2,616,250 Shares
INTEST CORPORATION
Common Stock
UNDERWRITING AGREEMENT
Philadelphia, Pennsylvania
June __, 1997
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXX & COMPANY, INC.
As Representatives of the Several
Underwriters Named in Schedule I
Hereto
c/o Janney Xxxxxxxxxx Xxxxx Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Dear Ladies and Gentlemen:
inTEST Corporation, a Delaware corporation (the "Company"),
proposes to sell to Xxxxxx Xxxxxxxxxx Xxxxx Inc. and Xxxxxxx & Company, Inc.
(the "Representatives") and the several other underwriters named in Schedule I
hereto (collectively with the Representatives, the "Underwriters") 1,820,000
shares of the Company's common stock ("Common Shares"), and the selling
stockholders of the Company named in Schedule II hereto (collectively, the
"Selling Stockholders") propose to sell severally to the Underwriters an
aggregate of 455,000 Common Shares. The Common Shares to be sold to the
Underwriters by the Company and the Selling Stockholders are hereinafter
referred to as the "Firm Shares." The respective amounts of the Firm Shares to
be so purchased by the several Underwriters are set forth opposite their names
in Schedule I hereto. The Firm Shares shall be offered to the public at an
initial public offering price of $_____ per Firm Share (the "Offering Price").
In addition, in order to cover over-allotments in the sale of
the Firm Shares, the Underwriters may purchase for the Underwriters' own
accounts, ratably in proportion to the amounts set forth opposite their
respective names in Schedule I hereto, up to 341,250 additional Common Shares
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from the Selling Stockholders as set forth on Schedule II hereto (such
additional Common Shares are referred to herein as the "Optional Shares"). If
any Optional Shares are purchased, the Optional Shares shall be purchased for
offering to the public at the Offering Price and in accordance with the terms
and conditions set forth herein. The Firm Shares and the Optional Shares are
referred to collectively herein as the "Shares."
The Company and the Selling Stockholders, intending to be
legally bound, hereby confirm their agreement with the Underwriters as follows:
1. Representations and Warranties.
(a) Representations and Warranties of the Company. The
Company, and each of the subsidiaries of the Company listed in Exhibit A hereto
(each a "Subsidiary", all of the foreign subsidiaries collectively referred to
as the "Foreign Subsidiaries", all of the domestic subsidiaries referred to as
the "Domestic Subsidiaries" and all of the Foreign Subsidiaries and Domestic
Subsidiaries collectively referred to as the "Subsidiaries") jointly and
severally represent and warrant to, and agree with, the several Underwriters
that:
(i) The Company has prepared, in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Regulations"), of the Securities and Exchange
Commission (the "SEC") under the Act in effect until applicable times, and has
filed with the SEC a registration statement on Form S-1 (File No. 333-_____) and
one or more amendments thereto for the primary purpose of registering the Shares
under the Act. Copies of such registration statement and any amendments thereto,
and all forms of the related prospectus contained therein, have been delivered
to the Representatives; any preliminary prospectus included in such registration
statement or filed with the SEC pursuant to Rule 424(a) of the Regulations is
hereinafter called a "Preliminary Prospectus." The various parts of such
registration statement, including all exhibits thereto and the information (if
any) contained in the form of final prospectus filed with the SEC pursuant to
Rule 424(b) of the Regulations in accordance with Section 5(a) of this Agreement
and deemed by virtue of Rule 424 of the Regulations to be part of the
registration statement at the time it was declared effective, each as amended at
the time the registration statement became effective, are hereinafter
collectively called the "Registration Statement." The final prospectus in the
form included in the Registration Statement or first filed with the SEC pursuant
to Rule 424(b) of the Regulations and any amendments or supplements thereto are
hereinafter called the "Prospectus."
(ii) The Registration Statement has become effective
under the Act and the SEC has not issued any stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Preliminary Prospectus, nor has the SEC instituted or threatened to
institute proceedings with respect to such an order. No stop order suspending
the sale of the Shares in any jurisdiction designated by the Representatives as
provided for in Section 5(f) hereof has been issued, and no proceedings for that
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purpose have been instituted or threatened. The Company has complied in all
material respects with all requests of the SEC, or requests of which the Company
has been advised of any state securities commission in a state designated by the
Representatives as provided for in Section 5(f) hereof, for additional
information to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus unless such request has been waived. Each
Preliminary Prospectus conformed to all the requirements of the Act and the
Regulations as of its date in all material respects and did not as of its date
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
the foregoing shall not apply to statements in or omissions from any Preliminary
Prospectus in reliance upon and in conformity with information supplied to the
Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein. The Registration Statement, on the
date on which it is declared effective by the SEC (the "Effective Date") and
when any post-effective amendment thereof shall become effective, and the
Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) and on
the Closing Date (as defined in Section 3 hereof) and any Option Closing Date
(as defined in Section 4(b) hereof), will conform in all material respects to
all the requirements of the Act and the Regulations, and will not, on any of
such dates, include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by or on behalf of any Underwriter through the
Representatives expressly for use therein.
(iii) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with all necessary corporate power and authority, and all required licenses,
permits, clearances, certifications, registrations, approvals, consents and
franchises, to own or lease and operate its properties and to conduct its
business as described in the Prospectus, and to execute, deliver and perform
this Agreement. Each of the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with all necessary corporate power and authority, and all
required licenses, permits, clearances, certifications, registrations,
approvals, consents and franchises, to own or lease and operate its properties
and to conduct its business as described in the Prospectus.
(iv) The outstanding shares of capital stock or other
evidence of ownership of the Subsidiaries have been duly authorized and validly
issued and are owned by the Company (A) 100% with respect to the Domestic
Subsidiaries, (B) 79.1% with respect to inTEST Kabushiki Kaisha, the Company's
Japanese subsidiary, (C) 79.0% with respect to inTEST Limited, the Company's
United Kingdom subsidiary, (D) 79.0% with respect to inTEST PTE, Limited, the
Company's Singapore subsidiary and (E) upon the consummation of the transactions
contemplated in the Exchange Agreements (the "Exchange") each dated April 4,
1997 (each an "Exchange Agreement" and collectively, the "Exchange Agreements")
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by and between the Company and each of those persons named in Schedule III
hereto (collectively, the "Subsidiary Stockholders"), 100% with respect to the
Foreign Subsidiaries, in all cases free and clear of all liens, encumbrances and
security interests. There are no outstanding options, obligations to issue or
other rights to convert or exchange any obligations into shares of capital stock
or ownership interests in the Subsidiaries. Except as provided in the
corporation law of the respective jurisdictions of incorporation of the
Subsidiaries or as set forth in the Prospectus, there are no restrictions of any
kind which prevent the payment of dividends by any of the Subsidiaries.
(v) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Subsidiaries and constitutes, with
respect to each, its legal, valid and binding obligation, enforceable against
the Company and each of the Subsidiaries in accordance with its terms, except as
such enforceability may be limited by equitable principles or by the application
of bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally, and except as rights to indemnity and contribution
hereunder may be limited by applicable securities laws.
(vi) The Exchange Agreements have been duly authorized,
executed and delivered by the Company and constitute the Company's legal, valid
and binding obligation, enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by equitable principles or
by the application of bankruptcy, insolvency or other similar laws relating to
or affecting creditors' rights generally.
(vii) The execution, delivery and performance of this
Agreement by the Company and the Subsidiaries does not and will not, with or
without the giving of notice or the lapse of time, or both, (a) conflict with
any term or provision of the Company's and each of the Subsidiaries' Articles of
Incorporation or Bylaws, or similar governing instruments, (b) result in a
breach of, constitute a default under, result in the termination or modification
of, result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the assets of the Company or any of the Subsidiaries,
or require any payment by the Company or any of the Subsidiaries, or impose any
liability on the Company or any of the Subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which any of
the Company's or any of the Subsidiaries' assets are bound or affected, (c)
assuming compliance with Blue Sky laws and regulations applicable to the offer
and sale of the Shares, violate any law, rule, regulation, judgment, order or
decree of any government or governmental agency, instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
Subsidiaries or any of the Company's or any of its Subsidiaries' properties or
business or (d) result in a breach, termination or lapse of the Company's or any
of its Subsidiaries' corporate power and authority to own or lease and operate
its assets and properties and conduct its business as described in the
Prospectus.
(viii) At the date or dates indicated in the
Prospectus, the Company had the duly authorized and outstanding capital stock
set forth in the Prospectus; and on the Effective Date, the Closing Date and
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any Option Closing Date, there were and will be no options or warrants for the
purchase of, other outstanding rights to purchase, agreements or obligations to
issue or agreements or other rights to convert or exchange any obligation or
security into, capital stock of the Company or securities convertible into or
exchangeable for capital stock of the Company, except as described in the
Prospectus.
(ix) The authorized capital stock of the Company
conforms in all material respects with the description thereof in the
Prospectus.
(x) The currently outstanding shares of the Company's
and the Subsidiaries' capital stock, including the Shares to be purchased by the
Underwriters from the Selling Stockholders, have been duly authorized and are
validly issued, fully paid and non-assessable, and none of such outstanding
shares of the Company's or Subsidiaries' capital stock has been issued in
violation of any preemptive rights of any security holder of the Company or the
Subsidiaries. The Common Shares to be issued to the Selling Stockholders upon
the consummation of the Exchange will, upon issuance in accordance with the
Exchange Agreements, be duly authorized, validly issued, fully paid and
non-assessable, and none of such outstanding shares of the Company's capital
stock will be issued in violation of any preemptive rights of any security
holder of the Company. The holders of the outstanding shares of the Company's
and the Subsidiaries' capital stock are not subject to personal liability solely
by reason of being such holders. The offers and sales of the outstanding shares
of the Company's and the Subsidiaries' capital stock, whether described in the
Registration Statement or otherwise, were and, as to the Common Shares to be
issued on consummation of the Exchange, will be made in conformity with
applicable federal, state and foreign securities laws.
(xi) When the Shares have been duly delivered against
payment therefor as contemplated by this Agreement, the Shares will be validly
issued, fully paid and non-assessable, and the holders thereof will not be
subject to personal liability solely by reason of being such holders. The
certificates representing the Shares are in proper legal form under, and conform
in all respects to the requirements of, the Delaware General Corporation Law, as
amended. Neither the filing of the Registration Statement nor the offering or
sale of Shares as contemplated by this Agreement gives any security holder of
the Company any rights for or relating to the registration of any Common Shares
or any other capital stock of the Company, except such as have been satisfied or
waived.
(xii) No consent, approval, authorization, order,
registration, license or permit of, or filing or registration with, any court,
government, governmental agency, instrumentality or other regulatory body or
official is required for the valid and legal execution, delivery and performance
by the Company and the Subsidiaries of this Agreement and the consummation of
the transactions contemplated hereby and described in the Prospectus, except
such as may be required for the registration of the Shares under the Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and for
compliance with the applicable state securities or Blue Sky laws.
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(xiii) The Common Shares (including the Shares) have
been approved for inclusion, subject only to official notice of issuance, in the
Nasdaq National Market.
(xiv) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of or references to contracts,
agreements or other documents, are accurate in all material respects and present
or summarize fairly, in all material respects, the information required to be
disclosed under the Act and/or the Regulations, and there are no contracts,
agreements or other documents required to be described or referred to in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement under the Act or the Regulations that have not been so
described, referred to or filed, as required.
(xv) The consolidated financial statements of the
Company (including the notes thereto) filed as part of any Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly, in all
material respects, the financial position of the Company and the Subsidiaries as
of the respective dates thereof, and the results of operations, stockholders'
equity and cash flows of the Company and the Subsidiaries for the periods
indicated therein, all in conformity with generally accepted accounting
principles consistently applied. The supporting notes and schedules included in
the Registration Statement fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The financial information included in the Prospectus under the caption
"Prospectus Summary" and "Selected Consolidated Financial Data" presents fairly
the information shown therein and has been compiled on a basis consistent with
that of the audited financial statements included in the Registration Statement.
The unaudited pro forma financial information included in the Registration
Statement complies as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts in
the compilation of this information.
(xvi) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
otherwise expressly stated therein or expressly contemplated thereby, there has
not been (a) any material adverse change (including, whether or not insured
against, any material loss or damage to any material assets), or development
which could reasonably be expected to involve a prospective material adverse
change, in the general affairs, properties, assets, management, condition
(financial or otherwise), results of operations, stockholders' equity, business
or prospects of either the Company or the Subsidiaries taken as a whole, (b) any
material adverse change, loss, reduction, termination or non-renewal of any
contract to which the Company or any Subsidiary is a party, (c) any transaction
entered into by the Company or any Subsidiary not in the ordinary course of its
business that is material to the Company and the Subsidiaries taken as a whole,
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(d) any dividend or distribution of any kind declared, paid or made by the
Company or any Subsidiary on its capital stock, (e) any liabilities or
obligations, direct or indirect, incurred by the Company or any Subsidiary that
are material to the Company and the Subsidiaries taken as a whole, (f) any
change in the capitalization or stock ownership of the Company or any Subsidiary
or (g) any change in the indebtedness of the Company or any Subsidiary that is
material to the Company and the Subsidiaries taken as a whole. Neither the
Company nor any Subsidiary has any contingent liabilities or obligations that
are material to the Company and the Subsidiaries taken as a whole and that are
not disclosed in the Prospectus.
(xvii) The Company has not distributed and will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, a Preliminary Prospectus, the
Prospectus and other material, if any, permitted by the Act and the Regulations.
Neither the Company nor any of its officers, directors or affiliates has taken
nor shall the Company take any action designed to, or that might be reasonably
expected to cause or result in, stabilization or manipulation of the price of
the Shares.
(xviii) The Company and each Subsidiary have filed with
the appropriate federal, state and local governmental agencies, and all foreign
countries and political subdivisions thereof, all tax returns that are required
to be filed or have duly obtained extensions of time for the filing thereof and
have paid all taxes shown on such returns or otherwise due and all material
assessments received by it to the extent that the same have become due. Neither
the Company nor any Subsidiary has executed or filed with any taxing authority,
foreign or domestic, any agreement extending the period for assessment or
collection of any income or other tax or is a party to any pending action or
proceeding by any foreign or domestic governmental agencies for the assessment
or collection of taxes, and no claims for assessment or collection of taxes have
been asserted against the Company or any Subsidiary that might materially
adversely affect the general affairs, assets, properties, condition (financial
or otherwise), results of operations, stockholders' equity, business or
prospects of the Company and the Subsidiaries, taken as a whole.
(xix) To the knowledge of the Company, KPMG Peat
Marwick LLP, which has given its reports on certain financial statements
included as part of the Registration Statement, is a firm of independent
certified public accountants as required by the Act and the Regulations.
(xx) Neither the Company nor any Subsidiary is in
violation of or in default under any of the terms or provisions of (a) its
Articles or Certificate of Incorporation or Bylaws or similar governing
instruments, or (b) any indenture, mortgage, deed of trust, contract, commitment
or other agreement or instrument to which it is a party or by which it or any of
its properties is bound or affected, (c) any law, rule, regulation, judgment,
order or decree of any government or governmental agency, instrumentality or
court, domestic or foreign, having jurisdiction over it or any of its properties
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or business or (d) any license, permit, certification, registration, approval,
consent or franchise referred to in Section 1(a)(iii) hereof, where, with
respect to clauses (b), (c) and (d) of this Section 1(xx), such violation or
default could reasonably be expected to have a material adverse effect on the
general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole.
(xxi) There are no claims, actions, suits, protests,
proceedings, arbitrations, investigations or inquiries pending before, or
threatened or to the Company's knowledge contemplated by, any governmental
agency, instrumentality, court or tribunal, domestic or foreign, or before any
private arbitration tribunal, including, without limitation, the current
reexamination by the U.S. Patent and Trademark Office of the Company's U.S.
Patent 4,589,815 issued on May 20, 1986, to which the Company or any Subsidiary
is a party, that could reasonably be expected to affect the validity of any of
the outstanding Common Shares, or that, if determined adversely to the Company
or any Subsidiary, would, in any case or in the aggregate, result in any
material adverse change in the general affairs, properties, condition (financial
or otherwise), results of operations, stockholders' equity, business or
prospects of the Company and the Subsidiaries taken as a whole; nor, to the
Company's knowledge, is there any reasonable basis for any such claim, action,
suit, protest, proceeding, arbitration, investigation or inquiry. There are no
outstanding orders, judgments or decrees of any court, governmental agency,
instrumentality or other tribunal, enjoining the Company or any Subsidiary from,
or requiring the Company or any Subsidiary to take or refrain from taking, any
action, or to which the Company or any Subsidiary, their properties, assets or
business are bound or subject.
(xxii) The Company and the Subsidiaries own, or possess
adequate rights to use, all patents, patent applications, trademarks, trade
names, service marks, licenses, inventions, copyrights, know-how, trade secrets,
confidential information, processes and formulations and other proprietary
information necessary for, used in or proposed to be used in the conduct of
their business as described in the Prospectus. The Company and the Subsidiaries
have not infringed upon, are not infringing upon and have not received any
notice of conflict with, the asserted intellectual property or other rights of
others and the Company knows of no reasonable basis for any notice or claim of
such infringement or conflict.
(xxiii) The Company and each Subsidiary have good and
marketable title to all property described in the Prospectus as being owned by
them, free and clear of all liens, security interests, charges or encumbrances,
except such as are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere in any
material respect with the use made, or proposed to be made, of such property by
the Company or the Subsidiary. The Company and each Subsidiary have adequately
insured their property against loss or damage by fire or other casualty and
maintain, in amounts reasonably believed by them to be adequate, insurance
against such other risks as they deem appropriate. All real and personal
property leased by the Company or any Subsidiary, as described or referred to in
the Prospectus, is held by the Company or such Subsidiary under valid leases.
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All of the facilities of the Company and each Subsidiary (the "Premises"), and
all operations conducted thereon, are now and, since the Company or any
Subsidiary began to use such Premises, always have been and, to the knowledge of
the Company, prior to when the Company or any Subsidiary began to use such
Premises, always had been, in compliance with all, foreign or domestic, federal,
state and local statutes or ordinances, regulations and rules concerning or
relating to industrial hygiene and the protection of health and the environment
(collectively, "the Governmental Laws"), except to the extent that any failure
to be in such compliance would not materially adversely affect the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole. There are no conditions on, about, beneath or arising from the
Premises that might give rise to liability, the imposition of a statutory lien
or require a "Response," "Removal" or "Remedial Action," as defined herein,
under any of the Governmental Laws, and that would materially adversely affect
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole. Neither the Company nor any Subsidiary has
received notice, and the Company does not have knowledge, of any claim, demand,
investigation, regulatory action, suit or other action instituted or threatened
against the Company or any Subsidiary or any portion of the Premises relating to
any of the Governmental Laws. Neither the Company nor any Subsidiary has
received any notice of material violation, citation, complaint, order,
directive, request for information or response thereto, notice letter, demand
letter or compliance schedule to or from any governmental or regulatory agency,
foreign or domestic, arising out of or in connection with "hazardous substances"
(as defined by applicable Governmental Laws) on, about, beneath, arising from or
generated at the Premises. As used in this subsection, the terms "Response,"
"Removal" and "Remedial Action" shall have the respective meanings assigned to
such terms under Sections 101(23)-101(25) of the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. 9601(23)- 9601(25).
(xxiv) The Company and each Subsidiary maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that: (a) transactions are executed in accordance with management's
general or specific authorization; (b) transactions are recorded as necessary in
order to permit preparation of financial statements in accordance with generally
accepted accounting principles and statutory accounting practices and to
maintain accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization and (d) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxv) Each contract or other instrument (however
characterized or described) to which the Company or any Subsidiary is a party or
by which any of their properties or business is bound or affected and which is
material to the conduct of the Company's business as described in the Prospectus
has been duly and validly executed by the Company or such Subsidiary, and, to
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the knowledge of the Company, by the other parties thereto. Each such contract
or other instrument is in full force and effect and is enforceable against the
parties thereto in accordance with its terms, and the Company and the
Subsidiaries are not, and to the knowledge of the Company, no other party is, in
material default thereunder, and no event has occurred that, with the lapse of
time or the giving of notice, or both, would constitute a material default under
any such contract or other instrument. All necessary consents under such
contracts or other instruments to disclosure in the Prospectus with respect
thereto have been obtained.
(xxvi) Except for such plans that are expressly
disclosed in the Prospectus, the Company and the Subsidiaries do not have any
employee benefit plan, profit sharing plan, employee pension benefit plan or
employee welfare benefit plan or deferred compensation arrangements ("Plans")
that are subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended, or the rules and regulations thereunder ("ERISA"). All
Plans that are subject to ERISA are in compliance with ERISA, in all material
respects, and, to the extent required by the Internal Revenue Code of 1986, as
amended (the "Code"), in compliance with the Code in all material respects.
Neither the Company nor any Subsidiary has or ever had any employee pension
benefit plan that is subject to Part 3 of Subtitle B of Title I of ERISA or any
defined benefit plan or multi-employer plan. The Company has not maintained
retired life and retired health insurance plans that are employee welfare
benefit plans providing for continuing benefit or coverage for any employee or
any beneficiary of any employee after such employee's termination of employment,
except as required by Section 4980B of the Code. No fiduciary or other party in
interest with respect to any of the Plans has caused any of such Plans to engage
in a prohibited transaction as defined in Section 406 of ERISA. As used in this
subsection, the terms "defined benefit plan," "employee benefit plan," "employee
pension benefit plan," "employee welfare benefit plan," "fiduciary" and
"multi-employer plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
(xxvii) No labor dispute exists with the employees of
the Company or any Subsidiary, and no such labor dispute is threatened. The
Company has no knowledge of any existing or threatened labor disturbance by the
employees of any of the principal suppliers, contractors or customers of the
Company or its Subsidiaries that would materially adversely affect the general
affairs, properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
(xxviii) Neither the Company nor any Subsidiary has
incurred any liability for any finder's fees or similar payments in connection
with the transactions contemplated herein.
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(xxix) Each of the Company and the Subsidiaries
currently intends to conduct its affairs in such a manner as to ensure that it
will not be an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder.
(xxx) There is no document or contract of a character
required to be described in the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required; no
statement, representation, warranty or covenant made by the Company or any
Subsidiary in this Agreement or in any certificate or document required by this
Agreement to be delivered to the Representatives is, was when made, or as of the
Closing Date or any Option Closing Date will be, inaccurate, untrue or incorrect
in any material respect. No transaction has occurred or is proposed between or
among the Company and any of its officers, directors or stockholders or any
affiliate of any such officer, director or stockholder that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(xxxi) None of the Company, any Subsidiary or any
officer, director, employee, agent or other person acting on behalf of the
Company or such Subsidiary has, directly or indirectly, given or agreed to give
any money, property or similar benefit or consideration to any customer or
supplier (including any employee or agent of any customer or supplier) or
official or employee of any agency or instrumentality of any government (foreign
or domestic) or political party or candidate for office (foreign or domestic) or
any other person who was, is or in the future may be in a position to affect the
general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company and the
Subsidiaries taken as a whole or any actual or proposed business transaction of
the Company or the Subsidiaries that (a) could subject the Company or such
Subsidiary to any liability (including, but not limited to, the payment of
monetary damages) or penalty in any civil, criminal or governmental action or
proceeding, foreign or domestic, which would have a material adverse effect on
the general affairs, properties, condition (financial or otherwise), results of
operations, stockholders' equity, business or prospects of the Company or the
Subsidiaries taken as a whole or (b) violates any law, rule or regulation,
foreign or domestic, to which the Company or the Subsidiaries are subject, which
violation if proven would have a material adverse effect on the general affairs,
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company and the Subsidiaries
taken as a whole.
(xxxii) The Company has not declared, paid or accrued
any dividends or distributions to stockholders since its inception except as
described or referred to in the Prospectus and will not hereafter declare, pay
or, except as described in the Prospectus, accrue any such dividends or
distributions prior to the Closing Date.
(xxxiii) Except as described on Schedule IV attached
hereto, none of the stockholders of the Company, including those who will become
such upon consummation of the Exchange, is affiliated with any member of the
National Association of Securities Dealers, Inc. (the "NASD").
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Any certificate signed by any officer of the Company or any
Subsidiary in such capacity and delivered to the Representatives or to counsel
for the Underwriters pursuant to this Agreement shall be deemed a representation
and warranty by the Company or such Subsidiary to the several Underwriters as to
the matters covered thereby.
(b) Representations and Warranties of the Selling
Stockholders. Each of the Selling Stockholders represents and warrants to, and
agrees with, the several Underwriters that:
(i) Such Selling Stockholder, if a Subsidiary
Stockholder, has duly executed and delivered the Exchange Agreement and the
Exchange Agreement constitutes such Subsidiary Stockholder's legal, valid and
binding obligation, enforceable against the Subsidiary Stockholder in accordance
with its terms, except as such enforceability may be limited by equitable
principles or by the application of bankruptcy, insolvency or other similar laws
relating to or affecting creditors' rights generally, and except as rights to
indemnity and contribution hereunder may be limited by applicable securities
laws.
(ii) Such Selling Stockholder has duly executed and
delivered a power of attorney in the form contained in the Custody Agreement (as
defined below) appointing each of Xxxx X. Xxxx and Xxxx X. Xxxxx, Xx. as such
Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact"). The
Attorney-in-Fact is authorized to execute, deliver and perform this Agreement on
behalf of such Selling Stockholder, including, without limitation, the authority
to determine the purchase price to be paid to such Selling Stockholder by the
Underwriters as set forth in Section 2 of this Agreement, and in connection
therewith such Selling Stockholder has duly executed and delivered a Power of
Attorney and Custody Agreement (the "Custody Agreement"), in the form heretofore
delivered to the Representatives, with The First National Bank of Boston as
custodian (the "Custodian"). Certificates in negotiable form representing the
Shares to be sold by such Selling Stockholder hereunder have been deposited with
the Custodian, except for those Shares to be issued in the Exchange in which
case the certificates representing the shares of the Foreign Subsidiaries to be
exchanged have been deposited, pursuant to the Custody Agreement for the purpose
of delivery pursuant to this Agreement. Those Shares to be issued in the
Exchange shall be issued by the Company's transfer agent upon the consummation
thereof and delivered pursuant to this Agreement. Such Selling Stockholder
agrees that the Shares represented by the certificates which are on deposit or
which will be issued by the Company's transfer agent upon the consummation of
the Exchange are subject to the interests of the Underwriters hereunder, that
the arrangements made for such custody and the appointment of the
Attorney-in-Fact are to that extent irrevocable, and that the obligations of
such Selling Stockholder hereunder shall not be terminated, except as expressly
provided in this Agreement or the Custody Agreement, by any act of such Selling
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Stockholder, by operation of law or otherwise, by the death or incapacity of
such Selling Stockholder, or by the occurrence of any other event. If such
Selling Stockholder should die or become incapacitated, or if any other event
should occur, before the delivery of the Shares to be sold by such Selling
Stockholder hereunder, the certificates for such Shares shall be delivered by
the Custodian and issued by the Company's transfer agent in accordance with the
terms and conditions of this Agreement and Custody Agreement as if such death,
incapacity, or other event had not occurred, regardless of whether or not the
Custodian or Attorney-in-Fact shall have received notice thereof.
(iii) Such Selling Stockholder has the full right,
power and authority to enter into this Agreement, the Custody Agreement and any
Exchange Agreement executed by such Selling Stockholder, and has or, in the case
of Shares to be issued pursuant to the Exchange Agreement, will have the full
right, power and authority to sell, transfer and deliver the Shares to be sold
by such Selling Stockholder hereunder, and this Agreement, the Custody Agreement
and any Exchange Agreement executed by such Selling Stockholder have been duly
authorized, executed and delivered by such Selling Stockholder and constitute
the legal, valid and binding obligations of such Selling Stockholder enforceable
in accordance with their respective terms. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and by
the Custody Agreement and any Exchange Agreement executed by such Selling
Stockholder will not result in a violation or breach by such Selling Stockholder
of, or constitute a default by such Selling Stockholder under, any indenture,
mortgage, deed of trust, note, bank loan or credit agreement or any other
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound, any organizational document relating to such
Selling Stockholder (including, without limitation, any partnership agreement,
articles of incorporation, bylaws or other governing instruments), or any
statute, judgment, decree, order, rule or regulation of any court or
governmental agency or body, foreign or domestic, applicable to such Selling
Stockholder.
(iv) All authorizations, approvals and consents
necessary for the execution and delivery by such Selling Stockholder of the
Custody Agreement and such Selling Stockholder's Exchange Agreement, if any, the
execution and delivery by or on behalf of such Selling Stockholder of this
Agreement, the consummation of the Exchange and the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder (other than such
authorizations, approvals or consents as may be necessary under the state
securities or Blue Sky laws), have been obtained and are in full force and
effect.
(v) Such Selling Stockholder now is (except for the
Shares to be issued upon the Exchange), and on the Closing Date will be, the
lawful owner of the Shares to be sold by such Selling Stockholder pursuant to
this Agreement. On the Closing Date, such Selling Stockholder will have valid
and marketable title to such Shares, free and clear of all liens, encumbrances,
security interests or other restrictions (other than those created under the
Custody Agreement). Upon proper delivery of and payment for such Shares as
provided herein, the Underwriters will acquire valid and marketable title
thereto, free and clear of all liens, encumbrances, security interests and other
restrictions.
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(vi) To the knowledge of such Selling Stockholder, the
representations and warranties of the Company contained in Section 1(a) hereof
are true and correct. Such Selling Stockholder has read the Registration
Statement and the Prospectus and has no knowledge of any fact, condition or
information not disclosed therein which has adversely affected or could
adversely affect the general affairs, assets, properties, condition (financial
or otherwise), results of operations, stockholders' equity, business or
prospects of the Company and the Subsidiaries, taken as a whole. To the
knowledge of such Selling Stockholder, neither the Registration Statement nor
the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such Selling Stockholder is not prompted to sell the
Shares to be sold by such Selling Stockholder hereunder by any information
concerning the Company or any Subsidiary which is not set forth in the
Prospectus.
(vii) Such Selling Stockholder has examined the caption
titled "Principal and Selling Stockholders" in the Registration Statement and
the Prospectus and the information relating to such Selling Stockholder set
forth therein and, as to such information, neither the Registration Statement
nor the Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(viii) Such Selling Stockholder has not incurred any
liability for any finder's fee or similar payments in connection with the sale
of such Selling Stockholder's Shares hereunder.
(ix) Such Selling Stockholder (A) has not distributed
and will not distribute any offering material in connection with the offering
and sale of the Shares other than the Registration Statement, a Preliminary
Prospectus, the Prospectus and other material, if any, permitted by the Act and
the Regulations, and (B) has not taken and will not take any action designed to,
or that might be reasonably expected to cause or result in, stabilization or
manipulation of the price of the Shares.
2. Purchase and Sale of Firm Shares. On the basis of the
representations, warranties, covenants and agreements contained herein, but
subject to the terms and conditions set forth herein, (a) the Company shall sell
to the several Underwriters at the Offering Price, less the Underwriting
Discounts and Commissions in the amount of $_______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto,
and the Underwriters, severally and not jointly, shall purchase from the Company
on a firm commitment basis, at the Offering Price, less the Underwriting
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Discounts and Commissions in the amount of $______ per Share, the respective
amounts of the Firm Shares set forth opposite their names on Schedule I hereto;
and (b) the Selling Stockholders shall sell to the several Underwriters at the
Offering Price, less the Underwriting Discounts and Commissions in the amount of
$_______ per Share, the respective amounts of the Firm Shares set forth opposite
their names on Schedule II hereto, and the Underwriters, severally and not
jointly, shall purchase from the Selling Stockholders on a firm commitment
basis, at the Offering Price, less the Underwriting Discounts and Commissions in
the amount of $_______ per Share, the respective amounts of the Firm Shares set
forth opposite their names on Schedule I hereto. In making this Agreement, each
Underwriter is contracting severally, and not jointly, and except as provided in
Sections 4 and 11 hereof, the agreement of each Underwriter is to purchase only
that number of shares specified with respect to that Underwriter in Schedule I
hereto. The Underwriters shall offer the Shares to the public as set forth in
the Prospectus.
3. Payment and Delivery. Payment for the Firm Shares shall be
made by certified or official bank check payable to the order of (i) the Company
with respect to the Firm Shares sold by it and (ii) the Custodian with respect
to the Firm Shares sold by the Selling Stockholders, in New York Clearing House
funds at the offices of Xxxxxx Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place as shall be agreed upon by the
Company, the Attorney-in-Fact and the Representatives, or in immediately
available funds wired to such accounts as the Company or the Custodian may
specify (with all costs and expenses incurred by the Underwriters in connection
with such settlement in immediately available funds, including, but not limited
to, interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Firm Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. Such payment
and delivery will be made at 10:00 AM., Philadelphia, Pennsylvania time, on
_________, 1997. Such time and date are referred to herein as the "Closing
Date." The certificates representing the Firm Shares to be sold and delivered
will be in such denominations and registered in such names as the
Representatives request not less than two full business days prior to the
Closing Date, and will be made available to the Representatives for inspection,
checking and packaging at the New York correspondent office of the Company's
transfer agent not less than one full business day prior to the Closing Date.
4. Option to Purchase Optional Shares.
(a) For the purposes of covering any over-allotments in
connection with the distribution and sale of the Firm Shares as contemplated by
the Prospectus, subject to the terms and conditions herein set forth, the
several Underwriters are hereby granted an option by the Selling Stockholders to
purchase all or any part of the Optional Shares, pro rata as among the Optional
Shares from each Selling Stockholder (the "Over-allotment Option"). The purchase
price to be paid for the Optional Shares shall be the Offering Price less the
Underwriting Discounts and Commissions shown on the cover page of the
-15-
Prospectus. The Over-allotment Option granted hereby may be exercised by the
Representatives on behalf of the several Underwriters as to all or any part of
the Optional Shares at any time and from time to time within 30 days after the
date of the Prospectus. No Underwriter shall be under any obligation to purchase
any Optional Shares prior to an exercise of the Over-allotment Option.
(b) The Over-allotment Option granted hereby may be
exercised by the Representatives on behalf of the several Underwriters by giving
notice to the Custodian by a letter sent by registered or certified mail,
postage prepaid, telex, telegraph, telegram or facsimile (such notice to be
effective when received), addressed as provided in Section 13 hereof, setting
forth the number of Optional Shares to be purchased, the date and time for
delivery of and payment for the Optional Shares and stating that the Optional
Shares referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares.
If such notice is given prior to the Closing Date, the date set forth therein
for such delivery and payment shall be the Closing Date. If such notice is given
on or after the Closing Date, the date set forth therein for such delivery and
payment shall be a date selected by the Representatives that is within three
full business days after the exercise of the Over-allotment Option. The date and
time set forth in such a notice is referred to herein as an "Option Closing
Date," and a closing held pursuant to such a notice is referred to herein as an
"Option Closing." Upon each exercise of the Over-allotment Option, and on the
basis of the representations, warranties, covenants and agreements herein
contained, and subject to the terms and conditions herein set forth, the several
Underwriters shall become severally, but not jointly, obligated to purchase from
the Selling Stockholders the number of Optional Shares specified in each notice
of exercise of the Over-allotment Option.
(c) The number of Optional Shares to be sold to each
Underwriter pursuant to each exercise of the Over-allotment Option shall be the
number that bears the same ratio to the aggregate number of Optional Shares
being purchased through such Over-allotment Option exercise as the number of
Firm Shares opposite the name of such Underwriter in Schedule I hereto bears to
the total number of all Firm Shares. Notwithstanding the foregoing, the number
of Optional Shares purchased and sold pursuant to each exercise of the
Over-allotment Option shall be subject to such adjustment as the Representatives
may approve to eliminate fractional shares and subject to the provisions for the
allocation of Optional Shares purchased for the purpose of covering
over-allotments set forth in the agreement entered into by and among the
Underwriters in connection herewith (the "Agreement Among Underwriters"). The
number of Optional Shares to be sold by each Selling Stockholder shall be the
respective number of Optional Shares obtained by multiplying the number of
Optional Shares specified in the notice to the Custodian referred to in Section
4(b) hereof by a fraction the numerator of which is the maximum number of
Optional Shares to be sold by such Selling Stockholders, as specified opposite
such Selling Stockholders name in Schedule II hereto, and the denominator of
which is the maximum number of all Optional Shares that may be sold pursuant to
this Agreement; subject, however, to such adjustment as the Representatives may
approve to eliminate fractional shares.
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(d) Payment for the Optional Shares shall be made to the
Custodian by certified or official bank check payable to the order of the
Custodian in New York Clearing House funds, at the offices of Xxxxxx Xxxxxxxxxx
Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such other place
as shall be agreed upon by the Attorney-in-Fact and the Representatives, or in
immediately available funds wired to such account as the Custodian may specify
(with all costs and expenses incurred by the Underwriters in connection with
such settlement in immediately available funds, including, but not limited to,
interest or cost of funds and expenses, to be borne by the Company), against
delivery of the Optional Shares to the Representatives at the offices of Xxxxxx
Xxxxxxxxxx Xxxxx Inc., 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, or such
other place as shall be agreed upon by the Company, the Attorney-in-Fact and the
Representatives, for the respective accounts of the Underwriters. The
certificates representing the Optional Shares to be issued and delivered will be
in such denominations and registered in such names as the Representatives
request not less than two full business days prior to the Option Closing Date,
and will be made available to the Representatives for inspection, checking and
packaging at the New York correspondent office of the Company's transfer agent
not less than one full business day prior to the Option Closing Date.
5. Certain Covenants and Agreements of the Company. The
Company covenants and agrees with the several Underwriters as follows:
(a) If Rule 430A of the Regulations is employed, the
Company will timely file the Prospectus pursuant to and in compliance with Rule
424(b) of the Regulations and will advise the Representatives of the time and
manner of such filing.
(b) The Company will not file or publish any amendment or
supplement to the Registration Statement, Preliminary Prospectus or Prospectus
at any time before the completion of the distribution of the Shares by the
Underwriters that is not (i) in compliance with the Regulations and (ii)
approved by the Representatives (such approval not to be unreasonably withheld
or delayed).
(c) The Company will advise the Representatives
immediately, and confirm such advice in writing, (i) when any post-effective
amendment to the Registration Statement is filed with the SEC, (ii) of the
receipt of any comments from the SEC concerning the Registration Statement,
(iii) when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (iv) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (v)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vi) during the period noted in (v) above, of the need
to amend the Registration Statement or supplement the Prospectus to comply with
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the Act, (vii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, and (viii)
of the suspension of the qualification of any of the Shares for offering or sale
in any jurisdiction in which the Underwriters intend to make such offers or
sales, or of the initiation or threatening of any proceedings for any of such
purposes known to the Company. The Company will use its best efforts to prevent
the issuance of any such stop order or of any order preventing or suspending
such use and, if any such order is issued, to obtain as soon as possible the
lifting thereof.
(d) The Company has delivered to the Representatives,
without charge, copies of each Preliminary Prospectus. The Company will deliver
to the Representatives, without charge, from time to time during the period when
delivery of the Prospectus is required under the Act, such number of copies of
the Prospectus (as supplemented or amended) as the Representatives may
reasonably request. The Company hereby consents to the use of such copies of the
Preliminary Prospectus and the Prospectus for purposes permitted by the Act, the
Regulations and the securities or Blue Sky laws of the states in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. The Company has
furnished or will furnish to the Representatives three original signed copies of
the Registration Statement as originally filed and of all amendments and
supplements thereto, whether filed before or after the Effective Date, three
copies of all exhibits filed therewith and three signed copies of all consents
and certificates of experts, and will deliver to the Representatives such number
of conformed copies of the Registration Statement, including financial
statements and exhibits, and all amendments and supplements thereto, as the
Representatives may reasonably request.
(e) The Company will comply with the Act, the Regulations,
the Exchange Act and the rules and regulations thereunder so as to permit the
continuance of sales of and dealings in the Shares for as long as may be
necessary to complete the distribution of the Shares as contemplated hereby.
(f) The Company will furnish such information as may be
required and otherwise cooperate in the registration or qualification of the
Shares, or exemption therefrom, for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of such
jurisdictions in which the Representatives determine to offer the Shares, after
consultation with the Company, and will file such consents to service of process
or other documents necessary or appropriate in order to effect such registration
or qualification; provided, however, that no such qualification shall be
required in any jurisdiction where, solely as a result thereof, the Company
would be subject to taxation or qualification as a foreign corporation doing
business in such jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject. The Company will, from time to time, prepare and file
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such statements and reports as are or may be required to continue such
qualification in effect for so long a period as is required under the laws of
such jurisdictions for such offering and sale.
(g) Subject to subsection 5(b) hereof, in case of any
event, at any time within the period during which, in the opinion of counsel for
the Underwriters, a prospectus is required to be delivered under the Act and
Regulations, as a result of which any Preliminary Prospectus or the Prospectus,
as then amended or supplemented, would contain an untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act and Regulations or any
applicable securities or Blue Sky laws, the Company promptly will prepare and
file with the SEC, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters such number of
copies of such amendment(s), supplement(s) or document(s) (in form and substance
satisfactory to the Representatives and counsel for the Underwriters) as the
Representatives may reasonably request. For purposes of this subsection (g), the
Company will provide such information to the Representatives, the Underwriters'
counsel and counsel to the Company as shall be necessary to enable such persons
to consult with the Company with respect to the need to amend or supplement the
Registration Statement, Preliminary Prospectus or Prospectus or file any
document, and shall furnish to the Representatives and the Underwriters' counsel
such further information as each may from time to time reasonably request.
(h) The Company will make generally available to its
security holders not later than 45 days after the end of the period covered
thereby, an earnings statement of the Company (which need not be audited) that
shall comply with Section 11(a) of the Act and cover a period of at least 12
consecutive months beginning not later than the first day of the Company's
fiscal quarter next following the Effective Date.
(i) For a period of five years following the Effective
Date, the Company will furnish to the Representatives copies of all materials
furnished by the Company to its Stockholders and all public reports and all
reports and financial statements furnished by the Company to the SEC pursuant to
the Exchange Act or any rule or regulation of the SEC thereunder.
(j) During the course of the distribution of the Shares,
the Company will not take, directly or indirectly, any action designed to or
that could reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Shares.
(k) The Company has caused each person listed on Schedule V
hereto to execute an agreement (a "Lock-up Agreement"). The Company has
delivered such Lock-up Agreements to Xxxxxx Xxxxxxxxxx Xxxxx Inc. prior to the
date of this Agreement. Appropriate stop transfer instructions will be issued by
the Company to the Company's transfer agent for the Common Shares.
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(l) The Company will not engage in any transaction with
affiliates (as defined in the Regulations) without the prior approval of a
majority of the members of its Board of Directors who do not have an interest in
such transaction other than in their capacity as directors of the Company.
(m) Except pursuant to the Exchange Agreements, for a
period of 180 days after the Effective Date, the Company will not, without the
prior written consent of Xxxxxx Xxxxxxxxxx Xxxxx Inc. offer, sell, contract to
sell or otherwise dispose of any Common Shares or any securities convertible
into or exercisable for any Common Shares or, except for up to 500,000 Common
Shares pursuant to the Company's 1997 Stock Plan (subject to the agreement of
each holder thereof that, until after the 180th day after the Effective Date,
such holder will not, without the prior written consent of Xxxxxx Xxxxxxxxxx
Xxxxx Inc., directly or indirectly offer to sell, sell, contract to sell or
otherwise transfer or dispose of any of such Common Shares), grant options to
purchase any Common Shares.
(n) The Company will use all reasonable efforts to maintain
the qualification or listing of the Common Shares (including, without
limitation, the Shares) on the Nasdaq National Market.
(o) The Company will maintain Directors and Officers
liability insurance in amounts reasonably determined by the Company's Board of
Directors to be appropriate to the Company's circumstances.
6. Payment of Fees and Expenses.
(a) Whether or not the transactions contemplated by this
Agreement are consummated and regardless of the reason this Agreement is
terminated, the Company will pay or cause to be paid, and bear or cause to be
borne, all costs and expenses incident to the performance of the obligations of
the Company and the Selling Stockholders under this Agreement, including: (i)
the fees and expenses of the accountants and counsel for the Company incurred in
the preparation of the Registration Statement and any post-effective amendments
thereto (including financial statements and exhibits), Preliminary Prospectuses
and the Prospectus and any amendments or supplements thereto, (ii) printing and
mailing expenses associated with the Registration Statement and any
post-effective amendments thereto, Preliminary Prospectus, the Prospectus, this
Agreement, the Agreement Among Underwriters, the Underwriters' Questionnaire
submitted to each of the Underwriters by Xxxxxx Xxxxxxxxxx Xxxxx Inc. in
connection herewith, the power of attorney executed by each of the Underwriters
in favor of Xxxxxx Xxxxxxxxxx Xxxxx Inc. in connection herewith, the Selected
Dealer Agreement and related documents and the preliminary Blue Sky memorandum
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relating to the offering prepared by Pepper, Xxxxxxxx & Xxxxxxx LLP, counsel to
the Underwriters (collectively with any supplement thereto, the "Preliminary
Blue Sky Memorandum"), (iii) the costs incident to the authentication, issuance,
sale and delivery of the Shares to the Underwriters, (iv) the fees, expenses and
all other costs of qualifying the Shares for sale under the securities or Blue
Sky laws of those states in which the Shares are to be offered or sold,
including, without limitation, the reasonable fees (not in excess of $5,000) and
expenses of Underwriters' counsel and such local counsel as may have been
reasonably required and retained for such purpose, (v) the fees, expenses and
other costs of, or incident to, securing any review or approvals by or from the
NASD, including the reasonable fees and expenses of the Underwriters' counsel,
(vi) the filing fees of the SEC, (vii) the cost of furnishing to the
Underwriters copies of the Registration Statement, Preliminary Prospectuses and
Prospectuses as herein provided, (viii) the Company's travel expenses in
connection with meetings with the brokerage community and institutional
investors, (ix) the costs and expenses associated with settlement in same day
funds (including, but not limited to, interest or cost of funds expenses), if
desired by the Company, (x) any fees or costs payable to the Nasdaq Stock
Market, Inc. as a result of the offering, (xi) the cost of printing certificates
for the Shares; (xii) the cost and charges of any of the Company's transfer
agent, (xiii) the costs (not in excess of $15,000) of advertising the offering,
including, without limitation, with respect to the placement of "tombstone"
advertisements in publications selected by the Representatives, (xiv) the costs
incident to the consummation of the Exchange Agreements and (xv) all other costs
and expenses reasonably incident to the performance of the Company's and the
Selling Stockholders' obligations hereunder that are not otherwise specifically
provided for in this Section 6(a); provided, however, that, except as
specifically set forth in Section 6(c) hereof, (A) the Underwriters shall be
responsible for their out-of-pocket expenses, including those associated with
meetings with the brokerage community and institutional investors, other than
the Company's travel expenses, and the fees and expenses of their counsel for
other than Blue Sky and NASD representation, and (B) the Selling Stockholders
shall be responsible for any transfer or income taxes assessed with respect to
the Shares sold by the Selling Stockholders and any fees and expenses of the
Selling Stockholders' counsel and such other expenses as are agreed to by the
Company and the Selling Stockholders or as may be required by law or regulation,
foreign or domestic.
(b) The Company shall pay as due any state registration,
qualification and filing fees and any accountable out-of-pocket disbursements in
connection with such registration, qualification or filing in the states in
which the Representatives determine to offer or sell the Shares.
7. Conditions of Underwriters' Obligations. The obligation of
each Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of the Company and the Selling Stockholders, to
the performance by the Company of its covenants and obligations hereunder, and
to the following additional conditions:
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(a) If required by the Regulations, the Prospectus shall
have been filed with the SEC pursuant to Rule 424(b) of the Regulations within
the applicable time period prescribed for such filing by the Regulations; on or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Registration Statement or the sale of any of the Shares shall have been issued
under the Act or any state securities law and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Representatives'
knowledge or the knowledge of the Company, shall be contemplated by the SEC or
by any authority in any jurisdiction designated by the Representatives pursuant
to Section 5(f) hereof; and any request on the part of the SEC for additional
information shall have been complied with to the reasonable satisfaction of
counsel for the Underwriters.
(b) All corporate proceedings and other matters incident to
the authorization, form and validity of this Agreement, the Shares and the form
of the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby, shall be
satisfactory in all material respects to counsel to the Underwriters. The
Exchange shall have been consummated. The Company and the Selling Stockholders
shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters. The Representatives
shall have received from the Underwriters' counsel, Pepper, Xxxxxxxx & Xxxxxxx
LLP, an opinion, dated as of the Closing Date and any Option Closing Date, as
the case may be, and addressed to the Representatives individually and as the
Representatives of the several Underwriters, which opinion shall be satisfactory
in all respects to the Representatives.
(c) The NASD shall have indicated that it has no objection
to the underwriting arrangements pertaining to the sale of any of the Shares.
(d) The Representatives shall have received a copy of an
executed Lock-up Agreement from each person listed on Schedule V hereto.
(e) The Representatives shall have received at or prior to
the Closing Date from the Underwriters' counsel a memorandum or summary, in form
and substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under the
securities or Blue Sky laws of such jurisdictions designated by the
Representatives pursuant to Section 5(f) hereof.
(f) On the Closing Date and any Option Closing Date, there
shall have been delivered to the Representatives signed opinions of Saul, Ewing,
Xxxxxx & Xxxx, counsel for the Company and the Selling Stockholders dated as of
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each such date and addressed to the Representatives individually and as the
Representatives of the several Underwriters to the effect set forth in Exhibit B
hereto or as is otherwise reasonably satisfactory to the Representatives.
(g) On the Closing Date and any Option Closing Date, there
shall have been delivered to the Representatives signed opinions of Xxxxxx &
Xxxxxxx, patent counsel for the Company dated as of each such date and addressed
to the Representatives individually and as the Representatives of the several
Underwriters to the effect set forth in Exhibit C hereto or as is otherwise
reasonably satisfactory to the Representatives.
(h) At the Closing Date and any Option Closing Date: (i)
the Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall contain all
statements that are required to be stated therein in accordance with the Act and
the Regulations and in all material respects shall conform to the requirements
of the Act and the Regulations, and neither the Registration Statement nor any
post-effective amendment thereto nor the Prospectus and any amendments or
supplements thereto shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) since the respective dates as
of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, except as otherwise stated therein, there shall have been
no material adverse change in the properties, condition (financial or
otherwise), results of operations, stockholders' equity, business or management
of the Company and the Subsidiaries, taken as a whole, from that set forth
therein, whether or not arising in the ordinary course of business, other than
as referred to in the Registration Statement or Prospectus (iii) since the
respective dates as of which information is given in the Registration Statement
and the Prospectus or any amendment or supplement thereto, there shall have been
no event or transaction, contract or agreement entered into by the Company or
any of the Subsidiaries, other than in the ordinary course of business and as
set forth in the Registration Statement or Prospectus, that has not been, but
would be required to be, set forth in the Registration Statement or Prospectus,
(iv) since the respective dates as of which information is given in the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto, there shall have been no
material adverse change, loss, reduction, termination or non-renewal of any
contract to which the Company or any Subsidiary is a party and (v) no action,
suit or proceeding at law or in equity, domestic or foreign, shall be pending or
threatened against the Company or any Subsidiary that would be required to be
set forth in the Prospectus, other than as set forth therein, and no proceedings
shall be pending or threatened against or directly affecting the Company or any
Subsidiary before or by any federal, state or other commission, board or
administrative agency, domestic or foreign, wherein an unfavorable decision,
ruling or finding would materially adversely affect the properties, condition
(financial or otherwise), results of operations, stockholders' equity, or
business of the Company or the Subsidiaries other than as set forth in the
Prospectus.
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(i) The Representatives shall have received at the Closing
Date and any Option Closing Date certificates of the Company executed by the
Chief Executive Officer and the Chief Financial Officer of the Company in their
capacities as such dated as of the date of the Closing Date or Option Closing
Date, as the case may be, and addressed to the Representatives, individually and
as the Representatives of the several Underwriters, to the effect that (i) the
signers of the certificate have read this Agreement and the representations and
warranties of the Company in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date or the Option Closing Date,
as the case may be, and the Company has complied in all material respects with
all the agreements, fulfilled in all material respects all the covenants and
satisfied all the conditions on its part to be performed, fulfilled or satisfied
at or prior to the Closing Date or the Option Closing Date, as the case may be,
and (ii) the signers of the certificate have examined the Registration Statement
and the Prospectus and any amendments or supplements thereto and that the
conditions set forth in Section 7(h) of this Agreement have been satisfied.
(j) The Representatives shall have received at the Closing
Date and any Option Closing Date certificates of or on behalf of the Selling
Stockholders dated as of the date of the Closing Date or Option Closing Date, as
the case may be, and addressed to the Representatives, individually and as the
Representatives of the several Underwriters, to the effect that (i) the Selling
Stockholders have read this Agreement and the representations and warranties of
the Selling Stockholders in this Agreement are true and correct in all material
respects, as if made at and as of the Closing Date or Option Closing Date, as
the case may be, and (ii) the Selling Stockholders have examined the
Registration Statement and the Prospectus and any amendments or supplements
thereto and that the conditions set forth in Section 7(h) of this Agreement have
been satisfied with respect to the Selling Stockholders.
(k) At the time this Agreement is executed and at the
Closing Date and any Option Closing Date the Representatives shall have received
a letter addressed to the Representatives individually and as the
Representatives of the several Underwriters, and in form and substance
satisfactory to the Representatives in all respects (including the non-material
nature of the changes or decreases, if any, referred to in clause (iii) below)
from KPMG Peat Marwick LLP dated as of the date of this Agreement, the Closing
Date or the Option Closing Date, as the case may be:
(i) confirming that they are independent certified
public accountants within the meaning of the Act and the Regulations and stating
that the section of the Registration Statement under the caption "Experts" is
correct insofar as it relates to them;
(ii) stating that, in their opinion, the consolidated
financial statements, schedules and notes of the Company and the Subsidiaries
audited by them and included in the Registration Statement comply in form in all
material respects with the applicable accounting requirements of the Act and the
Regulations;
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(iii) stating that, on the basis of specified
procedures, which included the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information, as
described in SAS No. 71, Interim Financial Information (with respect to the
latest unaudited consolidated financial statements of the Company), a reading of
the latest available unaudited interim consolidated financial statements of the
Company (with an indication of the date of the latest available unaudited
interim financial statements), a reading of the minutes of the meetings of the
stockholders and the Board of Directors of the Company and the Subsidiaries, and
audit and compensation committees of such Boards, if any, and inquiries to
certain officers and other employees of the Company and the Subsidiaries
responsible for operational, financial and accounting matters and other
specified procedures and inquiries, nothing has come to their attention that
would cause them to believe that (A) the unaudited consolidated financial
statements of the Company included in the Registration Statement, (1) do not
comply in form in all material respects with the applicable accounting
requirements of the Act and the Regulations, or (2) any material modifications
should be made to such unaudited financial statements for them to be in
conformity with generally accepted accounting principles; (B) at the date of the
latest available unaudited interim consolidated financial statements of the
Company and a specified date not more than five business days prior to the date
of such letter, there was any change in the capital stock or debt of the Company
or any decrease in net current assets, total assets or stockholders' equity of
the Company as compared with the amounts shown in the March 31, 1997 balance
sheet of the Company included in the Registration Statement, or that for the
periods from April 1, 1997 to the date of the latest available unaudited
financial statements of the Company and to a specified date not more than five
days prior to the date of the letter, there were any decreases, as compared to
the corresponding periods in the prior year, in revenues, gross profit,
operating income or total or per share amounts of net earnings, except in all
instances for changes, decreases or increases which the Registration Statement
discloses have occurred or may occur and except for such other changes,
decreases or increases which the Representatives shall in their sole discretion
accept; or (C) the unaudited pro forma consolidated financial statements
included in the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02 of Regulation
S-X under the Act and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements; and
(iv) stating that they have compared specific dollar
amounts, numbers of shares and other numerical data and financial information
set forth in the Registration Statement that have been specified by the
Representatives prior to the date of this Agreement, to the extent that such
information is derived from the accounting records subject to the internal
control structure, policies and procedures of the Company's or the Subsidiaries'
accounting systems, or has been derived directly from such accounting records by
analysis or comparison or has been derived from other records and analysis
maintained or prepared by the Company or the Subsidiaries with the results
obtained from the application of readings, inquiries and other appropriate
procedures (which procedures do not constitute an audit in accordance with
generally accepted auditing standards) set forth in the letter, and found them
to be in agreement.
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(l) There shall have been duly tendered to the
Representatives for the respective accounts of the Underwriters certificates
representing all of the Shares to be purchased by the Underwriters on the
Closing Date or any Option Closing Date, as the case may be.
(m) At the Closing Date and any Option Closing Date, the
Representatives shall have been furnished such additional documents, information
and certificates as they shall have reasonably requested.
(n) The issuance and sale of the Shares shall be legally
permitted under applicable Blue Sky or state securities laws so long as such
sales are made in accordance with the Preliminary Blue Sky Memorandum.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Representatives and Underwriters' counsel. The Company
and the Selling Stockholders shall furnish the Representatives with such
conformed copies of such opinions, certificates, letters and other documents as
they shall reasonably request. If any condition to the Underwriters' obligations
hereunder to be fulfilled prior to or at the Closing Date or any Option Closing
Date, as the case may be, is not fulfilled, the Representatives may on behalf of
the several Underwriters, terminate this Agreement with respect to the Closing
Date or such Option Closing Date, as applicable, or, if it so elects, waive any
such conditions which have not been fulfilled or extend the time for their
fulfillment. Any such termination shall be without liability of the Underwriters
to the Company or the Selling Stockholders.
8. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, severally and
not jointly, shall indemnify and hold harmless each Underwriter, and each
person, if any, who controls each Underwriter within the meaning of the Act,
against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever or in connection with any
investigation or inquiry of, or action or proceeding that may be brought
against, the respective indemnified parties, arising out of or based upon:
(i) in the case of each Selling Stockholder, any breach
of his, her, or its representations and warranties made in this Agreement; and
(ii) in the case of the Company, any breach of its
respective representations and warranties made in this Agreement and any untrue
statements or alleged untrue statements of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, any
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application or other document (in this Section 8 collectively called
"application") executed by the Company and based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify all or any part of the Shares under the securities laws thereof or filed
with the SEC or the NASD, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading;
provided, however, that the foregoing indemnity:
(x) shall not apply to statements in or omissions from any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in any
application or in any communication to the SEC, as the case may be, made in
reliance upon and in conformity with information supplied to the Company in
writing by or on behalf of any Underwriter through the Representatives expressly
for use therein; and
(y) 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 if, at or
prior to the written confirmation of the sale of such Shares, a copy of an
amended Preliminary Prospectus or the Prospectus (or the Prospectus as amended
or supplemented) was delivered to such Underwriter but was not sent, or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or Prospectus (or the Prospectus as amended or
supplemented).
This indemnity agreement will be in addition to any liability the Company and
the Selling Stockholders may otherwise have.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, each Selling Stockholder, and each other person, if any, who controls
the Company or a Selling Stockholder within the meaning of the Act to the same
extent as the foregoing indemnities from the Company and the Selling
Stockholders to the several Underwriters, but only with respect to any loss,
liability, claim, damage or expense resulting from statements or omissions, or
alleged statements or omissions, if any, made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any application or in any
communication to the SEC, as the case may be, made in reliance upon and in
conformity with information supplied to the Company in writing by or on behalf
of any Underwriter through the Representatives expressly for use therein. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) If any action, inquiry, investigation or proceeding is
brought against any person in respect of which indemnity may be sought pursuant
to any of the two preceding paragraphs, such person (hereinafter called the
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"indemnified party") shall, promptly after notification of, or receipt of
service of process for, such action, inquiry, investigation or proceeding,
notify in writing the party or parties against whom indemnification is to be
sought (hereinafter called the "indemnifying party") of the institution of such
action, inquiry, investigation or proceeding and the indemnifying party, upon
the request of the indemnified party, shall assume the defense of such action,
inquiry, investigation or proceeding, including the employment of counsel
(reasonably satisfactory to such indemnified party) and payment of expenses. No
indemnification provided for in this Section 8 shall be available to any
indemnified party who shall fail to give such notice if the indemnifying party
does not have knowledge of such action, inquiry, investigation or proceeding, to
the extent that such indemnifying party has been materially prejudiced by the
failure to give such notice, but the omission to so notify the indemnifying
party shall not relieve the indemnifying party otherwise than under this Section
8. Such indemnified party or controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless the employment
of such counsel shall have been authorized in writing by the indemnifying party
in connection with the defense of such action. If such indemnified party or
parties shall have been advised by counsel that there may be a conflict between
the positions of the indemnifying party or parties and of the indemnified party
or parties or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, the indemnified party or parties shall be
entitled to select counsel (such counsel, "Separate Counsel") to conduct the
defense to the extent determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and the reasonable fees and
expenses of such Separate Counsel shall be borne by the indemnifying party;
provided, however, that if the indemnified parties engage more than one Separate
Counsel, then the indemnifying party's liability with respect to such Separate
Counsel shall be limited, in the aggregate, to an amount equal to the highest
amount of reasonable fees and expenses charged or incurred by a single Separate
Counsel, which amount shall be divided among the indemnified parties on a pro
rata basis in accordance with the relative amounts of reasonable fees and
expenses of their respective Separate Counsel. Expenses covered by the
indemnification in this Section 8 shall be paid by the indemnifying party as
they are incurred by the indemnified party. Anything in this Section 8 to the
contrary notwithstanding, the indemnifying party shall not be liable for any
settlement of any such claim effected without its written consent.
(d) Each Selling Stockholder's aggregate liability under
this Section 8 shall be limited to an amount equal to the lesser of (i) such
Selling Stockholder's pro-rata portion of the total of all losses, liabilities,
claims, damages or expenses indemnified against (such pro-rata portion being
equal to the number of Shares sold by such Selling Stockholder, divided by the
total number of Shares sold by the Company and all of the Selling Stockholders)
or (ii) the net proceeds (before deducting expenses) received by such Selling
Stockholder from the sale of such Selling Stockholder's Shares pursuant to this
Agreement.
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(e) If the indemnification provided for in this Section 8
is unavailable to, or insufficient to hold harmless an indemnified party under
Sections 8(a) or (b) hereof in respect of any losses, liabilities, claims,
damages or expenses (or actions, inquiries, investigations or proceedings in
respect thereof) referred to therein, except by reason of the provisos set forth
in Section 8(a) hereof or the failure to give notice as required in Section 8(c)
hereof (provided that the indemnifying party does not have knowledge of the
action, inquiry, investigation or proceeding and to the extent such party has
been materially prejudiced by the failure to give such notice), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company or the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company or each Selling Stockholder on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, liabilities, claims or reasonable expenses (or actions, inquiries,
investigations or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company or each
Selling Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company or each Selling Stockholder
bears to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or a Selling Stockholder on the one hand or the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholders and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
Section 8(e) were determined by pro rata allocation (even if the Selling
Stockholders or the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 8(e). The amount paid or
payable by an indemnified party as a result of the losses, liabilities, claims,
damages or reasonable expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(e), (i) the
provisions of the Agreement Among Underwriters shall govern contribution among
Underwriters, (ii) no Underwriter (except as provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter, and (iii) no person guilty of fraudulent misrepresentation
-29-
(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' and the Selling Stockholders' obligations
in this Section 8(e) to contribute are several in proportion to their individual
underwriting obligations and number of Shares sold, respectively, and not joint.
9. Representations and Agreements to Survive Delivery. Except
as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date and any Option Closing Date; and
such representations, warranties and agreements of the Underwriters, the Company
and the Selling Stockholders, including, without limitation, the indemnity and
contribution agreements contained in Section 8 hereof and the agreements
contained in Sections 6, 9, 10 and 13 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling person, and shall survive delivery of the Shares
and termination of this Agreement, whether before or after the Closing Date or
any Option Closing Date.
10. Effective Date of This Agreement and Termination Hereof.
(a) This Agreement shall become effective at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the first business day following the
Effective Date or at the time of the public offering by the Underwriters of the
Shares, whichever is earlier, except that the provisions of Sections 6, 8, 9, 10
and 13 hereof shall be effective upon execution hereof. The time of the public
offering, for the purpose of this Section 10, shall mean the time when any of
the Shares are first released by the Underwriters for offering by dealers. The
Representatives may prevent the provisions of this Agreement (other than those
contained in Sections 6, 8, 9, 10 and 13) hereof from becoming effective without
liability of any party to any other party, except as noted below, by giving the
notice indicated in Section 10(c) hereof before the time the other provisions of
this Agreement become effective.
(b) The Representatives shall have the right to terminate
this Agreement at any time prior to the Closing Date as provided in Sections 7
and 11 hereof or if any of the following have occurred:
(i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the condition, financial or otherwise, of the
Company or its Subsidiaries, or the earnings, business affairs, management or
business prospects of the Company or its Subsidiaries, whether or not arising in
the ordinary course of business, that would, in the Representatives' reasonable
judgment, make the offering or delivery of the Shares impracticable;
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(ii) any outbreak of hostilities or other national or
international calamity or crisis or change in economic, political or financial
market conditions if the effect on the financial markets of the United States of
such outbreak, calamity, crisis or change is material and adverse and would, in
the Representatives' reasonable judgment, make the offering or delivery of the
Shares impracticable;
(iii) suspension of trading generally in securities
on the New York Stock Exchange, the American Stock Exchange, the Nasdaq Stock
Market or the over-the-counter market or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities or the
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority that in the Representatives' reasonable
opinion materially and adversely affects trading on such exchange or the
over-the-counter market;
(iv) declaration of a banking moratorium by either
federal or Pennsylvania state authorities;
(v) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs that in
the Representatives' reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(vi) trading in any securities of the Company shall
have been suspended or halted by the Nasdaq Stock Market or the SEC.
(c) If the Representatives elect to prevent this
Agreement from becoming effective or to terminate this Agreement as provided in
this Section 10, the Representatives shall notify the Company and the Selling
Stockholders thereof promptly by telephone, telex, telegraph, telegram or
facsimile, confirmed by letter.
11. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Optional Shares hereunder,
and if the Firm Shares or Optional Shares with respect to which such default
relates do not exceed the aggregate of 10% of the number of Firm Shares or
Optional Shares, as the case may be, that all Underwriters have agreed to
purchase hereunder, then such Firm Shares or Optional Shares to which the
default relates shall be purchased severally by the non-defaulting Underwriters
in proportion to their respective commitments hereunder.
(b) If such default relates to more than 10% of the Firm
Shares or Optional Shares, as the case may be, the Representatives may, in their
discretion, arrange for another party or parties (including a non-defaulting
Underwriter) to purchase such Firm Shares or Optional Shares to which such
default relates, on the terms contained herein. In the event that the
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Representatives do not arrange for the purchase of the Firm Shares or Optional
Shares to which a default relates as provided in this Section 11, this Agreement
may be terminated by the Representatives or by the Company without liability on
the part of the several Underwriters (except as provided in Section 8 hereof) or
the Company (except as provided in Sections 6 and 8 hereof), but nothing herein
shall relieve a defaulting Underwriter of its liability, if any, to the other
several Underwriters and to the Company for damages occasioned by its default
hereunder.
(c) If the Firm Shares or Optional Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, the Representatives or
the Company shall have the right to postpone the Closing Date or any Option
Closing Date, as the case may be, for a reasonable period but not in any event
exceeding seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment to the Registration Statement or supplement to the Prospectus that in
the opinion of counsel for the Underwriters may thereby be made necessary. The
terms "Underwriters" and "Underwriter" as used in this Agreement shall include
any party substituted under this Section 11 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares
and/or Optional Shares.
12. Information Furnished by Underwriters. The statement set
forth on the inside cover page regarding stabilization and the statements under
the caption "Underwriting" (except for the third to last and last paragraphs
thereunder) in any Preliminary Prospectus and the Prospectus constitute the only
written information furnished by or on behalf of any Underwriter referred to in
Sections 1(a)(ii) and 8 hereof.
13. Notice. All communications hereunder, except as herein
otherwise specifically provided, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to such Underwriter, c/o Janney Xxxxxxxxxx Xxxxx Inc.,
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X.
Xxxxxx, with a copy to Pepper, Xxxxxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esquire; if sent
to the Company shall be mailed, delivered, telexed, telegrammed, telegraphed or
telecopied and confirmed to inTEST Corporation, 0 Xxx Xxx Xxxx, Xxxxxx Xxxx, Xxx
Xxxxxx 00000, Attention: Xxxx X. Xxxx, with a copy to Saul, Ewing, Xxxxxx &
Xxxx, 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention:
Xxxxx X. Xxxxxxxx, Esquire; if sent to the Selling Stockholders shall be mailed,
delivered, telexed, telegrammed, telegraphed or telecopied and confirmed to Xxxx
X. Xxxx or Xxxx X. Xxxxx, Xx., as Attorney-in-Fact, c/o inTEST Corporation, (at
the address listed above), with a copy to Saul, Ewing, Xxxxxx & Xxxx Attention:
Xxxxx X. Xxxxxxxx, Esquire, (at the address listed above).
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14. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the several Underwriters, the Company, the
Subsidiaries, the Selling Stockholders and the controlling persons, directors
and officers thereof, and their respective successors, assigns, heirs and legal
representatives, and no other person shall have or be construed to have any
legal or equitable right, remedy or claim under or in respect of or by virtue of
this Agreement or any provision herein contained. The terms "successors" and
"assigns" shall not include any purchaser of the Shares merely because of such
purchase.
In all dealings with the Company and the Selling Stockholders
under this Agreement, the Representatives shall act on behalf of each of the
several Underwriters, and the Company and the Selling Stockholders shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by the Representatives jointly or by Xxxxxx Xxxxxxxxxx Xxxxx Inc. on
behalf of the Representatives.
15. Definition of Business Day. For purposes of this
Agreement, "business day" means any day on which the Nasdaq National Market is
opened for trading.
16. Counterparts. This Agreement may be executed in one or
more counterparts and by facsimile signatures and all such counterparts and
facsimile signatures will constitute one and the same instrument.
17. Construction. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to agreements made and performed entirely within such Commonwealth.
All references herein to the knowledge of the Company shall be deemed to include
the knowledge of each of the Subsidiaries.
-33-
If the foregoing correctly sets forth your understanding of
our agreement, please sign and return to the Company the enclosed duplicate
hereof, whereupon it will become a binding agreement in accordance with its
terms.
Very truly yours,
INTEST CORPORATION
By:______________________________
Xxxx X. Xxxx
Chairman of the Board and Chief
Executive Officer
THE SELLING STOCKHOLDERS
By: ______________________________
Attorney-in-Fact, acting on behalf of each of
the Selling Stockholders named in Schedule
II hereto.
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXX XXXXXXXXXX XXXXX INC.
XXXXXXX & COMPANY, INC.
As Representatives of the Several
Underwriters named in Schedule I
hereto
By: XXXXXX XXXXXXXXXX XXXXX INC.
By:_________________________
Authorized Representative
-34-
JOINDER
Each of the Subsidiaries, intending to be legally bound,
hereby joins this Agreement for purposes of Sections 1 and 9 hereof.
INTEST LIMITED
------------------------------
By:
Title:
INTEST KABUSHIKI KAISHA
-----------------------------
By:
Title:
INTEST PTE, LIMITED
----------------------------
By:
Title:
[DELAWARE SUB]
----------------------------
By:
Title:
[DELAWARE SUB]
----------------------------
By:
Title:
-35-
SCHEDULE I
Schedule of Underwriters
Number of Firm Number of
Shares to be Optional Shares
Underwriter Purchased to be Purchased
----------- --------------- ---------------
Xxxxxx Xxxxxxxxxx Xxxxx
Inc., Philadelphia, PA
Xxxxxxx & Company, Inc.
New York, NY
=============== ===============
Total
SCHEDULE II
Schedule of Selling Stockholders
Number of Firm Number of Optional
Selling Stockholder Shares to be Sold Shares to be Sold
------------------- ----------------- -------------------
Xxxx X. Xxxx 232,550 174,411
Xxxxxxx X. Xxxxxx 24,749 18,562
Xxxxxx X. Xxxxxx 49,868 37,401
Deed of Trust f/b/o X.X. Xxxx 29,216 21,913
Xxxxxx X. Xxxx 20,869 15,652
Xxxxxx X. Xxxxxxxxxxx 17,901 13,426
Xxxx X. Xxxxx, Xx. 14,411 10,808
Xxxxx X. Xxxxx 10,406 7,804
Xxxx X. Ny 7,826 5,869
Xxxx X. Xxxxxxx 7,530 5,648
Xxxx X. Xxxxxx 6,017 4,513
Micronics Japan Company, Ltd. 5,382 4,036
Xxxxxx X. Xxxxxxxxxx 5,097 3,824
Tomoyasu Ogura 4,843 3,633
Xxxxxxxxxxx X. Xxxx 4,748 3,561
Xxxxxxx X. Xxxxxxxxx 3,826 2,869
Xxx X. Xxxxx 2,609 1,956
Xxxx X. Xxxx 2,087 1,565
Xxxxxx X. Xxxxxxx 1,739 1,304
Xxxxxx X. Xxxxxxx, Ph.D. 1,565 1,174
Xxxx X. Xxxxxxxx 1,043 783
Xxxxx Xxxxxxxxx 359 269
Xxxxx Xxxxxxxx 359 269
======= =======
Total 455,000 341,250
SCHEDULE III
List of Subsidiary Stockholders
Xxxx X. Xxxx
Micronics Japan Company, Ltd.
Xxxxx X. Xxxxx
Tomoyasu Xxxxx
Xxxxxxxxx Hol
Xxxxxx X. Xxxxxxxxxx
Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
SCHEDULE IV
Stockholder NASD Affiliations
None
SCHEDULE V
List of Persons Who Are to Deliver Lock-Up
Agreements Called for Under Sections 5(k) and 7(d)
Xxxx X. Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Deed of Trust f/b/o X.X. Xxxx
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxx X. Xxxxx, Xx.
Xxxxx X. Xxxxx
Xxxx X. Ny
Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Micronics Japan Company, Ltd.
Xxxxxx X. Xxxxxxxxxx
Tomoyasu Ogura
Xxxxxxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxxx
Xxx X. Xxxxx
Xxxx X. Xxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, Ph.D.
Xxxx X. Xxxxxxxx
Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxxxxx Hol
EXHIBIT A
Subsidiaries of the Company, Jurisdiction
of Incorporation and Percentage Ownership by the Company
Subsidiary Jurisdiction % Ownership
---------- ------------ -----------
inTEST Limited U.K. 79.0%
inTEST Kabushiki Kaisha Japan 79.1%
inTEST PTE, Limited Singapore 79.0%
-------- Delaware 100%
-------- Delaware 100%
EXHIBIT B
Matters to be Covered in the Opinion of
Saul, Ewing, Xxxxxx & Xxxx
Counsel for the Company
(1) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, with full power and
authority to conduct all of the activities conducted by it, own or lease all of
the assets owned or leased by it, and conduct its business all as described in
the Registration Statement and the Prospectus; and is duly licensed or qualified
to do business and in good standing as a foreign corporation in all
jurisdictions, domestic or foreign, in which the nature of the activities
conducted by it and/or the character of the assets owned and leased by it makes
such qualification or license necessary, except where failure to do so could
reasonably be expected to have a material adverse effect on the general affairs,
properties, condition (financial or otherwise), results of operations,
stockholders' equity, business or prospects of the Company.
(2) Each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, domestic or foreign, with full power and authority to conduct all
of the activities conducted by it, own or lease all of the assets owned or
leased by it, and conduct its business all as described in the Registration
Statement and the Prospectus; and is duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions, domestic or
foreign, in which the nature of the activities conducted by it and/or the
character of the assets owned and leased by it makes such qualification or
license necessary;
(3) No authorization, approval, consent or license of any
governmental or regulatory body, domestic or foreign, except as may be required
under the Act or the blue sky laws of the various jurisdictions, is required in
connection with the (A) authorization, issuance, transfer, sale or delivery of
the Shares to be sold by the Company; (B) execution, delivery and performance of
the Agreement by the Company or (C) taking of any action contemplated herein or
in the Registration Statement or the Prospectus, including, without limitation,
the Exchange Agreements, or if so required, all such authorizations, approvals,
consents and licenses, specifying the same, have been obtained and are in full
force and effect and have been disclosed to the Representatives.
(4) The Company has authorized and outstanding capital stock,
stock options and other derivative securities as set forth in the Registration
Statement and the Prospectus. The outstanding shares of the Common Stock,
including the shares of the Common Stock issued pursuant to the Exchange
Agreements, have been, and all of the Shares will be, upon issuance and payment
therefor, duly authorized, validly issued, fully paid and nonassessable, are not
subject to preemptive rights and have not been issued in violation of any
statutory preemptive rights or, to the knowledge of such counsel, similar
contractual rights. The holders of shares of the Common Stock are not and will
not be subject to personal liability solely by reason of being such holders. The
issue and sale of the Shares by the Company have been duly and validly
authorized. The Common Stock has been duly authorized for quotation or listing
on the Nasdaq National Market. The transactions consummated pursuant to the
Exchange Agreements were exempt from, or complied in all material respects with,
the provisions of all applicable federal, state and foreign securities and
corporate laws.
(5) To the knowledge of such counsel, no holder of any
securities of the Company has the right to require registration of shares of the
Common Stock or other securities of the Company. The description of the Common
Stock and the Shares contained in the Registration Statement and the Prospectus
conforms to the rights set forth in the instruments or certificates defining the
same and is in conformity with the requirements of the Act and the Regulations.
(6) The Company is not an "investment company" as defined in
Section 3(a) of the Investment Company Act and, if the Company conducts its
business as set forth in the Registration Statement and the Prospectus, will not
become an "investment company" and will not be required to register under the
Investment Company Act; the Company has not, prior to the date of the
Prospectus, been required to make any filings pursuant to the Exchange Act.
(7) The Company has full power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, except insofar as rights to indemnity
or contribution may be limited by applicable law or equitable principles, and
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principles.
(8) The Registration Statement and the Prospectus, and each
amendment thereof or supplement thereto, comply as to form with, the
requirements of the Act and the Rules and Regulations (except that no opinion
need be expressed as to matters concerning financial statements and other
financial data and related notes, schedules and financial or statistical data
contained in the Registration Statement or the Prospectus).
(9) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to the attention
of such counsel to lead it to believe that, both as of the Effective Date and as
of the Closing Date and any Option Closing Date, either the Registration
Statement or the Prospectus, or any amendment or supplement thereto, contained
or contains any untrue statement of a material fact or omitted or omits to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (except that no opinion need be expressed as to matters
concerning financial statements and other financial data and related notes,
schedules and financial or statistical data contained in the Registration
Statement or the Prospectus).
B - 2
(10) Such counsel has read all contracts specifically
enumerated in the Registration Statement and the Prospectus, and such contracts
are fairly summarized or described therein, conform in all material respects to
the descriptions thereof contained therein, and are filed as exhibits thereto,
if required, and there are no contracts or documents required to be so
summarized or disclosed or so filed which have not been so summarized or
disclosed or so filed.
(11) The Registration Statement has become effective under the
Act, and (A) no stop order suspending the effectiveness of the Registration
Statement has been issued and (B) to the best of such counsel's knowledge, no
proceedings for that purpose have been instituted or are threatened, pending or
contemplated. The opinion delivered at the Closing Date shall state that all
filings required by Rule 424 and Rule 430A of the Rules and Regulations have
been made, to the extent that such rules are utilized.
(12) The Exchange has been consummated and the Shares to be
issued pursuant thereto have been duly issued in accordance therewith. The
outstanding shares of capital stock or other evidence of ownership of the
Subsidiaries are duly authorized, validly issued, fully paid and non-assessable,
are not subject to preemptive rights and have not been issued in violation of
any statutory preemptive rights or similar contractual rights. The Company, to
the knowledge of such counsel, owns 100% of the capital stock of the
Subsidiaries, in all cases, free and clear of all liens, encumbrances and
security interests.
(13) The execution and delivery of the Agreement by the
Company and the Subsidiaries, the consummation by the Company and the
Subsidiaries of the transactions herein contemplated, including, without
limitation, the Exchange Agreements, and the compliance with the terms of this
Agreement do not and will not conflict with or result in a breach of any of the
terms or provisions of or violate or constitute a default under, the Certificate
of Incorporation or Bylaws or other constituent documents, domestic or foreign,
of the Company or the Subsidiaries, or any indenture, mortgage or other
agreement or instrument to which the Company or the Subsidiaries is a party or
by which the Company or the Subsidiaries or any material portion of its
properties is bound of which counsel has knowledge, or any existing statute,
rule or regulation, or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over the Company or the Subsidiaries or any material portion of its properties.
(14) To the knowledge of such counsel, there are no legal
proceedings pending or threatened against the Company or the Subsidiaries which
are required to be disclosed in the Registration Statement, except as described
therein.
B - 3
(15) To the knowledge of such counsel, except as described in
the Prospectus, the Company or the Subsidiaries does not own any interest in any
corporation, partnership, joint venture, trust or other business entity.
(16) Each Selling Stockholder has full power and authority to
enter into the Agreement and the Power of Attorney and Custody Agreement (the
"Custody Agreement"). All authorizations and consents necessary for the
execution and delivery of the Agreement and the Custody Agreement on behalf of
each Selling Stockholder have been given. The delivery of the Shares on behalf
of each Selling Stockholder pursuant to the terms of the Agreement and payment
therefor by the Underwriters will pass marketable title to the Shares to the
Underwriters, free and clear of all liens, encumbrances and claims.
(17) Each of the Agreement and the Custody Agreement has been
duly authorized, executed and delivered by each Selling Stockholder, is a valid
and binding agreement of each Selling Stockholder and the Agreement and the
Custody Agreement are enforceable against each Selling Stockholder in accordance
with the terms thereof, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, arrangement or similar laws affecting creditors'
rights generally or by general equitable principals.
(18) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body, domestic
or foreign, is required in connection with the authorization, issuance,
transfer, sale or delivery of the Shares by or on behalf of each Selling
Stockholder, in connection with the execution, delivery and performance of the
Agreement and the Custody Agreement by each Selling Stockholder or in connection
with the taking by or on behalf of each Selling Stockholder of any action
contemplated thereby or, if so required, all such consents, approvals,
authorizations and orders, specifying the same, have been obtained and are in
full force and effect, except such as have been obtained under the Act or the
Regulations.
(19) The execution and delivery of the Agreement and the
Custody Agreement by each Selling Stockholder, the consummation by each Selling
Stockholder of the transactions herein contemplated and the compliance by each
Selling Stockholder with the terms thereof do not and will not result in a
breach or violation, in any material respect, of any, domestic or foreign,
statute, judgment, ruling, decree, order, rule or regulation of any, domestic or
foreign, court or other governmental agency or body applicable to each Selling
Stockholder.
(20) There are no transfer or similar taxes payable in
connection with the sale and delivery of the Shares by each Selling Stockholder
to the Underwriters, except as specified in such opinion.
In rendering such opinions, counsel for the Company may set
forth that as to certain matters of fact, such counsel is relying on one or more
certificates of public officials, governmental agencies or officers of the
Company. In addition, as to matters of law, counsel for the Company may rely as
to matters involving the application of laws other than the laws of the
B - 4
United States, the laws of New Jersey, the laws of Pennsylvania, the laws of
Delaware and jurisdictions in which they are admitted, to the extent such
counsel deems proper and to the extent specified in such opinion, if at all,
upon an opinion or opinions (in form and substance satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws.
Unless the context clearly indicates otherwise, the term
"Company" as used in this Exhibit, shall include the Subsidiaries. The opinion
of counsel for the Company shall include a statement to the effect that it may
be relied upon by counsel for the Underwriters in their opinion delivered to the
Underwriters.
B - 5
EXHIBIT C
Matters to be Covered in the Opinion of
Xxxxxx & Xxxxxxx
Patent Counsel for the Company
(1) The statements in the Prospectus under the headings "Risk
Factors -- Uncertainty of Patents and Proprietary Rights ; Risk of Litigation";
"Business - Strategy - Capitalize on Experience and Expertise" and "Business --
Patents and Other Proprietary Rights"; "Business Competition" and "Experts"
insofar as such statements constitute summary descriptions of the legal matters,
documents, proceedings or descriptions referred to therein, fairly present the
information called for with respect to such legal matters, documents,
proceedings or descriptions. To our knowledge, except as described in the
Prospectus, neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with (and we know of no infringement of or
conflict with) asserted rights of others in any patents, trade secrets,
copyrights, trademarks, service marks or trade names. To our knowledge, except
as set forth in the Prospectus, there is no infringement or violation by others
of any of the Company's patents, trade secrets, copyrights, trademarks, service
marks or trade names. Except as set forth in the Prospectus, to our knowledge
there are no legal or governmental proceedings pending or threatened related to
patents, trade secrets, copyrights, trademarks, service marks or trade names of
others to which the Company or any of its subsidiaries is a party or, except for
ordinary proceedings initiated by the Company or any of its subsidiaries seeking
statutory rights, registrations or certifications from governmental authorities,
to which any intellectual property of the Company or any of its subsidiaries is
subject.
(2) To our knowledge there is no contract or other document
relating to patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks or
trade names of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Prospectus that is not
filed or described as required.
(3) Attached hereto as Schedule A is an accurate and complete
list describing all patents issued to, and all patent applications filed on
behalf of, the Company or any of its subsidiaries with the U.S. Patent and
Trademark Office or with patent authorities in other countries. It is our
opinion that, based on the declarations of the named inventor(s) in the
applications and our investigation of the facts concerning the inventions by
such inventor(s), the named inventor(s) are the original and first inventor(s)
of the subject matter which is claimed. We are not aware of any other patents
issued to, or patent applications filed by or on behalf of, the Company or any
of its subsidiaries. On the basis of our review of assignments executed by the
inventors, it is our opinion that all the inventors have assigned all their
right, title and interest in the applications and the patents listed on Schedule
A to the Company or its subsidiaries. It is our opinion that the patents listed
on Schedule A are valid and enforceable and we are not aware of any information
B - 1
that would render the patents, or any of the claims therein, invalid or
unenforceable. Further, except as set forth in the Prospectus, we are not aware
of any actions brought or threatened by any party alleging the invalidity or
unenforceability of the patents listed on Schedule A. It is our opinion that
neither U.S. Patent 4,230,985, issued on October 28, 1980 to Xxxxxxx et al., nor
U.S. Patent 4,284,311, issued on August 8, 1981 to Xxxxxxx et al., whether such
patents are taken alone, together or in combination with any other prior art
known to us, will result in the invalidation of any of the claims of U.S. Patent
4,589,815, issued on May 20, 1986, which is currently undergoing reexamination
in the U.S. Patent and Trademark Office. It is our opinion that the Company has
not or is not infringing U.S. Patent 4,230,985, issued on October 28, 1980 to
Xxxxxxx et al., nor U.S. Patent 4,284,311, issued on August 8, 1981 to Xxxxxxx
et al. It is our opinion that claims 1,2,7,8 and 9 of U.S. Patent 4,589,815,
issued on May 20, 1986 and assigned to the Company, protect in the United States
the Company's docking products based on the patent (see attached Schedule B)
from exact copying.
(4) To our knowledge: (i) the Company and its subsidiaries
own, or are licensed or otherwise possess adequate rights to use, all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
(collectively "Intellectual Property") which are used in or necessary for the
conduct of their respective businesses as described in the Prospectus, except as
otherwise described in the Prospectus, no claims have been asserted by any
person to the use of any Intellectual Property or challenging or questioning the
validity or effectiveness of any Intellectual Property; and (ii) the use, in
connection with the business and operations of the Company and its subsidiaries,
of any Intellectual Property does not infringe on the rights of any person to
the extent that an unfavorable decision, ruling or finding as to such
infringement could materially adversely affect the business, properties,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole.
(5) We hereby consent to the reference to our firm under the
heading "Experts" in the Prospectus.
B - 2
