Exhibit No. 1
Form of Underwriting Agreement
Among ICC Technologies, Inc.,
Xxxxxx Xxxxxxxxxx Xxxxx, Inc. and
Xxxxxx Xxxxxx Xxxxxxxx & Co., LLC
2,500,000 Shares
ICC Technologies, Inc.
Common Stock
--------------------
UNDERWRITING AGREEMENT
--------------------
Philadelphia, Pennsylvania
______________, 199_
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXX XXXXXX XXXXXXXX & CO., LLC
As Representatives of the Several
Underwriters Named in Schedule I Hereto
c/o Janney Xxxxxxxxxx Xxxxx Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
ICC Technologies, Inc., a Delaware corporation (the "Company"), proposes to
sell to Xxxxxx Xxxxxxxxxx Xxxxx Inc. and Xxxxxx Xxxxxx Xxxxxxxx & Co., LLC
(collectively, the "Representatives") and the several other underwriters named
in Schedule I hereto (together with the Representatives, the "Underwriters")
2,500,000 shares of the Company's common stock, par value $.01 per share
("Common Shares"). The Common Shares to be sold to the Underwriters by the
Company are referred to herein 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 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 up to 375,000
additional Common Shares from the Company. Such 375,000 additional Common Shares
are referred to herein as the "Optional 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 Firm Shares and the Optional Shares are referred to collectively
herein as the "Shares."
1. Representations and Warranties of the Company. The Company 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. 33-_________) and one or more
amendments thereto for the purpose of registering the Shares under the Act.
Copies of such registration statement and any amendments thereto, and all forms
of the related prospectus contained therein, have been 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 5(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 the registration statement 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 has filed an abbreviated registration statement to
register additional Common Shares pursuant to Rule 462(b) under the Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 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 Shares
in any jurisdiction designated by the Representatives as provided for in Section
5(f) hereof has been issued, and no proceedings for that purpose have been
instituted or threatened. The Company has complied in all material respects with
all requests of the SEC, or requests of which the Company has been advised of
any state securities commission in a state designated by the Representatives as
provided for in Section 5(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 in all material respects and did not as of its date
contain any untrue statement of material fact or omit to state a 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 pursuant to Rule 424(b) and on
the Closing Date (as defined in Section 3 hereof) and any Option Closing Date
(as defined in Section 4(b) hereof), conformed and will conform in all material
respects to all the requirements of the Act and the Regulations, and did not and
will not, on any of such
- 2 -
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 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) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with all necessary
corporate power and authority, and all required licenses, permits,
certifications, registrations, approvals, consents and franchises to own or
lease and operate its properties and to conduct its business as described in the
Prospectus, and to execute, deliver and perform this Agreement. ICC Desiccant
Technologies, Inc. (the "Subsidiary") is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with all
necessary corporate power and authority, and all required licenses, permits,
certifications, registrations, approvals, consents and franchises to own or
lease and operate its properties and to conduct its business as described in the
Prospectus, and to execute, deliver and perform this Agreement. The Subsidiary
has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with all necessary corporate
power and authority, and all required licenses, permits, certifications,
registrations, approvals, consents and franchises to own or lease and operate
its properties and to conduct its business as described in the Prospectus. The
Company and the Subsidiary are duly qualified to do business as foreign
corporations, and are in good standing, in all jurisdictions in which such
qualification is required, except where the failure to so qualify would not have
a material adverse effect on the general affairs, properties, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects (collectively, the "Business Conditions") of the Company and the
Subsidiary taken as a whole. ICC/Engelhard Partnership (the "Partnership"), a
general partnership of which the Subsidiary is a 50% general partner, has been
duly organized and is validly existing as a general partnership under the laws
of the Commonwealth of Pennsylvania, with all necessary power and authority, and
all required licenses, permits, certifications, registrations, approvals,
consents and franchises to own or lease and operate its properties and to
conduct its business as described in the Prospectus. The Partnership is duly
qualified to do business, and is in good standing, in all jurisdictions in which
such qualification is required, except where the failure to so qualify would not
have a material adverse effect on the Business Conditions of the Partnership or
the Company.
(d) The outstanding shares of capital stock of the Subsidiary 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 Subsidiary or securities
convertible into or exchangeable for capital stock of, or other ownership
interests in, the Subsidiary are outstanding. Neither the Company nor the
Subsidiary 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 Subsidiary and the Subsidiary's 50% general partnership interest in
the Partnership. The Subsidiary owns a 50% general partnership interest in the
Partnership free and clear of all liens, encumbrances and security interests;
and no rights to purchase or agreements or other obligations of the Subsidiary
to issue ownership interests in the Partnership are outstanding, except for the
purchase option of
- 3 -
Engelhard Corporation ("Engelhard") set forth in the General Partnership
Agreement dated as of February 7, 1994 between the Subsidiary and Xxxxxxxxx XX,
Inc., a wholly-owned subsidiary of Engelhard.
(e) 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.
(f) The execution, delivery and performance of this Agreement and the
transactions contemplated herein, including without limitation, the Preferred
Stock Transactions defined in the Prospectus by the Company 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 or the Subsidiary's Certificate of
Incorporation or Bylaws or the Partnership's formation documents; (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, the
Subsidiary or the Partnership, or require any payment by the Company, the
Subsidiary or the Partnership or impose any liability on the Company, the
Subsidiary or the Partnership pursuant to, any contract, indenture, mortgage,
deed of trust, commitment or other agreement or instrument to which the Company,
the Subsidiary or the Partnership is a party or by which any of their properties
are bound or affected; (iii) assuming compliance with Blue Sky laws applicable
to the offer and sale of the 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, the Subsidiary or the Partnership or any of their respective properties
or businesses; or (iv) result in a breach, termination or lapse of the Company's
or the Subsidiary's corporate power and authority, or the Partnership's power
and authority, to own or lease and operate their respective properties and
conduct their respective businesses.
(g) 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 caption "Capitalization" and will have, as of the issuance of the Firm
Shares on the Closing Date, the pro forma as adjusted capitalization set forth
therein. 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 expressly described in the Prospectus with respect to outstanding
options and warrants to purchase __________ and __________ Common Shares,
respectively, and Preferred Stock convertible into an aggregate of Common
Shares. As of the Closing Date, all shares of Preferred Stock will be converted
into Common Shares or redeemed as described in the Prospectus under "Preferred
Stock Transactions" so that as of the Closing Date there will be no shares of
Preferred Stock outstanding and no rights to any dividends, whether or not
accrued or declared, with respect to any Preferred Stock. 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 in all
material respects.
(h) The currently outstanding shares of the Company's capital stock have
been duly authorized and are validly issued, fully paid and non-assessable, and
none of such
- 4 -
outstanding shares of the Company's capital stock has been issued in violation
of any preemptive rights of any security holder of the Company. As of the
Closing Date, all shares of Preferred Stock will be converted into Common Shares
or redeemed in connection with the Preferred Stock Transactions. 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 and state securities laws. The authorized capital stock
of the Company, including, without limitation, the outstanding Common Shares,
the Shares being issued, the outstanding Preferred Stock, the authorized but
unissued Preferred Stock and the outstanding options and warrants to purchase
shares of Common Stock conform in all material respects with the descriptions
thereof in the Prospectus, and such descriptions conform in all material
respects with the instruments defining the same.
(i) When the Shares have been duly delivered against payment therefor as
contemplated by this Agreement, the 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 Shares are in proper legal form under, and conform in all respects to the
requirements of, the Delaware General Corporation Law, as amended (the "DGCL").
Neither the filing of the Registration Statement nor the offering or sale of
Shares as contemplated by this Agreement gives any security holder of the
Company any rights for or relating to the registration of any Common Shares or
any other capital stock of the Company or any rights to convert or have redeemed
or otherwise receive anything of value with respect to any other security of the
Company.
(j) 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 Shares under the Act, the Regulations and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and for compliance with the applicable
state securities or Blue Sky laws or the Bylaws, rules and other pronouncements
of the National Association of Securities Dealers, Inc. (the "NASD").
(k) The Common Shares (including the Shares) are registered pursuant to
Section 12(g) of the Exchange Act, the Common Shares are included for quotation
in the Nasdaq Small Cap Market and the Common Shares (including the Shares and
the Shares issued in the Preferred Stock Transactions) have been approved for
listing, subject only to official notice of issuance, on the Nasdaq National
Market on the Effective Date, and neither the Company nor any other person has
taken any action designed to cause, or likely to result in, the termination of
the registration of the Common Shares under the Exchange Act or the inclusion
thereof on the Nasdaq National Market. The Company has not received any
notification that the SEC or Nasdaq is contemplating terminating such
registration or inclusion. On the Effective Date, the Closing Date and any
Option Closing Date, the Shares shall be included for quotation on the Nasdaq
National Market.
- 5 -
(l) The statements in the Registration Statement and Prospectus, insofar as
they are descriptions of or references to contracts, agreements or other
documents, are accurate in all material respects and present or summarize
fairly, in all material respects, the information required to be disclosed under
the Act and/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 that have not been so described, referred
to or filed, as required.
(m) Each contract or other instrument (however characterized or described)
to which the Company, the Subsidiary or the Partnership is a party or by which
any of their respective properties or businesses is bound or affected and which
is material to the conduct of the Company's, the Subsidiary's or the
Partnership's business has been duly and validly executed by the Company, the
Subsidiary or the Partnership, as applicable, and, to the knowledge of the
Company, 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 and neither the Company, the Subsidiary nor the
Partnership is, 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.
(n) The consolidated financial statements of the Company and the financial
statements of the Partnership (including, in each case, the notes thereto) filed
as part of any Preliminary Prospectus, the Prospectus and the Registration
Statement present fairly, in all material respects, the financial position of
the Company and the Partnership, respectively, as of the respective dates
thereof, and the results of operations and cash flows of the Company and the
Partnership for the periods indicated therein, all in conformity with generally
accepted accounting principles. The supporting notes and schedules included in
the Registration Statement fairly state in all material respects 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," "Selected Consolidated Financial Data of the
Company" and "Selected Consolidated Financial Data of the Partnership 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 unaudited pro forma adjustments to financial information included
in the Registration Statement have been properly applied to the historical
amounts in the compilation of that information.
(o) 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 material loss or damage to any material assets), or
development involving a prospective material adverse change, in the Business
Conditions of the Company or the Partnership; (ii) any material adverse change,
loss, reduction, termination or non-renewal of any contract to which the
Company, the Subsidiary or the Partnership is a party; (iii) any transaction
entered into by the Company, the Subsidiary or the Partnership not in the
ordinary course of its business that is material to the Company or the
Partnership; (iv) any dividend or distribution of any kind declared, paid or
made by the Company on its capital stock, except for and to the extent described
in the Prospectus in connection with the
- 6 -
Preferred Stock Transactions; (v) any liabilities or obligations, direct or
indirect, incurred by the Company, the Subsidiary or the Partnership that are
material to the Company, the Subsidiary or the Partnership; (vi) any change in
the capitalization or stock ownership of the Company, the Subsidiary or the
Partnership except for the Preferred Stock Transactions; or (vii) any change in
the indebtedness of the Company, the Subsidiary or the Partnership that is
material to the Company or the Partnership. Neither the Company, the Subsidiary
nor the Partnership has any contingent liabilities or obligations that are
material and that are not expressly disclosed in the Prospectus.
(p) The Company has not distributed, and will not distribute, any offering
material in connection with the offering and sale of the 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 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 Shares.
(q) The Company, the Subsidiary and the Partnership 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 has 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, the Subsidiary nor the Partnership has 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 none of them
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, the
Subsidiary or the Partnership that might materially adversely affect the
Business Conditions of the Company or the Partnership.
(r) Coopers & Xxxxxxx L.L.P., which has given its reports 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 both with respect to the Company and the Partnership.
(s) Neither the Company, the Subsidiary nor the Partnership is in violation
of, or in default under, any of the terms or provisions of (i) its 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 license, permit, certification, registration, approval, consent or
franchise.
(t) Except as expressly disclosed in the Prospectus, 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, the Subsidiary or the Partnership is
or may be made a party that could reasonably be expected to affect the validity
of any of the outstanding Common Shares, or that, if determined adversely to the
Company or the
- 7 -
Partnership, would, in any case or in the aggregate, result in any material
adverse change in the Business Conditions of the Company or the Partnership, nor
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, the Subsidiary or the Partnership from,
or requiring the Company, the Subsidiary or the Partnership to take or refrain
from taking, any action, or to which the Company, the Subsidiary or the
Partnership or their properties, assets or businesses are bound or subject.
(u) Each of the Company, the Subsidiary and the Partnership 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 or the Partnership'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 or the Partnership as described in the
Prospectus (collectively, the "Intellectual Property"). All patents owned by the
Company and/or the Partnership are listed on Schedule II hereto, all of which
patents are valid and enforceable. Neither the loss nor the unenforceability of
Patent No. 5450730 will have a material adverse effect on the Business
Conditions of the Company or the Partnership. Neither the Company nor the
Partnership has infringed, is infringing and, except as expressly disclosed in
the Prospectus, neither the Company nor the Partnership has 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 Partnership, and neither the Company
nor the Partnership knows of any 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 the Partnership is a party to, or
bound by, any agreement pursuant to which royalties, honorariums or fees are
payable by the Company or the Partnership to any person by reason of the
ownership or use of any Intellectual Property, except for any royalty payments
due Xxxxx Xxxxxxxx or Xxxx Xxxxxx pursuant to the Royalty Agreement dated as of
February 7, 1994.
(v) Each of the Company, the Subsidiary and the Partnership 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 or such as do not materially affect the value of such property and do
not interfere in any material respect with the use made, or proposed to be made,
of such property. Each of the Company, the Subsidiary and the Partnership has
adequately insured its property against loss or damage by fire or other casualty
and maintains, in amounts reasonably believed by the Company to be adequate,
insurance against such other risks as management of the Company deems
appropriate. All real and personal property leased by the Company, the
Subsidiary or the Partnership, as described or referred to in the Prospectus, is
held by the Company, the Subsidiary or the Partnership, as applicable, under
valid leases. The executive offices and the manufacturing and storage facilities
of the Company, the Subsidiary and the Partnership (the "Premises"), and all
operations presently or formerly conducted thereon by the Company, the
Subsidiary or the Partnership or any predecessors thereof, are now and, since
the Company, the
- 8 -
Subsidiary or the Partnership began to use such Premises, always have been and,
to the knowledge of the Company, prior to when the Company, the Subsidiary or
the Partnership began to use such Premises, always had been, in compliance with
all 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"), except to the extent that any failure in such compliance would not
materially adversely affect the Business Conditions of the Company or the
Partnership. There are no conditions on, about, beneath or arising from 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," as defined herein, under any of the Environmental Laws, and that would
materially adversely affect the Business Conditions of the Company or the
Partnership. Except as expressly disclosed in the Prospectus, which disclosed
items will not materially adversely affect the Business Conditions of the
Company or the Partnership, (i) neither the Company, the Subsidiary nor the
Partnership has received notice or has knowledge of any claim, demand,
investigation, regulatory action, suit or other action instituted or threatened
against the Company, the Subsidiary or the Partnership or any portion of the
Premises relating to any of the Environmental Laws and (ii) neither the Company,
the Subsidiary nor the Partnership has received any notice of material
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 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).
(w) Each of the Company, the Subsidiary and the Partnership 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
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(x) Except for the plans that are expressly disclosed in the Prospectus,
neither the Company, the Subsidiary nor the Partnership have had and do now have
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, in all material
respects, and, to the extent required by the Internal Revenue Code of 1986, as
amended (the "Code"), in compliance with the Code in all material respects.
Neither the Company, the Subsidiary nor the Partnership has had 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, the
Subsidiary nor the Partnership has maintained retiree life or retiree health
insurance plans that are employee welfare benefit plans providing for continuing
benefit or coverage for any employee
- 9 -
or any beneficiary of any employee after such employee's termination of
employment, except as required by Section 4980B of the Code. 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.
(y) No labor dispute exists with the Company's, the Subsidiary's or the
Partnership's employees, and no such labor dispute is threatened. 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, the Subsidiary or the Partnership that would materially adversely
affect the Business Conditions of the Company or the Partnership. None of the
Company's or the Partnership's employees are covered by a collective bargaining
agreement and no union organizing activity exists with respect to any of such
employees.
(z) Neither the Company, the Subsidiary nor the Partnership has 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.
(aa) 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.
(bb) No statement, representation, warranty or covenant made by the
Company, the Subsidiary or the Partnership in this Agreement or in any
certificate or document required by this Agreement to be delivered to the
Representatives is, was when made, 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 or the
Subsidiary and any of their respective officers, directors or stockholders or
any affiliate of the foregoing, or between or among the Partnership and any of
its officers, partners or management committee members or any affiliate of the
foregoing that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(cc) Neither the Company, the Subsidiary, the Partnership, nor any officer,
director, employee, partner, agent or other person acting on behalf of the
Company, the Subsidiary or the Partnership 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 or the Partnership
or any actual or proposed business transaction of the Company, the Subsidiary or
the Partnership that (i) could subject the Company, the Subsidiary or the
Partnership to any liability (including, but not limited to, the payment of
monetary damages) or penalty in any civil, criminal or governmental action or
proceeding that would have a material adverse effect on the
- 10 -
Business Conditions of the Company or the Partnership, or (ii) violates any law,
rule or regulation to which the Company, the Subsidiary or the Partnership is
subject.
Any certificate signed by any officer of the Company, the Subsidiary or the
Partnership 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, the Subsidiary or the Partnership, as the case may
be, to the several Underwriters as to the matters covered thereby.
2. 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, the Company shall sell the Firm Shares to the
several Underwriters at the Offering Price less the Underwriting Discounts and
Commissions 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 Discounts and Commissions
shown on the cover page of the Prospectus, the respective amounts of the 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 4 and 11 hereof, the agreement of each Underwriter is to
purchase only that number of Shares specified with respect to that Underwriter
in Schedule I hereto. The Underwriters shall offer the Shares to the public as
set forth in the Prospectus.
3. 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
in New York Clearing House (next day) funds, at the offices of Xxxxxx Xxxxxxxxxx
Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or in immediately
available funds wired to such accounts as the Company 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 Inc, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx for the
respective accounts of the Underwriters. Such payment and delivery will be made
at 10:00 AM., 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 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 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.
4. 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,
subject to the terms and conditions herein set forth, the several Underwriters
are hereby granted an option by the Company to purchase all or any part of the
Optional Shares (the "Over-allotment Option"). The purchase price to be paid for
the Optional Shares shall be the Offering Price less the Underwriting
- 11 -
Discounts and Commissions 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 45 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 13 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 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 on or after
the Closing Date, the date set forth therein for such delivery and payment shall
be a date selected by the Representatives not later than five 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
the number of Optional Shares specified in each notice of exercise of the
Over-allotment option (allocated among them in accordance with Section 4(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, by
certified or official bank check payable to the order of the Company, in New
York Clearing House (next day) funds, at the offices of Xxxxxx Xxxxxxxxxx Xxxxx
Inc., 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 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 Optional Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 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
- 12 -
reasonable notice prior to such Option Closing Date, and will be made available
to the Representatives for inspection, checking and packaging at the
Philadelphia correspondent office of the Company's transfer agent at a
reasonable time in advance of such Option Closing Date.
5. 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 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 Shares
for offering or sale in any jurisdiction in which the Underwriters intend to
make such offers or sales, or of 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 in which the Shares are offered by the several
Underwriters and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time
- 13 -
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.
(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 Shares for as long as may be necessary to complete
the distribution of the 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 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 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 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.
(g) Subject to Section 5(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
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 5(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.
- 14 -
(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 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 three 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-C, 10-K and 10-Q (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 three 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 reasonably request, and which can be prepared or obtained by the Company
without unreasonable effort or expense.
(k) During the course of the distribution of the 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 Shares.
(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 180 days after the Effective Date, such persons will not, without the
prior written consent of the Representatives, offer, sell, contract to sell or
otherwise dispose of any Common Shares or any securities convertible into or
exercisable for any Common Shares or grant options to purchase any Common
Shares. 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 Shares, and a copy of
such instructions will be delivered to the Representatives.
(m) The Company will not engage in any transactions with affiliates (as
defined in the Regulations) without the prior approval of a majority of the
disinterested members of its Board of Directors.
(n) For a period of 180 days after the Effective Date, the Company will
not, without the prior written consent of the Representatives, offer, sell,
contract to sell or otherwise dispose of any Common Shares or any securities
convertible into or exercisable for any Common Shares or grant options to
purchase any Common Shares, except (i) issuance of Common Shares upon conversion
of currently outstanding Preferred Stock, in accordance with the Preferred Stock
Transactions, (ii) issuance of Common Shares upon currently outstanding options
and warrants as
- 15 -
described in the Prospectus and (iii) grant of options to purchase Common Shares
under the Company's currently outstanding stock option plans as described in the
Prospectus.
(o) The Company will use all reasonable efforts to maintain the listing of
the Common Shares (including, without limitation, the Shares) on the Nasdaq
National Market.
(p) 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.
(q) The Company will use the net proceeds from the sale of the Shares to be
sold by it hereunder substantially in accordance with the description set forth
in the Prospectus.
(r) Within 60 days after the date hereof, the Company shall appoint two
nonemployee directors who are reasonably satisfactory to the Representatives to
its Board of Directors and will use its best efforts to continue to nominate and
recommend for election by the Company's stockholders two directors reasonably
acceptable to the Representatives at any elections for directors held within
three years from the date hereof (any such directors appointed or elected, the
"Independent Directors"). At least one of the Independent Directors will be a
member of the Compensation, Audit and Stock Option Committees of the Board of
Directors. The Company shall amend its By-laws, within 60 days of the Closing
Date, to provide that the following actions require a majority vote of the
nonemployee directors of the Board (including at least one of the Independent
Directors):
(i) Any use of the proceeds of the offering other than as described under
"Use of Proceeds" in the Prospectus;
(ii) The issuance of the Company of equity securities or securities
convertible into or exchangeable for equity securities by the Company, other
than for purposes of providing funds to make a contribution to the Partnership
substantially similar to investments to be made by Engelhard; and
(iii) The issuance by the Company of equity securities or securities
convertible into or exchangeable for equity securities of the Company to
officers, directors or 5% or greater stockholders of the Company (other than
with respect to options covered by plans which have been approved by the
Company's stockholders).
The Bylaw amendments referred to above shall further provide that such
amendments shall not be altered or amended by the Board of Directors within
three years of the date hereof without the approval of a majority of the
nonemployee directors (including at least one of the Independent Directors).
(s) The Company shall establish a policy for the issuance of press releases
which shall be effective as of the Closing Date and continue for three years
thereafter which shall require that each press release shall be approved by a
committee of the Board of Directors prior to release by the Company.
- 16 -
(t) The Company shall use its best efforts to obtain from the Partnership a
letter dated as of the date of the Closing Date or Option Closing Date, as the
case may be, addressed to the Representatives and in form and substance
satisfactory to the Representatives, to the effect that the Partnership has
carefully reviewed the Prospectus and that no facts have come to its attention
that would cause it to have reason to believe that, with respect to the
descriptions therein of the Partnership and of the use of proceeds of the
offering, the Prospectus on the Closing Date or Option Closing Date, as the case
may be, contains any untrue statement of a 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.
6. 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 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, the Underwriters' Questionnaire, the power of attorney executed by
each of the Underwriters, the Selected Dealer Agreement and related documents
and the Preliminary 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 Shares to the Underwriters; (iv) the fees, expenses and all
other costs of qualifying the Shares for sale under the securities or Blue Sky
laws of those states in which the Shares are to be offered or sold, including,
without limitation, 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 Shares; (xii) the cost and charges of any
transfer agent; (xiii) the costs of advertising the offering, including, without
limitation, with respect to the placement of "tombstone" advertisements in
publications selected by the Representatives; (xiv) all taxes, if any, on the
issuance, delivery and transfer of the Shares sold by the Company; and (xv) all
other costs and expenses reasonably incident to the performance of the Company's
obligations hereunder that are not otherwise specifically provided for in this
Section 6(a); provided, however, that, except as specifically set forth in
Section 6(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
- 17 -
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 registration, qualification and
filing fees and any accountable out-of-pocket disbursements in connection with
such registration, qualification or filing in the states in which the
Representatives determine to offer or sell the Shares.
(c) If (i) the Underwriters are willing to proceed with the offering, and
the transactions contemplated by this Agreement are not consummated because the
Company elects not to proceed with the offering for any reason or (ii) the
Representatives terminate this Agreement pursuant to Section 10(b) hereof, then
the Company will reimburse the Representatives for their reasonable
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 Shares or in contemplation of performing
their obligations hereunder, in an amount not to exceed $75,000.
7. Conditions of 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 4 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, to the performance by the Company
of its 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 or the sale of any of the Shares shall have been issued under the Act
or any state 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 5(f)
hereof. Any request on the part of the SEC or any state 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 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
Company 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, Cozen and
X'Xxxxxx, 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.
- 18 -
(c) The NASD shall have indicated it has no objection to the underwriting
arrangements pertaining to the sale of any of the Shares.
(d) The Representatives shall have received a copy of an executed Lock-up
Agreement from each person described on Schedule III hereto.
(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 Shares under the securities or Blue
Sky laws of such jurisdictions designated by the Representatives pursuant to
Section 5(f) hereof.
(f) On the Closing Date and any Option Closing Date, there shall have been
delivered to the Representatives signed opinions of Mesirov Xxxxxx Xxxxx Xxxxxx
& Xxxxxxxx, counsel for the Company, 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 Exhibit A hereto or to such effect as is
otherwise reasonably satisfactory to the Representatives.
(g) On the Closing Date and any Option Closing Date, there shall have been
delivered to the Representatives a signed opinion of Xxxxxxx Schwarze Xxxxxx &
Xxxxx, patent counsel for the Company, 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 Exhibit B hereto or as is otherwise
reasonably satisfactory to the Representatives.
(h) 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 or the Partnership, 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, the Subsidiary or the Partnership, 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, the Subsidiary or the Partnership is a party; and
(v) no action, suit or proceeding at law or in equity shall be pending or
threatened against the Company, the Subsidiary or the Partnership that would be
required to be set forth in the Prospectus, other than as set forth
- 19 -
therein, and no proceedings shall be pending or threatened against or directly
affecting the Company, the Subsidiary or the Partnership 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 or the Partnership.
(i) 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 signers of the certificate have read this Agreement carefully, and
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 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, 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 7(h) hereof have
been satisfied.
(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 Coopers & Xxxxxxx L.L.P.:
(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 financial statements, schedules and
notes of the Partnership examined 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 specified procedures, which included a
reading of the latest available unaudited interim consolidated financial
statements of the Company and unaudited financial statements of the Partnership
(with an indication of the date of the latest available unaudited interim
financial statements), a reading of the minutes of the meetings of the
stockholders and the Boards of Directors of the Company and the Subsidiary and
the Management Committee of the Partnership, and audit and compensation
committees of such Boards and Committee, if any, and inquiries to certain
officers and other employees of the Company, the Subsidiary and the Partnership
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 or the unaudited financial statements of the
Partnership included in the Registration Statement and related schedules, if
any, (I) do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Regulations, or (II) were not fairly
presented in conformity with
- 20 -
generally accepted accounting principles 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 or debt of the Company or the
Partnership or any decrease in net current assets, total assets or stockholders'
or partners' equity of the Company or the Partnership as compared with the
amounts shown in the respective September 30, 1995 unaudited balance sheets of
the Company and the Partnership included the Registration Statement, or that for
the periods from October 1, 1995 to the date of the latest available unaudited
financial statements of the Company and the Partnership and to a specified date
not more than five days prior to the date of the letter, there were any
decreases (or increases with respect to losses), as compared to the
corresponding periods in the prior year, in sales, operating income or total or
per share amounts of net loss, 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 are described in
such letter and which the Representatives shall in their sole discretion accept;
and
(iv) stating that they have compared specific dollar amounts (or
percentages delivered 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, the Subsidiary's or the Partnership'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, the Subsidiary or the Partnership) 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.
(k) On the Closing Date, there shall have been delivered to the
Representatives certified copies of resolutions of the Company's Board of
Directors undertaking to appoint two Independent Directors to the Board of
Directors, to establish a press release policy in accordance with subparagraphs
5(r) and (s) above and to amend the Company's Bylaws in accordance with
subparagraph 5(r) above.
(l) There shall have been duly tendered to the Representatives for the
respective accounts of the Underwriters certificates representing all of the
Shares to be purchased by the Underwriters on the Closing Date or any Option
Closing Date, as the case may be.
(m) The issuance and sale of the Shares shall be legally permitted under
applicable Blue Sky or state securities laws.
(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
- 21 -
hereby shall be satisfactory in all respects to counsel to the Underwriters. The
Company 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 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 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.
8. Indemnification and Contribution.
(a) The Company 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
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 (in this Section 8 collectively called "application") filed in
any jurisdiction in order to qualify all or any part of the Shares under the
securities laws thereof or filed with the SEC or the NASD, 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. The
obligations of the Company under this Section 8(a) will be in addition to any
liability the Company may otherwise have.
(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, 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 to the several
Underwriters, but only with respect to any loss, liability, claim, damage or
expense resulting from statements or omissions, or alleged statements or
omissions, if any, made in
- 22 -
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 8(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
8(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 8 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
8. 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. Expenses
covered by the indemnification in this Section 8 shall be paid by the
indemnifying party as they are incurred by the indemnified party. Anything in
this Section 8 to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of a claim effected without its written consent. 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.
(d) If the indemnification provided for in this Section 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(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 8(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
- 23 -
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, inquiries,
investigations or proceedings in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company 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 reasonable 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 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 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 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 and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, liabilities,
claims, damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(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 8(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 discounts and commissions applicable to the 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 8(d) to
contribute are several in proportion to their individual underwriting
obligations and not joint.
9. 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 and the Company,
including, without limitation, the indemnity and contribution agreements
contained in Section 8 hereof and the agreements contained in Sections 6, 9, 10
and 13 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 Shares and termination of this
Agreement, whether before or after the Closing Date or any Option Closing Date.
- 24 -
10. 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 Shares, whichever is
earlier, except that the provisions of Sections 6, 8, 9, 10 and 13 hereof shall
be effective upon execution hereof. The time of the public offering, for the
purpose of this Section 10, shall mean the time when any of the Shares are first
released by the Underwriters for offering by dealers. The Representatives may
prevent the provisions of this Agreement (other than those contained in sections
6, 8, 9, 10 and 13) hereof from becoming effective without liability of any
party to any other party, except as noted below, by giving the notice indicated
in Section 10(c) hereof before the time the other provisions of this Agreement
become effective.
(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 7 and 11 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 Partnership, whether or not arising in the ordinary course of
business, that would, in the Representatives' opinion, make the offering or
delivery of the 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 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 Partnership; (v) declaration of
a banking moratorium by either 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 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 10, the
Representatives shall notify the Company hereof promptly by telephone, telex,
telegraph, telegram or facsimile, confirmed by letter.
11. 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
- 25 -
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-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 11, this Agreement may be terminated by the
Representatives or by the Company without liability on the part of the several
Underwriters (except as provided in Section 8 hereof) or the Company (except as
provided in Sections 6 and 8 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 and to the Company 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 nondefaulting 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 11
with like effect as if it had originally been a party to this Agreement with
respect to such Firm Shares and/or Optional Shares.
12. Information Furnished by Underwriters. The statement set forth on the
last paragraph at the bottom of the cover page of the Prospectus regarding the
terms of the Offering by the Underwriters, the legends on the inside cover page
regarding stabilization and passive market making, the concession and
reallowance figures appearing in the third paragraph under the caption
"Underwriting" and the last paragraph under the caption"Underwriting" regarding
passive market making constitute the only written information furnished by or on
behalf of any Underwriter referred to in Sections l(a)(ii) and 8 hereof.
13. 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 Inc., 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxxx, with
a copy to Cozen and X'Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
- 26 -
19103, Attention: Xxxxxxx X. Xxxxx, Esquire; and if sent to the Company, shall
be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to ICC Technologies, Inc., 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxx, with a copy to Mesirov Xxxxxx
Xxxxx Xxxxxx & Xxxxxxxx, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxx, Esquire.
14. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, the several Underwriters, the Company 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 Shares
merely because of such purchase.
15. Definition of Business Day. For purposes of this Agreement, "business
day" means any day on which the Nasdaq National Market is opened for trading.
16. Counterparts. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.
17. 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.
- 27 -
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,
ICC TECHNOLOGIES, INC.
By:____________________________________
Xxxxx X. Xxxxx, President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXX XXXXXX XXXXXXXX & CO., LLC
As Representatives of the Several Underwriters
named in Schedule I hereto
By: XXXXXX XXXXXXXXXX XXXXX INC.
By:_____________________________________
Authorized Representative
- 28 -
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
Xxxxxx Xxxxxxxxxx Xxxxx Inc. ............................................................
Xxxxxx Xxxxxx Xxxxxxxx & Co., LLC .......................................................
Total ...................................................................................
====================
I-1
SCHEDULE II
Patents and Patent Applications
Owned by the Company and/or Partnership
II-1
SCHEDULE III
Persons Who Are to Deliver Lock-Up Agreements
Lock-Up Agreements are to be delivered by the following
persons and entities who are stockholders of the Company immediately prior to
the time the SEC declares the Registration Statement effective:
III - 1
EXHIBIT A
Matters to be Covered in the opinion of Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx
Counsel for the Company
1. Each of the Company and the Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with all necessary corporate power and authority to own or lease and operate its
properties and to conduct its business as described in the Prospectus and to
execute, deliver and perform this Agreement. The Partnership is a general
partnership duly organized and validly existing under the laws of the
Commonwealth of Pennsylvania, with all necessary power and authority to own or
lease and operate its properties and conduct its business as described in the
Prospectus. To the knowledge of such counsel, each of the Company, the
Subsidiary and the Partnership has 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. Each of the Company, the Subsidiary and the Partnership is duly
qualified to do business as a foreign corporation or partnership and is in good
standing in all jurisdictions in which such qualification is required, except
where the failure to so qualify would not have a material adverse effect on the
Business Conditions of the Company or the Partnership.
2. The Company has all requisite power and authority to enter into this
Agreement and the Preferred Stock Transactions, 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 as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principles, and except that the
enforceability of the indemnification and contribution provisions set forth in
this Agreement may be limited by the federal securities laws. The Preferred
Stock Transactions have been approved by all necessary corporate action.
3. The execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated herein, including without
limitation, the Preferred Stock Transactions, do 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 or the Subsidiary's Certificate of
Incorporation, as amended, or Bylaws, as amended, or the Partnership's
partnership formation documents; (b) result in a breach of, or constitute a
default under, result in the termination or modification of, or result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the properties of the Company or the Partnership pursuant to, any
indenture, mortgage, deed of trust, contract, commitment or other agreement or
instrument, known to such counsel, to which the Company, the Subsidiary or the
Partnership is a party or by which any of their respective properties is bound
or affected; (c) violate any law, rule or regulation, or to such counsel's
knowledge, any judgment, order or decree, of any government or governmental
agency, instrumentality or court, domestic or foreign, having jurisdiction over
the Company, the Subsidiary or the Partnership or any of their respective
properties or businesses; or (d) result in a breach, termination or lapse of the
Company's, the Subsidiary's or the Partnership's necessary power and authority
to own or lease and operate its respective properties and to conduct its
respective businesses as described in the Prospectus.
A-1
4. At the date or dates indicated in the Prospectus, the Company had the
duly authorized and outstanding capitalization set forth under the caption
"Capitalization" and "Description of Capital Stock" in the Prospectus. To the
knowledge of such counsel, there are no options or warrants for the purchase of,
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 and to the extent
expressly described in the Prospectus.
5. The authorized capital stock of the Company, including, without
limitation, the outstanding Common Shares, the Shares being issued, the
outstanding Preferred Stock and the authorized but unissued Preferred Stock,
conforms in all material respects with the descriptions thereof in the
Prospectus, and such descriptions conform in all material respects with the
instruments defining the same. The information in the Prospectus insofar as it
relates to options, warrants and any other derivative or convertible security
with respect to the Common Shares and preferred stock is true and correct in all
material respects.
6. The Common Shares outstanding immediately prior to the Closing Date have
been duly authorized and are validly issued, fully paid and non-assessable. The
Common Shares issuable upon exercise of outstanding options and warrants or,
upon Preferred Stock Transactions, when issued in accordance with the respective
terms thereof, will be duly authorized, validly issued, fully-paid and
non-assessable; and none of such outstanding Common Shares, were, and none of
such issuable Common Shares will be, issued in violation of any statutory
preemptive rights, preemptive rights in the Company's Certificate of
Incorporation or Bylaws or, to such counsel's knowledge, any other preemptive
right of any securityholder of the Company.
7. The issuance and sale of the Shares by the Company have been duly
authorized and, when duly delivered against payment therefor as contemplated by
this Agreement, the Shares will be validly issued, fully paid and nonassessable,
the holders thereof will not be subject to personal liability solely by reason
of being such holders, and good and valid title to the Shares, free and clear of
all liens, claims, encumbrances, security interests, restrictions, and defects
of title whatsoever, will pass to each of the Underwriters who has purchased
such Shares. None of the Shares will be issued in violation of any statutory
preemptive rights, preemptive rights in the Company's Certificate of
Incorporation or Bylaws or, to such counsel's knowledge, any other preemptive
right of any securityholder of the Company. The certificates representing the
Common Shares are in proper legal form under, and conform in all respects to the
requirements of, the DGCL. To the knowledge of such counsel, neither the filing
of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives any securityholder of the Company any
rights, other than those which have been waived, for or relating to the
registration of any Common Shares or any other securities of the Company.
8. To such counsel's knowledge, the Common Shares (including the Shares and
the shares issued in connection with the Preferred Stock Transactions) have been
duly listed on the Nasdaq National Market. To the best of such counsel's
knowledge, 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 and corporate laws.
A-2
9. All outstanding shares of capital stock of the Subsidiary 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.
To such counsel's knowledge, except for the common stock of the Subsidiary owned
by the Company, 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 of the Subsidiary or securities convertible into or
exchangeable for capital stock of the Subsidiary are outstanding. To the
knowledge of such counsel, the Company owns no stock or other interests
whatsoever, whether equity or debt, in any corporation, partnership or other
entity other than its ownership of all of the outstanding shares of capital
stock of the Subsidiary, and the Subsidiary owns no stock or other interests
whatsoever, whether equity or debt, in any corporation, partnership or other
entity other than its 50% general partnership interest in the Partnership.
10. No consent, approval, authorization, order, registration, license or
permit of any court, government, governmental agency, instrumentality or other
regulatory body or official is required for (a) the valid authorization,
issuance, sale and delivery by the Company of any of the Shares, (b) the
execution, delivery or performance by the Company of this Agreement or (c) the
taking of any action contemplated herein or in the Registration Statement or the
Prospectus, including without limitation, the Preferred Stock Transactions,
except such as may be required for the registration of the Shares under the Act,
the Regulations or the Exchange Act (all of which have been obtained), or for
compliance with the applicable state securities or Blue Sky laws, or the Bylaws,
rules and other pronouncements of the NASD.
11. The statements in the Registration Statement and Prospectus, insofar as
they are descriptions or summaries of, or references to, statutes, regulations,
governmental proceedings, contracts, agreements, or other documents, are
accurate in all material respects and present or summarize fairly the
information required to be disclosed under the Act or the Regulations. To such
counsel's knowledge, there are no contracts, agreements or other documents
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. Such counsel has read all contracts referred to in the Registration
Statement or the Prospectus, and such contracts (including, but not limited to,
the Partnership Agreement, the Engelhard Technology License Agreement, the
Engelhard Supply Agreement and the Partnership's agreements with Ciba-Geigy
Corporation) are fairly summarized or described therein conform in all material
respects to the descriptions thereof contained therein.
12. To such counsel's knowledge, neither the Company, the Subsidiary nor
the Partnership is in violation of, or in default under, any of the terms or
provisions of (a) its Certificate or Articles of Incorporation, as amended, or
Bylaws, as amended, or similar governing instruments, or (b) except to the
extent such action would not have a material adverse effect on the Business
Conditions of the Company or the Partnership, (i) 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 properties is bound; (ii) 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 (iii) any license, permit, certification,
registration, approval, consent or franchise referred to in Paragraph 1 hereof.
A-3
13. To such counsel's knowledge, the Company, the Subsidiary and the
Partnership are (a) in compliance with all applicable Environmental Laws, (b)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (c) are
in compliance with all terms and conditions of any such permit, license or
approval, except where any non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not
singularly or in the aggregate have a material adverse effect on the Business
Conditions of the Company or the Partnership.
14. To such counsel's knowledge, 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, the Subsidiary or the Partnership is a party or
is threatened to be made a party that, if determined adversely to the Company or
the Partnership, would, in any case or in the aggregate, result in any material
adverse change in the Business Conditions of the Company or the Partnership.
15. The Registration Statement has become effective under the Act, as of
the Effective Date and, if applicable, any Rule 462 Registration Statement
became effective under the Act upon its filing, and to such counsel's knowledge,
the SEC has not issued any stop order suspending the effectiveness of the
Registration Statement, nor has the SEC instituted or threatened to institute
proceedings with respect to any such order. Any and all filings required to be
made by Rules 424, 430A and 462 under the Act have been made.
16. The Registration Statement and the Prospectus, as of the Effective Date
(and any Rule 462 Registration Statement upon its filing), and each amendment or
supplement thereto as of its effective or issue date (except for the financial
statements, schedules and the notes thereto, as to which such counsel need not
express an opinion) comply as to form in all material respects with, and appear
on their face to be appropriately responsive in all material respects to the
applicable requirements of the Act and Regulations.
17. The Company is not, and will not be immediately after receiving the
proceeds from the sale of any of the Shares, an "investment company" within the
meaning of the 1940 Act.
18. Such counsel has participated in the preparation of the Registration
Statement and the Prospectus, including reviews and discussions of the contents
thereof, and while such counsel (for the purposes of this Paragraph 18) is not
passing upon the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, in the course of such reviews and
discussions, no facts came to its attention that would cause it 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
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 such
counsel need express
A-4
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
laws of the Commonwealth of Pennsylvania and the General Corporation Law of the
State of Delaware, and 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.
A-5
EXHIBIT "B"
Matters to be Covered in the Opinion of
Xxxxxxx Xxxxxxxx Xxxxxx & Xxxxx, Patent Counsel for the Company
1. The statements made in the Registration Statement and Prospectus under
the headings "Risk Factors -- Dependence on Proprietary Technology" and
"Business -- Patents and Proprietary Information" (the "Intellectual Property
Sections") to the extent they constitute matters of law or legal conclusions,
have been reviewed by counsel and fairly present the information disclosed
therein.
2. The Company and the Partnership, respectively, own or possess adequate
licenses or other rights to use all patents, technology, know-how and other
rights necessary to conduct their respective businesses presently and as
proposed to be conducted by them as described in the Registration Statement and
the Prospectus and, to such counsel's knowledge, except as described in the
Prospectus, neither the Company nor the Partnership has received any notice of
infringement of or conflict with, and does not otherwise know of any basis for,
notice of any such infringement of or conflict with, asserted rights of others
with respect to any patents, technology, know-how or other property rights.
3. The Company's and the Partnership's respective discoveries, inventions,
products or processes referred to in the Registration Statement and the
Prospectus do not, to the knowledge of such counsel, infringe or conflict with
any right or patent which is the subject of a patent application, which
infringement or conflict could result in any material adverse effect on the
Business Conditions of the Company or the Partnership.
4. To the knowledge of such counsel, the Partnership has the exclusive
right in the United States and in [list foreign jurisdictions] to use or license
the use of the trademarks described in the Registration Statement and the
Prospectus, as registered in the United States and [list foreign jurisdictions]
in connection with the advertising, promotion and sale of its products.
5. To the knowledge of such counsel, the Partnership is in the position to
prevent the adoption and use by third parties of any trademarks confusingly
similar to the trademarks described in the Registration Statement and the
Prospectus.
6. To such counsel's knowledge, the patents set forth on Schedule II to
this Agreement are the only patents issued to the Company or the Partnership and
all such patents have been validly issued by the Company or the Partnership, as
the case may be, with the rights attendant to a validly issued patent.
7. Such counsel has participated in the preparation of the Intellectual
Property Sections, including reviews and discussions of the contents thereof,
and while such counsel (for the purposes of this Paragraph 7) is not passing
upon the accuracy or completeness of the statements contained in the
Intellectual Property Sections, in the course of such reviews and discussions,
no facts came to its attention that would cause it to have reason to believe
that (a) the Intellectual Property Sections, on the date the Registration
Statement or any post-effective amendment thereto
B-1
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 misleading, or (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 a 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.
B-2
