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Exhibit 1.1
[____________] SHARES*
SIGNAL TECHNOLOGY CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
__________ ___, 2000
XXXXXXX & COMPANY, INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
XXXXXX XXXXXXX XXXXXX GULL
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Signal Technology Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell [____________] shares (the "Company Firm Shares") of
the Company's Common Stock, $0.01 par value per share (the "Common Stock"), and
the stockholders of the Company named in Schedule II hereto (collectively, the
"Selling Stockholders") propose to sell an aggregate of 200,000 shares (the
"Selling Stockholder Firm Shares") of Common Stock, in each case to you and to
the several other Underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional
[__________] shares (the "Option Shares") of Common Stock, respectively, on the
terms and for the purposes set forth in Section 1(b). The Company Firm Shares
and the Selling Stockholder Firm Shares are sometimes referred to collectively
herein as the "Firm Shares". The Firm Shares and the Option Shares are referred
to collectively herein as the "Shares."
The Company and each of the Selling Stockholders confirm as follows their
respective agreements with the Representatives and the several other
Underwriters.
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* Plus an option to purchase up to an additional [_____________] shares to cover
over-allotments.
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1. Agreement to Sell and Purchase
(a) On the basis of the representations, warranties and agreements of the
Company and the Selling Stockholders herein contained and subject to all the
terms and conditions of this Agreement, (i) the Company agrees to issue and sell
the Company Firm Shares to the several Underwriters, (ii) each Selling
Stockholder, severally and not jointly, agrees to sell to the several
Underwriters the respective number of Selling Stockholder Firm Shares set forth
opposite that Selling Stockholder's name on Schedule II hereto and (iii) each of
the Underwriters, severally and not jointly, agrees to purchase from the Company
and the Selling Stockholders the respective number of Firm Shares set forth
opposite that Underwriter's name in Schedule I hereto, at the purchase price of
$[____________] for each Firm Share. The number of Firm Shares to be purchased
by each Underwriter from the Company and each Selling Stockholder shall be as
nearly as practicable in the same proportion to the total number of Firm Shares
being sold by the Company and each Selling Stockholder as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder.
(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to the maximum number of Option Shares set forth in the first
paragraph hereof at the same price per share as the Underwriters shall pay for
the Firm Shares. The Option may be exercised only to cover over-allotments in
the sale of the Firm Shares by the Underwriters and may be exercised in whole or
in part at any time (but not more than once) on or before the 30th day after the
date of this Agreement upon written or telegraphic notice (the "Option Shares
Notice") by the Representatives to the Company no later than 12:00 noon, New
York City time, at least three and no more than five business days before the
date specified for closing in the Option Shares Notice (the "Option Closing
Date"), setting forth the aggregate number of Option Shares to be purchased and
the time and date for such purchase. On the Option Closing Date, the Company
will sell to the Underwriters the number of Option Shares set forth in the
Option Shares Notice, and each Underwriter will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such Underwriter
is purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to the
Representatives for the accounts of the Underwriters against payment of the
purchase price by wire transfer payable in same-day funds to the order of the
Company for the Company Firm Shares to be sold by it, and by wire transfer
payable in same-day funds to the order of [___________] as custodian for the
Selling Stockholders (the "Custodian"), for the Selling Stockholder Firm Shares
to be sold by them, at the office of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third (or,
if the purchase price set forth in Section 1(a) hereof is determined after 4:30
p.m., Washington D.C. time, the fourth) business day following the commencement
of the offering contemplated by this Agreement, or at such time on such other
date, not later than seven business days after the date of this Agreement, as
may be agreed upon by the Company and the Representatives (such date is
hereinafter referred to as the "Closing Date").
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To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
If the Representatives so request, certificates evidencing the Shares
shall be in definitive form and shall be registered in such names and in such
denominations as the Representatives shall request at least two business days
prior to the Closing Date or the Option Closing Date, as the case may be, by
written notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at least 24 hours prior to the Closing
Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares to the respective
Underwriters shall be borne by the Company. The Company will pay and save each
Underwriter and any subsequent holder of the Shares harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-_______) on Form S-3
relating to the Shares, including a preliminary prospectus and such amendments
to such registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") promulgated thereunder, and has been
filed with the Commission. The term "Preliminary Prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the
Rules and Regulations included at any time as part of the registration
statement. Copies of such registration statement and amendments and of each
related preliminary prospectus have been delivered to the Representatives. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective, will be filed promptly
by the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A, and includes any registration
statement relating to the offering contemplated by this Agreement and filed
pursuant to Rule 462(b) of the Rules and Regulations. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule
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424(b) of the Rules and Regulations or, if no such filing is required, the form
of final prospectus included in the Registration Statement at the Effective
Date.
(b) To the Company's knowledge after reasonable inquiry, no order
preventing or suspending the use of any Preliminary Prospectus to the Company's
knowledge after reasonable inquiry has been issued by the Commission and no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission. On the Effective
Date, the date the Prospectus is first filed with the Commission pursuant to
Rule 424(b) (if required), at all times subsequent to and including the Closing
Date and, if later, the Option Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included in the Prospectus, did and will comply with
all applicable provisions of the Act and the Rules and Regulations and will
contain all statements required to be stated therein in accordance with the Act
and the Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement, the Prospectus or any such amendment or supplement
thereto did or will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement.
(c) All documents that have been previously filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), when they became effective or were filed with the Commission,
as the case may be, complied in all material respects with the requirements of
the Exchange Act and the rules and regulations under the Exchange Act (the
"Exchange Act Rules and Regulations").
(d) The Company does not own, and at the Closing Date and, if later, the
Option Closing Date, will not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity, other than the subsidiaries listed in the
Prospectus or in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 (the "Subsidiaries"). The Company and each of its
Subsidiaries is, and at the Closing Date and, if later, the Option Closing Date,
will be, a corporation duly organized, validly
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existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of its Subsidiaries has, and at the Closing
Date and, if later, the Option Closing Date, will have, full power and authority
to conduct all the activities conducted by it, to own or lease all the assets
owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company and each of its
Subsidiaries is, and at the Closing Date and, if later, the Option Closing Date,
will be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
license or qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not materially and adversely affect
the Company and its Subsidiaries taken as a whole, or its consolidated business,
properties, financial condition or results of operations (such effect is
referred to herein as a "Material Adverse Effect"). All of the outstanding
shares of capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and owned by the Company free and
clear of all claims, liens, charges and encumbrances; there are no securities
outstanding that are convertible into or exercisable or exchangeable for capital
stock of any Subsidiary. The Company is not, and at the Closing Date and, if
later, the Option Closing Date, will not be, engaged in any discussions or a
party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws. Complete and correct copies of the certificate of incorporation
and the by-laws of the Company and each of its Subsidiaries and all amendments
thereto have been delivered to the Representatives, and no changes therein will
be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date.
(e) All of the outstanding shares of capital stock of the Company
(including the Selling Stockholder Shares to be sold by the Selling Stockholders
under this Agreement) have been duly authorized, validly issued and are fully
paid and nonassessable and were issued in compliance with all applicable state
and federal securities laws; the Firm Shares, and the Option Shares issued by
the Company (if any), have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and nonassessable; and no
preemptive or similar rights exist with respect to any of the Shares or the
issue and sale thereof. The Underwriters will receive good and valid title to
the Shares purchased from the Company, free and clear of all liens, claims,
security interests, pledges, charges, encumbrances, preemptive rights,
stockholders' agreements, voting trusts or other defects in title. The
description of the capital stock of the Company in the Registration Statement
and the Prospectus is, and at the Closing Date and, if later, the Option Closing
Date, will be, complete and accurate in all material respects. Except as set
forth in the Prospectus, the Company does not have outstanding, and at the
Closing Date and, if later, the Option Closing Date, will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of capital stock, or any such warrants, convertible
securities or obligations. No further approval or authority of stockholders or
the Board of Directors of the Company will be required for the transfer and sale
of the Selling Stockholder Firm Shares or the issuance and sale of the Firm
Shares and the Option Shares as contemplated herein.
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(f) The financial statements and schedules included in the Registration
Statement or the Prospectus present fairly the financial condition of the
Company and its consolidated Subsidiaries as of the respective dates thereof and
the results of operations and cash flows of the Company and its consolidated
Subsidiaries for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act, the Exchange Act Rules and Regulations or
the Rules and Regulations to be included in the Registration Statement or the
Prospectus. PricewaterhouseCoopers LLP (the "Accountants"), who have reported on
such financial statements and schedules, are independent accountants with
respect to the Company as required by the Act and the Rules and Regulations. The
summary consolidated financial and statistical data included in the Registration
Statement present fairly the information shown therein and have been compiled on
a basis consistent with the financial statements presented therein.
(g) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing Date and,
if later, the Option Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company (other than in
connection with the exercise of options to purchase the Company's Common Stock
granted pursuant to the Company's stock option plans from the shares reserved
therefor as described in the Registration Statement), or any Material Adverse
Effect arising for any reason whatsoever, (ii) neither the Company nor any of
its Subsidiaries has incurred nor will any of them incur, except in the ordinary
course of business as described in the Prospectus, any material liabilities or
obligations, direct or contingent, nor has the Company or any of its
Subsidiaries entered into nor will any of them enter into, except in the
ordinary course of business as described in the Prospectus, any material
transactions other than pursuant to this Agreement and the transactions referred
to herein and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.
(h) The Company is not, and will not become as a result of the
transactions contemplated hereby or the use of proceeds as described in the
Prospectus, an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(i) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company, its Subsidiaries or any of
their officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
would have a Material Adverse Effect.
(j) At the Closing Date, and, if later, the Option Closing Date, the
Company and each Subsidiary will not be, in default, under any contract or other
instrument to which it is a party or
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by which its property is bound or affected, which default would have a Material
Adverse Effect. To the knowledge of the Company, no other party under any
contract or other instrument to which it or any of its Subsidiaries is a party
is in default in any respect thereunder, which default would have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries is, and at the
Closing Date and, if later, the Option Closing Date, will be, in violation of
any provision of its certificate of incorporation or by-laws or other
organizational documents.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
(1) The Company has all requisite corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with the terms hereof.
The performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company pursuant to the
terms or provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the certificate or articles of incorporation or by-laws of the
Company or any of its Subsidiaries, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of its or their properties is bound or affected,
or violate or conflict with any judgment, ruling, decree, order, statute, rule
or regulation of any court or other governmental agency or body applicable to
the business or properties of the Company or any of its Subsidiaries.
(m) The Company has good and marketable title to all owned real property
and the Company or its Subsidiaries has good and marketable title to, or a valid
leasehold or other interest in and to all items of tangible personal property
reflected on the Company's consolidated balance sheet, free and clear of all
liens, charges, encumbrances or restrictions, except such as are described in
the Prospectus or are not material to the business of the Company or its
Subsidiaries. The Company or its Subsidiaries has valid, subsisting and
enforceable leases for the properties described in the Prospectus as leased by
them. The Company or one of its Subsidiaries owns or leases all such properties
as are necessary to conduct its operations, except where the failure to so own
or lease would not have a Material Adverse Effect.
(n) There is no document, contract, agreement, instrument, lease, license,
certificate, permit or other arrangement, whether written or oral, of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement which is
not described or filed as required. All such contracts to which the Company or
any of its Subsidiaries is a party have been duly authorized, executed and
delivered by the
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Company or such Subsidiary, constitute valid and binding agreements of the
Company or such Subsidiary and are enforceable against and by the Company or
such Subsidiary in accordance with its terms, except as to (i) rights to
indemnity and contribution thereunder, which may be limited under applicable
law, (ii) bankruptcy and laws relating to the rights and remedies of creditors
generally and (iii) the availability of equitable remedies.
(o) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by Section 6
of this Agreement to be delivered to the Representatives was or will be, when
made, inaccurate, untrue or incorrect in any material respect.
(p) The Company has not distributed and will not distribute prior to the
later of (i) the Closing Date or, if later, the Option Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act. Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration
Statement, which rights have not been exercised in accordance with their terms
or waived by the holder thereof as of the date hereof.
(r) The Common Stock is listed and duly admitted to trading on the Nasdaq
National Market ("NNM"), and the Company has received notification that the
listing of Shares to be issued by it has been approved, subject to official
notice of issuance of such Shares. The Shares to be sold by the Selling
Stockholders hereunder are listed on the NNM.
(s) Except as disclosed in or specifically contemplated by the Prospectus
(i) the Company and its Subsidiaries have sufficient trademarks, trade names,
patents, patent rights, mask works, copyrights, licenses, approvals and
governmental authorizations to conduct their businesses as now conducted, and to
the Company's knowledge, none of the foregoing intellectual property rights
owned or licensed by the Company is invalid or unenforceable, (ii) the Company
has no knowledge of any infringement by it or any of its Subsidiaries of
trademarks, trade name rights, patents, patent rights, mask work rights,
copyrights, licenses, trade secrets or other similar rights of others, where
such infringement would have a Material Adverse Effect, (iii) the Company is not
aware of any infringement, misappropriation or violation by others of, or
conflict by others with rights of the Company with respect to, any of the
foregoing intellectual property rights, and (iv) there is no claim being made
against the Company or any of its Subsidiaries, or to the best of the Company's
knowledge, any employee of the Company or any of its Subsidiaries, regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement where such infringement would have a Material Adverse Effect.
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(t) The Company and each of its Subsidiaries have filed all federal,
state, local and foreign income tax returns which have been required to be filed
and has paid all taxes and assessments received by it to the extent that such
taxes or assessments have become due other than taxes being contested in good
faith. Neither the Company nor any of its Subsidiaries has any tax deficiency
which has been or, to the knowledge of the Company, might be asserted or
threatened against them which would have a Material Adverse Effect.
(u) The pro forma financial information set forth in the Registration
Statement reflects, subject to the limitations set forth in the Registration
Statement as to such pro forma financial information, the results of operations
of the Company and its consolidated Subsidiaries purported to be shown thereby
for the periods indicated and conforms in all material respects to the
requirements of Regulation S-X of the Rules and Regulations and management of
the Company believes (i) the assumptions underlying the pro forma adjustments
are reasonable, (ii) that such adjustments have been properly applied to the
historical amounts in the compilation of such pro forma statements and notes
thereto, and (iii) that such statements and notes thereto present fairly, with
respect to the Company and its consolidated Subsidiaries, the pro forma
financial position and results of operations and the other information purported
to be shown therein at the respective dates or for the respective periods
therein specified.
(v) The Company or its Subsidiaries owns or possesses all authorizations,
approvals, orders, licenses, registrations, other certificates and permits of
and from all governmental regulatory officials and bodies, necessary to conduct
their respective businesses as contemplated in the Prospectus, except where the
failure to own or possess all such authorizations, approvals, orders, licenses,
registrations, other certificates and permits would not have a Material Adverse
Effect. There is no proceeding pending or threatened which may cause any such
authorization, approval, order, license, registration, certificate or permit to
be revoked, withdrawn, cancelled, suspended or not renewed; and the Company and
each of its Subsidiaries are conducting their business in compliance with all
laws, rules and regulations applicable thereto (including, without limitation,
all applicable federal, state and local environmental laws and regulations)
except where such noncompliance would not have a Material Adverse Effect.
(w) The Company and its Subsidiaries taken as a whole maintain insurance
of the types and in the amounts they deem adequate for their business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(x) Neither the Company nor any of its Subsidiaries has at any time during
the last five years (i) made any unlawful contribution to any candidate for
foreign office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
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4. Representations, Warranties and Covenants of the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:
(a) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and the
Power-of-Attorney and Custody Agreement (hereinafter referred to as a
"Stockholders' Agreement") relating hereto, and for the sale and delivery of the
Selling Stockholder Firm Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement and the Stockholders'
Agreement, to make the representations, warranties and agreements hereunder and
thereunder, and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder hereunder.
(b) Certificates in negotiable form representing all of the Selling
Stockholder Firm Shares to be sold by such Selling Stockholder have been placed
in custody under the Stockholders' Agreement, in the form heretofore furnished
to you, duly executed and delivered by such Selling Stockholder to the
Custodian, and such Selling Stockholder has duly executed and delivered a
power-of-attorney, in the form heretofore furnished to you and included in the
Stockholders' Agreement (the "Power-of-Attorney"), appointing [______________]
and [________________], and each of them, as such Selling Stockholder's
attorney-in-fact (the "Attorneys-in-Fact") with authority to execute and deliver
this Agreement on behalf of such Selling Stockholder, to determine (subject to
the provisions of the Stockholders' Agreement) the purchase price to be paid by
the Underwriters to the Selling Stockholders as provided in Section 1 hereof, to
authorize the delivery of the Selling Stockholder Firm Shares to be sold by such
Selling Stockholder hereunder and otherwise to act on behalf of such Selling
Stockholder in connection with the transactions contemplated by this Agreement
and the Stockholders' Agreement.
(c) Such Selling Stockholder specifically agrees that the Selling
Stockholder Firm Shares represented by the certificates held in custody for such
Selling Stockholder under the Stockholders' Agreement are for the benefit of and
coupled with and subject to the interests of the Underwriters, the Custodian,
the Attorneys-in-Fact, each other Selling Stockholder and the Company, that the
arrangements made by such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorneys-in-Fact by the
Power-of-Attorney, are to that extent irrevocable, and that the obligations of
such Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death, disability, incapacity, liquidation or dissolution of any
Selling Stockholder or by the occurrence of any other event. If any individual
Selling Stockholder or any executor or trustee for a Selling Stockholder should
die or become incapacitated, or if any Selling Stockholder that is an estate or
trust should be terminated, or if any Selling Stockholder that is a partnership
or corporation should be dissolved, or if any other such event should occur,
before the delivery of the Selling Stockholder Firm Shares hereunder,
certificates representing the Selling Stockholder Firm Shares shall be delivered
by or on behalf of the Selling Stockholders in accordance with the terms and
conditions of this Agreement and of the Stockholders' Agreement, and actions
taken by the Attorneys-in-Fact pursuant to the Powers-of-Attorney shall be as
valid as if such death, incapacity, termination, dissolution or other event had
not occurred, regardless of whether or not
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the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice
of such death, incapacity, termination, dissolution or other event.
(d) This Agreement and the Stockholders' Agreement have each been duly
authorized, executed and delivered by such Selling Stockholder and each such
document constitutes a valid and binding obligation of such Selling Stockholder,
enforceable in accordance with its terms.
(e) No consent, approval, authorization or order of, or any filing (other
than a final amendment to Schedule 13D, a Form 4 or an IRS Currency Transaction
Report, as may be required) or declaration with, any court or governmental
agency or body is required in connection with the sale of the Selling
Stockholder Firm Shares by such Selling Stockholder or the consummation by such
Selling Stockholder of the transactions on its part contemplated by this
Agreement and the Stockholders' Agreement, except such as have been obtained
under the Act or the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Shares
to be sold by such Selling Stockholder.
(f) The sale of the Selling Stockholder Firm Shares to be sold by such
Selling Stockholder hereunder and the performance by such Selling Stockholder of
this Agreement and the Stockholders' Agreement and the consummation of the
transactions contemplated hereby and thereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of such
Selling Stockholder pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or give any party a right to terminate any of its obligations
under, or result in the acceleration of any obligation under, any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease, contract or
other agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to such
Selling Stockholder or, if such Selling Stockholder is a corporation,
partnership or other entity, the organizational documents of such Selling
Stockholder.
(g) Such Selling Stockholder has, and at the Closing Date will have, good
and marketable title to the Selling Stockholder Firm Shares to be sold by such
Selling Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims whatsoever; and, upon delivery of such Selling Stockholder
Firm Shares and payment therefor pursuant hereto, good and marketable title to
such Selling Stockholder Firm Shares free and clear of all liens, encumbrances,
equities or claims whatsoever, will be delivered to the Underwriters.
(h) On the Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and
transfer of the Shares to be sold by such Selling Stockholder to the several
Underwriters hereunder will have been fully paid or provided for by such Selling
Stockholder and all laws imposing such taxes will have been fully complied with.
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(i) Other than as permitted by the Act and the Rules and Regulations, such
Selling Stockholder has not distributed and will not distribute any Preliminary
Prospectus, the Prospectus or any other offering material in connection with the
offering and sale of the Shares. Such Selling Stockholder has not taken and will
not at any time take, directly or indirectly, any action designed, or which
might reasonably be expected, to cause or result in, or which will constitute,
stabilization of the price of shares of Common Stock to facilitate the sale or
resale of any of the Shares.
(j) All information provided by such Selling Stockholder contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto complied or will comply in all material respects
with all applicable requirements of the Act and the Rules and Regulations and
does not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(k) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, such Selling
Stockholder agrees to deliver to you prior to or at the Closing Date or the
Option Closing Date, as applicable, a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof)
5. Agreements of the Company and the Selling Stockholders. Each of the Company
and the Selling Stockholders (with respect to subsections (i) and (m) only)
respectively covenants and agrees with the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have reasonably objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Representatives promptly, and
will confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of Section 5(e) that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any
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representative or attorney of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any Preliminary
Prospectus or the Prospectus. If at any time the Commission shall issue any
order suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and notify the Representatives
promptly of all such filings.
(c) The Company will furnish to each Representative, without charge, one
signed copy of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto
and will furnish to the Representatives, without charge, for transmittal to each
of the other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the Company
will deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such period
of time any event shall occur which in the reasonable judgment of the Company or
counsel to the Underwriters should be set forth in the Prospectus in order to
make any statement therein, in the light of the circumstances under which it was
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
deliver to each of the Underwriters, without charge, such number of copies of
such supplement or amendment to the Prospectus as the Representatives may
reasonably request. The Company will not file any document under the Exchange
Act or the Exchange Act Rules and Regulations before the termination of the
offering of the Shares by the Underwriters, if such document would be deemed to
be incorporated by reference into the Prospectus, that is not approved by the
Representatives after reasonable notice thereof.
(f) Prior to any public offering of the Shares, the Company will cooperate
with the Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably request; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
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(g) During the period of five years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who may
so request copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representatives and
each other Underwriter who may so request a copy of each annual or other report
it shall be required to file with the Commission.
(h) The Company will make generally available to holders of its securities
as soon as may be practicable but in no event later than the last day of the
fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited but shall
be in reasonable detail) for a period of 12 months ended commencing after the
Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or reimburse,
if paid by the Representatives, all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders under
this Agreement and in connection with the transactions contemplated hereby,
including but not limited to costs and expenses of or relating to (i) the
preparation, printing and filing of the Registration Statement and exhibits to
it, each Preliminary Prospectus, Prospectus and any amendment or supplement to
the Registration Statement or Prospectus, (ii) the preparation and delivery of
certificates representing the Shares, (iii) the printing of this Agreement, the
Agreement Among Underwriters, any Selected Dealer Agreements, any Underwriters'
Questionnaires, the Stockholders' Agreements, any Underwriters' Powers of
Attorney, and any invitation letters to prospective Underwriters, (iv)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any Preliminary Prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers to
whom Shares may be sold, (v) the listing of the Shares on the NNM, (vi) any
filings required to be made by the Underwriters with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriters in connection
therewith (except fees, disbursements and other charges of counsel for the
Underwriters relating to the form or adequacy of the underwriting arrangements),
(vii) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions designated pursuant to
Section 5(f), including the fees, disbursements and other charges of counsel to
the Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (viii) fees,
disbursements and other charges of counsel to the Company (but not those of
counsel for the Underwriters, except as otherwise provided herein), (ix) the
transfer agent for the Shares, and (x) any fees and expenses of the
Attorneys-in-Fact and the Custodian. The Underwriters may deem the Company to be
the primary obligor with respect to all costs, fees and expenses to be paid by
the Company and by the Selling Stockholders. The Selling Stockholders will pay
(directly or by reimbursement) all fees and expenses incident to the performance
of their obligations under this Agreement that are not otherwise specifically
provided for herein, including but not limited to any fees and expenses
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of counsel for such Selling Stockholders, and all expenses and
taxes incident to the sale and delivery of the Shares to be sold by such Selling
Stockholders to the Underwriters hereunder.
(j) The Company will not at any time, directly or indirectly, take any
action designed or which might reasonably be expected to cause or result in, or
which will constitute, stabilization of the price of the shares of Common Stock
to facilitate the sale or resale of any of the Shares.
(k) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company in the manner set forth in the Prospectus
under "Use of Proceeds".
(1) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, without the prior
written consent of Xxxxxxx & Company, Inc., the Company will not (1) offer,
sell, contract to sell, pledge, grant options, warrants or rights to purchase,
or otherwise dispose of any equity securities of the Company or any other
securities convertible into or exchangeable for its Common Stock or other equity
security (other than pursuant to employee stock option plans disclosed in the
Prospectus or pursuant to the conversion of convertible securities or the
exercise of warrants in each case outstanding on the date of this Agreement), or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of shares of Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise; provided, however, that the Company may (i) issue shares
of Common Stock or options to purchase Common Stock, or issue shares of Common
Stock upon the exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Prospectus, and (ii) file a
registration statement with respect to any stock option, stock bonus or other
stock plan or arrangement described in the Prospectus.
(m) The Selling Stockholders will, and the Company will cause each of its
executive officers and directors to, enter into lock-up agreements with the
Representatives to the effect that they will not, without the prior written
consent of Xxxxxxx & Company, Inc., sell, contract to sell or otherwise dispose
of any shares of Common Stock or rights to acquire such shares according to the
terms set forth in Schedule III hereto.
6. Conditions of the Obligations of the Underwriters. The obligations of each
Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 and Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the
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qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives do
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and, if later, the Option Closing Date and
signed by the President and Treasurer of the Company (who may, as to proceedings
threatened, rely upon their knowledge), to the effect of clauses (i), (ii) and
(iii) of this paragraph.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, properties,
management, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries, whether or not arising from transactions in
the ordinary course of business, in each case other than as described in or
contemplated by the Registration Statement and the Prospectus, and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree, which is not described in the
Registration Statement and the Prospectus, if in the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the public
offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company, any of its Subsidiaries, or
any of their officers or directors in their capacities as such, before or by any
Federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would have a Material
Adverse Effect.
(e) Each of the representations and warranties of the Company and the
Selling Stockholders contained herein shall be true and correct in all material
respects at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company or the Selling Stockholders and all
conditions contained herein to be fulfilled or complied with by the Company or
the Selling Stockholders at or prior to the Closing Date and, with respect to
the Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters from Xxxxxxx Xxxx LLP, counsel to the Company and the Selling
Stockholders.
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(g) The Representatives shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Xxxxxx, Xxxx & Xxxxxxx, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its Subsidiaries as required by the
Act and the Exchange Act and the Rules and Regulations and with respect to
certain financial and other statistical and numerical information contained in
the Registration Statement. At the Closing Date and, as to the Option Shares,
the Option Closing Date, the Accountants shall have furnished to the
Representatives a letter, dated the date of its delivery, which shall confirm,
on the basis of a review in accordance with the procedures set forth in the
letter from the Accountants, that nothing has come to their attention during the
period from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than five days prior to the Closing Date and
the Option Closing Date, as the case may be, which would require any change in
their letter dated the date hereof if it were required to be dated and delivered
at the Closing Date and the Option Closing Date.
(i) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representatives a certificate, dated the date of its
delivery, signed by each of the President and Treasurer of the Company, in form
and substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus as of the date of such
certificate, and (A) such documents are true and correct in all material
respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue
or misleading and (B) in the case of the certificate delivered at the
Closing Date and the Option Closing Date, since the Effective Date no
event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct.
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(iii) Each of the covenants required to be performed by the Company
herein on or prior to the date of such certificate has been duly, timely
and fully performed and each condition herein required to be satisfied or
fulfilled on or prior to the date of such certificate has been duly,
timely and fully satisfied or fulfilled.
(j) Concurrently with the execution and delivery of this Agreement and at
the Closing Date and, as to the Option Shares, the Option Closing Date, there
shall be furnished to the Representatives a certificate, dated the date of its
delivery, signed by the Selling Stockholders (or the Attorneys-in-Fact on their
behalf), in form and substance satisfactory to the Representatives, to the
effect that the representations and warranties of the Selling Stockholders
contained herein are true and correct in all material respects on and as of the
date of such certificate as if made on and as of the date of such certificate,
and each of the covenants and conditions required herein to be performed or
complied with by the Selling Stockholders on or prior to the date of such
certificate has been duly, timely and fully performed or complied with.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(n).
(l) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the NNM upon official notice of issuance.
(n) The Company and the Selling Stockholders shall have furnished to the
Representatives such certificates and opinions of counsel, in addition to those
specifically mentioned herein, as the Representatives may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus,
as to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company and the Selling Stockholders
herein, as to the performance by the Company and the Selling Stockholders of its
and their respective obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Representatives.
7. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims,
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liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading in
the light of the circumstances in which they were made, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Company contained herein or any failure of the Company to
perform its obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that (i) the Company will
not be liable to the extent that such loss, claim, liability, expense or damage
arises from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives, on behalf of any Underwriter, expressly for inclusion in the
Registration Statement, the Preliminary Prospectus or the Prospectus; and (ii)
the Company will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
Preliminary Prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person and
if copies of the Prospectus were timely delivered to such Underwriter pursuant
to Section 5 hereof. The Company acknowledges that the statements set forth
under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) Each Selling Stockholder will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which the Selling Stockholders, or any of them, may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading in
the light of the circumstances in which they were made, or arise out of or are
based in whole or in part on any inaccuracy in the representations and
warranties of the Selling Stockholder contained herein or any failure of the
Selling Stockholder to perform its obligations
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hereunder or under law in connection with the transactions contemplated hereby;
provided, however, that (i) the Selling Stockholder will not be liable to the
extent that such loss, claim, liability, expense or damage arises from the sale
of the Shares in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives, on
behalf of any Underwriter, expressly for inclusion in the Registration
Statement, the Preliminary Prospectus or the Prospectus; (ii) the Selling
Stockholder will not be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
Preliminary Prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchased Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person and
if copies of the Prospectus were timely delivered to such Underwriter pursuant
to Section 5 hereof; (iii) each Selling Stockholder will be liable under this
Section 7(b) with respect to any untrue statement or omission or alleged untrue
statement or omission to the extent, and only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any amendment or supplement to the Registration Statement or the Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder specifically for use in the preparation
thereof, and (iv) the liability of each Selling Stockholder under this Section
7(b) shall not exceed the product of the purchase price (less underwriting
discount) for each Share set forth in Section 1(a) hereof multiplied by the
number of Shares sold by such Selling Stockholder hereunder. This indemnity
agreement will be in addition to any liability that the Selling Stockholder
might otherwise have.
(c) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and each Selling
Stockholder to the same extent as the foregoing indemnity from the Company and
each Selling Stockholder to each Underwriter, as set forth in Sections 7(a) and
7(b), but only insofar as losses, claims, liabilities, expenses or damages arise
out of or are based on any untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the Preliminary Prospectus or the Prospectus. The
Company acknowledges that the statements set forth under the heading
"Underwriting" in the preliminary prospectus and the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the Company
by the Representatives on behalf of the Underwriters expressly for inclusion in
the Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
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(d) Any party that proposes to assert the right to be indemnified under
this Section 7 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 7 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party,
(iii) a conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has not in fact employed counsel to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. Any indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld).
(e) If the indemnification provided for in this Section 7 is applicable
in accordance with its terms but for any reason is held to be unavailable other
than for failure to give notice to hold harmless an indemnified party under
paragraphs (a), (b), (c) and (d) of this Section 7 in respect of any losses,
claims, liabilities, expenses and damages referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company or the Selling
Stockholders from persons other than the Underwriters, such as persons who
control the
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Company within the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be liable for
contribution) by such indemnified party as a result of such losses, claims,
liabilities, expenses and damages in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders, on the one hand, and the Underwriters, on the other hand. The
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company and the Selling
Stockholders, on the one and, and the Underwriters, on the other hand, with
respect to the statements or omissions which resulted in such loss, claim,
liability, expense or damage, or action in respect thereof, as well as any other
relevant equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Stockholders or
the Representatives on behalf of the Underwriters, the intent of the parties and
their relative 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 7(e) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 7(e) shall be deemed to
include, for purposes of this Section 7(e), 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 7(e), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts received by it, (ii) no person found guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation, and (iii) no Selling Stockholder shall be required
to contribute any amount in excess of the proceeds received by the Selling
Stockholder from the Underwriters in the offering. The Underwriters' obligations
to contribute as provided in this Section 7(e) are several in proportion to
their respective underwriting obligations and not joint. For purposes of this
Section 7(e), any person who controls a party to this Agreement within the
meaning of the Act will have the same rights to contribution as that party, and
each officer of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt of
notice of commencement of any action against any such party in respect of which
a claim for contribution may be made under this Section 7(e), will notify any
such party or parties from whom contribution may be sought, but the omission so
to notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have
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under this Section 7(e). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(f) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement
8. Reimbursement of Certain Expenses. In addition to its other obligations under
Section 7(a) of this Agreement, the Company hereby agrees to reimburse on a
quarterly basis the Underwriters for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon, in
whole or in part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company or the
Selling Stockholders contained herein or failure of the Company or the Selling
Stockholders to perform its or their respective obligations hereunder or under
law, all as described in Sections 7(a) and (b), notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 8 and the possibility that such payment might later be held
to be improper; provided, however, that, to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them.
9. Termination. The obligations of the several Underwriters under this Agreement
may be terminated at any time on or prior to the Closing Date (or, with respect
to the Option Shares, on or prior to the Option Closing Date), by notice to the
Company and the Selling Stockholders from the Representatives, without liability
on the part of any Underwriter to the Company if, prior to delivery and payment
for the Firm Shares or Option Shares, as the case may be, in the sole judgment
of the Representatives, (i) trading in any of the equity securities of the
Company shall have been suspended by the Commission or by the NNM, (ii) trading
in securities generally on the shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange, by order of the Commission or any court or other governmental
authority, or by the NNM, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 9 or 10 hereof,
neither the Company nor any Selling Stockholder shall be under any liability to
any Underwriter except as provided in Sections 5(j), 7 and 8 hereof, but, if due
to any breach of this Agreement by the Company or the Selling Stockholders, the
purchase of the Shares by the Underwriters is not consummated or the Company is
unable to perform its obligations hereunder, the Company will reimburse the
several
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Underwriters for all out-of-pocket expenses (including the fees, disbursements
and other charges of counsel to the Underwriters) incurred by them in connection
with the offering of the Shares.
10. Substitution of Underwriters. If any one or more of the Underwriters shall
fail or refuse to purchase any of the Firm Shares which it or they have agreed
to purchase hereunder, and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally, to purchase the Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase, in the proportions which the number of Firm Shares which they have
respectively agreed to purchase pursuant to Section 1 bears to the aggregate
number of Firm Shares which all such non-defaulting Underwriters have so agreed
to purchase, or in such other proportions as the Representatives may specify;
provided that in no event shall the maximum number of Firm Shares which any
Underwriter has become obligated to purchase pursuant to Section 1 be increased
pursuant to this Section 10 by more than one-ninth of such number of Firm Shares
without the prior written consent of such Underwriter. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate number of
the Firm Shares and arrangements satisfactory to the Representatives and the
Company for the purchase of such Firm Shares are not made within 48 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders for the
purchase or sale of any Shares under this Agreement. In any such case either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Any action taken pursuant to
this Section 10 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
11. Information Provided by Selling Stockholders. The Company, the Selling
Stockholders and the Underwriters acknowledge and agree that the only
information furnished by any Selling Stockholder to the Company for inclusion in
any Prospectus or the Registration Statement consists of the information set
forth in the caption "Principal and Selling Stockholders".
12. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be sent by
certified or registered mail, return receipt requested, or by nationally
recognized overnight courier, (a) if to the Company or the Selling Stockholders,
at the office of the Company, Signal Technology Corporation, 222
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00
Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000-000, Attention: Chief Executive Officer, with
a copy to Xxxxx Xxxxxxx, Esq., Xxxxxxx Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, XX
00000, or (b) if to the Underwriters, to the Representatives at the offices of
Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Cameron Read, Esq., Xxxxxx, Xxxx &
Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000. Any such notice
shall be effective only upon receipt. Any notice under such Section 9 or 10 may
be made by telex or telephone, but if so made shall be subsequently confirmed in
writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, the Selling Stockholders and the controlling persons,
directors and officers referred to in Section 7, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
Any action required or permitted to be made by the Representatives under
this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
[The remainder of this page is left blank intentionally.]
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
SIGNAL TECHNOLOGY CORPORATION
By:
------------------------------------
Title:
SELLING STOCKHOLDERS
(named in Schedule II hereto)
By:
------------------------------------
Attorney-in-Fact
Confirmed as of the date first above mentioned:
XXXXXXX & COMPANY, INC.
XXXXXX, XXXXX XXXXX, INCORPORATED
XXXXXX XXXXXXX XXXXXX GULL
Acting on behalf of themselves and as the Representatives of the other
several Underwriters named in Schedule I hereto.
By: XXXXXXX & COMPANY, INC.
By:
------------------------------------
Title:
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SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc...............................
Xxxxxx, Xxxxx Xxxxx, Incorporated....................
Xxxxxx Xxxxxxx Xxxxxx Gull...........................
--------
Total........................................
========
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SCHEDULE II
Total Number
of Firm Shares
to be Sold
--------------
...............................
--------------------------------
...............................
-------------------------------- -------
TOTALS..................................................
=======
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SCHEDULE III
FORM OF LOCK-UP AGREEMENT
The undersigned, a holder of securities of Signal Technology Corporation,
a Delaware corporation (the "Company"), is entering into this agreement (the
"Lock-Up Agreement") to facilitate the public offering of shares of Common Stock
(the "Common Stock") of the Company (the "Offering"). In connection with the
Offering, the Company will enter into an Underwriting Agreement with the several
Underwriters listed on Schedule I to the Underwriting Agreement (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives").
In consideration of your entering into the Underwriting Agreement and in
order to induce you to act as Representatives in connection with the Offering,
the undersigned hereby agrees that he or she will not, without the prior written
approval of Xxxxxxx & Company, Inc., acting on its own behalf and/or on behalf
of other Representatives of the Underwriters, directly or indirectly, sell,
contract to sell, make any short sale, pledge, or otherwise dispose of, or enter
into any hedging transaction that is likely to result in a transfer of, any
shares of Common Stock, options to acquire shares of Common Stock or securities
exchangeable for or convertible into shares of Common Stock of the Company which
he or she may own, for a period commencing as of the date hereof and ending on
the date which is one hundred and eighty (180) days after the date of the final
Prospectus relating to the Offering. The foregoing sentence shall not apply to
(A) the transfer of shares of Common Stock by the undersigned as a gift of
gifts; (B) the transfer of shares of Common Stock by the undersigned to its
affiliates, as such term is defined in Rule 405 under the Securities Act; and
(C) the exercise of stock options granted pursuant to the Company's stock option
and employee stock or option purchase plans; provided, that, in the case of
clause (A) or (B) above, the recipient(s), donee(s) or transferee(s),
respectively, agrees in writing as a condition precedent to such issuance, gift
or transfer to be bound by the terms of this agreement and, in the case of
clause (C), any shares of Common Stock acquired pursuant to the exercise of any
such stock option shall be subject to the restrictions of this letter.
The undersigned acknowledges the sufficiency of the consideration for this
Lock-Up Agreement. The undersigned confirms that he or she understands that the
Underwriters and the Company will rely upon the representations set forth in
this Lock-Up Agreement in proceeding with the Offering. The undersigned further
confirms that the agreements of the undersigned are irrevocable and shall be
binding upon the undersigned's heirs, legal representatives, successors and
assigns. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
securities held by the undersigned except in compliance with this Lock-Up
Agreement.
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This Lock-Up Agreement shall be binding on the undersigned and his or her
respective successors, heirs, personal representatives and assigns.
Very truly yours,
Date: , 2000
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30
