______________ Shares
EDUCATIONAL VIDEO CONFERENCING, INC.
Common Stock
UNDERWRITING AGREEMENT
________ __, 1998
Prime Charter Ltd.,
As representative of the
several Underwriters named
in Schedule A hereto
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Educational Video Conferencing, Inc., a Delaware corporation (the
"Company), proposes to issue and sell _________ shares (the "Firm Shares") of
its authorized but unissued common stock, par value $.0001 per share (the
"Common Stock"), to Prime Charter Ltd. (the "Representative") and the other
underwriters listed on Schedule A to this Agreement (the Representative and
the other underwriters being herein collectively called the "Underwriters").
The Company and the persons listed on Schedule B to this Agreement (the
"Selling Stockholders") also propose to grant to the Underwriters an option to
purchase up to an aggregate of ___________ additional shares (the
"Overallotment Shares") of Common Stock on the terms and conditions set forth
in Section 3(c). The Firm Shares and the Overallotment Shares are hereinafter
collectively referred to as the "Shares."
The Company and the Selling Stockholders wish to confirm as follows
their agreements with the Underwriters in connection with the several
purchases by the Underwriters of the Shares.
1. Registration Statement. The Company has prepared and
filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333- ),
including a prospectus relating to the Shares and each amendment thereto in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"). There have been delivered to you signed copies of such
registration statement and amendments, together with copies of each exhibit
filed therewith. Copies of such registration statement and amendments and of
the related preliminary prospectus have been delivered to you in such
reasonable quantities as you have requested for each of the Underwriters. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary
to permit such registration statement to become effective will be filed
promptly by the Company with the Commission. If such registration statement
has become effective, a final prospectus containing all Rule 430A Information
(as hereinafter defined) will be filed by the Company with the Commission in
accordance with, and if required by, Rule 424(b) of the rules and regulations
of the Act (the "Rules and Regulations") on or before the second business day
after the date hereof (or such earlier time as may be required by the Rules
and Regulations).
The term "Registration Statement" as used in this Agreement shall
mean such registration statement (including all exhibits and financial
statements) at the time such registration statement becomes or became
effective and, if any post-effective amendment thereto becomes effective prior
to the Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended; provided, however, that such term shall
include all Rule 430A Information deemed to be included in such registration
statement at the time such registration statement becomes effective as
provided by Rule 430A of the Rules and Regulations and shall also mean any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations with respect to the Shares. The term "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in the preceding paragraph
and any preliminary prospectus included in the Registration Statement at the
time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to
the Shares in the form in which it is first filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations or, if no filing pursuant to Rule
424(b) of the Rules and Regulations is required, shall mean the form of final
prospectus included in the Registration Statement at the time such
registration statement becomes effective. The term "Rule 430A Information"
means information with respect to the Shares and the offering thereof
permitted to
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be omitted from the Registration Statement when it becomes effective pursuant
to Rule 430A of the Rules and Regulations.
2. Representations and Warranties. (a) The Company hereby
represents and warrants as follows:
(i) The Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of any Preliminary
Prospectus, or the institution of proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Rules and
Regulations. When the Registration Statement became or becomes, as the case
may be, effective (the "Effective Date") and at all times subsequent thereto
up to and at the Closing Date (as hereinafter defined), any later date on
which Overallotment Shares are to be purchased (the "Overallotment Closing
Date") and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed
with the Commission, (A) the Registration Statement and Prospectus, and any
amendments or supplements thereto, will contain all statements which are
required to be stated therein by, and will comply with the requirements of,
the Act and the Rules and Regulations and (B) neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, will
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. The foregoing representations and warranties in this Section
2(a)(i) do not apply to any statements or omissions made in reliance on and in
conformity with the information contained in the section of the Prospectus
entitled "Underwriting." The Company has not distributed any offering material
in connection with the offering or sale of the Shares other than the
Registration Statement, the Preliminary Prospectus, the Prospectus or any
other materials, if any, permitted by the Act.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement. The Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify would not have a
material adverse effect on the business, properties, prospects, financial
condition or results of operations of the
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Company (a "Material Adverse Effect"). The Company has no subsidiaries (as
defined in the Rules and Regulations). The Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity. Complete and correct
copies of the certificates of incorporation and of the bylaws of the Company
and all amendments thereto have been delivered to the Representative and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Overallotment Closing Date.
(iii) The Company has full power and authority (corporate
and other) to enter into this Agreement and the agreement between the Company
and the Representative relating to issuance of the Representative's Warrants
(as hereinafter defined) (the "Representative's Warrant Agreement"), which is
being executed concurrently herewith, and to perform the transactions
contemplated hereby and thereby to be performed by it. Each of this Agreement
and the Representative's Warrant Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement on the part
of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
applicable laws or equitable principles and except as enforcement hereof or
thereof may be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. The performance of this Agreement and the
Representative's Warrant Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby will not result in
a breach or violation of any of the terms and provisions of, or constitute a
default under, (A) any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company is a
party or by which its properties are bound, (B) the certificate of
incorporation or bylaws of the Company or (C) any law, order, rule,
regulation, writ, injunction or decree of any court or governmental agency or
body to which the Company is subject. The Company is not required to obtain or
make (as the case may be) any consent, approval, authorization, order,
designation or filing by or with any court or regulatory, administrative or
other governmental agency or body as a requirement for the consummation by the
Company of the transactions contemplated by this Agreement or the
Representative's Warrant Agreement, except such as may be required under the
Act, the Securities Exchange Act of 1934, as
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amended (the "Exchange Act") or under state securities or blue sky ("Blue
Sky") laws or under the rules and regulations of The American Stock Exchange,
Inc.(the "AMEX").
(iv) There is not pending or, to the Company's knowledge,
threatened, any action, suit, claim, proceeding or investigation against the
Company or any of its officers or any of its properties, assets or rights
before any court or governmental agency or body or otherwise which might
result in a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby. There are no statutes, rules, regulations,
agreements, contracts, leases or documents that are required to be described
in the Prospectus, or to be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations that have not been accurately
described in all material respects in the Prospectus or filed as exhibits to
the Registration Statement.
(v) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right. The authorized and
outstanding capital stock of the Company conforms in all material respects to
the description thereof contained in the Registration Statement and the
Prospectus (and such description correctly states the substance of the
provisions of the instruments defining the capital stock of the Company). The
Shares have been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the Company
against payment therefor in accordance with the terms of this Agreement, will
be duly and validly issued and fully paid and nonassessable. No preemptive
right, co-sale right, right of first refusal or other similar rights of
security holders exists with respect to any of the Shares or the issue and
sale thereof other than those that have been expressly waived prior to the
date hereof. No holder of securities of the Company has the right to cause the
Company to include such holder's securities in the Registration Statement. The
Representative's Warrant Agreement and the Representative's Warrants (as
hereinafter defined) conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. The shares
of Common Stock issuable upon exercise of the Representative's Warrants (the
"Warrant Shares") have been duly authorized for issuance and sale to the
holders of the Representative's Warrants pursuant to the Representative's
Warrant Agreement and, when issued and delivered by the Company
5
against payment therefor in accordance with the terms of the Representative's
Warrant Agreement, will be duly and validly issued and fully paid and
nonassessable. No further approval or authorization of any security holder,
the Board of Directors or any duly appointed committee thereof or others is
required for the issuance and sale or transfer of the Shares or the Warrant
Shares, except as may be required under the Act, the Exchange Act or Blue Sky
laws. Except as disclosed in or contemplated by the Prospectus and the
financial statements of the Company and the related notes thereto, included in
the Prospectus, the Company does not have outstanding any options or warrants
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations. The description of the
Company's stock option and other plans or arrangements, and the options or
other rights which may be or have been granted thereunder, set forth in the
Prospectus accurately and fairly presents, in all material respects, the
information required to be shown with respect to such plans, arrangements,
options and rights.
(vi) Xxxxxxxxx Xxxxx Xxxxxxx LLP (the "Accountants") who
have examined the financial statements, together with the related schedules
and notes, of the Company filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are independent
public accountants within the meaning of the Act and the Rules and
Regulations. The financial statements of the Company, together with the
related schedules and notes, forming part of the Registration Statement and
the Prospectus, fairly present the financial position and the results of
operations of the Company at the respective dates and for the respective
periods to which they apply. All financial statements, together with the
related schedules and notes, filed with the Commission as part of the
Registration Statement have been prepared in accordance with generally
accepted accounting principles as in effect in the United States consistently
applied throughout the periods involved except as may be otherwise stated in
the Registration Statement. The selected and summary financial and statistical
data included in the Registration Statement present fairly the information
shown therein and have been compiled on a basis consistent with the financial
statements presented therein. No other financial statements or schedules are
required by the Act or the Rules and Regulations to be included in the
Registration Statement.
(vii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
6
Prospectus, there has not been (A) any material adverse change, or any
development which, in the Company's reasonable judgment, is likely to cause a
material adverse change, in the business, prospects, properties or assets
described or referred to in the Registration Statement, or the results of
operations, condition (financial or otherwise), business or operations of the
Company, (B) any transaction which is material to the Company, except
transactions in the ordinary course of business, (C) any obligation, direct or
contingent, which is material to the Company, incurred by the Company, except
obligations incurred in the ordinary course of business, (D) any change in the
capital stock or outstanding indebtedness of the Company or (E) (except as
specifically described in the Prospectus) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company. The Company
has no material contingent obligation which is not disclosed in the
Registration Statement.
(viii) Except as set forth in the Prospectus, (A) the
Company has good and marketable title to all material properties and assets
described in the Prospectus as owned by it, free and clear of any pledge,
lien, security interest, charge, encumbrance, claim, equitable interest or
restriction, (B) the agreements to which the Company is a party described in
the Prospectus are valid agreements, enforceable against the Company in
accordance with their respective terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles, and, to the Company's knowledge, the other
contracting party or parties thereto are not in material breach or default
under any of such agreements and (C) the Company has valid and enforceable
leases for the properties described in the Prospectus as leased by it, and
such leases conform in all material respects to the description thereof, if
any, set forth in the Registration Statement.
(ix) The Company now holds and at the Closing Date and any
later Overallotment Closing Date, as the case may be, will hold, all licenses,
certificates, approvals and permits from all state, United States, foreign and
other regulatory authorities that are material to the conduct of the business
of the Company (as such business is currently conducted), except for such
licenses, certificates, approvals and permits the failure of which to hold
would not have a Material Adverse Effect), all of which are valid and in full
force and effect (and there is no proceeding pending or, to the knowledge of
the Company, threatened which may cause any such license, certificate,
approval or permit to be withdrawn, canceled, suspended or not
7
renewed). The Company is not in violation of its certificate of incorporation
or bylaws, or, except for defaults or violations which would not have a
Material Adverse Effect, in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness or in any contract, indenture,
mortgage, loan agreement, joint venture or other agreement or instrument to
which it is a party or by which it or any of its properties are bound, or in
violation of any law, order, rule, regulation, writ, injunction or decree of
any court or governmental agency or body.
(x) The Company has filed on a timely basis all necessary
federal, state and foreign income, franchise and other tax returns and has
paid all taxes shown thereon as due, and the Company has no knowledge of any
tax deficiency which has been or might be asserted against the Company which
might have a Material Adverse Effect. All material tax liabilities are
adequately provided for within the financial statements of the Company.
(xi) The Company maintains insurance of the types and in the
amounts adequate for its business and consistent with insurance coverage
maintained by similar companies in similar businesses, including, but not
limited to, business interruption insurance and real and personal property
owned or leased against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full
force and effect.
(xii) The Company is not involved in any labor dispute or
disturbance nor, to the knowledge of the Company, is any such dispute or
disturbance threatened.
(xiii) The Company owns or possesses adequate licenses or
other rights to use all patents, trademarks, service marks, tradenames,
copyrights, trade secrets, know-how, franchises, and other material intangible
property and assets (collectively, "Intellectual Property") necessary to the
conduct of its business as conducted and as proposed to be conducted as
described in the Prospectus. The Company has no knowledge that it lacks or
will be unable to obtain any rights or licenses to use any of the Intellectual
Property necessary to conduct the business now conducted or proposed to be
conducted by it as described in the Prospectus. The Prospectus fairly and
accurately describes the Company's rights with respect to the Intellectual
Property. The Company has not received any notice of infringement or of
conflict with rights or claims of others with respect to any Intellectual
Property.
8
(xiv) The Company is not an "investment company," or a
"promoter" or "principal underwriter" for a registered investment company, as
such terms are defined in the Investment Company Act of 1940, as amended.
(xv) The Company has not incurred any liability for a fee or
commission or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement
other than the underwriting discounts and commissions contemplated hereby.
(xvi) The Company (A) is in compliance with any and all
applicable United States, foreign, state and local environmental laws, rules,
regulations, treaties, statutes and codes promulgated by any and all
governmental authorities relating to the protection of human health and
safety, the environment or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (B) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business as currently conducted and (C) is in compliance with all terms
and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permit
licenses or other approvals would not, individually or in the aggregate, have
a Material Adverse Effect. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or threatened relating to the Environmental
Laws or to the Company's activities involving Hazardous Materials. "Hazardous
Materials" means any material or substance (i) that is prohibited or regulated
by any environmental law, rule, regulation, order, treaty, statute or code
promulgated by any governmental authority, or any amendment or modification
thereto, or (ii) that has been designated or regulated by any governmental
authority as radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment.
(xvii) The Company has not engaged in the generation, use,
manufacture, transportation or storage of any Hazardous Materials on any of
the Company's properties or former properties, except where such use,
manufacture, transportation or storage is in compliance with Environmental
Laws. No Hazardous Materials have been treated or disposed of on any of the
Company's properties or on properties formerly owned or leased by the Company
during the time of such ownership or lease, except in compliance with
Environmental Laws. No spills, discharges, releases, deposits, emplacements,
leaks or disposal of any Hazardous Materials have occurred on or under or have
emanated from any of the Company's properties or former properties.
9
(xviii) The Company has not at any time during the last five
years (A) made any unlawful contribution to any candidate for foreign office,
or failed to disclose fully any contribution in violation of law, or (B) made
any payment to any foreign, United States or state governmental officer or
official, or other person charged with similar public of quasi-public duties,
other than payments required or permitted by the laws of the United States.
(xix) The Shares have been duly authorized for listing on
the AMEX upon notice of issuance. The Company has taken no action designed to,
or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the AMEX, nor
has the Company received any notification that the Commission or the AMEX is
contemplating terminating such registration or listing.
(xx) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at
any later Overallotment Closing Date, neither the Company nor, to its
knowledge, any of its officers, directors or affiliates will have taken,
directly or indirectly, any action which has constituted, or might reasonably
be expected to constitute, the stabilization or manipulation of the price of
sale or resale of the Shares.
(xxi) The Company has obtained and delivered to the
Representative agreements (the "Lock-Up Agreements") from each of the persons
and entities listed on Schedule C hereto, representing all of the Company's
executive officers, directors and stockholders (or holders of securities
convertible into or exchangeable or exercisable for equity securities of the
Company), providing that such person or entity will not, commencing on the
date of the Prospectus and continuing for a 12- month period thereafter,
without the Representative's prior written consent, directly or indirectly,
offer to sell, sell, pledge, solicit an offer to buy, contract to sell, grant
any option for the sale thereof, or otherwise encumber, or cause the transfer
or disposition of, any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for, Common Stock, or exercise any
registration rights with respect to any shares of common stock or any
securities convertible into or exchangeable or exercisable for any Shares of
Common Stock.
(xxii) The Company has not distributed and, prior to the
latest to occur of (A) the Closing Date, (B) the Overallotment Closing Date
and (C) the completion of the distribution of the Shares, will not distribute
any offering
10
material in connection with the offering and sale of the Shares other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or other materials, if
any permitted by the Act.
(b) Each of the Selling Stockholders hereby represents and
warrants as follows:
(i) Such Selling Stockholder has (A) caused a certificate or
certificates for the number of Overallotment Shares which may be sold by such
Selling Stockholder hereunder to be delivered to _________________ (the
"Escrow Agent"), duly endorsed in blank or together with blank stock powers
duly executed, with such Selling Stockholder's signature appropriately
guaranteed, such certificate or certificates to be held in escrow by the
Escrow Agent pursuant to an escrow agreement for delivery, pursuant to the
provisions hereof, on the Closing Date, and (B) granted an irrevocable power
of attorney to the Escrow Agent to purchase all requisite stock transfer tax
stamps, to sign this Agreement (including agreeing on the price at which the
Overallotment Shares are to be sold to the Underwriters) and thereafter to
modify and amend this Agreement, to settle any dispute relating to the terms
of this Agreement, to waive any condition to the obligations of such Selling
Stockholder, and to execute all other instruments and documents and to perform
all other acts necessary to carry out the provisions of this Agreement on
behalf of such Selling Stockholder (such escrow agreement together with such
irrevocable powers of attorney being herein called the "Escrow Agreement").
(ii) Such Selling Stockholder has full power and authority
to enter into this Agreement and the Escrow Agreement and to perform the
transactions contemplated hereby and thereby to be performed by such Selling
Stockholder. This Agreement and the Escrow Agreement have been duly executed
and delivered by such Selling Stockholder. No consent, authorization,
approval, order, license, certificate, or permit of or from, or declaration or
filing with, any federal, state, local or other governmental authority or any
court or other tribunal is required by such Selling Stockholder for the
execution, delivery or performance of this Agreement (except filings under the
Act which have been or will be made before the Closing Date and such consents
consisting only of consents under Blue Sky laws which have been obtained at or
prior to the date of this Agreement) or the Escrow Agreement by such Selling
Stockholder. No consent of any party to any contract, agreement, instrument,
lease, license, arrangement or understanding to which such Selling Stockholder
is a party, or to
11
which any of such Selling Stockholder's properties or assets are subject, is
required for the execution, delivery or performance of this Agreement or the
Escrow Agreement; and the execution, delivery and performance of this
Agreement and the Escrow Agreement will not violate, result in a breach of,
conflict with or (with or without the giving of notice or the passage of time
or both) entitle any party to terminate or call a default under any such
contract, agreement, instrument, lease, license, arrangement or understanding,
or violate, result in a breach of, or conflict with, any law, rule,
regulation, order, judgment or decree binding on such Selling Stockholder.
(iii) Such Selling Stockholder is the lawful owner of the
Overallotment Shares to be sold by him and upon sale and delivery of, and
payment for, such Overallotment Shares, as provided herein, such Selling
Stockholder will convey good and marketable title to such Overallotment
Shares, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(iv) Such Selling Stockholder has not, directly or
indirectly, (A) taken any action designed to cause or result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (B) since the filing of the
Registration Statement (i) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Shares or (ii) paid or agreed to
pay to any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of the Overallotment
Shares by such Selling Stockholder under this Agreement).
(v) To the extent that any statements or omissions are made
in the Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such Selling Stockholder
specifically for use therein, such Preliminary Prospectus did, and the
Registration Statement and the Prospectus and any amendments or supplements
thereto, when they become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of the
Act, the Exchange Act and the respective rules and regulations of the
Commission thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances
under which they are made, not misleading. Such
12
Selling Stockholder has reviewed the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and the Registration
Statement, and the information regarding such Selling Stockholder set forth
therein is complete and accurate.
(vi) The sale by such Selling Stockholder of the
Overallotment Shares being sold by him pursuant hereto is not prompted by any
adverse information concerning the Company that is not set forth in the
Registration Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(vii) The sale of the Overallotment Shares being sold to the
Underwriters by such Selling Stockholder pursuant to this Agreement, the
compliance by the Selling Stockholder with the other provisions of this
Agreement and the consummation of the other transactions herein contemplated
do not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under Blue Sky laws and, if the registration
statement filed with respect to the Shares (as amended) is not effective under
the Act as of the time of execution hereof, such as may be required (and shall
be obtained as provided in this Agreement) under the Act or (B) conflict with
or result in a breach or violation of any of the terms and provisions of, or
constitute a default under any indenture, mortgage, deed of trust, lease or
other agreement or instrument to which such Selling Stockholder is a party or
by which the Selling Stockholder is bound, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental authority
or any arbitrator applicable to the Selling Stockholder.
(viii) The Selling Stockholder has not distributed and,
prior to the latest to occur of (A) the Closing Date, (B) the Overallotment
Closing Date and (C) the completion of the distribution of the Shares, will
not distribute any offering material in connection with the offering and sale
of the Shares other than the Registration Statement or any amendment thereto,
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or other materials, if any permitted by the Act.
3. Purchase of the Shares by the Underwriters.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the
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Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each of the Underwriters agrees to purchase from the Company the
respective aggregate number of Firm Shares set forth opposite its name on
Schedule A, plus such additional number of Firm Shares which such Underwriter
may become obligated to purchase pursuant to Section 3(b) hereof. The price at
which such Firm Shares shall be sold by the Company and purchased by the
several Underwriters shall be $_____ per share. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
Section 3(b) and Section 3(c), the agreement of each Underwriter is to
purchase only the respective number of Firm Shares specified on Schedule A.
(b) If for any reason one or more of the Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 10 hereof) to
purchase and pay for the number of Shares agreed to be purchased by such
Underwriter or Underwriters, the non-defaulting Underwriters shall have the
right within 24 hours after such default to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the Shares which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such Shares
and portion, the number of Shares which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis (as adjusted by you in such manner as you deem
advisable to avoid fractional shares) to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the Shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such Shares exceeds
10% of the total number of Shares which all Underwriters agreed to purchase
hereunder. If the total number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase shall not be purchased or absorbed in
accordance with the two preceding sentences, the Company shall have the right,
within 24 hours next succeeding the 24-hour period referred to above, to make
arrangements with other underwriters or purchasers reasonably satisfactory to
you for purchase of such Shares and portion on the terms herein set forth. In
any such case, either you or the Company shall have the right to postpone the
Closing Date determined as provided in Section 5 hereof for not more than
seven business days after the date originally fixed as the Closing Date
pursuant to said
14
Section 5 in order that any necessary changes in the Registration Statement,
the Prospectus or any other documents or arrangements may be made. If the
aggregate number of Shares which the defaulting Underwriter or Underwriters
agreed to purchase exceeds 10% of the total number of Shares which all
Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the 24-hour
periods stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the
part of the Company to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company.
Nothing in this Section 3(b), and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company and the Selling Stockholders hereby grant an option to the
several Underwriters to purchase, in the case of the Company, up to ___________
shares of Common Stock, and, in the case of each of the Selling Stockholders, up
to the number of shares of Common Stock set forth opposite such Selling
Stockholder's name on Schedule B at the same price per share as the Underwriters
shall pay for the Firm Shares. Such option may be exercised only to cover
overallotments in the sale of the Firm Shares by the Underwriters and may be
exercised in whole or in part at any time, or from time to time, on or before
the 30th day after the date of the Prospectus upon written or telegraphic notice
by you to the Company and the Selling Stockholders setting forth the aggregate
number of Overallotment Shares as to which the Underwriters are exercising the
option. Delivery of certificates for the Overallotment Shares, and payment
therefor, shall be made as provided in Section 5 hereof. Each Underwriter shall
purchase such percentage of the Overallotment shares as is equal to the
percentage of Firm Shares that such Underwriter is purchasing, the exact number
of shares to be adjusted by the Representative in such manner as you deem
advisable to avoid fractional shares. In the event the options are exercised by
you with respect to less than all the Overallotment Shares, the number of
Overallotment Shares covered by the exercised options shall first be sold by the
Company until all of its Overallotment Shares have been purchased and any excess
shall then be sold by the Selling Stockholders on a pro rata basis until all of
their Overallotment Shares are sold.
15
(d) On the Closing Date, the Company shall issue and deliver
to the Representative, or at the direction of the Representative, to its
designees as provided in the Representative's Warrant Agreement, for a
purchase price of $.001 per Representative's Warrant (an aggregate of
$________), the Representative's Warrants entitling the holder thereof to
purchase ___________ shares of Common Stock on the terms and conditions set
forth in the Representative's Warrant Agreement.
4. Offering by Underwriters.
The terms of the offering of the Shares by the Underwriters
shall be as set forth in the Prospectus.
5. Delivery of and Payment for the Shares and the
Representative's Warrants.
(a) Delivery of certificates for the Firm Shares, the
Overallotment Shares (if the option granted pursuant to Section 3(c) hereof
shall have been exercised not later than 1:00 p.m., New York time, on the date
at least two business days preceding the Closing Date) and the
Representative's Warrants, and payment therefor, shall be made at the office
of Proskauer Rose LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 9:00
a.m., New York City time, on the fourth business day after the date of this
Agreement, or at such time on such other day, not later than seven full
business days after such fourth business day, as shall be agreed upon in
writing by the Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 3(c) hereof
shall be exercised after 1:00 p.m., New York City time, on the date two
business days preceding the Closing Date, and on or before the 30th day after
the date of this Agreement, delivery of certificates for the Overallotment
Shares, and payment therefor, shall be made at the office of Proskauer Rose
LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 9:00 a.m., New York City
time, on the third business day after the exercise of such option.
(c) Payment for the Shares shall be made to the Company or
(in the case of Overallotment Shares to be purchased from the Selling
Stockholders) to the Escrow Agent, as agent for the Selling Stockholders, by
either a same day funds check or federal funds wire transfer. Such payment
shall be made upon delivery of certificates for the Shares to you for the
respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Shares to be delivered to you shall be
registered in such name or names and shall be in
16
such denominations as you may request at least three business days before the
Closing Date, in the case of Firm Shares, and at least two business days prior
to the Overallotment Closing Date, in the case of the Overallotment Shares.
Such certificates will be made available to the Underwriters for inspection,
checking and packaging at a location in New York, New York, designated by the
Underwriters not less than one full business day prior to the Closing Date or,
in the case of the Overallotment Shares, by 3:00 p.m., New York time, on the
business day preceding the Overallotment Closing Date.
It is understood that you, individually and not on behalf of
the Underwriters, may (but shall not be obligated to) make payment to the
Company or (in the case of Overallotment Shares to be purchased from the
Selling Stockholders) to the Escrow Agent, as agent for the Selling
Stockholders, for shares to be purchased by any Underwriter whose check shall
not have been received by you on the Closing Date or any later Overallotment
Closing Date. Any such payment by you shall not relieve such Underwriter from
any of its obligations hereunder.
(d) Payment for the Representative's Warrants shall be made
to the Company or its order, by either a same day funds check or federal funds
wire transfer. Such payment shall be made upon delivery of certificates for
the Representative's Warrants to you against receipt therefor signed by you.
Certificates for the Representative's Warrants to be delivered to you shall,
subject to the terms and provisions of the Representative's Warrant Agreement,
be registered in such name or names and shall be in such denominations as you
may request at least three business days before the Closing Date.
6. Further Agreements of the Company. The Company covenants and
agrees as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective as promptly as possible; it will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement or any subsequent amendment to the Registration Statement has become
effective or any supplement to the Prospectus has been filed. If the Company
omitted information from the Registration Statement at the time it was
originally declared effective in reliance upon Rule 430A(a), the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time
17
period prescribed, with the Commission pursuant to subparagraph (1) or (4) of
Rule 424(b) of the Rules and Regulations or as part of a post-effective
amendment to such Registration Statement as originally declared effective
which is declared effective by the Commission. If for any reason the filing of
the final form of Prospectus is required under Rule 424(b)(3) of the Rules and
Regulations, it will provide evidence satisfactory to you that the Prospectus
contains such information and has been filed with the Commission within the
time period prescribed. The Company will notify you promptly of any request by
the Commission for the amending or supplementing of the Registration Statement
or the Prospectus or for additional information. Promptly upon your request,
it will prepare and file with the Commission any amendments or supplements to
the Registration Statement or Prospectus which, in the reasonable opinion of
counsel to the Representative, may be necessary or advisable in connection
with the distribution of the Shares by the Underwriters. The Company will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if,
at any time when a prospectus relating to the Shares is required to be
delivered under the Act, any event shall have occurred as a result of which
the Prospectus or any other prospectus relating to the Shares as then in
effect would include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In case any
Underwriter is required to deliver a prospectus within the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare promptly upon request, but at the expense of
such Underwriter, such amendment or amendments to the Registration Statement
and such prospectus or prospectuses as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Act. The Company will file no
amendment or supplement to the Registration Statement or Prospectus that shall
not previously have been submitted to you a reasonable time prior to the
proposed filing thereof or to which you shall reasonably object in writing or
which is not in compliance with the Act and Rules and Regulations or the
provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order
by the Commission suspending the effectiveness of the Registration Statement
or the use of the Prospectus or of the initiation or threat of any proceeding
for that purpose; and it will promptly use its best efforts to prevent the
issuance of
18
any such stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation, or to execute a
general consent to service of process in any jurisdiction, or to make any
undertaking with respect to the conduct of its business. In each jurisdiction
in which the Shares shall have been qualified, the Company will make and file
such statements, reports and other documents in each year as are or may be
reasonably required by the laws of such jurisdictions so as to continue such
qualifications in effect for so long a period as you may reasonably request
for distribution of the Shares, or as otherwise may be required by law.
(d) The Company will furnish to you, as soon as available,
copies of the Registration Statement (three of which will be signed and which
will include all exhibits), each Preliminary Prospectus, the Prospectus, and
any amendments or supplements to such documents, including any prospectus
prepared to permit compliance with Section 10(a)(3) of the Act, all in such
quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its
stockholders as soon as practicable, but in any event not later than the 45th
day following the end of the fiscal quarter first occurring after the first
anniversary of the Effective Date, an earnings statement (which will be in
reasonable detail but need not be audited) complying with the provisions of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations and
covering a 12-month period beginning after the Effective Date, and will advise
you in writing when such statement has been made available.
(f) During a period of five years after the date hereof, the
Company, as soon as practicable after the end of each respective period, will
furnish to its stockholders annual reports (including financial statements
audited by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the first
three quarters of the fiscal year, and will, upon request, furnish to you and
the other several Underwriters hereunder (i) concurrently with making such
reports available to
19
its stockholders, statements of operations of the Company for each of the
first three quarters in the form made available to the Company's stockholders;
(ii) concurrently with the furnishing thereof to its stockholders, a balance
sheet of the Company as of the end of such fiscal year, together with
statements of operations, of stockholders' equity and of cash flow of the
Company for such fiscal year, accompanied by a copy of the certificate or
report thereon of nationally recognized independent certified public
accountants; (iii) concurrently with the furnishing of such reports to its
stockholders, copies of all reports (financial or other) mailed to
stockholders; (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or automated quotation system by the Company (except for documents
for which confidential treatment is requested); and (v) every material press
release and every material news item or article in respect of the Company or
its affairs which was generally released to stockholders or prepared for
general release by the Company. During such five-year period, if the Company
shall have any active subsidiaries, the foregoing financial statements shall
be on a consolidated basis to the extent that the accounts of the Company are
consolidated with any subsidiaries, and shall be accompanied by similar
financial statements for any significant subsidiary that is not so
consolidated.
(g) The Company shall not, during the 12 months following
the Effective Date, except with the Representative's your prior written
consent, file, or announce an intent to file, a registration statement
covering any of its shares of capital stock, except that one or more
registration statements on Form S-8 may be filed at any time following the
Effective Date covering the shares of Common Stock reserved for issuance to
employees or directors of the Company pursuant to the 1998 Incentive Plan.
(h) The Company shall not, during the 12 months following
the Effective Date, except with the prior written consent of the
Representative, in its individual capacity and not in its capacity as
representative of the Underwriters, issue, sell, offer or agree to sell,
grant, distribute or otherwise dispose of, directly or indirectly, any shares
of Common Stock, or any options, rights or warrants with respect to shares of
Common Stock, or any securities convertible into or exchangeable for Common
Stock, other than the issuance of (i) the Overallotment Shares, (ii) the
Representative's Warrants and (iii) ________ shares of Common Stock reserved for
issuance to
20
employees or directors of the Company pursuant to the 1998 Incentive Plan.
(i) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will maintain a transfer agent and a
registrar (which may be the same entity as the transfer agent) for the Common
Stock.
(k) The Company will use its best efforts to maintain
listing of its shares of Common Stock on the AMEX.
(l) The Company is familiar with the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder, and has in the
past conducted its affairs, and will in the future conduct its affairs, in
such a manner so as to ensure that the Company was not and will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
(m) During a period of five years from the Effective Date,
the Company will, at the option of the Representative, (i) use its best
efforts to nominate and cause to be elected and reelected to the Board of
Directors of the Company a designee of the Representative or (ii) permit an
agent of the Representative to attend all meetings of the Board of Directors
of the Company as a non-voting observer, will give such agent notice of all
meetings of the Board of Directors at the same time and in the same manner
that directors are notified and will reimburse such agent for all expenses
incurred in attending such meetings, including, but not limited to food,
transportation and lodging.
7. Expenses.
The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and
expenses in connection with the preparation, printing and filing of the
Registration Statement (including all amendments, supplements, financial
statements, schedules and exhibits), as many Preliminary Prospectuses and
final Prospectuses and any amendments or supplements thereto that the
Representative reasonably deems necessary; the reproduction of this Agreement;
the issuance and delivery of the Shares and the Representative's Warrants,
including stock transfer taxes, if any; the cost of all stock certificates
representing the Shares and transfer agents'
21
and registrars' fees; the fees and disbursements of counsel for the Company;
all fees and other charges of the Company's independent public accountants;
the cost of furnishing to the several Underwriters copies of the Registration
Statement (including appropriate exhibits), Preliminary Prospectuses and the
Prospectus; NASD filing fees and expenses incident to securing any required
review; all fees and expenses relating to the listing of the Shares and the
Warrant Shares on the AMEX; all fees, expenses and disbursements relating to
the registration or qualification of the Shares under the securities laws of
such states and other jurisdictions as the Representative may reasonably
designate (including, without limitation, all filing and registration fees and
fees and disbursements of the Representative's counsel in connection with Blue
Sky matters, such as the Preliminary Blue Sky Memoranda and any supplemental
Blue Sky Memoranda and any instruments relating to any of the foregoing; the
fees and disbursements of counsel to the Underwriters (not to exceed $200,000)
in connection with the offering, this Agreement and the transactions
contemplated hereby; the costs of all mailing and printing of the underwriting
documents (including, but not limited to, the Underwriting Agreement, any Blue
Sky surveys and memoranda and, if appropriate, any Agreement Among
Underwriters, Selected Dealers Agreement, Underwriter's Questionnaire and
Power of Attorney); the costs of preparing, printing and delivering
certificates representing the Shares and the Representative's Warrants; and
all other expenses directly incurred by the Company in connection with the
performance of its obligations hereunder.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, the Company
will, in addition to paying the expenses described in Section 7(a), reimburse
the several Underwriters for all out-of-pocket expenses (including fees and
disbursements of Underwriters' counsel without the limitations therein set
forth in Section 7(a)) incurred by the Underwriters in reviewing the
Registration Statement and the Prospectus and in otherwise investigating,
preparing to market or marketing the Shares.
(c) The Representative, in its individual capacity and not
as representative of the Underwriters, shall also be entitled to a
non-accountable expense allowance equal to 3% of the aggregate offering price
of the Shares. The Company has previously paid the Representative an aggregate
of [$100,000] in partial payment of such non-accountable expense allowance,
which
22
amount shall be non-refundable (notwithstanding the termination of this
Agreement for any reason) and will be applied against the non-accountable
expense allowance.
8. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters to purchase and pay for
the Shares, as provided herein, shall be subject: (x) to the accuracy, as of
the date hereof and the Closing Date and any later Overallotment Closing Date,
as the case may be, of the representations and warranties of the Company
herein and to the performance by the Company of its obligations hereunder; (y)
in the event of the purchase of Overallotment Shares from the Selling
Stockholders, the accuracy, as of the Overallotment Closing Date relating to
such purchase, of the representations and warranties of the Selling
Stockholders herein and to the performance of the Selling Stockholders of
their obligations hereunder and (z) to the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 9:00 a.m., New York City time, on the day immediately following
the date of this Agreement, or such later time or date as shall be consented
to in writing by you. If the filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b) and Rule 430A of the Rules and
Regulations, the Prospectus shall have been filed in the manner and within the
time period required by Rule 424(b) and Rule 430A of the Rules and
Regulations. No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement, and the
Prospectus, and the registration, authorization, issue, sale and delivery of
the Shares shall have been reasonably satisfactory to counsel to the
Underwriters, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to herein.
(c) You shall have received, at no cost to you, on the
Closing Date and on any later Overallotment Closing Date, as the
23
case may be, the opinion of Xxxxxxxx o Xxxxxxx x Xxxxxx x Xxxxxxx, counsel to
the Company, dated the Closing Date or such later Overallotment Closing Date, in
the form attached hereto as Appendix A, addressed to the Underwriters and with
reproduced copies of signed counterparts thereof for the Representative.
(d) In the event of the purchase of any Overallotment Shares
from the Selling Stockholders, you shall have received, in addition to the
opinion described in section 8(c), the opinion of Xxxxxxxx o Xxxxxxx x Xxxxxx x
Xxxxxxx, counsel to the Selling Stockholders, dated the Overallotment Closing
Date, in the form attached hereto as Appendix B.
(e) You shall have received from Proskauer Rose LLP,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on
any later Overallotment Closing Date, as the case may be, in form and
substance reasonably satisfactory to you, with respect to certain legal
matters as you may reasonably require, and the Company shall have furnished to
such counsel such documents as it may have reasonably requested for the
purpose of enabling it to pass upon such matters.
(f) You shall have received on the Closing Date and on any
later Overallotment Closing Date, as the case may be, a letter from the
Accountants addressed to the Company and the Underwriters, dated the Closing
Date or such later Overallotment Closing Date, as the case may be, confirming
that it is an independent certified public accountant with respect to the
Company within the meaning of the Act and the Rules and Regulations thereunder
and based upon the procedures described in its letter delivered to you
concurrently with the execution of this Agreement (herein called the "Original
Letter"), but carried out to a date not more than three days prior to the
Closing Date or any such later Overallotment Closing Date, as the case may be,
(i) confirming that the statements and conclusions set forth in the Original
Letter are accurate as of the Closing Date or such later Overallotment Closing
Date, as the case may be; and (ii) setting forth any revisions and additions
to the statements and conclusions set forth in the Original Letter that are
necessary to reflect any changes in the facts described in the Original Letter
since the date of such letter, or to reflect the availability of more recent
financial statements, data or information. The letter shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company which, in your reasonable judgment,
makes it impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus. In addition, you shall have
received from the
24
Accountants a letter addressed to the Company and made available to you for
the use of the Underwriters stating that its review of the Company's system of
internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of the Company's financial
statements, did not disclose any weaknesses in internal controls that it
considered to be material weaknesses. All such letters shall be in a form
reasonably satisfactory to the Representative and its counsel.
(g) You shall have received on the Closing Date and on any
later Overallotment Closing Date, as the case may be, a certificate of the
President and the Chief Financial Officer of the Company, dated the Closing
Date or such later date, to the effect that as of such date (and you shall be
satisfied that as of such date):
(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made on and as of the
Closing Date or any later Overallotment Closing Date, as the case may be; and
the Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at or prior to the Closing
Date or any later Overallotment Closing Date, as the case may be;
(ii) The Registration Statement has become
effective under the Act and no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Prospectus
has been issued, and no proceedings for that purpose have been instituted or
are pending or, to the best of their knowledge, threatened under the Act;
(iii) They have carefully reviewed the Registration
Statement, and the Prospectus; and, when the Registration Statement became
effective and at all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus and any amendments
or supplements thereto contained all statements and information required to be
included therein or necessary to make the statements therein not misleading;
and when the Registration Statement became effective, and at all times
subsequent thereto up to the delivery of such certificate, none of the
Registration Statement, the Prospectus or any amendment or supplement thereto
included any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and, since the Effective Date, there has
occurred no event required to be set forth in an amended or supplemented
Prospectus that has not been so set forth; and
25
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement, and the Prospectus,
there has not been (A) any material adverse change in the properties or assets
described or referred to in the Registration Statement and the Prospectus or
in the condition (financial or otherwise), operations, business or prospects
of the Company, (B) any transaction which is material to the Company, except
transactions entered into in the ordinary course of business, (C) any
obligation, direct or contingent, incurred by the Company, which is material
to the Company taken as a whole, (D) any change in the capital stock or
outstanding indebtedness of the Company which is material to the Company taken
as a whole or (E) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, except as specifically described in
the Prospectus.
(h) In the event of the purchase of Overallotment Shares
from the Selling Stockholders, you shall have received on the Overallotment
Closing Date relating to such purchase a certificate of each of the Selling
Stockholders, dated such Overallotment Closing Date, to the effect that as of
such date (and you shall be satisfied that as of such date):
(i) The representations and warranties of such
Selling Stockholder in this Agreement are true and correct, as if made on and
as of such Overallotment Closing Date; and such Selling Stockholder has
complied with all of the agreements and satisfied all of the conditions on his
part to be performed or satisfied at or prior to such Overallotment Closing
Date; and
(ii) Such Selling Stockholder has carefully
reviewed the Registration Statement and the Prospectus; and, when the
Registration Statement became effective and at all times subsequent thereto up
to the delivery of such certificate, the Registration Statement and the
Prospectus and any amendments or supplements thereto, to the extent that any
statements or omissions are made in the Registration Statement, any
Preliminary Prospectus or the Prospectus or any amendment or supplement in
reliance upon and in conformity with information furnished by such Selling
Stockholder to the Company specifically for use therein, contained all
statements and information required to be included therein or necessary to
make the statements therein not misleading; and when the Registration
Statement became effective, and at all times subsequent thereto up to the time
of delivery of such certificate, none of the Registration Statement, the
Prospectus or any amendment or supplement thereto included any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make
26
the statements therein not misleading; and, since the Effective Date, there
has occurred no event required to be set forth in an amended or supplemented
Prospectus that has not been so set forth.
(i) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request as to the accuracy
of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder and as to the other
conditions precedent to the obligations of the Underwriters hereunder.
(j) The Firm Shares and the Overallotment Shares, if any,
shall have been approved for listing upon notice of issuance on the AMEX.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to counsel to the Underwriters. The Company will furnish you with such number
of conformed copies of such opinions, certificates, letters and documents as
you shall reasonably request.
9. Indemnification and Contribution.
(a) Subject to the provisions of Section 9(g), the Company
agrees to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter
within the meaning of Section 15 of the Act from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Act, the
Exchange Act, the common law or otherwise, and the Company agrees to reimburse
each such Underwriter and controlling person for any legal or other
out-of-pocket expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any
462(b) registration statement) or any post-effective amendment thereto
(including any 462(b) registration statement), or the omission or alleged
omission to state therein a material fact required to be
27
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company contained
in this Section 9(a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission is contained in the
section of the Prospectus entitled "Underwriting," and (2) the indemnity
agreement contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented was not sent or delivered to such person
(excluding any documents incorporated therein by reference) and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented unless the failure is the result of noncompliance by the Company
with Section 6(a) hereof. The indemnity agreements of the Company contained in
this Section 9(a) and the representations and warranties of the Company
contained in Section 2(a) hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of any payment for the Shares.
(b) Subject to the provisions of Section 9(g), each of the
Selling Stockholders severally agrees to indemnify and hold harmless the
Company, each of its executive officers, each of its directors, each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Act from and
against any and all losses, claims, damages or liabilities, joint or several,
to which such indemnified parties or any of them may become subject under the
Act, the Exchange Act, the common law or otherwise, and each of the Selling
Stockholders severally agrees to reimburse the Company, each of its executive
officers, each of its directors, and each such Underwriter and controlling
person for any legal or other out-of-pocket expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements
28
of counsel) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the
Prospectus as part thereof and any 462(b) registration statement) or any
post-effective amendment thereto (including any 462(b) registration
statement), or the 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 (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that (1) the indemnity agreements of
each of the Selling Stockholders severally contained in this Section 9(b)
shall apply to any such losses, claims, damages, liabilities or expenses only
if such statement or omission was made in reliance upon and in conformity with
written information furnished by such Selling Stockholder to the company for
use therein and (2) the indemnity agreement contained in this Section 9(b)
with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased the Shares which is the subject
thereof (or to the benefit of any person controlling such Underwriter) if at
or prior to the written confirmation of the sale of such Shares a copy of the
Prospectus (or the Prospectus as amended or supplemented was not sent or
delivered to such person (excluding any documents incorporated therein by
reference) and the untrue statement or omission of a material fact contained
in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented unless the failure is the result of
noncompliance by the Company with Section 6(a) hereof. The indemnity
agreements of the Selling Stockholders contained in this Section 9(b) and the
representations and warranties of the Selling Stockholders contained in
Section 2(b) hereof shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of any payment for the Shares.
29
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its executive officers, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Act, the Exchange Act, the common law
or otherwise and to reimburse each of them for any legal or other expenses
including, except as otherwise hereinafter provided, reasonable fees and
disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties,
in each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any 462(b)
registration statement) or the 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 (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus or
the Prospectus (as amended or as supplemented if the Company shall have filed
with the Commission any amendment thereof or supplement thereto) or the
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that in the cases of
clauses (i) and (ii) above, such statement or omission is contained in the
Section of the Prospectus entitled "Underwriting." The indemnity agreement of
each Underwriter contained in this Section 9(c) shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any indemnified party and shall survive the delivery of and payment for the
Shares.
(d) Each party indemnified under the provision of Section
9(a),(b)or(c)agrees that, upon the service of a summons or other initial legal
process upon it in any action or suit instituted against it or upon its
receipt of written notification of the commencement of any investigation or
inquiry of, or proceeding against it, in respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs, it
will promptly give written notice (a "Notice") of such service or notification
to the party or parties from whom
30
indemnification may be sought hereunder. No indemnification provided for in
such Section 9(a), (b) or (c) shall be available to any party who shall fail
so to give the Notice if the party to whom such Notice was not given was
unaware of the action, suit, investigation, inquiry or proceeding to which the
Notice would have related and was prejudiced by the failure to give the
Notice, but the omission so to notify such indemnifying party or parties of
any such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceeding against, or investigation or inquiry
of, an indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (the "Notice of Defense") to the indemnified party, to assume (alone or
in conjunction with any other indemnifying party or parties) the entire
defense of such action, suit, investigation, inquiry or proceeding, in which
event such defense shall be conducted, at the expense of the indemnifying
party or parties, by counsel chosen by such indemnifying party or parties
and reasonably satisfactory to the indemnified party or parties; provided,
however, that (i) if the indemnified party or parties reasonably determine
that there may be a conflict between the positions of the indemnifying party
or parties and of the indemnified party or parties in conducting the defense
of such action, suit, investigation, inquiry or proceeding or that there may
be legal defenses available to such indemnified party or parties different
from or in addition to those available to the indemnifying party or parties,
then counsel for the indemnified party or parties shall be entitled to conduct
the defense to the extent reasonably determined by such counsel to be
necessary to protect the interests of the indemnified party or parties and
(ii) in any event, the indemnified party or parties shall be entitled, at its
or their own expense to have counsel chosen by such indemnified party or
parties participate in, but not conduct, the defense. It is understood that
the indemnifying parties shall not, in respect of the legal defenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all of the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act, and (b) the fees and expenses of more than
one separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each person,
if any, who controls the Company
31
within the meaning of Section 15 of the Act. If, within a reasonable time
after receipt of the Notice, an indemnifying party gives a Notice of Defense
and the counsel chosen by the indemnifying party or parties is reasonably
satisfactory to the indemnified party or parties, the indemnifying party or
parties will not be liable under Section 9(a), (b) or (c) for any legal or
other expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (A) the indemnifying party or parties shall bear the
legal and other expenses incurred in connection with the conduct of the
defense as referred to in clause (i) of the proviso to the preceding sentence
and (B) the indemnifying party or parties shall bear such other expenses as it
or they have authorized to be incurred by the indemnified party or parties.
If, within a reasonable time after receipt of the Notice, no Notice of Defense
has been given, the indemnifying party or parties shall be responsible for any
legal or other expenses incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding. The indemnifying party or parties shall not be liable for any
settlement of any proceeding effected without its or their written consent,
provided such consent has not been unreasonably withheld.
(e) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
Section 9(a), (b) or (c), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 9(a), (b) or (c),(i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party 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 each indemnifying party in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the one hand, and the Underwriters, on the other, shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Shares received by the Company and the total underwriting discount received by
the Underwriters, as set forth in the table on the cover page of the
Prospectus, bear to the aggregate public offering price of the Shares.
Relative fault shall be determined by reference to,
32
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to Section 9(e) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this Section
9(d). The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities or actions in respect thereof, referred to in
the first sentence of this Section 9(e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigation, preparation to defend or defense against any action or
claim which is the subject of this Section 9(e). Notwithstanding the
provisions of this Section 9(e), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to the
Shares purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom contribution
may be sought from any obligation it may have hereunder or otherwise (except
as specifically provided in Section 9(d)).
(f) The Company will not, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter or any person who controls such Underwriter within the meaning of
33
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 includes an unconditional release of such Underwriter and each such
controlling person from all liability arising out of such claim, action, suit
or proceeding.
(g) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof, including without limitation
the provisions of this Section 9 and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Act and the Exchange Act.
10. Termination. This Agreement may be terminated by you at any time
on or prior to the Closing Date or on or prior to any later Overallotment
Closing Date, as the case may be, (i) if the Company shall have failed,
refused or been unable, at or prior to the Closing Date, or on or prior to any
later Overallotment Closing Date, as the case may be, to perform any agreement
on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, or (ii) if trading on the New York Stock Exchange, the AMEX or
the Nasdaq National Market shall have been suspended, or minimum or maximum
prices for trading shall have been fixed, or maximum ranges for prices for
securities shall have been required on the New York Stock Exchange, the AMEX
or the Nasdaq National Market, by such trading exchanges or by order of the
Commission or any other governmental authority having jurisdiction, or if a
banking moratorium shall have been declared by federal or New York
authorities, or (iii) if the Company shall have sustained a loss by strike,
fire, flood, accident or other calamity of such character as to have a
Material Adverse Effect regardless of whether or not such loss shall have been
insured, or (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets in the United
States as in the judgment of the Representative makes it inadvisable or
impracticable to proceed with the offering, sale and delivery of the Shares,
or (v) if there shall have occurred an outbreak or escalation of hostilities
between the United States and any foreign power or of any other insurrection
or armed conflict involving the United States or other national or
international calamity, hostilities or crisis or the declaration by the United
34
States of a national emergency which, in the judgment of the Representative,
adversely affects the marketability of the Shares, or (vi) if since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there shall have occurred any material adverse
change or any development involving a prospective material adverse change in
or affecting the condition, financial or otherwise, of the Company or the
business, affairs, management, or prospects of the Company, whether or not
arising in the ordinary course of business, or (vii) if any foreign, federal
or state statute, regulation, rule or order of any court or other governmental
authority shall have been enacted, published, decreed or otherwise promulgated
which in the judgment of the Representative materially and adversely affects
or will materially and adversely affect the business or operations of the
Company, or trading in the Common Stock shall have been suspended, or (viii)
there shall have occurred a material adverse decline in the value of
securities generally on the New York Stock Exchange, the AMEX or the Nasdaq
National Market or (ix) action shall be taken by any foreign, federal, state
or local government or agency in respect of its monetary or fiscal affairs
which, in the judgment of the Representative, has a material adverse effect on
the securities markets in the United States. If this Agreement shall be
terminated in accordance with this Section 10, there shall be no liability of
the Company to the Underwriters and no liability of the Underwriters to the
Company; provided, however, that in the event of any such termination the
Company agrees to indemnify and hold harmless the Underwriters from all costs
or expenses incident to the performance of the obligations of the Company
under this Agreement, including all costs and expenses referred to in Section 7.
If you elect to terminate this Agreement as provided in this Section
10, the Company shall be notified promptly by you by telephone, telecopy or
telegram, confirmed by letter.
11. Reimbursement of Certain Expenses.
(a) In addition to its other obligations under Section 9 of
this Agreement, the Company hereby agrees to reimburse on a monthly basis the
Underwriters for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in Section 9(a),
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be
35
held to be improper; provided, however, that (i) to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them and (ii) such persons shall provide to the Company,
upon request, reasonable assurances of their ability to effect any refund,
when and if due.
(b) In addition to their other obligations under Section 9
of this Agreement, the Underwriters hereby agree to reimburse on a monthly
basis the Company for all reasonable legal and other expenses incurred in
connection with investigating or defending any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in Section 9(b) of
this Agreement, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the obligations under this Section 11 and
the possibility that such payments might later be held to be improper;
provided, however, that (i) to the extent any such payment is ultimately held
to be improper, the Company shall promptly refund it and (ii) the Company
shall provide to the Underwriter, upon request, reasonable assurances of its
ability to effect any refund, when and if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 9 hereof, the several parties (in
addition to the Company and the several Underwriters) indemnified under the
provisions of said Section 9, and their respective personal representatives,
successors and assigns. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Shares from
any of the several Underwriters.
(a) Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to Prime Charter Ltd., 000 Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxx X. Xxxxxx;
and if to the Company, shall be mailed, telegraphed or delivered to it at its
office, Educational Video Conferencing, Inc., 00 Xxxx Xxxxxx Xxxxxx Xxxx,
Xxxxx 000, Xxxxxxx, Xxx Xxxx, 00000, Attention: Xx. Xxxx X. Xxxxxxxx.
36
(b) Applicable Law. The Company (a) agrees that any legal suit,
action or proceeding arising out of or relating to this letter shall be
instituted exclusively in New York State Supreme Court, County of New York or
in the United States District Court for the Southern District of New York, (b)
waives any objection to the venue of any such suit, action or proceeding, and
(c) irrevocably consents to the jurisdiction of the New York State Supreme
Court, County of New York, and the United States District Court for the
Southern District of New York, in any such suit, action or proceeding. The
Company further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the New
York State Supreme Court, County of New York, or in the United States District
Court for the Southern District of New York. The Company further agrees that
service of process upon it mailed by certified mail to its address shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and
effect regardless of (i) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company
or its respective directors of officers and (ii) delivery of and payment for
the Shares under this Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO RULES
GOVERNING THE CONFLICT OF LAWS.
Please sign and return to the Company the enclosed duplicate of this
letter, whereupon this letter will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
EDUCATIONAL VIDEO CONFERENCING, INC.
By
---------------------------------
37
Xxxx X. Xxxxxxxx
Chairman of the Board
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
PRIME CHARTER LTD.
By
------------------------------
Xxxxxx X. Xxxxxx
Managing Director
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
38
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
------------ ---------
Prime Charter Ltd.................................
Total [ ]
========
SCHEDULE B
Overallotment
Name of Selling Stockholder Shares
------------------------------------------------------------ ------------------
SCHEDULE C
Lock-up Agreements
APPENDIX A
(i) The Registration Statement has become effective under
the Act and, to such counsel's knowledge after due inquiry, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued and no proceedings for
that purpose have been instituted or are pending or threatened under the Act;
any required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules and Regulations has been made in the manner and
within the time period required by such Rule 424(b).
(ii) The Registration Statement, all Preliminary
Prospectuses, the Prospectus, and each amendment or supplement thereto (other
than the financial statements, financial data and supporting schedules
included therein, as to which such counsel need express no opinion), comply as
to form in all material respects with the requirements of the Act and the
applicable Rules and Regulations and to such counsel's knowledge after due
inquiry, there are no agreements, contracts, leases or documents of a
character required to be described in, or filed as an exhibit to, the
Registration Statement which are not described or filed as required by the Act
and the applicable Rules and Regulations.
(iii) The Company is duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(iv) The Company has full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement.
(v) To such counsel's knowledge after due inquiry, the
Company does not own or control, directly or indirectly, any shares of stock
or any other equity interest in any firm, partnership, joint venture,
association or other entity.
(vi) The Company has full corporate power and authority to
enter into the Underwriting Agreement and the Representative's Warrant
Agreement and to issue, sell and deliver the Firm Shares and the Overallotment
Shares in accordance with the terms of the Underwriting Agreement and the
Representative's Warrants in accordance with the terms of the Representative's
Warrant Agreement.
(vii) The Underwriting Agreement and the Representative's
Warrant Agreement have been duly authorized by all necessary corporate action
on the part of the Company, have been duly executed and delivered by the
Company and the Representative's Warrant Agreement is a valid and binding
agreement of the Company, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws of general applicability relating to
or affecting creditors' rights or by general principles of equity, whether
considered at law or in equity, and except as rights to indemnity and
contribution thereunder may be limited by federal or state securities laws or
the public policies underlying such laws.
(viii) The execution, delivery and performance of the
Underwriting Agreement and the Representative's Warrant Agreement by the
Company and the consummation of the transactions therein contemplated do not
and will not (a) conflict with or result in a violation or breach of any of
the terms or provisions of, or constitute a default under (i) any indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, or any lease, contract or other agreement or
instrument known to such counsel after due inquiry to which the Company is a
party or by which its respective properties are bound, (ii) the Certificate of
Incorporation or Bylaws (or other organizational documents) of the Company or
(iii) any applicable license, authorization, approval, permit, judgment,
franchise, law, order, rule, regulation, writ, injunction or decree of any
court or governmental agency or body to which the Company is subject.
(ix) The Company is not required to obtain or make any
consent, approval, authorization, order, designation or declaration of or
filing by or with any court or regulatory, administrative or other
governmental agency or body in connection with the execution and delivery of
the Underwriting Agreement or the Representative's Warrant Agreement by the
Company and the consummation of the transactions therein contemplated except
such as have been obtained under the Act and the Rules and Regulations or such
as may be required under state securities laws, Blue Sky laws or by the rules
and regulations of the AMEX in connection with the purchase and distribution
of the Shares by the Underwriters.
(x) To such counsel's knowledge after due inquiry, there are
no pending or threatened actions, suits, claims, proceedings or investigations
before any court, regulatory body, administrative agency or any other
governmental agency or body,
domestic or foreign against the Company or any of their respective officers or
any of their respective properties, assets or rights that, if successful,
would have a Material Adverse Effect or would limit, revoke, cancel, suspend,
or cause not to be renewed any existing license, certificate, registration,
approval or permit that is material to the conduct of the business of the
Company as presently conducted, or that is of a character otherwise required
to be disclosed in the Registration Statement or the Prospectus under the Act
or the applicable Rules and Regulations.
(xi) The authorized capital stock of the Company consists of
__________ shares of Common Stock, of which there are outstanding __________
shares and 1,000,000 shares of Preferred Stock. All the issued and outstanding
shares of Common Stock have been duly authorized and validly issued, are fully
paid and non-assessable, have been issued in compliance with the registration
requirements of applicable federal and state securities laws and were not
issued in violation of any preemptive right, resale right, registration right,
right of first refusal or other similar right known to such counsel.
(xii) The issuance and sale of the Shares and the
Representative's Warrants have been duly authorized by the Company. Upon
issuance and delivery against payment therefor in accordance with the terms of
the Underwriting Agreement, the Shares will be validly issued, fully paid and
non-assessable, and, to such counsel's knowledge after due inquiry, the
stockholders of the Company do not have any preemptive right, resale right,
registration right, right of first refusal or other similar right, in
connection with the purchase or sale of any of the Shares. Shares of Common
Stock have been duly and validly authorized and reserved for issuance upon
exercise of the Representative's Warrants and, when issued and delivered by
the Company against payment therefor in the manner set forth in the
Representative's Warrant Agreement, the Warrant Shares will be duly and
validly issued, fully paid, non-assessable and free of preemptive rights. To
such counsel's knowledge after due inquiry, there are no outstanding warrants,
options or other rights granted by the Company to purchase shares of its
Common Stock or other securities, other than as described in the Prospectus.
(xiii) The terms and provisions of the Common Stock conform
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus, and the information in the
Prospectus under the caption "Description of Capital Stock," to the extent
that it constitutes matters of
law or legal conclusions, has been reviewed by such counsel and is correct,
and the form of certificate evidencing the Common Stock complies with the
applicable provisions of Delaware law.
(xiv) The statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations, including the Delaware
General Corporation Law and the description of the Certificate of
Incorporation and Bylaws of the Company are accurate and fairly and correctly
present the information required to be presented by the Act or the Rules and
Regulations in all material respects; and there are no statutes, rules or
regulations required to be described in the Registration Statement or the
Prospectus that are not described or referred to therein as required.
(xv) The statements under the captions "Risk Factors
Outstanding Shares Eligible for Future Sale," "Management Employment and
Agreements," "Management - 1998 Incentive Plan," and "Certain Transactions" 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.
(xvi) The information required to be set forth in the
Registration Statement in answer to Item 509 of Regulation S-B insofar as it
relates to such counsel is accurately and adequately set forth therein in all
material respects or no response is required with respect to such Item.
(xvii) The Company is not in violation of its Certificate of
Incorporation or Bylaws, and to such counsel's knowledge after due inquiry,
the Company is not in breach of or default with respect to any provision of
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument by which it or any of its properties may be bound
or affected.
(xviii) To such counsel's knowledge after due inquiry,
except as set forth in the Registration Statement and Prospectus, no holders
of shares of Common Stock or other securities of the Company have registration
rights with respect to securities of the Company.
(xix) No transfer taxes are required to be paid in
connection with the sale or delivery to the Underwriters of the Firm Shares or
the Overallotment Shares.
(xx) The Company is not and will not, upon consummation of
the transactions contemplated by the Underwriting Agreement, be an "investment
company," or a "promoter" or "principal underwriter" for, a "registered
investment company," as such terms are defined in the Investment Company Act
of 1940, as amended.
(xxi) The Shares have been approved for listing on the AMEX,
subject to official notice of issuance.
(xxii) Counsel for the Company have participated in
conferences with officials and other representatives of the Company, the
Representative, counsel for the Representative and the independent public
accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed,
and although such counsel have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which caused them to believe
that, at the time the Registration Statement became effective the Registration
Statement (except as to financial statements, financial and statistical data
and supporting schedules contained therein, as to which such counsel need
express no opinion) contained any 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, or at the Closing Date or any
later Overallotment Closing Date, as the case may be, the Registration
Statement or the Prospectus (except as aforesaid) contained any 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.
Counsel rendering the foregoing opinion may rely as to questions of
fact upon representations or certificates of officers of the Company and of
governmental officials, as the case may be, in which case its opinion is to
state that it is so doing and that it has no actual knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificates,
and that such counsel believes that it and the Underwriters are justified in
relying on such opinions or certificates. Copies of any opinion,
representation or certificate so relied upon shall be delivered to the
Representative, and to the Representative's counsel.
Appendix B
(i) The Selling Stockholders have full power and authority
to enter into the Underwriting Agreement and the Escrow Agreement and to sell,
transfer and deliver the Overallotment Shares to be sold by them in the manner
provided in the Underwriting Agreement. The Underwriting Agreement and the
Escrow Agreement have been duly executed and delivered by the Selling
Stockholders.
(ii) Each of the Selling Stockholders is the lawful owner of
the Overallotment Shares to be sold by him upon sale and delivery of, and
payment for, such Overallotment Shares, as provided in the Underwriting
Agreement. Each of the Selling Stockholders will convey good and marketable
title to such Overallotment Shares, free and clear of any security interests,
liens, encumbrances, equities, claims or other defects.
(iii) The execution, delivery or performance of the
Underwriting Agreement or the Escrow Agreement by any of the Selling
Stockholders, the sale of the Overallotment Shares being sold to the
Underwriters by any of the Selling Stockholders pursuant to the Underwriting
Agreement, the compliance by any of the Selling Stockholders with the other
provisions of the Underwriting Agreement and the Escrow Agreement and the
consummation of the other transactions contemplated in the Underwriting
Agreement and the Escrow Agreement do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental
authority, except such as have been obtained, such as may be required under
Blue Sky laws and, if the registration statement filed with respect to the
Shares (as amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in this
Agreement) under the Act or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under
any indenture, mortgage, deed of trust, lease or other agreement or instrument
to which any such Selling Stockholder is a party or by which any of the
Selling Stockholders is bound, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to any of the Selling Stockholders.
