EXHIBIT 1.1
950,000 SHARES*
NOBLE INTERNATIONAL, LTD.
COMMON STOCK
UNDERWRITING AGREEMENT
St. Petersburg, Florida
September ___, 2002
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Noble International, Ltd., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 950,000 shares of its Common Stock, par value $.001 per share
(the "Common Stock"). The aggregate of 950,000 shares to be purchased from the
Company are called the "Firm Shares." In addition, the Company has agreed to
sell to the Underwriters, upon the terms and conditions stated herein, up to an
additional 142,500 shares of Common Stock (the "Additional Shares") to cover
over-allotments by the Underwriters, if any. The Firm Shares and the Additional
Shares are collectively referred to in this Agreement as the "Shares." Xxxxxxx
Xxxxx & Associates, Inc. and Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. represent that
they are acting as the Representatives of the several Underwriters and in such
capacity are referred to in this Agreement as the "Representatives."
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-2 (File No. 333-90836).
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* Plus an additional 142,500 shares subject to Underwriter's
over-allotment option.
The Company has filed one or more amendments to such registration statement,
copies of which have been furnished to you. Such registration statement, as
amended, including the financial statements, exhibits and schedules thereto, at
the time when it becomes effective and as thereafter amended by any
post-effective amendment, is referred to in this Agreement as the "Registration
Statement." The prospectus in the form included in the Registration Statement at
the time it becomes effective or, if the prospectus included in the Registration
Statement omits certain information in reliance upon Rule 430A under the Act and
such information is thereafter included in a prospectus filed with the
Commission pursuant to Rule 424(b) under the Act or as part of a post-effective
amendment to the Registration Statement after the Registration Statement becomes
effective, the prospectus as so filed, is referred to in this Agreement as the
"Prospectus." If the Company elects, with the consent of the Representatives, to
rely on Rule 434 under the Act, all references to the Prospectus shall be deemed
to include the form of prospectus and the term sheet contemplated by Rule 434,
taken together, provided to the Underwriters by the Company in reliance on Rule
434 under the Act (the "Rule 434 Prospectus"). If the Company files another
registration statement with the Commission to register a portion of the Shares
pursuant to Rule 462(b) under the Act (the "Rule 462 Registration Statement"),
then any reference to "Registration Statement" herein shall be deemed to include
the registration statement on Form S-2 (File No. 333-90836) and the Rule 462
Registration Statement, as each such registration statement may be amended
pursuant to the Act. The prospectus subject to completion in the form included
in the Registration Statement at the time of the initial filing of such
Registration Statement with the Commission and as such prospectus is amended
from time to time until the date of the Prospectus is referred to in this
Agreement as the "Preliminary Prospectus." All references in this Agreement to
the Registration Statement, the Rule 462 Registration Statement, the Rule 434
Prospectus, a Preliminary Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX"). Any reference in this Agreement to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-2 under the Act, as of the effective date of the Registration Statement,
or the date of such Preliminary Prospectus or the Prospectus, as the case may
be, as such documents are modified or superseded by such Preliminary Prospectus
or the Prospectus. As used herein, the term "Incorporated Documents" means the
documents that at the effective date of the Registration Statement are
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees to issue
and sell the Firm Shares to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company at a purchase
price of $______ per Share (the "purchase price per Share"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto. As
compensation for their services rendered as Underwriters hereunder, the Company
will pay to such Underwriters 6.0 % of the purchase price per Share (the
"Underwriting Compensation") for each Firm Share set forth opposite the name of
such Underwriter in Schedule I hereto.
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The Company hereby also agrees to sell to the Underwriters, and, upon
the basis of the representations, warranties and agreements of the Company
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right for 30 days from the date of the
Prospectus to purchase from the Company the Additional Shares at the purchase
price per Share. The Additional Shares may be purchased solely for the purpose
of covering over-allotments, if any, made in connection with the offering of the
Firm Shares. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase the number of Additional Shares
(subject to such adjustments as you may determine to avoid fractional shares)
that bears the same proportion to the total number of Additional Shares to be
purchased by the Underwriters as the number of Shares set forth opposite the
name of such Underwriter in Schedule I hereto bears to the total number of
Shares (the "Additional Share Ratio"). If any Additional Shares are purchased by
the Underwriters, the Company agrees to pay to such Underwriters an amount equal
to the Underwriting Compensation multiplied by the number of Additional Shares
purchased hereunder (the "Additional Share Compensation"), in which case each
Underwriter will receive its respective percentage interest, based on the
Additional Share Ratio, of the Additional Share Compensation. The option to
purchase Additional Shares may be exercised at any time within 30 days after the
date of the Prospectus, but no more than once. No Additional Shares will be sold
and delivered unless the Firm Shares previously have been, or simultaneously
are, sold and delivered.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date
the Shares are released by the Underwriters for sale to the public, the Company
shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxx Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx at 10:00 a.m., St. Petersburg, Florida time, four business
days after the date of this Agreement (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement between the
Representatives and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, at
10:00 a.m., St. Petersburg, Florida time, on such date or dates (the "Additional
Closing Date") (which may be the same as the Closing Date, but shall in no event
be earlier than the Closing Date nor earlier than three nor later than ten
business days after the giving of the notice hereinafter referred to) as shall
be specified in a written notice, from the Representatives on behalf of the
Underwriters to the Company, of the Underwriters' determination to purchase a
number, specified in such notice, of Additional Shares. Such notice may be given
at any time within 30 days after the date of the Prospectus. The place of
closing
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for the Additional Shares and the Additional Closing Date may be varied by
agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., St. Petersburg, Florida time, not later
than the second full business day preceding the Closing Date or the Additional
Closing Date, as the case may be. Such certificates shall be made available to
you in St. Petersburg, Florida for inspection and packaging not later than 9:30
a.m., St. Petersburg, Florida time, on the business day immediately preceding
the Closing Date or the Additional Closing Date, as the case may be. The
certificates evidencing the Firm Shares and any Additional Shares to be
purchased hereunder shall be delivered to you on the Closing Date or the
Additional Closing Date, as the case may be, against payment of the purchase
price therefore by wire transfer of immediately available funds to an account
specified in writing, not later than the close of business on the business day
next preceding the Closing Date or the Additional Closing Date, as the case may
be, by the Company. Payment for the Shares sold by the Company hereunder shall
be delivered by the Representatives via wire transfer to the Company.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price per Share
for the Firm Shares and the Additional Shares, if any, that the Underwriters
have agreed to purchase. Xxxxxxx Xxxxx and Associates, Inc., individually and
not as Representatives of the Underwriters, may, but shall not be obligated to,
make payment for any Shares to be purchased by any Underwriter whose funds shall
not have been received by the Representatives by the Closing Date or the
Additional Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
5. Covenants and Agreements of the Company. The Company covenants and
agrees with the several Underwriters as follows:
(a) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and the time and date of any filing of any post-effective
Registration Statement or any amendment or supplement to any Preliminary
Prospectus or the Prospectus and the time and date that any post-effective
amendment to the Registration Statement becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed pursuant to
Rule 424(b) under the Act, (iii) of the receipt of any comments of the
Commission, or any request by the Commission for amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of time
referred to in Section 5(e) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any material respect or that requires
the making of any additions
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thereto or changes therein in order to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were made) not
misleading in any material respect, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal or lifting of such order at the
earliest possible time. If the Company elects, with the consent of the
Representatives, to rely on Rule 434 under the Act, the Company will provide the
Underwriters with copies of the form of Rule 434 Prospectus (including copies of
a term sheet that complies with the requirements of Rule 434 under the Act), in
such number as the Underwriters may reasonably request, and file with the
Commission in accordance with Rule 424(b) of the Act the form of Prospectus
complying with Rule 434(b)(2) of the Act before the close of business on the
first business day immediately following the date hereof. If the Company elects
not to rely on Rule 434 under the Act, the Company will provide the Underwriters
with copies of the form of Prospectus, in such number as the Underwriters may
reasonably request, and file with the Commission such Prospectus in accordance
with Rule 424(b) of the Act before the close of business on the first business
day immediately following the date hereof.
(b) The Company will furnish to you, without charge, two
signed duplicate originals of the Registration Statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration
Statement or any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus unless (i) you shall have previously been
advised thereof and been given a reasonable opportunity to review such filing,
amendment or supplement and (ii) you have not reasonably objected to such
filing, amendment or supplement after being so advised and having been given a
reasonable opportunity to review such filing, amendment or supplement.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have reasonably requested or may hereafter reasonably request, copies of
each form of the Preliminary Prospectus. Consistent with the provisions of
Section 5(e) hereof, the Company consents to the use, in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters and by
dealers, prior to the date of the Prospectus, of each Preliminary Prospectus so
furnished by the Company.
(e) As soon after the execution and delivery of this Agreement
as is practicable and thereafter from time to time for such period as in the
reasonable opinion of counsel for the Underwriters a prospectus is required by
the Act to be delivered in connection with sales by any Underwriter or a dealer
(the "Prospectus Delivery Period"), and for so long a period as you may request
for the distribution of the Shares, the Company will deliver to each Underwriter
and each dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as they may reasonably request. The Company
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the
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provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the several Underwriters and by
all dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or dealer. If at any time prior to the later of (i) the completion of the
distribution of the Shares pursuant to the offering contemplated by the
Prospectus or (ii) the expiration of prospectus delivery requirements with
respect to the Shares under Section 4(3) of the Act and Rule 174 thereunder, any
event shall occur that in the judgment of the Company or in the opinion of
counsel for the Underwriters is required to be set forth in the Prospectus (as
then amended or supplemented) or should be set forth therein in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with the Act or any other law, the Company will forthwith
prepare and, subject to Sections 5(a) and 5(c) hereof, file with the Commission
an appropriate supplement or amendment thereto and, in the case of any such
amendment, use its best efforts to cause such amendment to become effective as
promptly as possible, and will furnish to each Underwriter who has previously
requested Prospectuses, without charge, a reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in suits, other than
those arising out of the offering or sale of the Shares, as contemplated by this
Agreement and the Prospectus, in any jurisdiction where it is not now so
subject. In each jurisdiction in which the Shares shall have been qualified as
above provided, the Company will make and file such statements and reports in
each year as are or may be required by the laws of such jurisdiction. If the
qualification of the Shares is suspended in any jurisdiction, the Company shall
so advise you promptly in writing.
(g) The Company will make generally available to its security
holders a consolidated earnings statement (in form complying with the provisions
of Rule 158), which need not be audited, covering a twelve-month period
commencing after the effective date of the Registration Statement and the Rule
462 Registration Statement, if any, and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(h) During the period ending three years from the date hereof,
the Company will furnish to you such information concerning the Company,
excluding non-public information, as you may reasonably request, provided that
the Company shall have no obligation to furnish any documents available to the
public on XXXXX. During the Prospectus Delivery Period, the Company will file
all documents required to be filed with the Commission pursuant to Sections 13,
14 and 15 of the Exchange Act in the manner and within the time periods required
by the Exchange Act.
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(i) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder in accordance in all material respects
with the statements under the caption "Use of Proceeds" in the Prospectus.
(j) If Rule 430A under the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act.
(k) For a period of 90 days after the date of the Prospectus
first filed pursuant to Rule 424(b) under the Act, without your prior written
consent, the Company will not, directly or indirectly, issue, sell, offer or
contract to sell or otherwise dispose of or transfer any shares of Common Stock
or securities convertible into or exchangeable or exercisable for shares of
Common Stock (collectively, "Company Securities") or any rights to purchase
Company Securities, or file any registration statement under the Act with
respect to any of the foregoing except to the Underwriters pursuant to this
Agreement and except for grants of options pursuant to the Company's stock
option, stock bonus or other stock plans or arrangements in effect as of the
date hereof and described in the Prospectus and except for issuances of shares
of Common Stock upon the exercise of options outstanding as of the date hereof
under such stock plans.
(l) Prior to the Closing Date or the Additional Closing Date,
as the case may be, the Company will furnish to you, as promptly as possible,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any period subsequent to the periods covered by the
financial statements appearing in the Prospectus.
(m) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(n) 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 or manipulation of the price
of the shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(o) The Company will timely file with NASDAQ all documents and
notices required by the NASDAQ of companies that have or will issue securities
that are traded on the NASDAQ.
(p) The Company shall engage and maintain, at its expense, a
transfer agent and, if necessary under the jurisdiction of its incorporation or
the rules of any national securities exchange on which the Common Stock is
listed, a registrar (which, if permitted by applicable laws and rules may be the
same entity as the transfer agent) for the Common Stock.
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6. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter on the date hereof, and shall be
deemed to represent and warrant to each Underwriter on the Closing Date and the
Additional Closing Date, as the case may be, that:
(a) The Company satisfies all of the requirements of the Act
for use of Form S-2 for the offering of the Shares contemplated hereby. Each
Preliminary Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto, or filed
pursuant to Rule 424(a) under the Act, complied as to form when so filed in all
material respects with the provisions of the Act, except that this
representation and warranty does not apply to statements in or omissions from
such Preliminary Prospectus (or any amendment or supplement thereto) made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of any Underwriter through
you expressly for use therein. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus and no proceeding
for that purpose has been instituted or threatened by the Commission or the
securities authority of any state or other jurisdiction.
(b) The Company has prepared each of the Registration
Statement, any Rule 462 Registration Statement and any post-effective amendment
thereto, and the Prospectus and any amendments or supplements thereto. The
Registration Statement (including any Rule 462 Registration Statement), in the
form in which it becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and the Prospectus, and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, will comply as to form in all material respects with the
provisions of the Act and will not at any such times contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements in or omissions
from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on behalf
of any Underwriter through you expressly for use therein. All agreements,
contracts, indentures, leases or other documents or instruments (or summaries
thereof) delivered to the Underwriters or their counsel in response to their due
diligence requests (including amendments or supplements thereto) in connection
with the Registration Statement and the Prospectus are true and complete and the
Company does not know of any agreements, contracts, indentures, leases or other
documents or information required to be delivered in response to such due
diligence requests that have not been so delivered or (ii) statements in or
omissions from the Registration Statement (or any amendment hereto) related to
or resulting from the specific terms of the offering of the Shares, which terms
are included in the Prospectus.
(c) Each Preliminary Prospectus and the Prospectus, filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the Shares.
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(d) The authorized and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization" as
of the date set forth therein. All the outstanding shares of Common Stock of the
Company have been, and as of the Closing Date and the Additional Closing Date,
as the case may be, will be, duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights; except as
set forth in the Prospectus, the Company is not a party to or bound by any
outstanding options, warrants or similar rights to subscribe for, or contractual
obligations to issue, sell, transfer or acquire, any of its capital stock or any
securities convertible into or exchangeable for any of such capital stock; the
Shares to be issued and sold to the Underwriters by the Company hereunder have
been duly authorized and, when issued and delivered to the Underwriters against
full payment therefor in accordance with the terms hereof will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights; the capital stock of the Company conforms in all material respects to
the description thereof in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) under the caption "Description of Capital
Stock"; and the delivery of certificates for the Shares being sold by the
Company against payment therefor pursuant to the terms of this Agreement will
pass valid title to the Shares being sold by the Company, free and clear of any
claim, encumbrance or defect in title, to the several Underwriters purchasing
such shares in good faith and without notice of any lien, claim or encumbrance.
The certificates for the Shares being sold by the Company are in valid and
sufficient form.
(e) Each of the Company and its subsidiaries is a corporation
duly organized and validly existing as a corporation in good standing under the
laws of the state of its incorporation with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
presently conducted and as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure to so
register or qualify has not had or will not have a material adverse effect on
the condition (financial or other), business, properties, net worth, results of
operations or prospects of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(f) Except as disclosed in the Prospectus, the issued shares
of capital stock of each of the Company's subsidiaries and to the best knowledge
of the Company the shares of SET Enterprises' preferred stock held by the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company free and clear of any security
interests, liens, encumbrances, equities or claims. The Company does not have
any subsidiaries and does not own a material interest in or control, directly or
indirectly, any other corporation, partnership, joint venture, association,
trust or other business organization, except as disclosed in the Prospectus or
as set forth in Exhibit 21 to the Annual Report on Form 10-K of the Company for
the fiscal year ended December 31, 2001.
(g) There are no legal or governmental proceedings pending or,
to the best knowledge of the Company, threatened, against the Company or its
subsidiaries or to which the Company or its subsidiaries or any of their
properties are subject, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) but are not
described as required. Except as described in the Prospectus, there is no
action, suit, inquiry, proceeding or investigation by or before any court or
governmental or other
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regulatory or administrative agency or commission pending or, to the best
knowledge of the Company, threatened, against or involving the Company or its
subsidiaries, which might individually or in the aggregate prevent or adversely
affect the transactions contemplated by this Agreement or result in a Material
Adverse Effect, nor to the Company's knowledge, is there any basis for any such
action, suit, inquiry, proceeding or investigation. There are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the Registration Statement
that are not described, filed or incorporated by reference in the Registration
Statement and the Prospectus as required by the Act. All such contracts to which
the Company or any of its subsidiaries is a party have been duly authorized,
executed and delivered by the Company or the applicable subsidiary, constitute
valid and binding agreements of the Company or the applicable subsidiary and are
enforceable against the Company or the applicable subsidiary in accordance with
the terms thereof, except as enforceability thereof may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other laws affecting
creditors' rights generally and (ii) equitable principles being applied at the
discretion of a court before which any proceeding may be brought. Neither the
Company nor the applicable subsidiary nor to the Company's knowledge, any other
party, is in breach of or default to the Company under any of such contracts,
which breach or default would have a Material Adverse Effect.
(h) Neither the Company nor any of its subsidiaries is (i) in
violation of (A) its certificate of incorporation or bylaws, or other
organizational documents, (B) any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any of its subsidiaries the
violation of which would have a Material Adverse Effect; or (C) any decree of
any court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries the violation of which would have a Material Adverse
Effect; or (ii) in default in any material respect in the performance of any
obligation, agreement or condition contained in (A) any bond, debenture, note or
any other evidence of indebtedness or (B) any agreement, indenture, lease or
other instrument (each of (A) and (B), an "Existing Instrument") to which the
Company or any of its subsidiaries is a party or by which any of their
properties may be bound, which default would have a Material Adverse Effect; and
to the Company's knowledge there does not exist any state of facts that
constitutes an event of default on the part of the Company or any of its
subsidiaries as defined in such documents or that, with notice or lapse of time
or both, would constitute an event of default that would have a Material Adverse
Effect.
(i) The Company's execution and delivery of this Agreement and
the performance by the Company of its obligations under this Agreement have been
duly and validly authorized by the Company and have been duly executed and
delivered by the Company, and this Agreement constitutes a valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent enforceability may be limited by (i) the
application of bankruptcy, reorganization, insolvency and other laws affecting
creditors' rights generally and (ii) equitable principles being applied at the
discretion of a court before which any proceeding may be brought, except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws.
(j) Neither the issuance and sale of the Shares by the
Company, the execution, delivery or performance of this Agreement by
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the Company nor the consummation by the Company of the transactions contemplated
hereby (i) requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency or official (except such as may be required
for the registration of the Shares under the Act, the listing of the Shares for
trading on NASDAQ, the registration of the Common Stock under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") and compliance with the
securities or Blue Sky laws of various jurisdictions, all of which will be, or
have been, effected in accordance with this Agreement and except for the NASD's
clearance of the underwriting terms of the offering contemplated hereby as
required under the NASD's Rules of Fair Practice), (ii) conflicts with or will
conflict with or constitutes or will constitute a breach of, or a default under,
the Company's certificate of incorporation or the Company's bylaws or any
agreement, indenture (except with respect to indentures, such breaches or
defaults that individually or in the aggregate would not result in a Material
Adverse Effect), lease or other instrument to which the Company or any of its
subsidiaries is a party or by which any of its properties may be bound, (iii)
violates any statute, law, regulation, ruling, filing, judgment, injunction,
order or decree applicable to the Company or any of its subsidiaries or any of
their properties, or (iv) results in a breach of, or default or Debt Repayment
Triggering event (as defined below) under, or results in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries. As used herein, a "Debt Repayment Triggering
Event" means any event or condition that gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any of its subsidiaries.
(k) Except as described in the Prospectus, and except for
options to purchase capital stock issued pursuant to the Company's 1997 Stock
Option Plan, the 2001 Non-Employee Director Stock Incentive Plan and the 2001
Stock Incentive Plan, neither the Company nor any of its subsidiaries has
outstanding and at the Closing Date and the Additional Closing Date, as the case
may be, will have outstanding any options to purchase, or any warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock or any
such warrants or convertible securities or obligations. No holder of securities
of the Company has rights to the registration of any securities of the Company
as a result of or in connection with the filing of the Registration Statement or
the consummation of the transactions contemplated hereby that have not been
satisfied or heretofore waived in writing.
(l) Deloitte & Touche LLP and Xxxxx Xxxxxxxx LLP, the
certified public accountants who have certified the financial statements
(including the related notes thereto and supporting schedules) filed as part of
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the Act and the
Exchange Act.
(m) The financial statements, together with related schedules
and notes, included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the financial condition,
results of operations, cash flows and changes in financial position of the
Company on the basis stated in the Registration Statement at the
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respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and
Prospectus (and any amendment or supplement thereto) is accurately presented in
all material respects and prepared on a basis consistent with such financial
statements and the books and records of the Company. No other financial
statements or schedules are required to be included or incorporated by reference
in the Registration Statement.
Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), including any Incorporated Documents,
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) and prior to the Closing Date and the Additional Closing Date, (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
transaction that is not in the ordinary course of business, (ii) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) neither
the Company nor any of its subsidiaries has paid or declared any dividends or
other distributions with respect to its capital stock and the Company is not in
default under the terms of any class of capital stock of the Company or any
outstanding debt obligations, (iv) there has not been any change in the
authorized or outstanding capital stock of the Company (other than pursuant to
the grant or exercise of stock options or similar equity-based compensation
awards) or any material change in the indebtedness of the Company (other than in
the ordinary course of business), (v) there has not been any material adverse
change, or any development involving or that may reasonably be expected to
result in a Material Adverse Effect, in the condition (financial or otherwise),
business, properties, net worth or result of operations of the Company, (vi) the
Company has not made and has not been requested to make any payments with
respect to its guarantee of indebtedness of SET Enterprises and (vii) the
Company is not aware of any default of SET Enterprises with respect to SET's
bank covenants to its lender. As used in the preceding subparagraph (vii), the
word "aware", when referring to the Company, means the actual knowledge of any
officer or director of the Company and does not imply or require any specific
investigation of matters relating to SET Enterprises' bank covenants to its
lender.
(n) All offers and sales of the Company's capital stock and
other debt or other securities prior to the date hereof were made in compliance
with or were the subject of an available exemption from the Act and all other
applicable state and federal laws or regulations, or any actions under the Act
or any state or federal laws or regulations in respect of any such offers or
sales are effectively barred by effective waivers or statutes of limitation.
(o) The Common Stock (including the Shares) is registered
pursuant to Section 12(g) of the Exchange Act and is listed on NASDAQ, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from NASDAQ, nor has the Company received any
notification that the Commission or the NASDAQ is contemplating terminating such
registration or listing.
-12-
(p) The Company has not distributed and will not distribute,
and has not authorized the Underwriters to distribute, any written offering
material in connection with the offering and sale of the Shares other than the
Preliminary Prospectus, the Prospectus or other offering material, if any, as
permitted by the Act.
(q) Other than excepted activity pursuant to Regulation M
under the Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other purpose.
(r) The Company and each of its subsidiaries have filed all
tax returns required to be filed (other than certain state or local tax returns,
as to which the failure to file, individually or in the aggregate, would not
have a Material Adverse Effect), which returns are complete and correct, and
neither the Company nor any subsidiary is in default in the payment of any taxes
that were payable pursuant to said returns or any assessments with respect
thereto. Except as disclosed in the Prospectus, all deficiencies asserted as a
result of any federal, state, local or foreign tax audits have been paid or
finally settled and no issue has been raised in any such audit that, by
application of the same or similar principles, reasonably could be expected to
result in a proposed deficiency for any other period not so audited. There are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for any
period. On the Closing Date and the Additional Closing Date, as the case may be,
all stock transfer and other taxes that are required to be paid in connection
with the sale of the shares to be sold by the Company to the Underwriters will
have been fully paid by the Company and all laws imposing such taxes will have
been complied with.
(s) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
(t) Except as otherwise disclosed in the Prospectus, each of
the Company and its subsidiaries has good and valid title to all property (real
and personal) described in the Prospectus as being owned by it, free and clear
of all liens, claims, security interests or other encumbrances except (i) such
as are described in the Prospectus or (ii) such as are not materially burdensome
and do not have or will not result in a Material Adverse Effect to the use of
the property or the conduct of the business of the Company. All property (real
and personal) held under lease by the Company and its subsidiaries is held by it
under valid, subsisting and enforceable leases with only such exceptions as in
the aggregate are not materially burdensome and do not have or result in a
Material Adverse Effect to the use of the property or the conduct of the
business of the Company.
(u) Except as otherwise disclosed in the Prospectus, each of
the Company and its subsidiaries has all permits, licenses, franchises,
approvals, consents and authorizations of governmental or regulatory authorities
(hereinafter "permit" or "permits") as are necessary to own its properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus, except where the
failure to have obtained any such permit has not had and will not have a
Material Adverse Effect; each of the
-13-
Company and its subsidiaries has operated and is operating its business in
material compliance with and not in material violation of all of its obligations
with respect to each such permit and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination of any such
permit or result in any other material impairment of the rights of any such
permit, subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, such permits contain no
restrictions that are materially burdensome to the Company or any of its
subsidiaries.
(v) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) Except as otherwise disclosed in the Prospectus, neither
the Company nor any of its subsidiaries, since each has been a subsidiary of the
Company, nor, to the Company's knowledge, any employee or agent of the Company
or any of its subsidiaries, has, directly or indirectly, (i) made any unlawful
contribution to any candidate for political office, or failed to disclose fully
any contribution in violation of law or (ii) made any payment to any federal,
state, local or foreign governmental official, or other person charged with
similar public or quasi-public duties, or any person, trust, corporation,
partnership, limited liability company or similar entity, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof or applicable foreign jurisdictions.
(x) Except as otherwise disclosed in the Prospectus, the
Company and its subsidiaries are (i) in compliance with any and all applicable
federal, state, local and foreign laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or other approvals would not,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended. Neither the Company nor any of its subsidiaries owns,
leases or occupies any property that appears on any list of hazardous sites
compiled by any state or local governmental agency.
(y) Each of the Company and its subsidiaries owns and has full
right, title and interest in and to, or has valid licenses to use, each material
trade name, trademark, service xxxx, patent, copyright, approval, trade secret
and other similar rights (collectively "Intellectual Property") under which the
Company and its subsidiaries conduct all or any material part of its business,
and the Company has not created any lien or encumbrance on, or granted any right
or
-14-
license with respect to, any such Intellectual Property except where the failure
to own or obtain a license or right to use any such Intellectual Property has
not and will not have a Material Adverse Effect; there is no claim pending
against the Company or its subsidiaries with respect to any Intellectual
Property and the Company and its subsidiaries have not received notice or
otherwise become aware that any Intellectual Property that it uses or has used
in the conduct of its business infringes upon or conflicts with the rights of
any third party. Neither the Company nor any of its subsidiaries has become
aware that any material Intellectual Property that it uses or has used in the
conduct of its business infringes upon or conflicts with the rights of any third
party.
(z) The Company has procured Lock-Up Agreements, in the form
of Exhibit A attached hereto, from each of the Company's executive officers and
directors listed on Schedule II.
(aa) Except as previously disclosed to the Representatives in
writing, no officer, director or nominee for director of the Company has a
direct or indirect affiliation or association with any member of the NASD.
(bb) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against (i) losses resulting
from interruption of the Company's business in such amounts as approximate the
Company's earnings at the time of such loss and (ii) such losses and risks and
in such amounts as are prudent and customary in the businesses in which the
Company is engaged; and neither the Company nor any of its subsidiaries has
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not result in a Material Adverse Effect. (cc) In the ordinary course of
its business, the Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such review and
amount of its established reserves, the Company has reasonably concluded that
such associated costs and liabilities would not, individually or in the
aggregate, result in a Material Adverse Effect.
(dd) The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA and all other applicable state and federal
laws. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group or organization described in Sections 414(b), (c), (m) or
(o) of the Code of which the Company or such subsidiary is a member. No
"reportable event" (as defined in ERISA) has occurred or is reasonably expected
to occur with respect to any "employee benefit plan" established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates. No
-15-
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such "employee benefit plan"
were terminated, would have any "amount of unfunded benefit liabilities" (as
defined in ERISA). Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each "employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, that would cause the loss of such
qualification.
(ee) The statements, (including the assumptions described
therein) included in the Registration Statement and the Prospectus are within
the coverage of Rule 175(b) under the Act to the extent such data constitute
forward looking statements as defined in Rule 175(c) and (ii) were made by the
Company with a reasonable basis and reflect the Company's good faith estimate of
the matters described therein.
(ff) The Company and its subsidiaries have complied and will
comply in all material respects with wage and hour determinations issued by the
U.S. Department of Labor under the Service Contract Act of 1965 and the Fair
Labor Standards Act in paying its employees' salaries, fringe benefits and other
compensation for the performance of work or other duties in connection with
contracts with the U.S. government, and have complied and will comply in all
material respects with the requirements of the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1964
(Title VII), the National Labor Relations Act, the Vietnam Era Veteran's
Readjustment Act, the Age Discrimination in Employment Act, as amended by the
Older Workers' Benefit Protection Act, and federal, state and local and foreign
labor laws, each as amended except where the failure to comply with any such
requirements has not, and will not, have a Material Adverse Effect.
(gg) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such documents was filed,
when such amendment was filed), as such Incorporated Documents are modified or
superceded by the Preliminary Prospectus or the Prospectus, conformed in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, and any further Incorporated Documents so filed will,
when they are filed, conform in all material respects with the requirements of
the Exchange Act and the rules and regulations thereunder; no such Incorporated
Document when it was filed, (or, if an amendment with respect to any such
document was filed, when such amendment was filed), as such Incorporated
Documents are modified or superceded by the Preliminary Prospectus or the
Prospectus, contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein not misleading; and no such further
Incorporated Document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Company
agrees to pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses
-16-
in connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof and of any Preliminary Prospectus to
the Underwriters and dealers; (ii) the printing and delivery (including postage,
air freight charges and charges for counting and packaging) of such copies of
the Registration Statement, the Prospectus, each Preliminary Prospectus, the
Blue Sky memoranda, the Master Agreement Among Underwriters, this Agreement, the
Selected Dealers Agreement and all amendments or supplements to any of them as
may be reasonably requested for use in connection with the offering and sale of
the Shares; (iii) consistent with the provisions of Section 5.1(f), all expenses
in connection with the qualification of the Shares for offering and sale under
the securities or Blue Sky laws of the jurisdictions designated by the
Underwriters, including reasonable attorneys' fees and out-of-pocket expenses of
the counsel for the Underwriters in connection therewith; (iv) the filing fees
incident to securing any required review by the NASD of the fairness of the
terms of the sale of the Shares; (v) the fees and expenses associated with
including the Shares of Common Stock on the NASDAQ; (vi) the cost of preparing
stock certificates; (vii) the costs and charges of any transfer agent or
registrar; (viii) the cost of the tax stamps, if any, in connection with the
issuance and delivery of the Shares to the respective Underwriters; (ix) all
other fees, costs and expenses referred to in Item 13 of the Registration
Statement; and (x) the transportation, lodging, graphics and other expenses
incidental to the Company's preparation for and participation in the "roadshow"
for the offering contemplated hereby. Except as specifically set forth herein,
the Representatives will pay or cause to be paid the following: (i) the fees,
disbursements and out-of-pocket expenses of the counsel for the Underwriters in
connection with the registration of the Shares under the Act; (ii) the
out-of-pocket expenses of the Representatives; and (iii) the lodging, graphics,
and other expenses incidental to the Representatives' preparation for and
participation in the "roadshow" for the offering contemplated hereby.
8. Indemnification and Contribution. Subject to the limitations in this
paragraph below, the Company agrees to indemnify and hold harmless you and each
other Underwriter, the directors, officers, employees and agents of each
Underwriter, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses, including
reasonable costs of investigation and attorneys' fees and expenses
(collectively, "Damages") arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except (x) to the extent that any
such Damages arise out of or are based upon an untrue statement or omission or
alleged untrue statement or omission that has been made therein or omitted
therefrom in reliance upon and in conformity with the information furnished in
writing to the Company by or on behalf of any Underwriter through you, expressly
for use in connection therewith or (y) with respect to statements in or
omissions from the Registration Statement (or any amendment thereto) related to
or resulting from the specific terms of the offering of the Shares, to the
extent such terms are included in the Prospectus or (ii) any inaccuracy in or
breach of the representations and warranties of the Company contained herein or
any failure of the Company to perform its obligations hereunder or under law;
provided, however, that with respect to any untrue statement or omission made in
any Preliminary
-17-
Prospectus, the indemnity agreement contained in this paragraph shall not inure
to the benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter or to any officer, director, employee or agent of any
Underwriter) from whom the person asserting any such Damages purchased the
Shares concerned if both (A) a copy of the Prospectus was not sent or given to
such person at or prior to the written confirmation of the sale of such Shares
to such person as required by the Act and (B) the untrue statement or omission
in the Preliminary Prospectus was corrected in the Prospectus. This
indemnification shall be in addition to any liability that the Company may
otherwise have.
In addition to its other obligations under this Section 8, the Company
agrees that, as an interim measure, if any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any inaccuracy in the representations and warranties of the Company herein or
failure to perform its obligations hereunder, all as set forth in this Section
8, is not resolved by agreement among the parties or the judgment (which may be
subject to reconsideration or appeal) by a court of competent jurisdiction prior
to the Underwriter incurring Expenses (as defined below) of $100,000 in the
aggregate (to the extent documented by reasonably itemized invoices therefor)
for all such claims, actions, investigations, inquiries, or other proceedings
from the date the Underwriter provides written notice to the Company of any such
claim, then the party against whom indemnification is being sought will
thereafter reimburse each Underwriter on a monthly basis for all reasonable
legal or other out-of-pocket expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding
(to the extent documented by reasonably itemized invoices therefor)
("Expenses"), notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligation of the Company to reimburse each
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the person(s) from whom
it was received. Any such interim reimbursement payments that are not made to
the Underwriters within 30 days of a request for reimbursement shall bear
interest compounded monthly at a rate determined on the basis of the base
lending rate announced from time to time by The Wall Street Journal from the
date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Company, such Underwriter or such controlling person shall promptly
notify in writing the party against whom indemnification is being sought (the
"indemnifying party"), and such indemnifying party shall assume the defense
thereof, including the employment of counsel reasonably acceptable to such
Underwriter or such controlling person and the payment of all reasonable fees of
and expenses incurred by such counsel. Such Underwriter or any such controlling
person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person, unless
(i) the indemnifying party has agreed in writing to pay such fees and expenses,
(ii) the indemnifying party has failed to assume the defense and employ counsel
reasonably acceptable to the Underwriter or such controlling person or (iii) the
named parties to any such action (including any impleaded parties) include both
such Underwriter or such controlling person and the indemnifying party, and such
Underwriter or such controlling person shall have been advised by its counsel
that one or more legal defenses may be available to the Underwriter
-18-
that may not be available to the Company, or that representation of such
indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person (but the Company shall not be liable for
the fees and expenses of more than one counsel for the Underwriters and such
controlling persons)). The indemnifying party shall not be liable for any
settlement of any such action effected without its written consent, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agree to indemnify and hold
harmless any Underwriter and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment, but in the case of a judgment only to the extent stated in the
immediately preceding paragraph.
Each Underwriter agrees, severally and jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing several indemnity from the Company to each Underwriter, but only with
respect to information furnished in writing by or on behalf of such Underwriter
through you expressly for use in the Registration Statement, the Prospectus or
any Preliminary Prospectus, or any amendment or supplement thereto. If any
action or claim shall be brought or asserted against the Company, any of its
directors, any of its officers or any such controlling person based on the
Registration Statement, the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph, such Underwriter shall have
the rights and duties given to the Company by the immediately preceding
paragraph (except that if the Company shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company, its
directors, any such officers and any such controlling persons, shall have the
rights and duties given to the Underwriters by the immediately preceding
paragraph.
In any event, the Company will not, without the prior written consent
of the Representatives, settle or compromise or consent to the entry of any
judgment in any proceeding or threatened claim, action, suit or proceeding in
respect of which the indemnification may be sought hereunder (whether or not the
Representatives or any person who controls the Representatives within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of all Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever to an indemnified party in respect of any
Damages referred to herein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Damages (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand, and the Underwriters on the other hand, from the offering and sale of the
Shares or (ii) if
-19-
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative and several fault of the
Company on the one hand, and the Underwriters on the other hand, in connection
with the statements or omissions that resulted in such Damages as well as any
other relevant equitable considerations. The relative and several benefits
received by the Company 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 bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus; provided
that, in the event that the Underwriters shall have purchased any Additional
Shares hereunder, any determination of the relative benefits received by the
Company or the Underwriters from the offering of the Shares shall include the
net proceeds (before deducting expenses) received by the Company and the
underwriting discounts and commissions received by the Underwriters, from the
sale of such Additional Shares, in each case computed on the basis of the
respective amounts set forth in the notes to the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand, and the
Underwriters on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand, or by the Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount of the underwriting commissions received by such underwriter in
connection with the Shares underwritten by it and distributed to the public. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 11
hereof) and not joint.
Notwithstanding the foregoing, any Damages for which an indemnified
party is entitled to indemnification or contribution under this Section 8 shall
be paid by the indemnifying party to the indemnified party as Damages are
incurred after receipt of reasonably itemized invoices therefor. The indemnity,
contribution and reimbursement agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or
-20-
officers or any person controlling the Company, (ii) acceptance of any Shares
and payment therefor hereunder and (iii) any termination of this Agreement. A
successor to any Underwriter or any person controlling any Underwriter, or to
the Company, its directors or officers or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the second paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. If
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Such an arbitration would be limited to the
operation of the interim reimbursement provisions contained in the second
paragraph of this Section 8, and would not resolve the ultimate propriety or
enforceability of the obligation to reimburse expenses that is created by the
provisions of the second paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., St. Petersburg, Florida time, on the date hereof, or at
such later date and time as shall be consented to in writing by the
Representatives, and all filings required by Rules 424(b), 430A and 462 under
the Act shall have been timely made, and any request of the Commission for
additional information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the representatives and complied with to
their reasonable satisfaction.
(b) You shall be reasonably satisfied that since the
respective dates as of which information is given in the Registration Statement
and Prospectus, (i) there shall not have been any change in the authorized or
outstanding capital stock of the Company (other than for grants or exercises of
stock options or similar equity-based compensation arrangements) or any material
change in the indebtedness (other than in the ordinary course of business) of
the Company, (ii) except as set forth or contemplated by the Registration
Statement or the Prospectus, no material oral or written agreement or other
transaction shall have been entered into by the Company that is not in the
ordinary course of business or that could reasonably be expected to result in a
material reduction in the future earnings of the Company, (iii) no loss or
damage (whether or not insured) to the property of the Company shall have been
sustained that had or could reasonably be expected to have a Material Adverse
Effect, (iv) no legal or governmental action, suit or proceeding affecting the
Company or any of its properties that is material to the Company or that affects
or could reasonably be expected to affect the transactions contemplated by this
Agreement shall have been instituted or threatened and (v) there shall not have
been any material change in the condition (financial or otherwise), business,
management, results of operations or prospects of the Company or its
subsidiaries that makes it impractical or inadvisable in your judgment to
proceed with the public offering or purchase of the Shares as contemplated
hereby.
-21-
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP,
counsel to the Company, substantially to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered or otherwise qualified to
conduct its business as a foreign corporation and is in good standing
in each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a
Material Adverse Effect.
(ii) Each of the Company's subsidiaries is a
corporation duly organized and validly existing in good standing under
the laws of the jurisdiction of its organization, with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly
registered or otherwise qualified to conduct its business as a foreign
corporation and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires
such registration or qualification, except where the failure to so
register or qualify does not have a Material Adverse Effect; and all of
the outstanding shares of capital stock of each of the subsidiaries
have been duly authorized and validly issued, and are fully paid and
nonassessable, and are owned by the Company directly, or indirectly
through one of the other subsidiaries, free and clear of any perfected
security interest, or any other security interest, lien, adverse claim,
equity or other encumbrance.
(iii) The capitalization of the Company conforms in
all material respects to the description thereof contained in the
Prospectus under the caption "Capitalization" and the Shares conform in
all material respects to the description of the Common Stock in the
Prospectus. Except as set forth in the Prospectus, the Company is not a
party to or bound by any outstanding options, warrants or similar
rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities
convertible into or exchangeable for any of such capital stock.
(iv) All shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold
by the Company hereunder, have been duly authorized and validly issued,
are fully paid and nonassessable and are free of any preemptive or
similar rights that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company, and no such rights
will exist as of the Closing Date.
(v) All offers and sales of the Company's securities
have been made in compliance in all material respects with the
registration requirements of the Act and other applicable state
securities laws or regulations or applicable exemptions therefrom.
-22-
(vi) Neither the Company nor any of its subsidiaries
is in violation of its certificate of incorporation or bylaws and is
not in default in the performance of any obligation, agreement or
condition contained in any bond, indenture, note or other evidence of
indebtedness or any other agreement or obligation of the Company, where
the default would have, individually or in the aggregate, a Material
Adverse Effect.
(vii) Neither the offer, sale or delivery of the
Shares by the Company, the execution, delivery or performance by the
Company of this Agreement, compliance by the Company with all
provisions hereof nor consummation by the Company of the transactions
contemplated hereby (A) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, the certificate of
incorporation or bylaws of the Company or any material agreement,
indenture, lease or other instrument to which the Company is a party or
by which any of its properties is bound or (B) creates or will result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or (C) violates or will result in
any violation of any existing law, statute, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree that is known to such
counsel and is applicable to the Company or any of its properties.
(viii) Except as described in the Registration
Statement or Prospectus, there is no action, suit, inquiry, proceeding,
or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or, to the
knowledge of such counsel, threatened, against or involving the Company
or its subsidiaries, or the properties of either the Company or any of
its subsidiaries: (A) which might individually or in the aggregate
prevent or adversely affect the transactions contemplated by this
Agreement or result in a Material Adverse Effect, nor, to the knowledge
of such counsel, is there any basis for any such action, suit, inquiry,
proceeding or investigation; or (B) that are required to be described
in the Registration Statement or Prospectus (or any amendment or
supplement thereto) that are not described as required therein.
(ix) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or instruments that
are exhibits to the Registration Statement, and such agreements,
contracts (and forms of contracts), indentures, leases or other
documents or instruments are fairly summarized or disclosed in all
material respects in the Registration Statement and in the Prospectus,
and such counsel does not know of any agreements, contracts,
indentures, leases or other documents or instruments required to be so
included as exhibits to the Registration Statement.
(x) The four properties held under lease by the
Company or a subsidiary in Warren, Michigan; Lubbock, Texas; Brantford,
Ontario, Canada; and Xxxxx, Mexico are held under duly executed leases.
(xi) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official is
required on the part of the Company (except such as have been obtained
under the Act or such as may be required under state
-23-
securities or Blue Sky laws governing the purchase and distribution of
the Shares) for the valid issuance and sale of the Shares to the
Underwriters under this Agreement.
(xii) The Company satisfies all of the requirements
of the Act for use of Form S-2 for the offering of Shares contemplated
by this Agreement.
(xiii) The form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
requirements of the certificate of incorporation and bylaws of the
Company and the applicable corporate laws of the State of Delaware.
(xiv) The Company has all requisite power and
authority to enter into this Agreement and to issue, sell and deliver
the Shares to be sold by it to the Underwriters as provided herein. The
Agreement has been duly authorized, executed and delivered by, and is a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as to the extent
enforceability may be limited by (i) the application of bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights
generally and (ii) equitable principles being applied at the discretion
of a court before which any proceeding may be brought, and except as
rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.
(xv) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and,
when issued and delivered to the Underwriters against payment therefor
in accordance with the terms hereof, (A) such Shares will be validly
issued, fully paid and nonassessable and free of any preemptive or
similar rights that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company and (B) good and valid
title to such Shares, free and clear of any claim, encumbrance or
defect in title of any nature (other than any arising by or through the
Underwriters), will pass to each Underwriter that has purchased any
portion of such Shares in good faith and without knowledge of any such
claim, encumbrance or defect.
(xvi) The Registration Statement has been declared
effective by the Commission under the Act. To the best knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and no proceedings
for such purpose have been instituted or are pending or are
contemplated or threatened by the Commission. Any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b) under
the Act has been made in the manner and within the time period required
by such Rule 424(b).
(xvii) The Registration Statement, including any Rule
462 Registration Statement, the Prospectus and each amendment or
supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or in exhibits to
or excluded from the Registration Statement, as to which no opinion
need be given) comply as to form in all material respects with the
requirements of the Act. Without limiting the
-24-
generality of the foregoing, any Rule 434 prospectus conform in all
material respects with the requirements of Rule 434 under the Act.
(xviii) The descriptions in the Prospectus including
any document incorporated by reference therein of statutes, regulations
or legal or governmental proceedings, insofar as they purport to
summarize certain of the provisions thereof, are accurate in all
material respects and fairly present the information required to be
presented by the Act and the rules and regulations thereunder.
(xix) The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal investor" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(xx) The Shares have been approved for listing on the
Nasdaq National Market.
(xxi) To the extent that they constitute matters of
law, summaries of legal matters, the Company's certificate of
incorporation or bylaw provisions, legal proceedings, or legal
conclusions, the statements in (i) the Prospectus under the captions
"Risk Factors," "Description of Capital Stock," "Management's
Discussion and Analysis and Results of Operations--Liquidity,"
"Business--Legal Proceedings," "Business--Environmental Matters,"
"Business--Government Regulation," and (ii) Item 15 of the Registration
Statement, have been reviewed by such counsel and fairly present and
summarize, in all material respects, the matters referred to therein.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be.
In addition to the opinion set forth above, such counsel shall state
that during the course of his participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, such
counsel has considered the information therein in light of the matters required
to be set forth therein and has participated in conferences with officers and
representatives of the Company, including its independent public accountants
during the course of which the contents of the Registration Statement and the
Prospectus and related matters were discussed. Such counsel shall additionally
state that as a result of such consideration and participation, nothing has come
to the attention of such counsel that has caused him to believe or given him
reason to believe that the Registration Statement or the Prospectus or any
amendment thereto (except for the financial statements and other financial and
accounting information contained therein or omitted therefrom as to which no
opinion need be expressed), at the date thereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Registration Statement or the Prospectus as of the date of the opinion (except
as aforesaid), contains an untrue statement of a material fact or omits to state
a material fact necessary to make
-25-
the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) You shall have received on the Closing Date or Additional
Closing Date, as the case may be, an opinion of Xxxxx & Xxxxxxx, as counsel for
the Underwriters, dated the Closing Date or Additional Closing Date, as the case
may be, with respect to the issuance and sale of the Shares, the Registration
Statement and other related matters as you may reasonably request, and the
Company and its counsel shall have furnished to your counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(e) You shall have received letters addressed to you and dated
the date hereof and the Closing Date or the Additional Closing Date, as the case
may be, from (i) the firms of Deloitte & Touche LLP and Xxxxx Xxxxxxx LLP,
independent certified public accountants, to the effect set forth in Annex I and
(ii) the Chief Financial Officer of the Company, substantially in the forms
heretofore approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Company, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order
suspending the effectiveness of the Registration Statement or the 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 or, to the knowledge of the Company, threatened or contemplated by the
authorities of any 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; (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 you and you did not object thereto in good faith;
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects (except for
such representations and warranties qualified by materiality, which
representations and warranties shall be true and correct in all respects) on and
as of the date hereof and on and as of the Closing Date or Additional Closing
Date, as the case may be, as if made on and as of the Closing Date or Additional
Closing Date, as the case may be, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you) to the effect set forth in this Section 9(f) and in Sections 9(b) and 9(g)
hereof.
(g) The Company shall not have failed in any material respect
at or prior to the Closing Date or the Additional Closing Date, as the case may
be, to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date or Additional Closing Date, as the case may be.
(h) The Company shall have furnished or caused to have been
furnished to you such further certificates and documents as you shall have
reasonably requested.
-26-
(i) At or prior to the Closing Date, you shall have received
the written commitment of each of the Company's officers and directors set forth
on Schedule III not to directly or indirectly (i) sell, offer or contract to
sell or otherwise dispose of or transfer any shares of Company Securities,
whether now owned or acquired after the date of the Prospectus or with respect
to which the power of disposition is acquired after the date of the Prospectus,
or file any registration statement under the Act with respect to the foregoing
or (ii) enter into any swap or other agreement or any other agreement that
transfers, in whole or in part, directly or indirectly, the economic
consequences of ownership of Company Securities whether any such swap or
transaction is to be settled by delivery of Company Securities, in cash or
otherwise; other than as provided in such written commitment before the
expiration of 90 days from the Closing Date, without the prior written consent
of Xxxxxxx Xxxxx & Associates, Inc.
(j) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate Financing
Department of the NASD confirming that such Department has determined to raise
no objections with respect to the fairness or reasonableness of the underwriting
terms and arrangements of the offering contemplated hereby.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c) and (d)
shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective
upon the later of (a) the execution and delivery hereof by the parties hereto
and (b) release of notification of the effectiveness of the Registration
Statement by the Commission; provided, however, that the provisions of Sections
7 and 8 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares that it or they have agreed to
purchase hereunder, and the aggregate number of Firm Shares that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate number of the Firm Shares, each non-defaulting
Underwriter shall be obligated, severally, in the proportion in which the number
of Firm Shares set forth opposite its name in Schedule I hereto bears to the
aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
-27-
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default
of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in the
Company's Common Stock shall have been suspended by the Commission or NASDAQ,
(ii) trading in securities generally on the NYSE or NASDAQ shall have been
suspended or, materially 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 any such exchange or by order of
the Commission or any court or other governmental authority, (iii) a general
moratorium on commercial banking activities shall have been declared by either
federal or New York State authorities (iv) there shall have occurred any
outbreak or escalation of hostilities or act of terrorism or other international
or domestic calamity, crisis or change in political, financial or economic
conditions or other material event the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to market the Shares or to enforce contracts for the sale of the
Shares or (v) the Company or any subsidiary shall have, in the sole reasonable
judgment of the Representatives, sustained any loss or interference, material to
the Company and its subsidiaries, taken as a whole, with their respective
businesses or properties from fire, flood, hurricane, accident, or other
calamity, whether or not covered by insurance, or from any labor disputes or any
legal or governmental proceeding, or there shall have been any material adverse
change (including, without limitation, a material change in management or
control of the Company) in the condition (financial or otherwise), business
prospects, net worth, or results of operations of the Company and its
subsidiaries, taken as a whole, except in each case as described in, or
contemplated by, the Prospectus (excluding any amendment or supplement thereto).
Notice of such cancellation shall be promptly given to the Company and its
counsel by telegraph, telecopy or telephone and shall be subsequently confirmed
by letter. For purposes of this Section 12, the determination as to whether any
circumstance or event is material shall be in the sole reasonable judgment of
the Representatives.
13. Information Furnished by the Underwriters. The Company acknowledges
that the fifth, seventh, eighth and ninth paragraphs under the caption
"Underwriting" in any Preliminary Prospectus, constitute the only information
furnished by or on behalf of the Underwriters through you or on your behalf as
such information is referred to in Sections 6(a), 6(b) and 8 hereof.
-28-
14. Miscellaneous. Except as otherwise provided in Sections 5 and 12
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered
(i) To the Company
Noble International, Ltd.
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx, Esq.
with a copy to
Xxxxxxxxxxx, Xxxxx & Xxxxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
(ii) To the Underwriters
Xxxxxxx Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxxx
with a copy to
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and its directors and officers.
15. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
-29-
16. Jury Trial Waiver. The Company and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
Noble International, Ltd.
----------------------------------------
Xxxxxxx X. Xxxx, Vice President, General
Counsel and Secretary
CONFIRMED as of the date first above
mentioned, on behalf of the Representatives
and the other several Underwriters named in
Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
By:
--------------------------------------------
Authorized Representatives
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SCHEDULE I
Number
Name Firm Shares
---- -----------
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
TOTAL: 950,000
=========
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SCHEDULE II
Lock-Up Agreements
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. XxXxxxx
Xxxx X. Xxxxxxx
Van X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxx X. Xxxxxx
Xxxxxx X. Xxxxx
-32-
EXHIBIT A
_______, 2002
Noble International, Ltd.
00000 Xxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
RE: NOBLE INTERNATIONAL, LTD. (THE "COMPANY") - RESTRICTION ON STOCK
SALES
Dear Sirs:
This letter is delivered to you pursuant to the Underwriting Agreement
(the "Underwriting Agreement") to be entered into by the Company, as issuer, and
Xxxxxxx Xxxxx & Associates, Inc., the Representatives (the "Representatives") of
certain underwriters (the "Underwriters") to be named therein. Upon the terms
and subject to the conditions of the Underwriting Agreement, the Underwriters
intend to effect a public offering of Common Stock, par value $.001 per share,
of the Company (the "Shares"), as described in and contemplated by the
registration statement of the Company on Form S-2, File No. 333-90836 (the
"Registration Statement"), as filed with the Securities and Exchange Commission
on June 20, 2002 (the "Offering").
As an inducement to the Underwriters to execute the Underwriting
Agreement, the undersigned hereby acknowledges and agrees that the undersigned
will not (i) offer, sell, contract to sell, pledge, grant any option to purchase
or otherwise dispose of (collectively, a "Disposition") any stock, options,
warrants or other Securities of the Company (the "Company Securities"), or any
securities convertible into or exercisable or exchangeable for, or any rights to
purchase or otherwise acquire, any Company Securities held by the undersigned or
acquired by the undersigned after the date hereof, or that may be deemed to be
beneficially owned by the undersigned (collectively, the "Lock-Up Shares"),
pursuant to the Rules and Regulations promulgated under the Securities Act of
1933, as amended (the "Act"), and the Securities Exchange Act of 1934, as
amended, for a period commencing on the date hereof and ending 90 days after the
date of the Company's Prospectus first filed pursuant to Rule 424(b) under the
Act, inclusive (the "Lock-Up Period"), without the prior written consent of
Xxxxxxx Xxxxx & Associates, Inc. or (ii) exercise or seek to exercise or
effectuate in any manner any rights of any nature that the undersigned has or
may have hereafter to require the Company to register under the Act the
undersigned's sale, transfer or other disposition of any of the Lock-Up Shares
or
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other securities of the Company held by the undersigned, or to otherwise
participate as a selling securityholder in any manner in any registration
effected by the Company under the Act, including under the Registration
Statement, during the Lock-Up Period. The foregoing restrictions are expressly
agreed to preclude the undersigned from engaging in any hedging, collar (whether
or not for any consideration) or other transaction that is designed to or
reasonably expected to lead or result in a Disposition of Lock-Up Shares during
the Lock-Up Period, even if such Lock-Up Shares would be disposed of by someone
other than such holder. Such prohibited hedging or other transactions would
include any short sale or any purchase, sale or grant of any right (including
any put or call option or reversal or cancellation thereof) with respect to any
Lock-Up Shares or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Lock-Up Shares.
Notwithstanding the agreement not to make any Disposition during the
Lock-Up Period, you have agreed that the foregoing restrictions shall not apply
to:
1. the Company Securities being offered in the prospectus included in
the Registration Statement; or
2. any grant or exercise of warrants or options pursuant to the
Company's 1997 Stock Option Plan or 2001 Non-Employee Director Stock Incentive
Plan;
3. the tender of Company Securities to the Company for the purpose of
paying the exercise price of and any applicable withholding taxes in connection
with the exercise of outstanding stock options granted by the Company;
4. the transfer of Company Securities to the Company in connection with
the repurchase of such securities by the Company;
5. any gift of Company Securities, if the donee agrees to transfer
restrictions similar to the foregoing; or
6. any transfer of Company Securities by will or intestacy or to a
trust, if prior to any such transfer each transferee agrees to transfer
restrictions similar to the foregoing.
Xxxxxxx Xxxxx & Associates, Inc. shall be authorized, on behalf of the
Underwriters and the other Representatives, to waive any provisions of this
letter agreement.
If the Underwriting Agreement (other than the provisions thereof that
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Shares, you will release the undersigned from the obligations
under this letter agreement will likewise be terminated.
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In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of Lock-Up
Shares if such transfer would constitute a violation or breach of this letter.
This letter shall be binding on the undersigned and the respective successors,
heirs, personal Representatives and assigns of the undersigned. Capitalized
terms used but not defined herein have the respective meanings assigned to such
terms in the Underwriting Agreement.
Very truly yours,
------------------------------
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ANNEX I
Pursuant to Section 9(c) of the Underwriting Agreement, Xxxxx Xxxxxxx
LLP and Deloitte & Touche LLP shall furnish a letter to the underwriters with
respect to the financial statements and schedules audited or reviewed by them to
the following effect:
1. The form of the comfort letter should generally conform to example
"B" in SAS 72.
2. For each of the unaudited interim periods of the Company contained
in the prospectus, a SAS 71 review should be conducted and the standard language
relating thereto be included in the comfort letter.
3. In the event that pro forma financial statements and data are
included in the offering memorandum, it should be reviewed in accordance with
Regulation S-X, Article 11 and the comfort letter should include language
conforming to example "D" in SAS 72.
4. The comfort letter should also include descriptions of procedures
and findings regarding tables, statistics and other financial information, with
attached documents (or selected pages) with markings cross-referenced to a key
describing such procedures and findings, all in general conformity with the
approach taken in example "H" of SAS 72.
With respect to Item 4, the underwriters will provide a draft
of the prospectus and the documents incorporated therein by reference circled to
reflect the numbers for which comfort is requested. As a general matter, the
preferred level of comfort on these items would be to have them directly tied
back to, or recalculated from, the audited financial statements. In the case of
numbers that cannot be tied to or recalculated from the financial statements,
every attempt should be made to agree them to the general ledger and accounting
books and records of the Company.
The executed comfort letter addressed to the underwriters
should be dated and delivered on the pricing date, and the executed bring down
comfort letter substantially in the form of example "C" in SAS 72 should be
dated and delivered on the date of closing. Notwithstanding these dates, all
procedures that your firms will need to perform before the delivery of the
initial comfort letter will have been carried out before the printing of the
Preliminary Prospectus so any required changes may be made to that document
before its distribution.
If any additional information is added to the Preliminary
Prospectus or the final Prospectus, the comfort letters should cover the
additional information to the extent derived or derivable from the financial or
accounting records of Noble International, Inc. and its subsidiaries. In
addition, any filings with the Securities and Exchange Commission that are
incorporated by reference into the Prospectus must also be covered by the
comfort letters.
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