options to purchase Common Stock under the
Company's currently outstanding stock option plans as described in the
Prospectus and the issuance of Common Stock upon the exercise thereof.
(n) For a period of three years from the Effective Date, the Company
will use all reasonable efforts to maintain the listing of the Common Stock
(including, without limitation, the Offered Shares) on the Nasdaq National
Market or on a national securities exchange.
(o) The Company shall, at its sole cost and expense, supply and
deliver to the Representatives and the Underwriters' counsel, within a
reasonable period from the Closing Date, transaction binders in such number and
in such form and content as the Representatives reasonably request.
(p) The Company will use the net proceeds from the sale of the
Offered Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectus.
(q) The Company will not engage in any transaction with affiliates
(as defined in the Regulations) without the prior approval of a majority of the
members of the Company's Board of Directors who do not have an interest in such
transaction other than in their capacity as directors of the Company.
7. Certain Covenants and Agreements of the Selling Shareholders. Each
Selling Shareholder severally agrees with the several Underwriters as follows:
(a) Each Selling Shareholder will cooperate to the extent reasonably
necessary to cause the Registration Statement or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Each Selling Shareholder will pay all Federal and other taxes,
if any, on the transfer or sale of the Offered Shares being sold by the Selling
Shareholder to the Underwriters and will pay any fees and expenses of Selling
Shareholders' counsel and any other fees as are agreed to by the Company and the
Selling Shareholders.
(c) Each Selling Shareholder will do or perform all things
reasonably required to be done or performed by the Selling Shareholder prior to
the Closing Date or any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of his or its Offered Shares pursuant to
this Agreement.
14
(d) Except as stated in this Agreement and in the Preliminary
Prospectus and the Prospectus, each Selling Shareholder will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Offered Shares.
(e) Each Selling Shareholder will advise the Representatives
promptly, and if requested by the Representatives, will confirm such advice in
writing, of any change in information relating to the Selling Shareholder
relating to any matter stated in the Prospectus or any amendment or supplement
thereto which comes to the attention of the Selling Shareholder that suggests
that any statement relating to the Selling Shareholder made in the Registration
Statement or the Prospectus (as then amended or supplemented, if amended or
supplemented) is or may be untrue in any material respect or that the
Registration Statement or Prospectus (as then amended or supplemented, if
amended or supplemented) omits or may omit to state a material fact or a fact
necessary to be stated therein in order to make the statements relating to the
Selling Shareholder therein not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented, if amended or supplemented) in order to comply with the Act or any
other law.
(f) Each Selling Shareholder will comply in all respects with the
Lockup Agreements.
8. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by this Agreement
are consummated and regardless of the reason this Agreement is terminated, the
Company will pay or cause to be paid, and bear or cause to be borne, all costs
and expenses incident to the performance of the obligations of the Company and
the Selling Shareholders under this Agreement, including: (i) the fees and
expenses of the accountants and counsel for the Company incurred in the
preparation of the Registration Statement and any post-effective amendments
thereto (including financial statements and exhibits), Preliminary Prospectuses
and the Prospectus and any amendments or supplements thereto; (ii) printing and
mailing expenses associated with the Registration Statement and any
post-effective amendments thereto, any Preliminary Prospectus, the Prospectus,
this Agreement, the Agreement Among Underwriters and related documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Offered Shares and the Blue Sky Memorandum (and any supplement thereto);
(iii) the costs and expenses (other than fees and expenses of the Underwriters'
counsel, except such fees incurred in connection with Blue Sky and NASD filings
or exemptions as provided herein) incident to the authentication, issuance, sale
and delivery of the Offered Shares to the Underwriters; (iv) the fees, expenses
and all other costs of qualifying the Offered Shares for sale under the
securities or Blue Sky laws of those states or foreign jurisdictions in which
the Offered Shares are to be offered or sold, including the reasonable fees and
expenses of Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose; (v) the fees, expenses and
other costs of, or incident to, securing any review or approvals by or from the
NASD, including the reasonable fees and expenses of the Underwriters' counsel;
(vi) the filing fees of the SEC; (vii) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided; (viii) the Company's travel expenses in
connection with meetings with the brokerage community and institutional
investors; (ix) the costs and expenses associated with settlement in same day
funds (including, but not limited to, interest or cost of funds expenses), if
desired by the Company; (x) any fees or costs payable to the Nasdaq National
Market as a result of the offering; (xi) the cost of printing certificates for
the Offered Shares; (xii) the costs and charges of any transfer agent; (xiii)
all taxes, if any, on the issuance, delivery and transfer of the Offered Shares
sold by the Company; and (xiv) all other costs and expenses reasonably incident
to the performance of the Company's and the Selling Shareholders' obligations
hereunder that are not otherwise specifically provided for in this Section 8(a);
provided, however, that except as specifically set forth in Section 8(c) hereof,
the Underwriters shall be responsible for their out-of-pocket expenses,
including those associated with meetings with the brokerage community and
institutional investors, other than the Company's travel expenses, and the fees
and expenses of their counsel for other than with respect to Blue Sky and NASD
matters.
(b) The Company shall pay as due any state or foreign registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states and
foreign jurisdictions in which the Representatives determine to offer or sell
the Offered Shares.
15
(c) In order to reimburse Xxxxxx Xxxxxxxxxx Xxxxx LLC and Pacific
Growth Equities, Inc. for costs and expenses associated with the offering of the
Offered Shares, on the Closing Date, the Company will pay a non-accountable
expense allowance of (i) $125,000 to Xxxxxx Xxxxxxxxxx Xxxxx LLC and (ii)
$75,000 to Pacific Growth Equities, Inc.; provided, however, that if the sale of
the Firm Shares is not completed pursuant to this Agreement, the Xxxxxx
Xxxxxxxxxx Xxxxx LLC and Pacific Growth Equities, Inc. shall be entitled to
reimbursement only for their actual out-of-pocket expenses, including, without
limitation, the reasonable fees and expenses of Underwriters' counsel.
(d) If (i) the Underwriters are willing to proceed with the sale of
the Offered Shares and such sale is not consummated because the Company elects
not to proceed therewith for any reason or (ii) the Representatives terminate
this Agreement pursuant to Section 12(b)(i), (iv) or (vii) hereof, then the
Company will reimburse the Representatives for their out-of-pocket expenses,
including, without limitation, fees and disbursements of counsel for the
Underwriters, incurred in connection with investigating, marketing and proposing
to market the Offered Shares or in contemplation of performing their obligations
hereunder.
9. Conditions to Underwriters' Obligations. The obligation of each
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 5 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Shareholders, to
the performance by the Company and the Selling Shareholders of their covenants
and obligations hereunder, and to the following additional conditions:
(a) If required by the Regulations, the Prospectus shall have been
filed with the SEC pursuant to Rule 424(b) of the Regulations within the
applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Registration Statement (including any document incorporated by reference
therein) or the sale of any of the Offered Shares shall have been issued under
the Act or any state or foreign securities law, and no proceedings for that
purpose shall have been initiated or shall be pending or, to the
Representatives' knowledge or the knowledge of the Company, shall be
contemplated by the SEC or by any authority in any jurisdiction designated by
the Representatives pursuant to Section 6(f) hereof. Furthermore, there has been
no challenge to or comment on any document incorporated by reference in the
Prospectus by the SEC. Any request on the part of the SEC or any state or
foreign securities authority for additional information shall have been complied
with to the reasonable satisfaction of counsel for the Underwriters.
(b) All corporate proceedings and other matters incident to the
authorization, form and validity of this Agreement, the Offered Shares and the
form of the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all material respects to counsel for the Underwriters.
The options/warrants to be exercised by the Selling Shareholder in connection
with the Selling Shareholders Firm Shares, if any, shall have been executed and
the Custodian shall have received the certificates representing the Shares
issued to the Selling Shareholders upon exercise of such options/warrants. The
Company and the Selling Shareholders shall have furnished to such counsel all
documents and information that they may have reasonably requested to enable them
to pass upon such matters. The Representatives shall have received from the
Underwriters' counsel, Xxxxxx Xxxxxxxx LLP, an opinion, dated as of the Closing
Date and any Option Closing Date, as the case may be, and addressed to the
Representatives, individually and as representatives of the several
Underwriters, which opinion shall be satisfactory in all respects to the
Representatives.
(c) The NASD shall have indicated it has no objection to the
underwriting arrangements pertaining to the sales of any of the Offered Shares.
(d) The Representatives shall have received a copy of an executed
Lock-up Agreement from each person listed on Schedule III hereto.
16
(e) The Representatives shall have received at or prior to the
Closing Date from the Underwriters' counsel a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Offered Shares under the
securities or Blue Sky laws of such jurisdictions designated by the
Representatives pursuant to Section 6(f) hereof.
(f) On the Closing Date and any Option Closing Date, there shall
have been delivered to the Representatives signed opinions of Blank Rome Xxxxxx
Xxxxxxxxxx LLP, counsel to the Company and the Selling Shareholders, dated as of
each such date and addressed to the Representatives, individually and as
representatives of the several Underwriters, to the effect set forth in Exhibits
A and B hereto or to such effect as is otherwise reasonably satisfactory to the
Representatives.
(g) At the Closing Date and any Option Closing Date: (i) the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and neither the Registration Statement nor any
post-effective amendment thereto nor the Prospectus and any amendments or
supplements 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) since the respective dates as
of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, except as otherwise stated therein, there shall have been
no material adverse change in the Business Conditions of the Company and the
Subsidiaries from that set forth therein, whether or not arising in the ordinary
course of business; (iii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus or any amendment or
supplement thereto, there shall have been no event or transaction, contract or
agreement entered into by the Company or the Subsidiaries other than in the
ordinary course of business and as set forth in the Registration Statement or
Prospectus, that has not been, but would be required to be, set forth in the
Registration Statement or Prospectus; (iv) since the respective dates as of
which information is given in the Registration Statement and any post-effective
amendment thereto and the Prospectus and any amendments or supplements thereto,
there shall have been no material adverse change, loss, reduction, termination
or non-renewal of any contract to which the Company or the Subsidiaries is a
party, that has not been, but would be required to be set forth in the
Registration Statement or Prospectus; and (v) no action, suit or proceeding at
law or in equity shall be pending or threatened against the Company or the
Subsidiaries that would be required to be set forth in the Prospectus, other
than as set forth therein, and no proceedings shall be pending or threatened
against or directly affecting the Company or the Subsidiaries before or by any
federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially adversely affect the
Business Conditions of the Company and the Subsidiaries.
(h) The Representatives shall have received at the Closing Date and
any Option Closing Date certificates of the Chief Executive Officer and the
Chief Financial Officer of the Company dated as of the date of the Closing Date
or Option Closing Date, as the case may be, and addressed to the
Representatives, individually and as representatives of the several
Underwriters, to the effect that (i) the representations and warranties of the
Company in this Agreement are true and correct, as if made at and as of the
Closing Date or the Option Closing Date, as the case may be, and that the
Company has complied with all the agreements, fulfilled all the covenants and
satisfied all the conditions on its part to be performed, fulfilled or satisfied
at or prior to the Closing Date or the Option Closing Date, as the case may be
in all material respects, and (ii) the signers of the certificate have carefully
examined the Registration Statement and the Prospectus and any amendments or
supplements thereto, and the conditions set forth in Section 9(g) hereof have
been satisfied.
(i) The Representatives shall have received at the Closing Date, and
any Option Closing Date, certificates of or on behalf of the Selling
Shareholders dated as of the date of the Closing Date or Option Closing Date, as
the case may be, and addressed to the Representatives, individually and as
representatives of the several Underwriters, to the effect that (i) the Selling
Shareholders have read this Agreement carefully, and the representations and
warranties of the Selling Shareholders in this Agreement are true and correct,
as if made at and as of the Closing Date or the Option Closing Date, as the case
may be, and (ii) the Selling Shareholders have examined the Registration
Statement and Prospectus and any amendment or supplement thereto, and the
conditions set forth in Section 9(g) of this Agreement have been satisfied.
17
(j) At the time this Agreement is executed and at the Closing Date
and any Option Closing Date the Representatives shall have received a letter,
dated the date of delivery thereof, addressed to the Representatives,
individually and as representatives of the several Underwriters, in form and
substance satisfactory to the Representatives in all respects (including,
without limitation, the non-material nature of the changes or decreases, if any,
referred to in clause (iii) below) from BDO Xxxxxxx, LLP:
(i) confirming they are independent certified public accountants
within the meaning of the Act and the Regulations, and stating that the section
of the Registration Statement under the caption "Experts" is correct insofar as
it relates to them;
(ii) stating that, in their opinion, the consolidated financial
statements, schedules and notes of the Company and the Subsidiaries audited by
them and included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Regulations;
(iii) stating that, on the basis of the specified procedures,
which included the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information, as described
in SAS No. 71, Interim Financial Information (with respect to the latest
available unaudited consolidated financial statements of the Company), a reading
of the latest available unaudited interim consolidated financial statements of
the Company (with an indication of the date of the latest available unaudited
interim financial statements), a reading of the minutes of the meetings of the
shareholders and the Board of Directors of the Company and the Audit and
Compensation Committees of such Boards and inquiries to certain officers and
other employees of the Company responsible for operational, financial and
accounting matters and other specified procedures and inquiries, nothing has
come to their attention that would cause them to believe that (A) the unaudited
consolidated financial statements of the Company included in the Registration
Statement and related schedules, if any, (1) do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the
Regulations, or (2) were not fairly presented in conformity with GAAP or
statutory accounting practices on a basis substantially consistent with that of
the audited Consolidated Financial Statements and related schedules included in
the Registration Statement; or (B) at a specified date not more than five
business days prior to the date of such letter, there was any change in the
capital stock (other than the issuance of capital stock upon the exercise of
options granted under plans disclosed in the Prospectus or otherwise outstanding
and disclosed in the Prospectus), increase in long-term debt of the Company or
any decrease in consolidated net current assets or shareholders equity of the
Company as compared with the amounts shown in the June 30, 2001 audited balance
sheets of the Company included the Registration Statement or that for the
periods from June 30, 2001 to the date of the latest available unaudited
financial statements of the Company and to a specified date not more than five
days prior to the date of the letter, there were any decreases, as compared to
the corresponding periods in the prior year, in operating income or total or per
share amounts of net income, except in all instances for changes, decreases or
increases that the Registration Statement discloses have occurred or may occur
and except for such other changes, decreases or increases which the Underwriters
shall in their sole discretion accept;
(iv) stating that they have compared specific dollar amounts (or
percentages derived from such dollar amounts), numbers of shares and other
numerical data and financial information set forth in the Registration Statement
that have been specified by the Representatives prior to the date of this
Agreement (in each case to the extent that such dollar amounts, percentages and
other information is derived from the general accounting records subject to the
internal controls of the Company's accounting systems, or has been derived
directly from such accounting records by analysis or comparison or has been
derived from other records and analyses maintained or prepared by the Company)
with the results obtained from the application of readings, inquiries and other
appropriate procedures set forth in the letter, and found them to be in
agreement.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included in the
Registration Statement for purposes of this subsection (j).
(k) There shall have been duly tendered to the Representatives for
the respective accounts of the Underwriters, certificates or uncertificated
shares representing all of the Offered Shares to be purchased by the
Underwriters on the Closing Date or Option Closing Date, as the case may be.
18
(l) The issuance and sale of the Offered Shares shall be legally
permitted under applicable Blue Sky or state securities laws so long as such
sales are made in accordance with the Blue Sky Memorandum.
(m) The Representatives shall have received copies of the Custody
Agreement and Power of Attorney provided for in Section 2(a) hereof for each
Selling Shareholder, and such documents shall have been approved in form and
substance by the Underwriters' counsel, such approval not to be withheld
unreasonably.
(n) All corporate and other proceedings and other matters incident
to the authorization, form and validity of this Agreement and the form of the
Registration Statement and Prospectus and all other legal matters related to
this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all respects to counsel to the Underwriters. The Company and the
Selling Shareholder shall have furnished to such counsel all documents and
information that they shall have reasonably requested to enable them to pass
upon such matters.
(o) At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates relating to the Company and the Subsidiaries or the
transactions contemplated by this Agreement as they shall have reasonably
requested.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Representatives and the Underwriters' counsel. The Company and
the Selling Shareholders shall furnish the Representatives with such conformed
copies of such opinions, certificates, letters and other documents as they shall
reasonably request. If any condition to the Underwriters' obligations hereunder
to be fulfilled prior to or at the Closing Date or any Option Closing Date, as
the case may be, is not fulfilled, the Representatives may, on behalf of the
several Underwriters, terminate this Agreement with respect to the Closing Date
or such Option Closing Date, as applicable, or, if they so elect, waive any such
conditions which have not been fulfilled or extend the time for their
fulfillment. Any such termination shall be without liability of the Underwriters
to the Company and the Selling Shareholders.
10. Indemnification and Contribution.
(a) The Company and each Selling Shareholder, severally and not
jointly, shall indemnify and hold harmless each Underwriter, and each person, if
any, who controls each Underwriter within the meaning of the Act, against any
and all loss, liability, claim, damage and expense whatsoever, including, but
not limited to, any and all reasonable expenses incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever or in connection with any investigation or inquiry of, or
action or proceeding that may be brought against, the respective indemnified
parties, arising out of or based upon any breach of the Company's or the Selling
Shareholders' representations and warranties made in this Agreement or any
untrue statements or alleged untrue statements of material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, any
application or other document filed in any jurisdiction in order to qualify all
or any part of the Offered Shares under the securities laws thereof or filed
with the SEC or the NASD (in this Section 10 collectively called "application"),
or the omission or alleged omission from any of the foregoing of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing indemnity shall not apply in
respect of any statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through the
Representatives expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus, or any amendment or supplement thereto, or
in any application or in any communication to the SEC, as the case may be; and
further provided, however, that the indemnification contained in this Section
10(a) with respect to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, liability or expense arising
from the sale of the Offered Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act and the Regulations thereunder, and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus, provided that the Company has delivered the Prospectus to the
several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The obligations of the Company and the Selling Shareholders
under this Section 10(a) will be in addition to any liability the Company and
the Selling Shareholders may otherwise have. Each Selling Shareholder's
aggregate liability under this Section 10 shall be limited to an amount equal to
the gross
19
proceeds received by such Selling Shareholder from the sale of such Selling
Shareholder's Offered Shares pursuant to this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, each of the directors of the Company, each of the
officers of the Company who shall have signed the Registration Statement, each
Selling Shareholder, and each other person, if any, who controls the Company
within the meaning of the Act to the same extent as the foregoing indemnities
from the Company and the Selling Shareholders to the several Underwriters, but
only with respect to any and all loss, liability, claim, damage or expense
resulting from statements or omissions, or alleged statements or omissions, if
any, made in any Preliminary Prospectus, Registration Statement or Prospectus or
any amendment or supplement thereof or any application in reliance upon, and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use in any Preliminary Prospectus, the
Registration Statement or Prospectus or any amendment or supplement thereof or
any application, as the case may be. The obligations of each Underwriter under
this Section 10(b) will be in addition to any liability which such Underwriter
may otherwise have.
(c) If any action, inquiry, investigation or proceeding is brought
against any person in respect of which indemnification may be sought pursuant to
Section 10(a) or (b) hereof, such person (hereinafter called the "indemnified
party") shall, promptly after notification of, or receipt of service of process
for, such action, inquiry, investigation or proceeding, notify in writing the
party or parties against whom indemnification is to be sought (hereinafter
called the "indemnifying party") of the institution of such action, inquiry,
investigation or proceeding. The indemnifying party, upon the request of the
indemnified party, shall assume the defense of such action, inquiry,
investigation or proceeding, including, without limitation, the employment of
counsel (reasonably satisfactory to such indemnified party) and payment of
expenses. No indemnification provided for in this Section 10 shall be available
to any indemnified party who shall fail to give such notice if the indemnifying
party does not have knowledge of such action, inquiry, investigation or
proceeding to the extent that such indemnifying party has been materially
prejudiced by the failure to give such notice, but the omission to so notify the
indemnifying party shall not relieve the indemnifying party otherwise than under
this Section 10. Such indemnified party 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 unless the employment of such
counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action or if the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party or if
such indemnified party or parties shall have been advised by counsel that there
may be a conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, in any of which events the
indemnified party or parties shall be entitled to select counsel to conduct the
defense to the extent determined by such counsel to be necessary to protect the
interests of the indemnified party or parties, and the reasonable fees and
expenses of such counsel shall be borne by the indemnifying party. The
indemnifying party shall be responsible for the fees and disbursements of only
one such counsel so engaged by the indemnified party or parties. Expenses
covered by the indemnification in this Section 10 shall be paid by the
indemnifying party as they are incurred by the indemnified party. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party. Anything in this Section 10 to the contrary
notwithstanding an indemnifying party shall not be liable for any settlement of
a claim effected without its written consent, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 10 is
unavailable or insufficient to hold harmless an indemnified party under Section
10(a) or (b) hereof in respect of any losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to therein, except by reason of the failure to give notice as
required in Section 10(c) hereof (provided that the indemnifying party does not
have knowledge of the action, inquiry, investigation or proceeding and to the
extent such party has been materially prejudiced by the failure to give such
notice), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions,
20
inquiries, investigations or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Shareholders on the one hand and the Underwriters on the other from
the offering of the Offered Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, liabilities,
claims or expenses (or actions, inquiries, investigations or proceedings in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders bears to the
total underwriting discount and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholders on the one hand or the Underwriters on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
10(d) were determined by pro rata allocation (even if the Selling Shareholders
or the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to above in this Section 10(d). The amount paid or payable by an
indemnified party as a result of the losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to above in this Section 10(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(d), (i) the provisions of the
Agreement Among Underwriters shall govern contribution among Underwriters, (ii)
no Underwriter (except as provided in the Agreement Among Underwriters) shall be
required to contribute any amount in excess of the underwriting discount
applicable to the Offered Shares purchased by such Underwriter, and (iii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 10(d) to contribute are several in proportion to their individual
underwriting obligations and not joint.
11. Representations and Agreements to Survive Delivery. Except as
the context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriters, the Company and
the Selling Shareholders, including, without limitation, the indemnity and
contribution agreements contained in Section 10 hereof and the agreements
contained in Sections 8, 11, 12 and 15 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person, and shall survive delivery of the
Offered Shares and termination of this Agreement, whether before or after the
Closing Date or any Option Closing Date.
12. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Offered Shares, whichever is earlier, except that the provisions of Sections 8,
10, 11 and 12 hereof shall be effective upon execution hereof. The time of the
public offering, for the purpose of this Section 12, shall mean the time when
any of the Offered Shares are first released by the Underwriters for offering by
dealers. The Representatives, the Company and the Selling Shareholders may
prevent the provisions of this Agreement (other than those contained in Sections
8, 10, 11 and 12) hereof from becoming effective without liability of any party
to any other party, except as noted below, by giving the notice indicated in
Section 12(c) hereof before the time the other provisions of this Agreement
become effective.
21
(b) The Representatives shall have the right to terminate this
Agreement at any time prior to the Closing Date or any Option Closing Date as
provided in Sections 9 and 13 hereof or if any of the following have occurred:
(i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change or
any development involving a prospective material adverse change in or affecting
the Business Conditions of the Company or the Subsidiaries, whether or not
arising in the ordinary course of business, that would, in the Representatives'
opinion, make the offering or delivery of the Offered Shares impracticable;
(ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change would, in the Representatives'
opinion, make the offering or delivery of the Offered Shares impracticable;
(iii) any suspension or limitation of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the over-the-counter market or any setting of minimum
prices for trading or the promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority that in
the Representatives' opinion materially and adversely affects trading on such
exchange or the over-the-counter market;
(iv) the enactment, publication, decree or other promulgation of
any federal or state statute, regulation, rule or order of any court or other
governmental authority which in the Representatives' opinion materially and
adversely affects or will materially or adversely affect the business or
operations of the Company or the Subsidiaries;
(v) declaration of a banking moratorium by the United States,
New York or Pennsylvania authorities;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that in the
Representatives' opinion has a material adverse effect on the securities markets
in the United States; or
(vii) trading in any securities of the Company shall have been
suspended or halted by Nasdaq National Market or the SEC.
(c) If the Representatives elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided in this Section
12, the Representatives shall notify the Company and the Selling Shareholders
hereof promptly by telephone, telex, telegraph, telegram or facsimile, confirmed
by letter.
13. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Optional Shares hereunder, and if the Firm
Shares or Optional Shares with respect to which such default relates do not
exceed in the aggregate 10% of the number of Firm Shares or Optional Shares, as
the case may be, that all Underwriters have agreed to purchase on the relevant
Closing Date or Option Closing Date, then the Representatives may make
arrangements satisfactory to the Company for the purchase of such Firm Shares by
other persons, including any of the Underwriters, but if no such arrangements
are made by the relevant Closing Date or Option Closing Date, such Firm Shares
or Optional Shares to which the default relates shall be purchased severally by
the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
(b) If such default relates to more than 10% of the Firm Shares or
Optional Shares, as the case may be, the Representatives may in their discretion
arrange for another party or parties (including a non-
22
defaulting Underwriter) to purchase such Firm Shares or Optional Shares to which
such default relates, on the terms contained herein. In the event that the
Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 13, this Agreement
may be terminated by the Representatives or by the Company without liability on
the part of the non-defaulting several Underwriters (except as provided in
Section 10 hereof) or the Company (except as provided in Sections 8 and 10
hereof); provided that if such default occurs with respect to Optional Shares
after the Closing Date, this Agreement will not terminate as to the Firm Shares
or any Optional Shares purchased prior to such termination. Nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other several
Underwriters, to the Company and to the Selling Shareholders for damages
occasioned by its default hereunder.
(c) If the Firm Shares or Optional Shares to which the default
relates are to be purchased by the non-defaulting Underwriters, or are to be
purchased by another party or parties, the Representatives or the Company shall
have the right to postpone the Closing Date or any Option Closing Date, as the
case may be, for a reasonable period but not in any event exceeding seven 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, and the Company agrees to file promptly any amendment to the
Registration Statement or supplement to the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The terms
"Underwriters" and "Underwriter" as used in this Agreement shall include any
party substituted under this Section 13 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and/or Optional
Shares.
14. Information Furnished by Underwriters. The identity of the
Underwriters set forth in the first paragraph under the heading "Underwriting,"
the concession and reallowance figures appearing in the third paragraph under
the heading "Underwriting," the representations with respect to discretionary
authority in the ninth paragraph under the heading "Underwriting" and the tenth
paragraph under the heading "Underwriting" regarding passive market making
constitute the only written information furnished by reference or on behalf of
any Underwriter referred to in Sections 1(b) and 10 hereof.
15. Notice. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to any Underwriter,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to such Underwriter, c/o Janney Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxx-Xxxxxx,
facsimile number (000) 000-0000 with a copy to Xxxxxx Xxxxxxxx LLP, 3000 Two
Xxxxx Square, Xxxxxxxxxx & Xxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxx, Esquire; facsimile number (000) 000-0000 and if
sent to the Company or the Selling Shareholders, shall be mailed, delivered,
telexed, telegrammed, telegraphed or telecopied and confirmed to Suprema
Specialties, Inc., 000 Xxxx 00xx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention:
Xxxx Xxxxxxxxx, facsimile number (000) 000-0000, with a copy to Blank Rome
Xxxxxx Xxxxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Ethan Seer, Esquire; facsimile number (000) 000-0000.
16. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the several Underwriters, the Company, the Selling
Shareholder and the controlling persons, directors and officers thereof, and
their respective successors, assigns, heirs and legal representatives, and no
other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision herein contained. The terms "successors" and "assigns" shall not
include any purchaser of the Offered Shares merely because of such purchase. In
all dealings with the Company and the Selling Stockholders under this Agreement,
the Representatives shall act on behalf of each of the several Underwriters, and
the Company and the Selling Stockholders shall be entitled to act and rely upon
any statement, request, notice or agreement made or given by the
Representatives.
17. Definition of Business Day. For purposes of this Agreement,
"business day" means any day on which the Nasdaq National Market is opened for
trading.
18. Counterparts. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.
23
19. Construction. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within such Commonwealth. All references
herein to the knowledge of the Company shall be deemed to include the knowledge
of each of the Subsidiaries.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
If the foregoing correctly sets forth your understanding of our
agreement, please sign and return to the Company the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
SUPREMA SPECIALTIES, INC.
By: -----------------------
Name: Xxxx Xxxxxxxxx
Title: President
Selling Shareholders named in Schedule II hereto
By: ----------------------------
Attorney-in-Fact
The foregoing Agreement is hereby confirmed and accepted as of the date First
above written.
XXXXXX XXXXXXXXXX XXXXX LLC
PACIFIC GROWTH EQUITIES, INC.
XXXX CAPITAL PARTNERS, LLC
As Representatives of the Several Underwriters
named in Schedule I hereto
XXXXXX XXXXXXXXXX XXXXX LLC
By: ----------------------------
Name:
Title:
PACIFIC GROWTH EQUITIES, INC.
By: ----------------------------
Name:
Title:
XXXX CAPITAL PARTNERS, LLC
By: ----------------------------
Name:
Title:
25
SCHEDULE I
Schedule of Underwriters
Number of Selling
Number of Company Firm Shareholder Firm Number of Optional
Underwriter Shares to be Purchased Shares to be Purchased Shares to be Purchased
----------- ---------------------- ---------------------- ----------------------
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Pacific Growth Equities, Inc.
Xxxx Capital Partners, LLC
Total..................................
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SCHEDULE II
Schedule of Selling Shareholders
Number of Number of
Selling Shareholder Firm Shares Optional Shares
------------------- ----------- ---------------
Xxxx Xxxxxxxxx 193,423 154,386
Estate of Xxxx Xxxxxxxx 303,640 32,143
Xxxxxx Xxxxxxxxxx 52,937 63,471
Total........................................... 550,000 250,000
27
SCHEDULE III
Persons Who Are to Deliver Lock-Up Agreements
Lock-Up Agreements are to be delivered by the following persons and
entities prior to the time the SEC declares the Registration Statement
effective:
1. Xxxx Xxxxxxxxx
2. Estate of Xxxx Xxxxxxxx
3. Xxxxxx Xxxxxxxxxx
4. Xxxxxx Xxxx
5. Xxxxx Xxxxxxxxx
6. Xxxxxxx Xxxxxxxx
7. Xx. Xxxxxxx Xxxxxx
8. Xxxx XxXxxxx
9. Xxxxx X. Xxxxxxxxx
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EXHIBIT A
Matters to be Covered in the Opinion of
Blank Rome Xxxxxx Xxxxxxxxxx LLP
Counsel for the Company
1. The Company has been duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the State of New York with
corporate power and authority to own its properties and conduct its businesses
as described in the Prospectus; each of the Company's Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it was incorporated with corporate power and
authority to own its properties and conduct its businesses as described in the
Prospectus; each of the Company and the Subsidiaries are qualified to transact
business in each jurisdiction where it is required to be qualified. The Company
and the Subsidiaries have all licenses, permits, certifications, registrations,
approvals, consents and franchises required to own or lease and operate its
properties and to conduct its business as described in the Prospectus.
2. The Company has all requisite power and authority to enter into
this Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes its legal, valid and binding
obligation, enforceable against the Company in accordance with its terms, except
insofar as rights to indemnity or contribution may be limited by applicable law
or equitable principles, and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws
affecting creditors' rights generally or by general equitable principles.
3. The execution, delivery and performance of this Agreement by the
Company does not and will not, with or without the giving of notice or the lapse
of time or both, (A) conflict with any terms or provisions of the Company's
Articles of Incorporation, as amended, or Bylaws, as amended or any of the
Subsidiaries' Articles or Certificates of Incorporation, as amended, or Bylaws,
as amended; (B) result in a breach of, or constitute a default under, result in
the termination or modification of, or result in the creation of imposition of
any lien, security interest, charge or encumbrance upon any of the properties of
the Company and/or the Subsidiaries pursuant to, any indenture, mortgage, deed
of trusts, contract, commitment or other agreement or instrument to which the
Company or the Subsidiaries are a party or by which any of their properties are
bound or affected; (C) violate any law, rule or regulation, or any judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over the Company or the
Subsidiaries or any of their respective properties or business; or (D) result in
a breach, termination or lapse of the Company's or the Subsidiaries' necessary
corporate power and authority to own or lease and operate their properties and
to conduct their business as described in the Prospectus.
4. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all liens,
encumbrances and security interests, and to the best knowledge of such counsel,
no options, warrants or other rights to purchase any shares of capital stock are
outstanding.
5. At the date or dates indicated in the Prospectus, the Company had
the duly authorized and outstanding capital stock as set forth under the heading
"Capitalization" in the Prospectus; the authorized shares of Common Stock have
been duly authorized; the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and non-assessable; the Common
Stock issuable upon exercise of outstanding options, when issued in accordance
with the respective terms thereof, will be duly authorized and validly issued
and will be fully paid and non-assessable; all of the Offered Shares conform to
the description thereof contained in the Prospectus; certificates for the
Offered Shares (if any) are in due and proper form and conform in all respects
to the requirements of the New York Business Corporation Law; the Offered Shares
to be sold by the Company pursuant to this Agreement have been duly authorized
and will be validly issued, fully paid and non-assessable when issued and paid
for as contemplated by this Agreement; and no preemptive rights of shareholders,
by operation of law or by contract exists with respect to any of the Offered
Shares or the issue and sale thereof and neither the filing of the Registration
Statement nor the offering or sale of the Offered Shares as contemplated by this
Agreement gives any security holder of the Company any rights, other than those
which have been satisfied or waived, for or relating to the registration of any
Common Stock.
29
6. The Registration Statement has become effective under the Act
and, to the best knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened under the Act.
Any and all filings required to be made by Rule 424 and Rule 430A under the Act
have been made.
7. The authorized capital stock of the Company, including, without
limitation, the outstanding Common Stock, the Offered Shares being issued and
the authorized but unissued preferred stock, conforms with the descriptions
thereof in the Prospectus, and such descriptions conform with the instruments
defining the same. The information in the Prospectus insofar as it relates to
options and any other derivative security of the Company common stock and
preferred stock is true and correct.
8. The Common Stock (including the Offered Shares) have been duly
included for quotation on the Nasdaq National Market. All previous transactions
by or on behalf of the Company in its own securities complied in all material
respects with the provisions of all applicable federal and state securities laws
and state corporate laws.
9. The Registration Statement, the Preliminary Prospectus, the
Prospectus and each amendment or supplement thereto and each document
incorporated by reference therein, comply as to form with the requirements of
the Act and the Exchange Act, as applicable, and the applicable rules and
regulations thereunder (except that such counsel need express no opinion as to
the financial statements, schedules and other financial information included or
incorporated by reference therein).
10. The statements under the heading "Description of Capital Stock"
in the Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly present
the information called for with respect to such documents and matters.
11. Such counsel does not know of any contracts or documents
required to be filed as exhibits to, or incorporated by reference in, the
Registration Statement or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference or described as
required, and such required contracts and documents as are summarized in the
Registration Statement or the Prospectus are fairly summarized.
12. The Company is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
13. To such counsel's best knowledge, there are no claims, actions,
suits proceedings, arbitrations, investigations or inquiries pending before, or
threatened or contemplated by, any governmental agency, instrumentality, court
or tribunal, domestic or foreign, or before any private arbitration tribunal, to
which the Company or any of the Subsidiaries is a party or is threatened to be
made a party that, if determined adversely to the Company or any of the
Subsidiaries, would, in any case or in the aggregate, result in any material
adverse change in the general affairs, properties, condition (financial or
otherwise), results of operations, shareholders' equity or business of the
Company or materially adversely affect the sale of the Offered Shares or the
validity of this Agreement.
14. Other than from the SEC, no approval, consent, order or
authorization by any regulatory, administrative or other governmental body is
necessary in connection with the execution and delivery of this Agreement and
the consummation of the transactions herein contemplated (other as may be
required by the NASD or by state securities and Blue Sky laws as to which such
counsel need express no opinion).
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof, and while such counsel (for the purposes
of this Paragraph 15) in not passing upon the accuracy or completeness of the
statements contained in the Registration Statement or the Prospectus, in the
course of such review and discussion, no facts came to the attention of such
counsel that would cause such counsel to have reason to believe that (a) the
Registration Statement or any post-effective amendment thereto on the date it
became effective, contained any untrue statement of a material fact or omitted
to state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not
30
misleading, or that (b) the Prospectus on the Effective Date, on the date it was
filed pursuant to Rule 424(b) and on the Closing Date or Option Closing Date, as
the case may be, contains any untrue statement of material fact or omits to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; except that with
respect to both clause (a) and (b) above such counsel need express no opinion
with respect to the financial statements, schedules and the notes thereto
included in the Registration Statement or the Prospectus.
The foregoing opinion may be limited to the laws of the United
States, the New York Business Corporation Law, as amended. Such counsel may rely
as to questions of fact upon the representations of the Company set forth in
this Agreement and upon certificates of officers of the Company and of
government officials, all of which certificates must be satisfactory in form and
scope to counsel for the Underwriters.
31
EXHIBIT B
Matters to be Covered in the Opinion of
Blank Rome Xxxxxx Xxxxxxxxxx LLP
Counsel for the Selling Shareholders
1. Each Selling Shareholder has duly authorized, executed and
delivered a Custody Agreement and Power of Attorney which constitute valid and
legally binding agreements of such Selling Shareholder in accordance with their
terms.
2. This Agreement has been duly authorized, executed and delivered
by or on behalf of each Selling Shareholder and constitutes a valid and legally
binding agreement of such Selling Shareholder in accordance with its terms
except insofar as rights to indemnify or contribution may be limited by
applicable law or equitable principles, and except as enforceability may be
limited by bankruptcy, insolvency, moratorium, arrangement or similar laws
affecting creditors' rights generally or by general equitable principles.
3. All authorizations, approvals and consents necessary for the
execution and delivery by such Selling Shareholders of the Custody Agreement and
the Power of Attorney, the execution and delivery by or on behalf of such
Selling Shareholder of this Agreement, and the sale and delivery of the Offered
Shares to be sold by such Selling Shareholder hereunder (other than, at the time
of the execution thereof, the issuance of the order of the commission declaring
the Registration Statement effective and such authorizations, approvals and
consents as may be necessary under state securities or Blue Sky laws and the
Bylaws, rules and pronouncements of the NASD), have been obtained and are in
full force and effect.
4. The execution, delivery and performance by or on behalf of such
Selling Shareholder of this Agreement, the Custody Agreement and the Power of
Attorney, and the consummation of the transactions contemplated hereby, thereby
and by the Registration Statement and the Prospectus do not, with our without
the giving of notice or lapse of time or both, (A) conflict with the result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage or other agreement or instrument to which
such Selling Shareholder is a party or by which such Selling Shareholder or any
Offered Shares is bound, or (B) violate any existing, applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over such
Selling Shareholder or any Offered Shares.
5. To the best of such counsel's knowledge and belief, the delivery
of certificates for the Offered Shares being sold by such Selling Shareholder
hereunder against payment therefor as provided herein will transfer to the
Underwriters good and marketable title to such Offered Shares, free and clear of
all liens, encumbrances, security interests and claims, assuming the
Underwriters purchased such Offered Shares in good faith without notice of any
adverse claim.
In rendering such opinion, such counsel may rely (a) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to counsel for the
Underwriters) of other counsel reasonably acceptable to counsel for the
Underwriters, familiar with the applicable laws; (b) as to matters of fact, to
the extent they deem proper, on certificates of any Selling Shareholder,
provided that copies of any such statements or certificates shall be delivered
to counsel for the Underwriters, and on the representations and warranties of
the Selling Shareholders contained in this Agreement. The opinion of such
Counsel for the Selling Shareholder shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
32
