1
EXHIBIT 1.1
3,220,000 Shares
FARO TECHNOLOGIES, INC.
Common Stock
UNDERWRITING AGREEMENT
St. Petersburg, Florida
September __, 1997
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX, XXXXXX INC.
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
FARO Technologies, Inc., a Florida corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell an
aggregate of 2,200,000 authorized and unissued shares (the "Company Firm
Shares") of the Company's common stock, par value $.001 per share, to the
several Underwriters named in Schedule I hereto (the "Underwriters"). Certain
shareholders of the Company, named in Schedule II hereto (the "Selling
Shareholders"), acting severally and not jointly, propose, subject to the terms
and conditions stated herein, to issue and sell an aggregate of 600,000
authorized and outstanding shares (the "Shareholder Firm Shares") of the
Company's common stock, par value $.001 per share, to the Underwriters. The
Company Firm Shares and the Shareholder Firm Shares are hereafter collectively
referred to as the "Firm Shares." In addition, the Company has agreed to
sell to the Underwriters, upon the terms and conditions set forth herein, up to
an additional 75,000 authorized and unissued shares of the Company's common
stock, par value $.001 per share (the "Company Additional Shares"), solely to
cover overallotments by the Underwriters, if any. The Selling Shareholders,
acting severally and not jointly, have agreed to sell to the Underwriters,
upon the terms and conditions set forth herein, up to an additional 345,000
authorized and outstanding shares of the Company's common stock, par value
$.001 per share (the "Shareholder Additional Shares"), solely to cover
over-allotments by the Underwriters, if any. The Shareholder Additional Shares
and the Company Additional Shares are hereinafter collectively referred to as
the "Additional Shares." The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares." The Company's common
stock, par value $.001 per share, including the Shares, is hereinafter referred
to as the "Common Stock." Xxxxxxx Xxxxx & Associates, Inc. and Xxxxxxx, Xxxxxx
Inc. are acting as the representatives of the several Underwriters and in such
capacity are hereinafter referred to as the "Representatives."
Each of the Company and each Selling Shareholder agrees with the several
Underwriters as follows:
2
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 (File No.
333-32983), including a prospectus subject to completion, relating to the
Shares. Such registration statement (including all financial schedules and
exhibits), as amended at the time when it became effective and as thereafter
amended by any post-effective amendment, together with any registration
statement filed by the Company with respect to the foregoing pursuant to Rule
462(b) under the Act, is referred to in this Agreement as the "Registration
Statement." The term "Prospectus" as used in this Agreement means (i) the
prospectus in the form included in the Registration Statement, or (ii) if the
prospectus included in the Registration Statement omits information in reliance
upon Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act or as part of a
post-effective amendment to the Registration Statement after the Registration
Statement becomes effective, the prospectus as first so filed, or (iii) if the
prospectus included in the Registration Statement omits information in reliance
upon Rule 430A under the Act and such information is included in a term sheet
(as described in Rule 434(c) under the Act) filed with the Commission pursuant
to Rule 424(b) under the Act, the prospectus included in the Registration
Statement and such term sheet, taken together. The prospectus subject to
completion in the form included in the Registration Statement at the time of the
initial filing of such Registration Statement with the Commission and as such
prospectus is amended from time to time until the date upon which the
Registration Statement was declared effective by the Commission is referred to
in this Agreement as the "Prepricing Prospectus."
SECTION 2. AGREEMENTS TO SELL AND PURCHASE.
The Company hereby agrees to sell the Company Firm Shares, and each
Selling Shareholder hereby agrees to sell such number of Shareholder Firm Shares
as is set forth opposite such Selling Shareholder's name on Schedule II hereto,
to the Underwriters and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Shareholders herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company and the Selling
Shareholders the aggregate number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number of Firm Shares as adjusted
pursuant to Section 10 hereof), at a purchase price of $_________ per Share (the
"purchase price per Share").
Upon the basis of the representations, warranties and agreements of the
Company and the Selling Shareholders herein contained and subject to all the
terms and conditions set forth herein, the Underwriters shall have the right for
30 days from the date upon which the Registration Statement is declared
effective by the Commission to purchase from the Company, from time to time,
and the Company agrees to sell to the Underwriters subject to conditions set
forth below, any or all of the Company Additional Shares at the purchase price
per Share for the Firm Shares. Upon the basis of the representations,
warranties and agreements of the Company and the Selling Shareholders herein
contained and subject to all the terms and conditions set forth herein, the
Underwriters shall have the right for 30 days from the date upon which the
Registration Statement is declared effective by the Commission to purchase
from the Selling Shareholders, from time to time, and each Selling Shareholder
agrees to sell to the Underwriters subject to conditions set forth below, any
or all of the Shareholder Additional Shares as is set forth opposite such
Selling Shareholders's name on Schedule II, at the purchase price per Share for
the Firm Shares. The Additional Shares shall, if purchased, be purchased solely
for the purpose of covering any
-2-
3
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments as you may determine to avoid fractional shares) which bears the
same proportion to the total number of Additional Shares to be purchased by the
Underwriters as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares as adjusted
pursuant to Section 10 hereof) bears to the total number of Firm Shares.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m., St. Petersburg, Florida time, four business
days after the date hereof (the "Closing Date"). The place of closing for the
Firm Shares and the Closing Date may be varied by agreement between you and the
Company.
Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at the offices of Xxxxxxx Xxxxx &
Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at 10:00 a.m.,
St. Petersburg, Florida time, on such date or dates (the "Additional Closing
Date") (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor earlier than three nor latter than ten
business days after the giving of the notice hereinafter referred to), as shall
be specified in a written notice from you on behalf of the Underwriters to the
Company, of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. Such notice may be given to the Company by
you at any time within 30 days after the date upon which the Registration
Statement is declared effective by the Commission. The place of closing for the
Additional Shares and the Additional Closing Date may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and such denominations as
you shall request prior to 1:00 p.m., St. Petersburg, Florida time, on the
second full business day preceding the Closing Date or the Additional Closing
Date, as the case may be. Such certificates shall be made available to you in
St. Petersburg, Florida for inspection and packaging not later than 9:30 a.m.,
St. Petersburg, Florida time, on the business day immediately preceding the
Closing Date or the Additional Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing Date or the
Additional Closing Date, as the case may be, against payment of the purchase
price therefor by wire transfer or certified or official bank check or checks
payable in same day funds. If the Representatives so elect, delivery of the
Shares may be made by credit through full fast transfer to the accounts at the
Depository Trust Company designated by the Representatives.
-3-
4
The certificates in negotiable form for the Shareholder Firm Shares and
the Shareholder Additional Shares have been placed in custody (for deliver under
this Agreement) under the Custody Agreement (as defined below). Each Selling
Shareholder agrees that the certificates for the Shares for such Selling
Shareholder so held in custody are subject to the interests of the Underwriters
hereunder, that the arrangements made by such Selling Shareholder for such
custody, including the Power of Attorney (as defined below) is to that extent
irrevocable and that the obligations of such Selling Shareholder hereunder shall
not be terminated by the act of such Selling Shareholder or by operation of law,
whether by the death or incapacity of such Selling Shareholder or the occurrence
of any other event, except as specifically provided herein or in the Custody
Agreement. If any Selling Shareholder should die or be incapacitated, or if any
other such event should occur, before the delivery of the certificates for the
Shares to be sold by such Selling Shareholder hereunder, such Shares, except as
specifically provided herein or in the Custody Agreement, shall be delivered by
the Custodian (as defined below) in accordance with the terms and conditions of
this Agreement as if such death, incapacity or other event had not occurred,
regardless of whether the Custodian shall have received notice of such death or
other event.
SECTION 5. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants
and agrees with the several Underwriters as follows:
(a) The Company will use its reasonable best efforts to cause the
Registration Statement and any amendment thereto to become effective, if it has
not already become effective, and will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and when any post-effective amendment to the Registration
Statement or any registration statement filed pursuant to Rule 462(b) under the
Act relating to the Registration Statement is filed or becomes effective, (ii)
if information is omitted from the Registration Statement pursuant to Rule 430A
under the Act, when the Prospectus or term sheet (as described in Rule 434(b)
under the Act) has been timely filed pursuant to Rule 424(b) under the Act,
(iii) of any request by the Commission for amendments or supplements to the
Registration Statement, any Prepricing Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation (or threatened initiation) of an proceeding for such purposes, and
(v) within the period of time referred to in Section 5(e) below, of any change
in the Company's condition (financial or other), business, prospects,
properties, net worth or results of operations, or of any event that comes to
the attention of the Company that makes any statement made in the Registration
Statement or the Prospectus (as then amended or supplemented) untrue in any
material respect or that requires the making of any additions thereto or changes
therein in order to make the statements therein not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
-4-
5
(b) The Company will furnish to you, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto as you may reasonably request.
(c) The Company will not file any amendment to the Registration
Statement, file any registration statement pursuant to Rule 462(b) under the Act
or make any amendment or supplement to the Prospectus of which you shall not
previously have been advised (with a reasonable opportunity to review such
amendment, registration statement or supplement) or to which you have reasonably
objected after being so advised, or which is not in compliance with the Act. The
Company will prepare and file with the Commission any amendments or supplements
to the Registration Statement or Prospectus which, in the opinion of counsel of
the several Underwriters may be necessary or advisable in connection with the
distribution of the Shares by the Underwriters.
(d) The Company has delivered or will deliver to you, without
charge, in such quantities as you have requested or may hereafter reasonably
request, copies of each form of the Prepricing Prospectus. The Company consents
to the use, in accordance with the Act and the securities or "blue sky" laws of
the jurisdictions in which the Shares are offered by the several Underwriters
and by dealers, prior to the date of the Prospectus, of each Prepricing
Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this Agreement as
is practicable (but in no event later than 48 hours from the execution and
delivery of this Agreement) and thereafter from time to time for such period as
in the reasonable opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or a dealer, and for so long a period as you may request for the distribution of
the Shares, the Company will deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as they may reasonably request. The Company consents to the
use of the Prospectus (and of any amendment or supplement thereto) in accordance
with the Act and the securities or "blue sky" laws of the jurisdictions 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 thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If at any
time prior to the later of (i) the completion of the distribution of the Shares
pursuant to the offering contemplated by the Registration Statement or (ii) the
expiration of prospectus delivery requirements with respect to the Shares under
Section 4(3) of the Act and Rule 174 thereunder, any event shall occur that in
the judgment of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with the Act or any
other law, the Company will promptly prepare and, subject to Sections 5(a) and
5(c) hereof, file with the Commission an appropriate supplement or amendment
thereto, and will furnish to each
-5-
6
Underwriter and to each dealer who has previously requested Prospectuses,
without charge, a reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or "blue sky" laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any 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. In each jurisdiction in which the Shares shall have been
qualified as above provided, the Company will make and file such statements and
reports in each year as are or may be required by the laws of such jurisdiction.
In the event that the qualification of the Shares in any jurisdiction is
suspended, the Company shall so advise you promptly in writing.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the provisions
of Rule 158 under the Act), which need not be audited, covering a 12-month
period commencing after the effective date of the Registration Statement and
ending not later than 15 months thereafter, as soon as practicable after the end
of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act, and will
advise you in writing when such statement has been so made available.
(h) During the period ending five years from the date hereof, the
Company will furnish to you and, upon your request, to each of the other
Underwriters, (i) as soon as available, a copy of each report or definitive
proxy statement of the Company filed with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the National Association
of Securities Dealers, Inc. (the "NASD"), the Nasdaq Stock Market or any
national securities exchange or mailed to shareholders, and (ii) from time to
time such other information concerning the Company as you may reasonably
request. Until the termination of the offering of the Shares, the Company will
timely file all documents, and any amendments to previously filed documents,
required to be filed by it pursuant to Sections 13, 14 or 15(d) of the Exchange
Act. The Company will file Form SR as required by the Act.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provision hereof (except Section 11), or if this
Agreement shall be terminated by the Underwriters because of any inability,
failure or refusal on the part of the Company or any Selling Shareholder to
perform any agreement herein or to comply with any of the terms or provisions
hereof or to fulfill any of the conditions of this Agreement, the Company agrees
to reimburse you and the other Underwriters for all out-of-pocket expenses
(including travel expenses and reasonable fees and expenses of counsel for the
Underwriters but excluding wages and salaries paid by you) incurred by you in
connection herewith, provided, however, that if this
-6-
7
Agreement shall be terminated by the Company for any reason, the Company's
obligation to reimburse the Underwriters shall be limited to a maximum amount of
$50,000.
(j) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
statements set forth under the caption "Use of Proceeds" in the Prospectus.
(k) If information is omitted from the Registration Statement
pursuant to Rule 430A under the Act, the Company will timely file the Prospectus
or a term sheet (as described in Rule 434(b) under the Act) pursuant to Rule
424(b) under the Act.
(l) For a period of 180 days after the date of the Prospectus as
first filed with the Commission pursuant to Rule 424(b) under the Act, without
the prior written consent of Xxxxxxx Xxxxx & Associates, Inc., the Company will
not, directly or indirectly, issue, sell, contract to sell, offer or otherwise
dispose of or transfer any shares of Common Stock or securities convertible into
or exchangeable or exercisable for shares of Common Stock (collectively,
"Company Securities") or any rights to purchase Company Securities, except (i)
to the Underwriters pursuant to this Agreement, (ii) pursuant to and in
accordance with the Company's stock option plans described in the Prospectus, or
(iii) pursuant to the exercise or conversion of warrants, stock options,
preferred stock or convertible debentures issued and outstanding at the time of
effectiveness of the Registration Statement and described in the Registration
Statement.
(m) Prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company will furnish to you, as promptly as possible,
copies of any unaudited interim consolidated financial statements of the Company
and its Subsidiaries (as defined below) for any period subsequent to the periods
covered by the financial statements appearing in the Prospectus.
(n) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(o) The Company will not, directly or indirectly, take any action
that would constitute or any action designed, or which might reasonably be
expected to cause or result in or constitute, under the Act or otherwise,
stabilization nor manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(p) The Company will use its reasonable best efforts to qualify or
register its Common Stock for sale in non-issuer transactions under (or obtain
exemptions from the application of ) the "blue sky" laws of each state where
necessary to permit market making transactions and secondary trading, and will
comply with such "blue sky" laws and will continue such qualifications,
registrations and exemptions in effect for a period of five years after the date
hereof.
(q) For so long as the Company's Common Stock is listed
therewith, the Company will comply with the filing and other requirements of
the Nasdaq National Market.
-7-
8
(r) If at any time during the 90-day period after the first date
that any of the Shares are released by you for sale to the public, any rumor,
publication, or event relating to or affecting the Company shall occur as a
result of which in your opinion the market price of the Common Stock (including
the Shares) has been or is likely to be materially affected (regardless of
whether such rumor, publication, or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after written notice from you of
advising the Company to the effect set forth above, promptly consult with
Xxxxxxx Xxxxx & Associates, Inc. concerning the advisability and substance of,
and, if appropriate, disseminate a press release or other public statement
reasonably satisfactory to you responding to or commenting on such rumor,
publication, or event.
(s) The Company shall not invest or otherwise use the proceeds
received by the Company from its sale of the Shares, or otherwise conduct its
business, in such a manner as would require the Company or any Subsidiary (as
defined below) to register as an investment company under the Investment Company
Act of 1940, as amended.
(t) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of its incorporation or the rules of the Nasdaq National
Market or any national securities exchange on which the Common Stock is then
listed, a registrar (which, if permitted by applicable laws and rules, may be
the same entity as the transfer agent) for its Common Stock.
(u) The Company hereby agrees that this Agreement shall be deemed,
for all purposes, to have been made and entered into in Pinellas County,
Florida. The Company agrees that any dispute hereunder shall be litigated solely
in the Circuit Court of the State of Florida in Pinellas County, Florida or in
the United States District Court for the Middle district of Florida, Tampa
Division, and further agrees to submit itself to the personal jurisdiction of
such courts.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company,
Xxxxx Xxxx and Xxxxxxx X. Xxxxxx, jointly and not severally, represent and
warrant to each Underwriter and the Company represents and warrants to each
Selling Shareholder on the date hereof, and shall be deemed to represent and
warrant to each Underwriter and each Selling Shareholder on the Closing Date and
the Additional Closing Date, that:
(a) The Registration Statement has been declared effective by the
Commission under the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. Each Prepricing
Prospectus included as part of the Registration Statement as originally filed or
as part of any amendment or supplement thereto, or filed pursuant to Rule 424(a)
under the Act, complied when so filed in all material respects with the
provisions of the Act, except that this representation and warranty does not
apply to statements in or omissions from such Prepricing Prospectus (or any
amendment or supplement thereto) made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through you expressly for use therein.
(b) The Prepricing Prospectus included as part of the Registration
Statement declared effective by the Commission complies as to form in all
material respects with the requirements of
-8-
9
the Act and, to the knowledge of the Company, the Commission has not issued any
order preventing or suspending the use of any Prepricing Prospectus. The
Registration Statement, in the form in which it became effective and also in
such form as it may be when any post-effective amendment thereto shall become
effective, and any registration statement filed pursuant to Rule 462(b) under
the Act, complies and will comply in all material respects with the provisions
of the Act and does not and will not at any such times contain an untrue
statement of a material fact or omit to state a 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 any amendment or supplement
thereto) made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein. The Prospectus, and any
supplement or amendment thereto, when filed with the Commission under Rule
424(b) under the Act, complies and will comply in all material respects with the
provisions of the Act and does not and will not at any such times contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that this representation and
warranty does not apply to statements in or omissions from the Prospectus (or
any amendment or supplement thereto) made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by or on behalf of any Underwriter through you expressly for use therein.
(c) The capitalization of the Company is as set forth in the
Prospectus as of the date set forth therein. All the outstanding shares of
Common Stock (including without limitation the Shareholder Firm Shares and the
Shareholder Additional Shares) and other securities of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are
free of any preemptive or similar rights; all offers and sales of the capital
stock, warrants, options and debt or other securities or the Company and the
Subsidiaries (as defined below) prior to the date hereof (including without
limitation the Shareholder Firm Shares and the Shareholder Additional Shares)
were made in compliance with the Act and all other applicable state, federal and
foreign laws or regulations, or any actions under the Act or any state, federal
or foreign laws or regulations in respect of any such offers or sales are
effectively barred by effective waivers or statutes of limitation; the Shares to
be issued and sold to the Underwriters by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; the securities
of the Company conform to the description thereof in the Registration Statement
and the Prospectus (or any amendment or supplement thereto); the form of
certificate for the Shares conforms to the corporate law of the State of
Florida; and the delivery of certificates for the Shares to be issued and sold
by the Company pursuant to the terms of this Agreement and payment for such
Shares will pass good and valid title to such shares, free and clear of any
voting trust arrangements, liens, encumbrances, equities, claims or defects in
title to the several Underwriters purchasing such Shares in good faith and
without notice of any lien, claim or encumbrance.
(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Florida with full
corporate power and authority to own,
-9-
10
lease and operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify does not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Company.
(e) FARO Worldwide, Inc., a Florida corporation, and FARO France,
S.A.S., a French corporation (individually a "Subsidiary" and collectively, the
"Subsidiaries"), are each corporations duly organized and validly existing in
good standing under the laws of their respective jurisdictions of incorporation
or organization with full corporate power and authority to own, lease and
operate their respective properties and to conduct their respective businesses
as presently conducted and as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and are each duly
registered and qualified to conduct their respective businesses and are in good
standing in each jurisdiction or place where the nature of their respective
properties or the conduct of their respective businesses require such
registration or qualification, except where the failure to so register or
qualify does not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of the Company
and the Subsidiaries, taken as a whole. All of the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, and are owned by the Company directly (except
that 50% of the outstanding shares of capital stock of FARO France, S.A.S. are
owned directly by FARO Worldwide, Inc., a wholly owned subsidiary of the
Company), free and clear of any lien, adverse claim, security interest, equity
or other encumbrance. Except for the Subsidiaries, the Company does not own a
material interest in or control, directly or indirectly, any other corporation,
partnership, joint venture, association, trust or other business organization.
(f) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened, against the Company or any Subsidiary,
or to which the Company or any Subsidiary, or to which any of their respective
properties, is subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) but are not
described as required. There is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the best knowledge of the
Company, threatened against or involving the Company or any Subsidiary
(including without limitation any such action, suit, inquiry, proceeding or
investigation relating to any product alleged to have been manufactured or sold
by the Company or any Subsidiary and alleged to have been unreasonably
hazardous, defective, or improperly designed or manufactured), nor, to the
knowledge of the Company, is there any basis for any such action, suit, inquiry,
proceeding, or investigation. There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the Act. All such contracts to which the
Company or any Subsidiary is a party have been duly authorized, executed and
delivered by the Company or the respective Subsidiary, constitute valid
-10-
11
and binding agreements of the Company or the respective Subsidiary and are
enforceable against the Company or the respective Subsidiary in accordance with
the terms thereof.
(g) Neither the Company nor any Subsidiary is (i) in violation of
(A) its articles of incorporation or bylaws or other charter documents, or (B)
any law, ordinance, administrative or governmental rule or regulation applicable
to the Company or any Subsidiary or (C) of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary, or (ii) in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Company or any Subsidiary is a party or by which
the Company or any Subsidiary or any of their respective properties may be bound
except, in the case of (i)(B), (i)(C) and (ii) above, where such violation or
default would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(h) The execution and delivery of this Agreement, and the
performance by the Company of its obligations under this Agreement, have been
duly and validly authorized by the Company, and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except insofar as the indemnification and contribution provisions
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by general
equitable principles.
(i) None of the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby (i) is or may be void or
voidable by any person or entity, (ii) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Shares
under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and compliance with the securities or Blue Sky laws of various
jurisdictions, all of which will be, or have been, effected in accordance with
this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the articles of incorporation or
bylaws or other charter documents, of the Company or any subsidiary, or (iii)
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, any agreement, indenture, lease or other instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their respective properties may be bound, or violates any
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any Subsidiary or any of their respective
properties, or results in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to the terms of any agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary may be bound or
to which the property or assets of the Company or any Subsidiary is subject.
-11-
12
(j) Except as described in the Prospectus, the Company does not
have outstanding and at the Closing Date (and the Additional Closing Date, if
applicable) will not have outstanding any options to purchase, or any warrants
to subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock or any
such warrants or convertible securities or obligations. Except as has been
complied with or waived, no holder of securities of the Company or any other
person has rights to the registration of any securities of the Company because
of the filing of the Registration Statement.
(k) Deloitte & Touche LLP, the certified public accountants who
have certified the consolidated financial statements filed as part of the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), are independent public accountants as required by the Act. The
consolidated financial statements, together with related schedules and notes,
forming part of the Registration Statement and the Prospectus (and any amendment
or supplement thereto), present fairly the historical consolidated financial
position, results of operations and changes in financial position of the Company
and the Subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
all adjustments necessary for a fair presentation of the results for such period
have been made; and the other financial and statistical information and data set
forth in the Registration Statement and Prospectus (and any amendment or
supplement thereto) is accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company. No
financial statements or schedules are required to be included in or incorporated
by reference into the Registration Statement that have not been so included or
incorporated.
(l) Subsequent to the respective dates as of which such
information is given in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), neither the Company nor any Subsidiary has
incurred any liability or obligation, direct or contingent, or entered into any
transaction, whether or not in the ordinary course of business, that is material
to the Company and the Subsidiaries, taken as a whole, and there has not been
(i) any material change in or dividend paid on the capital stock, (ii) any
material increase in the short-term debt or long-term debt, of the Company or
any Subsidiary, or (iii) any material adverse change, or any development
involving or which may reasonably be expected to involve a potential future
material adverse change, in the condition (financial or other), business, net
worth or results of operations of the Company and the Subsidiaries, taken as a
whole.
(m) The Company and the Subsidiaries have good and marketable
title to all property (real and personal) described in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) as being
owned by the Company or such Subsidiary, free and clear of all liens, claims,
security interests or other encumbrances except such as are described in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or such as are not materially burdensome and do not interfere in any
material respect with the use of the property or the conduct of the business of
the Company and the Subsidiaries, taken as a whole, and the property (real and
personal) held under lease by the Company or any Subsidiary, as
-12-
13
applicable, is held by them under valid, subsisting and enforceable leases with
only such exceptions as in the aggregate are not materially burdensome and do
not interfere in any material respect with the conduct of the business of the
Company and the Subsidiaries, taken as a whole.
(n) The Company has not distributed and will not distribute prior
to the Closing Date (or the Additional Closing Date, if any) any offering
material in connection with the offering and sale of the Shares other than the
Prepricing Prospectus and the Registration Statement, the Prospectus or other
materials permitted by the Act and distributed with the prior written approval
of the Underwriters. The Company has not taken, directly or indirectly, any
action which constituted or any action designed, or which might reasonably be
expected to cause or result in or constitute, under the Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares. The Company acknowledges that the
Underwriters may engage in passive market making transactions in the Common
Stock on The Nasdaq Stock Market in accordance with Regulation M under the
Exchange Act.
(o) Neither the Company nor any Subsidiary is an "investment
company," an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company within the meaning of the Investment Company Act of
1940, as amended.
(p) The Company and the Subsidiaries have all permits, licenses,
franchises, approvals, consents and authorizations of governmental or regulatory
authorities or private persons or entities (hereinafter "permit or "permits") as
are necessary to own their respective properties and to conduct their respective
businesses in the manner described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subject to such
qualifications as may be set forth therein, and as are necessary to allow the
use of the Company's products in the industries discussed in the Registration
Statement and the Prospectus (or any amendment or supplement thereto)
(including, without limitation, in the health care industry and the aircraft
manufacturing industry), except where the failure to have obtained any such
permit has not had and will not have a material adverse effect upon the
condition (financial or other) or the business of the Company and the
Subsidiaries, taken as a whole; the Company and the Subsidiaries have fulfilled
and performed all of their material obligations with respect to each such permit
and no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination of any such permit or result in any other
material impairment of the rights of the holder of any such permit, subject in
each case to such qualification as may be set forth in the Prospectus; and,
except as described in the Prospectus, such permits contain no restrictions that
are materially burdensome to the Company and the Subsidiaries, taken as a whole.
(q) The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in which they are engaged;
and the Company has no reason to believe that the Company and the Subsidiaries
will not be able to renew their existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their respective businesses at a comparable cost.
-13-
14
(r) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations; 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.
(s) Neither the Company nor any Subsidiary has, directly or
indirectly, at any time during the past five years (i) made any unlawful
contribution to any candidate for political office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any federal,
state or foreign governmental official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(t) Except as set forth in the Registration Statement and the
Prospectus, to the knowledge of the Company neither the Company nor any
Subsidiary has violated any environmental, safety or similar law applicable to
their respective businesses, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material adverse change in
the business, prospects, financial condition or results of operation of the
Company and the Subsidiaries, taken as a whole. To the best of the Company's
knowledge, no labor disturbance by the employees of the Company or any of the
Subsidiaries exists or is imminent; and the Company is not aware of any existing
or imminent labor disturbances by the employees of any of its principal
suppliers, subassemblers, value added resellers, subcontractors, original
equipment manufacturers, dealers or distributors that might be expected to
result in any material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiaries, taken as a whole. No collective bargaining agreement exists with
any of the Company's or any Subsidiary's employees and, to the Company's
knowledge, no such agreement is imminent. To the knowledge of the Company,
neither the employment by the Company or any Subsidiary of their key personnel
nor the activities of such individuals at the Company or any Subsidiary
conflicts with, constitutes a breach of, or otherwise violates any employment,
noncompetition, nondisclosure or similar agreement or covenant by which such
individuals may be bound.
(u) The Company and the Subsidiaries own and have full right,
title and interest in and to, or have the right to use, each material trade
name, trademark, service xxxx, patent, copyright, license, and other rights and
all know-how (including trade secrets and other unpatented and/or proprietary or
confidential information, systems, or procedures) (collectively, "Intellectual
Property Rights") under which the Company and the Subsidiaries conduct all or
any portion of their respective businesses, which Intellectual Property Rights
are adequate to conduct such businesses as conducted or as proposed to be
conducted or as described in the Registration Statement and the Prospectus (or
any amendment or supplement thereto); except as otherwise
-14-
15
disclosed in the Registration Statement and the Prospectus (or any amendment or
supplement thereto), neither the Company nor any Subsidiary has created any lien
or encumbrance on, or granted any right or license with respect to, its
respective Intellectual Property Rights; there is no claim pending against the
Company or any Subsidiary with respect to any of their respective Intellectual
Property Rights; neither the Company nor any Subsidiary has received notice
that, nor is the Company aware that, any Intellectual Property Right which they
use or have used in the conduct of their respective businesses infringed or
infringes upon or conflicted or conflicts with the rights of any third party,
which infringement or conflict could have a material adverse effect upon the
condition (financial or other) of the Company and the Subsidiaries, taken as a
whole; and the Company is not aware of any facts which, with the passage of time
or otherwise, would cause the Company or any Subsidiary to infringe upon or
otherwise violate the Intellectual Property Rights of any third party.
(v) All federal, state, local and foreign tax returns required to
be filed by or on behalf of the Company and any Subsidiary with respect to all
periods ended prior to the date of this Agreement have been filed (or are the
subject of valid extension) with the appropriate federal, state, local and
foreign authorities (except where such failure to file would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole) and all
such tax returns, as filed, are accurate in all material respects. All federal,
state, local and foreign taxes (including estimated tax payments) required to be
shown on all such tax returns or claimed to be due from or with respect to the
respective businesses of the Company and the Subsidiaries have been paid or
reflected as a liability on the consolidated financial statements of the Company
for appropriate periods (except for any such tax the failure of which to pay
would not have a material adverse effect on the Company and the Subsidiaries,
taken as a whole). All deficiencies asserted as a result of any federal, state,
local or foreign tax audits have been paid or finally settled and no issue has
been raised in any such audit which, by application of the same or similar
principles, reasonably could be expected to result in a proposed deficiency for
any other period not so audited. No state of facts exist or has existed which
would constitute grounds for the assessment of any material tax liability with
respect to the periods that have not been audited by appropriate federal, state
local or foreign authorities. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any federal, state,
local or foreign tax return for any period.
(w) The Company and its Subsidiaries have obtained all required
permits, licenses, and other authorizations, if any, which are required under
federal, state, local and foreign statutes, ordinances and other laws relating
to pollution or protection of the environment, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, chemicals, or industrial, hazardous, or toxic materials or wastes
into the environment (including, without limitation, ambient air, surface water,
ground water, land surface, or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
hazardous, or toxic materials or wastes, or any regulation rule, code, plan,
order, decree, judgment, injunction, notice, or demand letter issued, entered,
promulgated, or approved thereunder ("Environmental Laws") the failure of which
to obtain would have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. The Company and its Subsidiaries
-15-
16
are in material compliance with all terms and conditions of all required
permits, licenses and authorizations, and are also in material compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in the
Environmental Laws. There is no pending or, to the best knowledge of the
Company, threatened, civil or criminal litigation, notice of violation, or
administrative proceeding relating in any way to the Environmental Laws
(including notices, demand letters, or claims under the Resource Conservation
and Recovery Act of 1976, as amended ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), and
similar foreign, state, or local laws) involving the Company or any Subsidiary.
There have not been and there are not any past, present, or foreseeable future
events, conditions, circumstances, activities, practices, incidents, actions, or
plans which may interfere with or prevent continued compliance, or which may
give rise to any common law or legal liability, or otherwise form the basis of
any claim, action, demand, suit, proceeding, hearing, study, or investigation,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release, or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, hazardous, or toxic material or
waste, including, without limitation, any liability arising, or any claim,
action, demand, suit, proceeding, hearing, study, or investigation which may be
brought, under RCRA, CERCLA, or similar foreign, state or local laws, in each
case which individually or in the aggregate would have a material adverse effect
on the Company and its Subsidiaries, taken as a whole.
(x) The Company and the Subsidiaries are in compliance with all
provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to
Disclosure of doing Business with Cuba; if the Company or any Subsidiary
commences engaging in business with the government of Cuba or with any person or
affiliate located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida Department of
Banking and Finance (the "Department"), whichever date is later, or if the
information reported or incorporated by reference in the Prospectus, if any,
concerning the business of the Company or any Subsidiary with Cuba or with any
person or affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as appropriate in
a form acceptable to the Department.
SECTION 6A. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS.
Each Selling Shareholder, severally and not jointly, represents and warrants to
each Underwriter and the Company on the date hereof, and shall be deemed to
represent and warrant to each Underwriter and the Company on the Closing Date
and the Additional Closing Date, that:
(a) Such Selling Shareholder has full right, power and authority
to sell, assign, transfer and deliver the Shares to be sold by such Selling
Shareholder hereunder; and upon delivery of such Shares hereunder and payment of
the purchase price as herein contemplated, each of the Underwriters purchasing
such Shares in good faith and without notice of any lien, claim or encumbrance
will obtain good and valid title to the Shares purchased by it from such Selling
Shareholder, free and clear of any pledge, lien, security interest, encumbrance,
claim or
-16-
17
equitable interest, including any liability for estate or inheritance taxes, or
any liability to or claims of any creditor, devisee, legatee or beneficiary of
such Selling Shareholder.
(b) Such Selling Shareholder has duly authorized (if applicable),
executed and delivered, in the form heretofore furnished to the Representatives,
a Power of Attorney (the "Power of Attorney") appointing Xxxxx Xxxx and
Xxxxxxx X. Xxxxxx as attorneys-in-fact (collectively, the "Attorneys" and
individually, an "Attorney") and a Letter of Transmittal and Custody Agreement
(the "Custody Agreement") with Firstar Trust Company, as custodian (the
"Custodian"); each of the Power of Attorney and the Custody Agreement
constitutes a valid and binding agreement of such Selling Shareholder,
enforceable against such Selling Shareholder in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles; and each of such
Selling Shareholder 's Attorneys, acting alone, is authorized to execute and
deliver this Agreement and the certificate referred to in Section 9(i) hereof on
behalf of such Selling Shareholder, to determine the purchase price to be paid
by the several Underwriters to such Selling Shareholder as provided in Section 2
hereof, to authorize the delivery of the Shares to be sold by the Selling
Shareholders under this Agreement and to duly endorse (in blank or otherwise)
the certificate or certificates representing such Shares or a stock power or
powers with respect thereto, to accept payment therefor, and otherwise to act on
behalf of such Selling Shareholder in connection with this Agreement.
Certificates in negotiable form for all Shares to be sold by such Selling
Shareholder under this Agreement, together with a stock power or powers duly
endorsed in blank by such Selling Shareholder, have been placed in custody with
the Custodian for the purpose of effecting delivery hereunder.
(c) All authorizations, approvals, consents and orders necessary
for the execution and delivery by such Selling Shareholder of the Power of
Attorney and the Custody Agreement, the execution and delivery by or on behalf
of such Selling Shareholder of this Agreement and the sale and delivery of the
Shares to be sold by the Selling Shareholders under this Agreement (other than
such authorizations, approvals or consents as may be necessary under state or
other securities or Blue Sky laws) have been obtained and are in full force and
effect; such Selling Shareholder, if other than a natural person, has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its organization as the type of entity that it purports to be;
and such Selling Shareholder has full right, power, and authority to enter into
and perform its obligations under this Agreement and such Power of Attorney and
Custody Agreement, and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder under this Agreement.
(d) Such Selling shareholder will not offer, sell or otherwise
dispose ofany shares of Common Stock or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock, during the period from the date of this Agreement to the date 180 days
following the effective date of the Registration Statement, inclusive, without
the prior written consent of Xxxxxxx Xxxxx & Associates, Inc.
-17-
18
(e) Certificates in negotiable form for all Shares to be sold by
such Selling shareholder under this Agreement, together with a stock power or
powers duly endorsed in blank by such Selling Shareholder, have been placed in
custody with the Custodian for the purpose of effecting delivery hereunder.
(f) This Agreement has been duly authorized by such Selling
Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of such Selling Shareholder and constitutes the valid
and binding agreement of such Selling Shareholder, enforceable against such
Selling Shareholder in accordance with its terms, except insofar as the
indemnification and contribution provisions hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles;; and the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach of or default under
any material bond, debenture, note or other evidence of indebtedness, or any
material contract, indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder or any Selling Shareholder Shares hereunder may
be bound or, to the best of such Selling Shareholder's knowledge, result in any
violation of any law, order, rule, regulation, writ, injunction or decree of any
court or governmental agency or body or, if such Selling Shareholder is other
than a natural person, result in any violation of any provisions of the charter,
bylaws or other organizational documents of such Selling Shareholder.
(g) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.
(h) Such Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(i) All information furnished by or on behalf of such Selling
Shareholder relating to such Selling Shareholder and the Shares to be sold by
such Selling Shareholders under this Agreement that is contained in the
representations and warranties of such Selling Shareholder in such Selling
Shareholder's Power of Attorney or set forth in the Registration Statement is,
and on the Closing Date will be, true, correct and complete, and does not, and
on the Closing Date will not, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
such statements not misleading and any such statement that are set forth in the
Prospectus is, and on the Closing Date will be, true, correct and complete, and
does not , and on the Closing Date will note, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make such statements therein, in light of the circumstances under
which they were made, not misleading.
(j) Such Selling Shareholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be complied
with or satisfied pursuant to this Agreement on or prior to the Closing Date and
will advise one of its Attorneys prior to the
-18-
19
Closing Date if any statement to be made on behalf of such Selling Shareholder
in the certificate contemplated by Section 9(i) would be inaccurate if made as
of the Closing Date.
(k) Such Selling Shareholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Shareholders to the Underwriters pursuant to
this Agreement; and such Selling Shareholder does not own any capital stock of
the Company or warrants, options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company, other than those described in the
Registration Statement and the Prospectus.
(l) Such Selling Shareholder is not aware (without having
conducted any investigation or inquiry) that any of the representations and
warranties of the Company set forth in Section 6 above is untrue or inaccurate.
SECTION 7. EXPENSES. The Company hereby agrees with the several
Underwriters that the Company will pay or cause to be paid the costs and
expenses associated with the following: (i) the preparation, printing or
reproduction, and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each Prepricing
Prospectus, the Prospectus, each registration statement filed pursuant to Rule
462(b) under the Act, and each amendment or supplement to any of them; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Registration
Statement, each Prepricing Prospectus, the Prospectus, each registration
statement filed pursuant to Rule 462(b) under the Act, and all amendments or
supplements to any of them, as may be reasonably requested for use in connection
with the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in connection with the offering of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares;
(v) the listing of the Shares on the Nasdaq National Market; (vi) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(f)
hereof (including the reasonable fees and expenses of counsel for the
Underwriters relating to the preparation, printing or reproduction, and delivery
of the preliminary and supplemental Blue Sky Memoranda and such registration and
qualification) which fees will not exceed, in the aggregate, $5,000; (vii) the
filing fees in connection with any filings required to be made with the NASD in
connection with the offering; (viii) the transportation and other expenses
incurred by or on behalf of representatives of the Company in connection with
the presentations to prospective purchasers of the Shares; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; (x) the preparation,
printing and distribution of bound volumes of the relevant transaction documents
for the Representatives and their counsel; and (xi) the performance by the
Company of its other obligations under this Agreement. If the transactions
contemplated hereby are not consummated by reason of any failure, refusal or
inability on the part of the Company or any Selling Shareholder to perform any
agreement on its part to be performed hereunder or to fulfill any condition of
the Underwriters'
-19-
20
obligations hereunder, the Company will reimburse the several Underwriters for
all reasonable out-of-pocket expenses (including fees and disbursements of
counsel for the several Underwriters) incurred by the Underwriters in
investigating, preparing to market or marketing the Shares.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION. Each of the Company, Xxxxx
Xxxx and Xxxxxxx X. Xxxxxx agrees to indemnify and hold harmless you and each
other Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any breach
of any representation, warranty, agreement or covenant of the Company contained
herein or any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any amendment or supplement thereto, or
in any Registration Statement filed pursuant to Rule 462(b) under the Act, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prepricing
Prospectus, the Prospectus, or any amendment or supplement thereto, or arising
out of or based upon any omission or alleged omission to state therein 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 or arising out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual materials
used in connection with the marketing of the Shares, including, without
limitation, slides, videos, films and tape recordings, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
an untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to an Underwriter furnished in writing to the
Company by or on behalf of any Underwriter through you expressly for use in
connection therewith or arise out of materials prepared solely by the
Underwriters without the knowledge of the Company or any of its representatives
based upon material information obtained from sources other than, directly or
indirectly, the Company or its representatives, provided, further, that the
indemnity agreement contained in this subsection with respect to any Prepricing
Prospectus and the Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage, liability or action
purchased any of the Shares which are the subject thereof if a copy of the
Prospectus (as amended or supplemented, if the Company shall have furnished any
amendment or supplement thereto to such Underwriter which shall correct the
untrue statement or alleged untrue statement or omission or alleged omission
which is the basis of the loss, claim, damage, liability or action for which
indemnification is sought) was not delivered or given to such person at or prior
to the written confirmation of the sale to such person. This indemnification
shall be in addition to any liability that the Company may otherwise have.
Each Selling Shareholder other than Xxxxx Xxxx and Xxxxxxx X. Xxxxxx,
severally and not jointly, agrees to indemnify and hold harmless you and each
other Underwriter and each person, if any, who controls any underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities
-20-
21
and expenses (including reasonable costs of investigation) arising out of or
based upon any breach of any representation, warranty, agreement or covenant of
such Selling Shareholder contained herein or any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus, the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
in any Registration Statement filed pursuant to Rule 462(b) under the Act, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with respect to information relating to such
Selling Shareholder furnished in writing by or on behalf of such Selling
Shareholder through you expressly for use in the Registration Statement, the
Prospectus or any Prepricing Prospectus, any amendment or supplement thereto, or
any Registration Statement filed pursuant to Rule 462(b) under the Act. This
indemnification shall be in addition to any liability that the Selling
Shareholders or any Selling Shareholder may otherwise have.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other Selling
Shareholder, such Underwriter or such controlling person shall promptly notify
in writing the party(s) against whom indemnification is being sought (the
"indemnifying party" or "indemnifying parties"), but the omission so to notify
the indemnifying party(s) shall not relieve such indemnifying party(s) from any
liability which it may have to such Underwriter or such controlling person. In
case any such action shall be brought against any Underwriter or controlling
person and it shall notify the indemnifying party(s) of the commencement
thereof, the indemnifying party(s) shall be entitled to participate therein and,
to the extent that it shall wish, jointly with any other indemnifying party(s)
similarly notified, to assume the defense thereof, with counsel satisfactory to
such Underwriter or controlling person (who shall not, except with the consent
of the Underwriter or controlling person, be counsel to the indemnifying
party(s)), and, after notice from the indemnifying party(s) to such Underwriter
or controlling person of its election so to assume the defense thereof, the
indemnifying party(s) shall not be liable to such Underwriter or controlling
person under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such Underwriter or
controlling person, in connection with the defense thereof other than reasonable
costs of investigation. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
indemnifying party(s) has (have) agreed in writing to pay such fees and
expenses, (ii) the indemnifying party(s) has (have) failed to assume the defense
and employ counsel reasonably acceptable to the Underwriter or such controlling
person, or (iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and the
indemnifying party(s), and such Underwriter or such controlling person shall
have been advised by its counsel that representation of such indemnified party
and any indemnifying party(s) by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party(s) shall not have
the right to assume the defense of such action on behalf of such Underwriter or
such controlling person).
-21-
22
The indemnifying party(s) shall not be liable for any settlement of any such
action effected without its (their) written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, the indemnifying party(s) agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the immediately preceding
paragraph.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and each Selling Shareholder,
to the same extent as the foregoing indemnity from the Company, Xxxxx Xxxx,
Xxxxxxx X. Xxxxxx or any other Selling Shareholder to each Underwriter, but only
with respect to information relating to such Underwriter furnished in writing by
or on behalf of such underwriter through you expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, any
amendment or supplement thereto, or any Registration Statement filed pursuant to
Rule 462(b) under the Act. If any action or claim shall be brought or asserted
against the Company, any of its directors, any such officers, or any such
controlling person or any Selling Shareholder based on the Registration
Statement, the Prospectus or any Prepricing Prospectus, any amendment or
supplement thereto, or any Registration Statement filed pursuant to Rule 462(b)
under the Act, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph, such Underwriter shall have the rights
and duties given to the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other
Selling Shareholder by the preceding paragraph (except that if the Company,
Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other Selling Shareholder shall have
assumed the defense thereof such Underwriter shall not be required to do so, but
may employ separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's expense),
and the Company, its directors, any such officers, and any such controlling
persons and the Selling Shareholders shall have the rights and duties given to
the Underwriters by the immediately preceding paragraph. This indemnification
shall be in addition to any liability the Underwriters or any Underwriter may
otherwise have.
If the indemnification provided for in this Section 8 is unavailable to
an indemnified party under the first, second or fourth paragraph hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party(s), in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other Selling Shareholder, as
applicable, on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other
Selling Shareholder, as applicable, on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, Xxxxx
Xxxx, Xxxxxxx X. Xxxxxx
-22-
23
or any other Selling Shareholder, as applicable, on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Shares (before deducting
expenses) received by the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other
Selling Shareholder, as applicable, bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company, Xxxxx Xxxx,
Xxxxxxx X. Xxxxxx or any other Selling Shareholder, as applicable, or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company, Xxxxx Xxxx, Xxxxxxx X.
Xxxxxx or any other Selling Shareholder, as applicable, and the underwriting
discounts and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx or any other
Selling Shareholder, as applicable on the one hand and the Underwriters on the
other hand 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 or the omission or alleged omission to state a
material fact relates to information supplied by the Company, Xxxxx Xxxx,
Xxxxxxx X. Xxxxxx or any other Selling Shareholder, as applicable, on the one
hand or by 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.
In any event, neither the Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx nor any
other Selling Shareholder will, without the prior written consent of the
Representatives, settle or compromise or consent to the entry of any judgment in
any proceeding or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not the
Representatives or any person who controls the Representatives within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent (i) includes an unconditional release of all Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act, by or on behalf of any Underwriter or
controlling person.
The Company, Xxxxx Xxxx, Xxxxxxx X. Xxxxxx, the other Selling
Shareholders and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this Section 8 was determined by a 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 in the fifth paragraph of this Section 8.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in the fifth paragraph of
this Section 8 shall be deemed to include, subject to the limitations set forth
above, 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, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been required
-23-
24
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. 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 to contribute pursuant to this Section 8 are several
in proportion to the respective numbers of Firm Shares set forth opposite their
names in Schedule I hereto (or such numbers of Firm Shares increased as set
forth in Section 10 hereof) and not joint.
Notwithstanding the foregoing, the liability of each Selling Shareholder,
other than Xxxxx Xxxx and Xxxxxxx X. Xxxxxx, under the representations and
warranties contained in Section 6A hereof and under the indemnity agreements
contained in the provisions of this Section 8 shall be limited to an amount
equal to the initial public offering price of the Shares sold by such Selling
Shareholder to the Underwriters minus the amount of the underwriting discount
paid thereon to the Underwriters by such Selling Shareholder. The Company and
such Selling Shareholders may agree, as among themselves and without limiting
the rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which they each shall be responsible.
In any proceeding relating to the Registration Statement, any Preliminary
Prospectus, the Prospectus, any supplement or amendment thereto, or any
registration statement filed pursuant to Section 462(b) of the Act, each party
against whom contribution may be sought under this Section 8 hereby consents to
the jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon him or it
by any other contributing party and consents to the service of such process and
agrees that any other contributing party may join him or it as an additional
defendant in any such proceeding in which such other contributing party is a
party.
Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party(s) to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Selling Shareholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any person controlling the Company, or any Selling Shareholder, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, to the Company, its directors or officers, or any
person controlling the Company, or any Selling Shareholder, shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
SECTION 9. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
-24-
25
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., New York City time, on the date hereof, or at such later
date and time as shall be consented to in writing by you, and all filings
required by Rules 424(b) and 430A under the Act shall have been timely made; and
any request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction.
(b) Subsequent to the effective date of the Registration
Statement there shall not have occurred any change, or any development
involving, or which might reasonably be expected to involve, a potential future
material adverse change, in the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, not contemplated by the Prospectus (or any
supplement thereto), that in your reasonable opinion, as Representatives of the
several Underwriters, would materially and adversely affect the market for the
Shares.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxx & Lardner, counsel for the
Company, dated the Closing Date (and the Additional Closing Date, if any),
satisfactory to you and your counsel, to the effect that:
(i) The Company is a corporation duly incorporated under the
laws of the State of Florida, and validly existing in good standing, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto),
and is duly registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does
not have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operation of the Company
and the Subsidiaries, taken as a whole.
(ii) Each Subsidiary is a corporation duly incorporated and
validly existing in good standing under the laws of the jurisdiction of
its organization, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to so register or
qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operation of the Company and the Subsidiaries, taken as a whole. All
issued and outstanding shares of capital stock of each Subsidiary have
been validly issued and are fully paid and nonassessable and, to such
counsel's knowledge, free and clear of all liens, encumbrances, equities
and claims. To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than FARO Worldwide, Inc., a Florida corporation, and FARO
France, S.A. S., a French corporation;
-25-
26
(iii) The authorized capital stock and other securities of the
Company conform in all material respects as to matters of Florida or
federal law to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock."
(iv) All shares of capital stock or other securities of the
Company outstanding prior to the issuance of the Shares to be issued and
sold by the Company hereunder have been duly authorized and validly
issued, are fully paid and nonassessable and have not been issued in
violation of any co-sale right, registration right, right of first
refusal, preemptive right, or other similar right that has been described
in the Registration Statement, the Prepricing Prospectus or the
Prospectus.
(v) To such counsel's knowledge, (A) all offers and sales of
the Company's capital stock or other securities prior to the date hereof
were made in compliance with the registration provisions of the Act and
the registration provisions of all other applicable state and federal
laws or regulations or any actions under the Act, or any state or federal
laws or regulations, or pursuant to applicable exemptions therefrom or
(B) any actions thereunder are effectively barred by effective waivers or
statutes of limitation or similar laws.
(vi) The Shares to be issued and sold to the Underwriters by the
Company, and the Shares to be sold by the Selling Shareholders, hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms
hereof, will be validly issued, fully paid and nonassessable and, to such
counsel's knowledge, free and clear of all liens, encumbrances, equities
and claims and will not have been issued in violation of any co-sale
right, registration right, right of first refusal, preemptive right, or
other similar right that has been described in the Registration
Statement, the Prepricing Prospectus or the Prospectus.
(vii) The form of certificates for the Shares conforms to the
requirements of the applicable corporate laws of the State of Florida.
(viii) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel after reasonable inquiry, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose are pending before or
threatened by the Commission.
(ix) The Company has all requisite corporate power and authority
to enter into this Agreement and to issue, sell and deliver the Shares to
be sold by it to the Underwriters as provided herein, and this Agreement
has been duly authorized, executed and delivered by the Company and is a
valid, legal and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforceability thereof
may be limited by (A) the application of bankruptcy, reorganization,
insolvency and other laws affecting creditors' rights generally, and (B)
equitable principles being applied at the discretion of a court before
which any
-26-
27
proceeding may be brought; and the Company has adequate authorization and
has taken all action necessary to authorize the indemnification
provisions contained in Section 8 herein, provided, however that such
counsel may specifically refrain from opining as to the validity of the
indemnification provisions hereof insofar as they are or may be held to
be violative of public policy (under either state or federal law) against
such types of provisions in the context of the offer, offer for sale, or
sale of securities.
(x) Neither the Company nor any Subsidiary is in violation of
its respective articles of incorporation or bylaws or other charter
documents, and to the knowledge of such counsel after reasonable inquiry,
neither the Company nor any Subsidiary is in default in the performance
of any material obligation, agreement or condition contained in any bond,
indenture, note or other evidence of indebtedness or in any other
agreement material to the Company and the Subsidiaries, taken as a whole.
(xi) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement, compliance by the
Company with all provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, articles
of incorporation or bylaws or other charter documents, of the Company or
any Subsidiary, or any agreement, indenture, lease or other instrument to
which the Company or any Subsidiary, or any of their respective
properties, is bound, that is or was required to be filed by the Company
with the Commission, or is known to such counsel after reasonable
inquiry, or will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any
Subsidiary, nor will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all applicable
federal and state securities and "blue sky" laws), judgment, injunction,
order or decree known to such counsel after reasonable inquiry,
applicable to the Company or any Subsidiary, or any of their respective
properties.
(xii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official is required on the
part of the Company (except such as have been obtained under the Act or
such as may be required under state securities or "blue sky" laws
governing the purchase and distribution of the Shares and the clearance
of the underwriting arrangements with the National Association of
Securities Dealers, Inc.) for the valid issuance and sale of the Shares
to the Underwriters under this Agreement.
(xiii) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and
statistical data included or incorporated by reference therein, as to
which such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Act.
(xiv) To the knowledge of such counsel after reasonable inquiry,
(A) there are no legal or governmental proceedings pending or threatened
against the Company or any
-27-
28
Subsidiary, or to which the Company or any Subsidiary, or any of their
respective properties, are subject, that are required to be described in
the Registration Statement or Prospectus (or any amendment or supplement
thereto) or any document incorporated by reference therein that are not
described as required therein, and (B) there are no agreements,
contracts, indentures, leases or other instruments, that are required to
be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or any document incorporated by
reference therein or to be filed as an exhibit to the Registration
Statement or incorporated by reference therein that are not described or
filed as required, as the case may be.
(xv) To the knowledge of such counsel after reasonable inquiry,
neither the Company nor any Subsidiary is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable
to the Company or any Subsidiary or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary except where such violation does not and will not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operation of the Company and the
Subsidiaries, taken as a whole.
(xvi) To the knowledge of such counsel after reasonable inquiry,
(A) the Company and the Subsidiaries have such permits, licenses,
franchises, approvals, consents and authorizations of governmental or
regulatory authorities ("permits"), as are necessary to own their
respective properties and to conduct their respective businesses in the
manner described in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), subject to such qualifications as may
be set forth therein; (B) the Company and the Subsidiaries have fulfilled
and performed all of their respective material obligations with respect
to such permits and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or result
in any other material impairment of the rights of the holder of any such
permit, subject in each case to such qualification as may be set forth in
the Registration Statement and the Prospectus (or any amendment or
supplement thereto); and (C) except as described in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
such permits contain no restrictions that are materially burdensome to
the Company and the Subsidiaries, taken as a whole.
(xvii) Such counsel has reviewed all agreements, contracts,
indentures, leases or other documents or instruments referred to in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) (other than routine contracts entered into by the Company or any
Subsidiary for the purchase of materials or the sale of products, entered
into in the normal course of business) and such agreements, contracts,
indentures, leases or other documents or instruments are fairly
summarized or disclosed therein, and filed as exhibits thereto or
incorporated by reference therein as required.
(xviii) The statements under the captions "Risk Factors -- Control
by Principal Shareholders; Anti-Takeover Considerations," "-- Shares
Eligible for Future Sale," "Description of Capital Stock" and "Shares
Eligible for Future Sale" in the Registration
-28-
29
Statement and the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of Florida or federal
law, are accurate summaries and fairly and correctly summarize and
present in all material respects the information called for with respect
to such documents and matters. Such counsel has no reason to believe that
the descriptions in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) of statutes, regulations or legal or
governmental proceedings are other than accurate or fail to present
fairly the information required to be shown.
(xix) Neither the Company nor any Subsidiary is, nor will any of
them become, as a result of the consummation of the transactions
contemplated hereby and the application of the net proceeds therefrom as
set forth in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) under the caption "Use of Proceeds," an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(xx) To the knowledge of such counsel after reasonable inquiry,
neither the Company nor any Subsidiary has received written notice from
any third party alleging that their employment of any individual or the
activities of any individual at the Company or any Subsidiary conflicts
with, constitutes a breach of, or otherwise violates any employment,
noncompetition, nondisclosure or similar agreement or covenant by which
such individual may be bound, and such counsel has no reason to believe
that the employment by the Company or any Subsidiary of any individual or
the activities of any individual at the Company or any Subsidiary
conflicts with, constitutes a breach of, or otherwise violates any
employment, noncompetition, nondisclosure or similar agreement or
covenant by which such individual may be bound.
In rendering such opinion, counsel may rely upon an opinion or opinions,
each dated the Closing Date (and the Additional Closing Date, if applicable), of
other counsel as to the laws of a jurisdiction other than the State of Florida,
provided that (1) each such local counsel is acceptable to you, (2) each such
opinion so relied upon is addressed to counsel and you, (3) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to you and is in form and substance satisfactory to you,
and (4) counsel shall state in their opinion that they believe that they and you
are justified in relying thereon. In rendering such opinion, local counsel may
rely, to the extent they deem such reliance proper, as to matters of fact upon
certificates of officers of the Company and of government officials. Copies of
all such certificates shall be furnished to you and your counsel on the Closing
Date (and the Additional Closing Date, if applicable).
In rendering such opinion, in each case where such opinion is qualified
by "the knowledge of such counsel after reasonable inquiry," such counsel may
rely as to matters of fact upon certificates of executive and other officers and
employees of the Company as you and such counsel shall deem are appropriate and
such other procedures as you and such counsel shall mutually agree; provided,
however, in each such case, such counsel shall state that it has no
-29-
30
knowledge contrary to the information contained in such certificates or
developed by such procedures and knows of no reason why you should not
reasonably rely upon the information contained in such certificates or developed
by such procedures.
In addition to the opinion set forth above, such counsel shall state that
during the course of the preparation of the Registration Statement and the
Prospectus, and any amendments or supplements thereto, nothing has come to the
attention of such counsel which has caused it to believe and such counsel does
not believe that the Registration Statement, as of the time it became effective
under the Act, the Prospectus or any amendment or supplement thereto, on the
date it was filed pursuant to Rule 424(b), as of the respective dates when such
documents were filed with the Commission, and the Registration Statement, or any
amendment or supplement thereto, as of the Closing Date (except for the
financial statements and notes and schedules thereto and other financial and
statistical information contained therein or omitted therefrom as to which no
opinion need be expressed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Prospectus, or any amendment
or supplement thereto, as of the Closing Date (except for the financial
statements and notes and schedules thereto and other financial and statistical
information contained therein or omitted therefrom as to which no opinion need
be expressed, contained an untrue statement of a material fact or omitted 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. With respect to such statement, counsel shall state that
although such counsel did not undertake to determine independently the accuracy,
completeness and fairness of the statements contained in the Registration
Statement or in the Prospectus and takes no responsibility therefor (except to
the extent specifically set forth herein), such counsel did participate in
discussions and meetings with officers and other representatives of the Company
and discussions with the auditor for the Company in connection with the
preparation of the Registration Statement and the Prospectus, and it is on the
basis of the foregoing (relying as to certain factual matters on the information
provided to such counsel and not on an independent investigation) that such
counsel is making such statement.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any), an opinion of counsel for the Selling
Shareholders, dated the Closing Date (and the Additional Closing Date, if any),
satisfactory to you and your counsel, to the effect that:
(i) Each Selling Shareholder that is not a natural person has
full right, power and authority to enter into and to perform its
obligations under the Power of Attorney and Custody Agreement to be
executed and delivered by it in connection with the transactions
contemplated herein; the Power of Attorney and Custody Agreement of each
Selling Shareholder that is not a natural person has been duly authorized
by such Selling Shareholder has been duly executed and delivered by or on
behalf of such Selling Shareholder; and the Power of Attorney and Custody
Agreement of each Selling Shareholder constitutes the valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting creditors' rights generally or by general equitable
principles;
-30-
31
(ii) Each of the Selling Shareholders has full right, power and
authority to enter into and to perform its obligations under this
Agreement and to sell, transfer, assign and deliver the Shares to be sold
by such Selling Shareholder hereunder;
(iii) This Agreement has been duly authorized by each Selling
Shareholder that is not a natural person and has been duly executed and
delivered by or on behalf of each Selling Shareholder and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of such Selling Shareholder, enforceable in accordance with its
terms, except insofar as the indemnification and contribution provisions
hereunder may be limited by applicable law and except as the enforcement
hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors'
rights generally or by general equitable principles;
(iv) Upon the delivery of and payment for the Shares as
contemplated in this Agreement, each of the Underwriters will receive
valid marketable title to the Shares purchased by it from such selling
Shareholder, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest. In rendering such opinion, such
counsel may assume that the Underwriters are without notice of any defect
in the title of any of such Selling Shareholders to the Shares being
purchased from such Selling Shareholders;
In rendering such opinion, counsel may rely upon an opinion or opinions,
each dated the Closing Date (and the Additional Closing Date, if applicable), of
other counsel as to the laws of a jurisdiction other than the State of Florida,
provided that (1) each such local counsel is acceptable to you, (2) each such
opinion so relied upon is addressed to counsel and you, (3) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to you and is in form and substance satisfactory to you,
and (4) counsel shall state in their opinion that they believe that they and you
are justified in relying thereon. In rendering such opinion, local counsel may
rely, to the extent they deem such reliance proper, as to matters of fact upon
certificates of officers of the Company and of government officials. Copies of
all such certificates shall be furnished to you and your counsel on the Closing
Date (and the Additional Closing Date, if applicable).
In rendering such opinion, in each case where such opinion is qualified
by "the knowledge of such counsel after reasonable inquiry," such counsel may
rely as to matters of fact upon certificates of executive and other officers and
employees of the Company as you and such counsel shall deem are appropriate and
such other procedures as you and such counsel shall mutually agree; provided,
however, in each such case, such counsel shall state that it has no knowledge
contrary to the information contained in such certificates or developed by such
procedures and knows of no reason why you should not reasonably rely upon the
information contained in such certificates or developed by such procedures.
In addition to the opinion set forth above, such counsel shall state that
during the course of the preparation of the Registration Statement and the
Prospectus, and any amendments or
-31-
32
supplements thereto, nothing has come to the attention of such counsel which has
caused it to believe and such counsel does not believe that the Registration
Statement, as of the time it became effective under the Act, the Prospectus or
any amendment or supplement thereto, on the date it was filed pursuant to Rule
424(b), as of the respective dates when such documents were filed with the
Commission, the Registration Statement, or any amendment or supplement thereto,
as of the Closing Date (except for the financial statements and notes and
schedules thereto and other financial and statistical information contained
therein or omitted therefrom as to which no opinion need be expressed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus, or any amendment or supplement thereto, as of
the Closing Date (except for the financial statements and notes and schedules
thereto and other financial and statistical information contained therein or
omitted therefrom as to which no opinion need be expressed, contained an untrue
statement of a material fact or omitted 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. With respect to such
statement, counsel shall state that although such counsel did not undertake to
determine independently the accuracy, completeness and fairness of the
statements contained in the Registration Statement or in the Prospectus and
takes no responsibility therefor (except to the extent specifically set forth
herein), such counsel did participate in discussions and meetings with officers
and other representatives of the Company and discussions with the auditor for
the Company in connection with the preparation of the Registration Statement and
the Prospectus, and it is on the basis of the foregoing (relying as to certain
factual matters on the information provided to such counsel and not on an
independent investigation) that such counsel is making such statement.
(e) On each Closing Date there shall have been furnished to you
the opinion (addressed to the Underwriters) of _______________, patent counsel
to the Company, dated such Closing Date (or the Additional Closing Date, if any)
and in form and substance satisfactory to counsel for the Underwriters to the
effect that such counsel is familiar with that portion of the technology used by
the Company and any Subsidiary in its business concerning which such counsel has
been consulted and has read the Registration Statement and the Prospectus (or
any amendment or supplement thereto), including in particular the portions of
the Registration Statement and the Prospectus referring to patents, trade
secrets, trademarks, service marks or other proprietary information or
materials, including such information or material licensed by the Company or any
Subsidiary (the "Technology Portion"), to the effect that:
(i) to the best of such counsel's knowledge, all information
submitted to the Patent and Trademark Office in connection with the
prosecution of patent applications on behalf of the Company or any
Subsidiary has been accurate, and neither such counsel, nor to the best
of such counsel's knowledge, the Company, any Subsidiary or any other
person, have made any misrepresentation or concealed any material
information from the Patent and Trademark Office in connection with the
prosecution of such applications;
(ii) such counsel has no knowledge of any fact which would
preclude the Company and the Subsidiaries from having clear title to the
respective patents and patent applications of the Company and the
Subsidiaries referred in the Technology Portion. To
-32-
33
the best of such counsel's knowledge, neither the Company nor any
Subsidiary lacks or will be unable to obtain any rights or licenses to
use any patent or know-how necessary to conduct the respective businesses
now conducted or proposed to be conducted by the Company and the
Subsidiaries as described in the Registration Statement and the
Prospectus (any amendment or supplement thereto). To the best of such
counsel's knowledge, none of the patents owned by the Company or any
Subsidiary is unenforceable or invalid. To the best of such counsel's
knowledge, neither the Company nor any Subsidiary has received any notice
of infringement or of conflict with rights or claims of others with
respect to any patents, trademarks, service marks, trade names,
copyrights or know-how that could result in a material adverse effect
upon the Company and the Subsidiaries, takes as a whole. Such counsel is
not aware of any patents of others which are infringed by specific
products or processes referred to in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) in such manner as to
materially and adversely affect the Company and the Subsidiaries, taken
as a whole;
(iii) to the best of such counsel's knowledge, there are no
legal, administrative or other governmental proceedings pending relating
to patent rights, trade secrets, trademarks, service marks or other
proprietary information or materials of the Company or any Subsidiary,
and to the best of such counsel's knowledge no such proceedings are
threatened or contemplated by governmental authorities or others, other
than as described in the Registration Statement and the Prospectus (or
any amendment or supplement thereto);
(iv) such counsel does not know of any material contracts or
other material documents relating to the Company's proprietary
information, other than those filed as exhibits to the Registration
Statement;
(v) the statements under the captions "Risk Factors --
Dependence on Proprietary Technology" and "Business -- Intellectual
Property" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material respects, the
information called for with respect to such documents and matters;
provided, however, that such counsel may rely on representations of the
Company with respect to the factual matters contained in such statements,
and provided that such counsel shall state that nothing has come to the
attention of such counsel which leads them to believe that such
representations are not true and correct in all materials respects; and
(vi) such counsel has no reason to believe and does not believe
that the Registration Statement or the Prospectus (or any amendment or
supplement thereto) (A) contains any untrue statement of a material fact
with respect to patents, trade secrets, trademarks, service marks or
other proprietary information owned or used by the Company or any
Subsidiary, or (B) omits to state any material fact relating to patents,
trade secrets, trademarks, service marks or other proprietary information
owned or used by the Company or any Subsidiary which omission would make
the statements made misleading.
-33-
34
(f) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of King & Spalding, counsel for the
Underwriters, dated the Closing Date (and the Additional Closing Date, if any),
with respect to the issuance and sale of the Firm Shares, the Registration
Statement and other related matters as you may reasonably request, and the
Company and its counsel shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(g) You shall have received letters addressed to you and dated
the date hereof and the Closing Date (and the Additional Closing Date, if any)
from Deloitte & Touche LLP, independent certified public accountants,
substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock or other securities of the Company
nor any material increase in the short-term or long-term debt of the Company
(other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any material adverse change (present or potential future)
in the condition (financial or other), business properties, net worth or results
of operations of the Company and the Subsidiaries shall not have any liabilities
or obligations, direct or contingent (whether or not in the ordinary course of
business) that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (iv) all of the
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects on and as of the date hereof and on
and as of the Closing Date as if made on and as of the Closing Date, and you
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of the Company (or such
other officers as are acceptable to you) to the effect set forth in this Section
9(g) and in Section 9(h) hereof.
(i) The Company shall not have failed in any material respect at
or prior to the Closing Date to have performed or complied with any of its
agreements herein contained and required to be performed or complied with by it
hereunder at or prior to the Closing Date.
(j) You shall be satisfied that, and you shall have received a
certificate dated the Closing Date, from the Attorneys for each Selling
Shareholder to the effect that, as of the Closing Date, they have not been
informed that: (i) the representations and warranties made by such Selling
Shareholder herein are not true or correct in any material respect on the
Closing Date; or (ii) such Selling Shareholder has not complied with any
obligation or satisfied any condition which is required to be performed or
satisfied on his or its part at or prior to the Closing Date.
-34-
35
(k) The Company and the Selling Shareholders shall have furnished
or caused to have been furnished to you such further certificates and documents
as you shall be reasonably requested.
(l) At or prior to the Closing Date, you shall have received the
written commitment of each of the Company's directors, executive officers and
shareholders set forth on Schedule III hereto, not to offer, sell or otherwise
dispose of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for, or any rights to purchase or acquire, Common
Stock, during the period from the time of effectiveness of the Registration
Statement to the date 180 days following the effective date of the Registration
Statement, inclusive, without the prior written consent of Xxxxxxx Xxxxx &
Associates, Inc., which commitments shall be in full force and effect as of the
Closing Date (and the Additional Closing Date, if any).
(m) The Shares shall be listed on the Nasdaq National Market,
subject to notice of issuance.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Additional Closing
Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in paragraphs (c) through (j) shall be dated
the Additional Closing Date and the opinions and letters referred to in
paragraphs (c) through (f) shall be revised to reflect the sale of Additional
Shares.
SECTION 10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto, or (b) release of notification of the effectiveness of the Registration
Statement by the Commission.
If any one or more of the Underwriters shall fail or refuse to purchase
Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in the Agreement Among Underwriters,
to purchase the Firm Shares which such defaulting Underwriter or Underwriters
agreed, but failed or refused to purchase. If any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares and arrangements satisfactory to you and the
Company for the purchase of such Firm Shares are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company or any Selling
-35-
36
Shareholder. In any such case that does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this Agreement.
SECTION 11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or The Nasdaq
Stock Market shall have been suspended or materially limited, (ii) trading of
any securities of the Company, including the Shares, on the New York Stock
Exchange, American Stock Exchange or The Nasdaq Stock Market shall have been
suspended or materially limited, whether as the result of a stop order by the
Commission or otherwise, (iii) a general moratorium on commercial banking
activities in New York or Florida shall have been declared by either federal or
state authorities, (iv) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make it, in
your judgment, impracticable or inadvisable to market the Shares or to enforce
contracts for the sale of the Shares, or (v) the Company or any Subsidiary shall
have, in the sole judgment of the Representatives, sustained any loss or
interference, material to the Company and the Subsidiaries, taken as a whole,
with their respective businesses or properties from fire, flood, hurricane,
accident, or other calamity, whether or not covered by insurance, or from any
labor disputes or any legal or governmental proceeding, or there shall have been
any material adverse change (including, without limitation, a material change in
management or control of the Company) in the condition (financial or otherwise),
business prospects, net worth, or results of operations of the Company and the
Subsidiaries, taken as a whole, except in each case as described in, or
contemplated by, the Prospectus (excluding any amendment or supplement thereto).
Notice of such cancellation shall be promptly given to the Company and its
counsel by telegraph, telecopy or telephone and shall be subsequently confirmed
by letter.
All representations, warranties, covenants and agreements of the Company
and the Selling Shareholders herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Section 8
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,
or by or on behalf of the Company or any Selling Shareholder, or any of their
officers, directors or controlling persons, and shall survive the delivery of
the Shares to the several Underwriter hereunder or termination of this
Agreement.
SECTION 12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth under the caption "Underwriting" in any Prepricing Prospectus and in the
Prospectus, constitute
-36-
37
all the information furnished by or on behalf of the Underwriters through you or
on your behalf as such information is referred to in Sections 6(a), 6(b) and 8
hereof.
SECTION 13. NOTICES; SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at 000 Xxxxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxx 00000, Attention: Xxxxx Xxxx,
Chief Executive Officer (with a copy to Xxxxxx X. Xxxxxx, Xxxxx & Xxxxxxx, 000
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000; or (ii) if to you, as the
Underwriters, to (A) Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxx, Xx.; and (B) Xxxxxxx,
Xxxxxx Inc., 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxxxxx (with a copy to King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx; or (iii) if to one or
more of the Selling Shareholders, to Xxxxx Xxxx or Xxxxxxx X. Xxxxxx, as
Attorney-in-Fact for the Selling Shareholders, at 000 Xxxxxxxxxx Xxxx, Xxxx
Xxxx, Xxxxxxx 00000.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors and officers and the other controlling
persons referred to in Section 8 hereof, and the Selling Shareholders, and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither of the terms "successor" and "successors and assigns" as used in this
Agreement shall include a purchaser from you of any of the Shares in his status
as such purchaser.
SECTION 14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida
without reference to choice of law principles thereunder. This Agreement may be
signed in various counterparts which together shall constitute one and the same
instrument. This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
FARO TECHNOLOGIES, INC.
By:
-------------------------------------
Xxxxx Xxxx
President and Chief Executive Officer
XXXXX XXXX
-------------------------------------
XXXXXXX X. XXXXXX
-------------------------------------
-37-
38
SELLING SHAREHOLDERS
By:
--------------------------------
Attorney-in-Fact for the
Selling Shareholders
named in Schedule II hereto
CONFIRMED as of the date first
above mentioned, on behalf of
itself and the other several
Underwriters named in Schedule I
hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXX, XXXXXX INC.
By: XXXXXXX XXXXX & ASSOCIATES, INC.
By:
-----------------------------------
Authorized Representative
-38-
39
SCHEDULE I
UNDERWRITERS
Number of
Name Firm Shares
---- -----------
Xxxxxxx Xxxxx & Associates Inc................................
Xxxxxxx, Xxxxxx Inc.
Total......................................................... 2,800,000
==========
-39-
40
SCHEDULE II
SELLING SHAREHOLDERS
Number of
Number of Additional
Name Firm Shares Shares
---- ----------- ----------
Xenon Research, Inc................................. 166,855
Xxxxxxx X. Xxxxxx................................... 75,995
Xxxxxx d'Amours..................................... 7,800
Xxxxxxx X. Xxxxxx................................... 9,110
483663 Ontario Ltd.................................. 5,285
Xxxxxx X. Xxxxxxxx Q.C.............................. 21,804
Philanderer Tree, Inc............................... 57,435
Philanderer Six Inc................................. 9,360
Xxxxxxx Xxxxxx...................................... 2,611
Alexis Nihon Credit Inc............................. 5,720
Xxxxxx Xxxx......................................... 5,296
Xxxx Xxxxx.......................................... 1,716
Xxxxxxx Xxxxxx Xxxxxxxx Family Trust................ 11,440
Capital CDPQ, Inc................................... 18,980
Xxxxxxx Xxxx........................................ 317
Consumers Glass Company Ltd. Pension
Fund........................................... 15,600
Xxxxxxx and Xxxx Xxxxxxxx........................... 2,708
Fiducie de Quebec................................... 3,432
Hawk Hill Investments Limited....................... 21,655
X.X. Xxxx Investments............................... 39,392
Island City Investments Ltd......................... 2,600
Josyd Inc........................................... 1,560
Les Fiduciares de la Cite et de District de
Montreal....................................... 3,432
Xxxxxxxx Xxxxxxxx Xxxxxxxxx Inc..................... 1,560
L'Industrielle-Alliance, Compagnie d'Assurance
sur la Vie..................................... 6,292
O. Xxxx Xxxxxx...................................... 12,561
Xxxx Xxxxxxx........................................ 2,080
Marleau Xxxxxx Inc.................................. 1,560
Mar-Pick Enterprises, Inc........................... 1,442
Nicanco Holdings Inc................................ 1,560
Nodel Investments Limited........................... 1,560
Power Corporation of Canada......................... 5,720
Rash Holdings Reg'd................................. 2,080
Redpoll Holdings Ltd................................ 2,288
Xxxxxxx Xxxxxx...................................... 17,230
Xxxxxxx Xxxxxxxxxx.................................. 1,716
Xxx X. Xxxxxx....................................... 24,166
1236344 Ontario Limited............................. 21,268
Starjay Holdings Inc................................ 1,716
T.N.G. Corporation Inc.............................. 3,016
Xxxxxxx Xxxxxxxx.................................... 2,080
TOTAL...................................... 599,998
========= =========
-40-
41
SCHEDULE III
LOCK-UP AGREEMENTS
Name
----
Xxxxx Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxx d'Amours
Xxxxxxx X. Xxxxxx
Xxxxxxxxx Xxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxxx Nihon Credit Inc.
Xxxxxx Xxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxxxxx Family Trust
Capital CDPQ, Inc.
Xxxxxxx Xxxx
Consumers Glass Company Ltd. Pension Fund
Xxxxxxx and Xxxx Xxxxxxxx
Fiducie de Quebec
Xxxxxxxx Xxxxx
Island City Investments Ltd.
Josyd Inc.
Xxxx Xxxxxxx
Les Fiduciares de la Cite et de District de Montreal
Xxxxxxxx Xxxxxxxx Xxxxxxxxx Inc
L'Industrielle-Alliance, Compagnie d'Assurance sur la Vie
O. Xxxx Xxxxxx
Xxxx Xxxxxxx
Marleau Xxxxxx Inc.
Mar-Pick Enterprises, Inc.
Nicanco Holdings Inc.
Nodel Investments Limited
Power Corporation of Canada
Rash Holdings Reg'd
Redpoll Holdings Ltd.
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxxx
Xxx X. Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxx
Starjay Holdings Inc.
T.N.G. Corporation Inc.
Xxxxxxx Xxxxxxxx
-41-
