Exhibit 1.1
UNDERWRITING AGREEMENT
Dated: [EFFECTIVE DATE]
▇.▇. ▇▇▇▇▇▇ & CO., INC.
AS REPRESENTATIVE OF THE
UNDERWRITERS NAMED IN
SCHEDULE I HERETO
▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
GENERAL BEARING CORPORATION, a Delaware corporation (the
"Company"), proposes to issue and sell to the one or more
Underwriters named in Schedule I hereto (the "Underwriters"),
including ▇.▇. ▇▇▇▇▇▇ & Co., Inc. (the "Representative" or
"you"), the Representative of the several Underwriters, pursuant
to this Underwriting Agreement (this "Agreement"), 1,000,000
shares of the Common Stock, $.01 par value, of the Company (the
"Common Stock"). In addition, the Company proposes to grant to
the Underwriters the Over-Allotment Option, referred to and
defined in Section 2(c), to purchase all or any part of an
aggregate of 150,000 additional shares of Common Stock, and to
issue to you the Representative's Warrant, referred to and
defined in Section 12, to purchase certain further additional
shares of Common Stock.
The 1,000,000 shares of Common Stock to be sold by the
Company, together with the 150,000 additional shares of Common
Stock that are the subject of the Over-Allotment Option, are
herein collectively called the "Shares." The Shares and the
shares of Common Stock issuable upon exercise of the
Representative's Warrant, are herein collectively called the
"Securities." The term "Representative's Counsel" shall mean the
firm of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Representative,
and the term "Company Counsel" shall mean the firm of ▇▇▇▇ &
Priest, LLP, counsel to the Company. Unless the context
otherwise requires, all references herein to a "Section" shall
mean the appropriate Section of this Agreement.
You have advised the Company that the Underwriters desire to
purchase the Shares as herein provided, and that you have been
authorized to execute this Agreement as representative of the
Underwriters. The Company confirms the agreements made by it
with respect to the purchase of the Shares by the Underwriters,
as follows:
1. REPRESENTATIONS AND WARRANTIES.
[NOTE: SECTION 1 MAY BE EXPANDED AFTER DUE DILIGENCE IS
COMPLETED.]
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each Underwriter
that:
(A) REGISTRATION STATEMENT; PROSPECTUS. A
registration statement (File No. 33- ____) on Form S-1 relating
to the public offering of the Shares (the "Offering"), including
a preliminary form of prospectus, copies of which have heretofore
been delivered to you, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated
thereunder (the "Rules and Regulations"), and has been filed with
the Commission under the Act. As used herein, the term
"Preliminary Prospectus" shall mean each prospectus filed
pursuant to Rule 430 or Rule 424(a) of the Rules and Regulations.
The Preliminary Prospectus bore the legend required by Item 501
of Regulation S-K under the Act and the Rules and Regulations.
Such registration statement (including all financial statements,
schedules and exhibits) as amended at the time it becomes
effective and the final prospectus included therein are herein
respectively called the "Registration Statement" and the
"Prospectus," except that (i) if the prospectus first filed by
the Company pursuant to Rule 424(b) or Rule 430A of the Rules and
Regulations shall differ from such final prospectus as then
amended, then the term "Prospectus" shall instead mean the
prospectus first filed pursuant to said Rule 424(b) or Rule 430A,
and (ii) if such registration statement is amended or such
prospectus is amended or supplemented after the effective date of
such registration statement and prior to the Option Closing Date
(as defined in Section 2(c)), then (unless the context
necessarily requires otherwise) the term "Registration Statement"
shall include such registration statement as so amended, and the
term "Prospectus" shall include such prospectus as so amended or
supplemented, as the case may be.
(B) CONTENTS OF REGISTRATION STATEMENT. On the
Effective Date, and at all times subsequent thereto for so long
as the delivery of a prospectus is required in connection with
the offering or sale of any of the Securities, (i) the
Registration Statement and the Prospectus shall in all material
respects conform to the requirements of the Act and the Rules and
Regulations, and (ii) neither the Registration Statement nor the
Prospectus shall include any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary to make statements therein not misleading; provided,
however, that the Company makes no representations, warranties or
agreements as to information contained in or omitted from the
Registration Statement or Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by
or on behalf of the Underwriters specifically for use in the
preparation thereof. It is understood that the statements set
forth in the Prospectus with respect to stabilization, the
material set forth under the caption "UNDERWRITING," and the
identity of counsel to the Representative under the caption
"LEGAL MATTERS," constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the
Registration Statement and Prospectus, as the case may be.
(C) ORGANIZATION, STANDING, ETC. The Company and each
subsidiary of the Company (a "Subsidiary") has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full power
and corporate authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified or
licensed to do business as a foreign corporation and is in good
standing in each other jurisdiction in which the nature of its
business or the character or location of its properties requires
such qualification, except where failure so to qualify will not
materially affect the business, properties or financial condition
of the Company or such Subsidiary, as the case may be.
(D) CAPITALIZATION. The authorized, issued and
outstanding capital stock of the Company as of the date of the
Prospectus is as set forth in the Prospectus under the caption
"CAPITALIZATION" and consists of 20,000,000 shares of Common
Stock, $.01 par value, of which no more than 3,500,000 shares,
options, and Common Stock equivalents will be issued and
outstanding or reserved for issuance. Except as set forth in the
Prospectus there are no more than 500,000 shares of Common Stock
will be reserved for issuance under an employee stock option
plan. The shares of Common Stock issued and outstanding on the
Effective Date have been duly authorized, validly issued and are
fully paid and nonassessable. No options, warrants or other
rights to purchase, agreements or other obligations to issue, or
agreements or other rights to convert any obligation into, any
shares of capital stock of the Company or any Subsidiary. The
Securities conform in all material respects, issued by on to
which the Company or any Subsidiary is a party or bound to all
statements relating thereto contained in the Registration
Statement or the Prospectus.
(E) SECURITIES. The Shares and the Representative's
Warrant have been duly authorized and, when issued and delivered
against payment therefor pursuant to this Agreement, the Shares
will be duly authorized, validly issued, fully paid and
non-assessable and free of preemptive rights of any security
holder of the Company and the Representative's Warrant will be a
valid and binding obligation of the Company. Neither the filing
of the Registration Statement nor the offering or sale of any of
the Shares or the Representative's Warrant as contemplated by
this Agreement gives rise to any rights, other than those which
have been waived or satisfied, for or relating to the
registration of any securities of the Company, except as
described in the Registration Statement.
(F) AUTHORITY, ETC. This Agreement, the
Representative's Warrant, the Financial Consulting Agreement, and
the M/A Agreement (each as hereinafter defined) have been duly
and validly authorized, executed and delivered by the Company
and, assuming due execution of this Agreement and such other
agreements by the other party or parties hereto and thereto,
constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their
respective terms, except as rights to indemnification hereunder
may be limited by applicable law and except as the enforcement
hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable
principles. The Company has full right, power and lawful
authority to authorize, issue and sell the Shares and the
Representative's Warrant on the terms and conditions set forth
herein. All consents, approvals, authorizations and orders of
any court or governmental authority which are required in
connection with the authorization, execution and delivery of such
agreements, the authorization, issue and sale of the Shares and
the Representative's Warrant, and the consummation of the
transactions contemplated hereby have been obtained.
(G) NO CONFLICT. Except as described in the
Prospectus, neither the Company nor any Subsidiary is in
violation, breach or default of or under, and consummation of the
transactions hereby contemplated and fulfillment of the terms of
this Agreement will not conflict with or result in a breach of,
any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance pursuant to the terms of, any contract, indenture,
mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or such Subsidiary
is a party or by which the Company or such Subsidiary may be
bound or to which any of the property or assets of the Company or
such Subsidiary are subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation
or the By-laws of the Company or any Subsidiary, or any statute,
order, rule or regulation applicable to the Company or any
Subsidiary of any court or governmental authority.
(H) ASSETS. Subject to the qualifications stated in
the Prospectus: (i) the Company and each Subsidiary, as the case
may be, has good and marketable title to all properties and
assets described in the Prospectus as owned by it, including
without limitation intellectual property, free and clear of all
liens, charges, encumbrances or restrictions, except such as are
not materially significant or important in relation to its
business or described in or contemplated by the Prospectus; (ii)
all of the material leases and subleases under which the Company
or any Subsidiary is the lessor or sublessor of properties or
assets or under which the Company or any Subsidiary holds
properties or assets as lessee or sublessee, as described in the
Prospectus, are in all material respects in full force and effect
and, except as described in the Prospectus, neither the Company
nor any Subsidiary is in default in any material respect with
respect to any of the terms or provisions of any of such leases
or subleases, and, to the Company's knowledge, no claim has been
asserted in writing by any party adverse to the rights of the
Company or such Subsidiary as lessor, sublessor, lessee or
sublessee under any such lease or sublease, or affecting or
questioning the right of the Company or such Subsidiary to
continued possession of the leased or subleased premises or
assets under any such lease or sublease, except as described or
referred to in the Prospectus; and (iii) the Company and each
Subsidiary, as the case may be, owns or leases all such
properties, described in the Prospectus, as are reasonably
necessary to its operations as now conducted and, except as
otherwise stated in the Prospectus, as proposed to be conducted
as set forth in the Prospectus.
(I) INDEPENDENT ACCOUNTANTS. BDO ▇▇▇▇▇▇▇, L.L.P. and
Ferro, Berndon & Company, L.L.P., who have each given their
report on certain financial statements filed or to be filed with
the Commission as a part of the Registration Statement, and which
are included in the Prospectus, are with respect to the Company,
independent public accountants as required by the Act and the
Rules and Regulations.
(J) FINANCIAL STATEMENTS. The financial statements
and schedules, together with related notes, set forth in the
Registration Statement and the Prospectus present fairly the
financial position, results of operations and cash flows of the
Company on the basis stated in the Registration Statement, at the
respective dates and for the respective periods to which they
apply. Such financial statements, schedules and related notes
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
the entire period involved, except to the extent disclosed
therein. The audited financial statements, together with the
related notes and schedules and the unaudited financial
information for each of the periods presented in the Registration
Statement and the Prospectus fairly present a true and complete
statement of the financial position of the Company and the
Predecessor at the dates indicated and the results of their
operations for the periods then ended. The Summary Financial
Information and Selected Financial Data included in the
Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus.
(K) NO MATERIAL CHANGE. Except as otherwise set forth
in the Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has:
(i) incurred any liability or obligation, direct or contingent,
or entered into any transaction, which is material to its
business; (ii) effected or experienced any change in its capital
stock; (iii) issued any options, warrants or other rights to
acquire its capital stock; (iv) declared, paid or made any
dividend or distribution of any kind on its capital stock; or (v)
effected or experienced any material adverse change, or
development involving a prospective material adverse change, in
its business, property, operations, condition (financial or
otherwise) or earnings.
(L) LITIGATION. Except as set forth in the
Prospectus, there is not now pending nor, to the best knowledge
of the Company, threatened, any action, suit or proceeding
(including any related to environmental matters or discrimination
on the basis of age, sex, religion or race), whether or not in
the ordinary course of business, to which the Company or any
Subsidiary is a party or its business or property is subject,
before or by any court or governmental authority, which might
result in any material adverse change in the business, property,
operations, condition (financial or otherwise) or earnings of the
Company or such Subsidiary; and no labor disputes involving the
employees of the Company or any Subsidiary exist which might be
expected to affect materially adversely the business, property,
operations, condition (financial or otherwise) or earnings of the
Company or such Subsidiary.
(M) NO UNLAWFUL PROSPECTUSES. The Company has not
distributed any prospectus or other offering material in
connection with the Offering contemplated herein, other than any
Preliminary Prospectus, the Prospectus or other material
permitted by the Act and the Rules and Regulations.
(N) TAXES. Except as disclosed in the Prospectus, the
Company and each Subsidiary has filed all necessary federal,
state, local and foreign income and franchise tax returns and has
paid all taxes shown as due thereon or has requested extension
thereof, except in any case in which the failure so to file or
request an extension would not have a material adverse effect on
the Company; and there is no tax deficiency which has been or, to
the best knowledge of the Company, might be asserted against the
Company or any Subsidiary.
(O) LICENSES, ETC. The Company and each Subsidiary
has in effect all necessary and material licenses, permits and
other governmental authorizations currently required for the
conduct of its business or the ownership of its property, as
described in the Prospectus, and is in all material respects in
compliance therewith, except in any case in which the failure to
so comply would not have a material adverse effect. The Company
owns or possesses adequate rights to use all material patents,
patent applications, trademarks, ▇▇▇▇ registrations, copyrights
and licenses disclosed in the Prospectus and/or which are
necessary for the conduct of such business, and except as
disclosed in the Prospectus has not received any notice in
writing of conflict with the asserted rights of others in respect
thereof. To the best knowledge of the Company, none of the
activities or business of the Company or any Subsidiary is in
violation of, or would cause the Company or such Subsidiary to
violate, any law, rule, regulation or order of the United States,
any state, county or locality, the violation of which would have
a material adverse effect upon the business, property,
operations, condition (financial or otherwise) or earnings of the
Company or such Subsidiary.
(P) NO PROHIBITED PAYMENTS. Neither the Company nor
any Subsidiary have, directly or indirectly at any time: (i)
made any contribution to any candidate for political office, or
failed to disclose fully any such contribution in violation of
law; or (ii) made any payment to any federal, state, local or
foreign governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments
or contributions required or allowed by applicable law. The
Company's internal accounting controls and procedures are
sufficient to cause the Company to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as
amended.
(Q) TRANSFER TAXES. On the Closing Dates (as defined
in Section 2(d)), all transfer and other taxes (including
franchise, capital stock and other tax, other than income taxes,
imposed by any jurisdiction), if any, which are required to be
paid in connection with the sale and transfer by the Company of
the Securities to the Underwriters hereunder shall have been
fully paid or provided for by the Company, and all laws imposing
such taxes shall have been fully complied with by the Company; it
being expressly understood and agreed that no representation or
warranty is made hereby as to sales or transfers by any
underwriter.
(R) EXHIBITS. All contracts and other documents of
the Company or any Subsidiary which are, under the Rules and
Regulations, required to be filed as exhibits to the Registration
Statement have been so filed.
(S) SUBSIDIARIES. Except as described in the
Prospectus, the Company has no significant Subsidiaries, as
defined under Section 1-02 of Regulation S-X. All of the capital
stock of each Subsidiary is owned by the Company.
(T) SHAREHOLDER AGREEMENTS, REGISTRATION RIGHTS.
Except as described in the Prospectus, no security holder of the
Company has any rights with respect to the purchase, sale or
registration of any Securities, and all registration rights with
respect to the Offering have been effectively waived.
2. PURCHASE, DELIVERY AND SALE OF SHARES.
(A) PURCHASE PRICE FOR SHARES. The Shares of Common
Stock shall be sold to and purchased by the Underwriters
hereunder at the purchase price of $9.10 per Share (that being
the public offering price of $10.00 per Share less an
underwriting discount of 9.0 percent) (the "Purchase Price").
(B) FIRM SHARES.
(i) Subject to the terms and conditions of this
Agreement, and on the basis of the representations, warranties
and agreements herein contained the Company agrees to issue and
sell to the Underwriters, severally and not jointly, and each of
the Underwriters agrees, severally and not jointly, to buy from
the Company at the Purchase Price, the number of Shares set forth
opposite such Underwriter's name in Schedule I hereto (the "Firm
Shares").
(ii) Delivery of the Firm Shares against payment
therefor shall take place at the offices of the Representative,
▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Representative's Offices") (or at such other place as may be
designated by agreement between you and the Company) at 10:00
a.m., New York time, on January ___, 1997, or at such later time
and date, not later than ten banking days after the Effective
Date, as you may designate (such time and date of payment and
delivery for the Firm Shares being herein called the "First
Closing Date"). Time shall be of the essence and delivery of the
Firm Shares at the time and place specified in this Section
2(b)(ii) is a further condition to the obligations of the
Underwriters hereunder.
(C) OPTION SHARES.
(i) In addition, subject to the terms and
conditions of this Agreement, and on the basis of the
representations, warranties and agreements herein contained, the
Company hereby grants to the Underwriters an option (the
"Over-Allotment Option") to purchase from the Company all or any
part of an aggregate of an additional 150,000 Shares at the
Purchase Price (the "Option Shares"). In the event that the
Over-Allotment Option is exercised by the Underwriters in whole
or in part, each Underwriter shall purchase Option Shares in the
same proportion as the number of Firm Shares purchased by it bore
to the total number of Firm Shares, unless you and the other
Underwriters shall otherwise agree.
(ii) The Over-Allotment Option may be exercised by
the Underwriters, in whole or in part, within 45 days after the
Effective Date, upon notice by you to the Company advising it of
the number of Option Shares as to which the Over-Allotment Option
is being exercised, the names and denominations in which the
certificates for the Shares comprising such Option Shares are to
be registered, and the time and date when such certificates are
to be delivered. Such time and date shall be determined by you
but shall not be less than four nor more than ten banking days
after exercise of the Over-Allotment Option, nor in any event
prior to the First Closing Date (such time and date being herein
called the "Option Closing Date"). Delivery of the Option Shares
against payment therefor shall take place at the Representative's
Offices. Time shall be of the essence and delivery at the time
and place specified in this Section 2(c)(ii) is a further
condition to the obligations of the Underwriters hereunder.
(iii) The Over-Allotment Option may be
exercised only to cover over-allotments in the sale by the
Underwriters of Firm Shares.
(D) DELIVERY OF CERTIFICATES; PAYMENT.
(i) The Company shall make the certificates for
the Shares to be purchased hereunder available to you for
checking at least one banking day prior to the First Closing Date
or the Option Closing Date (each, a "Closing Date"), as the case
may be. The certificates shall be in such names and
denominations as you may request at least two banking days prior
to the relevant Closing Date. Time shall be of the essence and
the availability of the certificates at the time and place
specified in this Section 2(d)(i) is a further condition to the
obligations of the Underwriters hereunder.
(ii) On the First Closing Date: (A) the Company
shall deliver to you for the several accounts of the Underwriters
definitive engraved certificates in negotiable form representing
all of the Firm Shares to be sold by the Company, against payment
of the Purchase Price therefor by you for the several accounts of
the Underwriters, by certified or bank cashier's checks payable
in next day funds to the order of the Company, such payment to be
made not later than ten days after the Effective Date.
(iii) In addition, if and to the extent that the
Underwriters exercise the Over-Allotment Option, then on the
Option Closing Date: (A) the Company shall deliver to you for
the several accounts of the Underwriters definitive engraved
certificates in negotiable form representing the Shares
comprising the Option Shares to be sold by the Company, against
payment of the Purchase Price therefor by you for the several
accounts of the Underwriters, by certified or bank cashier's
checks payable in next day funds to the order of the Company.
(iv) It is understood that the Underwriters propose to
offer the Shares to be purchased hereunder to the public, upon
the terms and conditions set forth in the Registration Statement,
after the Registration Statement becomes effective.
3. COVENANTS.
COVENANTS OF THE COMPANY. The Company covenants and agrees
with each Underwriter that:
(A) REGISTRATION.
(i) The Company shall use its best efforts to
cause the Registration Statement to become effective and, upon
notification from the Commission that the Registration Statement
has become effective, shall so advise you and shall not at any
time, whether before or after the Effective Date, file any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus of which you shall not previously
have been advised and furnished with a copy, or to which you or
Representative's Counsel shall have objected in writing, or which
is not in compliance in all material respects with the Act and
the Rules and Regulations. At any time prior to the later of (A)
the completion by the Underwriters of the distribution of the
Shares contemplated hereby (but in no event more than nine months
after the Effective Date), and (B) 25 days after the Effective
Date, the Company shall prepare and file with the Commission,
promptly upon your request, any amendments to the Registration
Statement or any amendments or supplements to the Prospectus
which, in your reasonable opinion, may be necessary or advisable
in connection with the distribution of the Shares.
(ii) Promptly after you or the Company shall have
been advised thereof, you shall advise the Company or the Company
shall advise you, as the case may be, and confirm such advice in
writing, of (A) the receipt of any comments of the Commission,
(B) the effectiveness of any post-effective amendment to the
Registration Statement, (C) the filing of any supplement to the
Prospectus or any amended Prospectus, (D) any request made by the
Commission for amendment of the Registration Statement or
amendment or supplementing of the Prospectus, or for additional
information with respect thereto, or (E) the issuance by the
Commission or any state or regulatory body of any stop order or
other order denying or suspending the effectiveness of the
Registration Statement, or preventing or suspending the use of
any Preliminary Prospectus, or suspending the qualification of
the Securities for offering in any jurisdiction, or otherwise
preventing or impairing the Offering, or the institution or
threat of any proceeding for any of such purposes. The Company
and you shall not acquiesce in such order or proceeding, and
shall instead actively defend such order or proceeding, unless
the Company and you agree in writing to such acquiescence.
(iii) The Company has caused to be delivered
to you copies of each Preliminary Prospectus, and the Company has
consented and hereby consents to the use of such copies for the
purposes permitted by the Act. The Company authorizes the
Underwriters and selected dealers to use the Prospectus in
connection with the sale of the Shares for such period as in the
opinion of Representative's Counsel the use thereof is required
to comply with the applicable provisions of the Act and the Rules
and Regulations. In case of the happening, at any time within
such period as a prospectus is required under the Act to be
delivered in connection with sales by an underwriter or dealer,
of any event of which the Company has knowledge and which
materially affects the Company or the Securities, or which in the
opinion of Company Counsel or of Representative's Counsel should
be set forth in an amendment to the Registration Statement or an
amendment or supplement to the Prospectus in order to make the
statements made therein not then misleading, in light of the
circumstances existing at the time the Prospectus is required to
be delivered to a purchaser of the Shares, or in case it shall be
necessary to amend or supplement the Prospectus to comply with
the Act or the Rules and Regulations, the Company shall notify
you promptly and forthwith prepare and furnish to the
Underwriters copies of such amended Prospectus or of such
supplement to be attached to the Prospectus, in such quantities
as you may reasonably request, in order that the Prospectus, as
so amended or supplemented, shall not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements in the Prospectus, in
the light of the circumstances under which they are made, not
misleading. The preparation and furnishing of each such
amendment to the Registration Statement, amended Prospectus or
supplement to be attached to the Prospectus shall be without
expense to the Underwriters, except that in the case that the
Underwriters are required, in connection with the sale of the
Shares, to deliver a prospectus nine months or more after the
Effective Date, the Company shall upon your request and at the
expense of the Underwriters, amend the Registration Statement and
amend or supplement the Prospectus, or file a new registration
statement on Form SB-2 (if applicable) or Form S-1, if necessary,
and furnish the Underwriters with reasonable quantities of
prospectuses complying with section 10(a)(3) of the Act.
(iv) The Company shall comply with the Act, the
Rules and Regulations, and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder in connection with the offering and
issuance of the Securities.
(B) BLUE SKY. The Company shall, at its own expense,
use its best efforts to qualify or register the Securities for
sale under the securities or "blue sky" laws of such
jurisdictions as you may designate, and shall make such
applications and furnish such information to Representative's
Counsel as may be required for that purpose, and shall comply
with such laws; provided, however, that the Company shall not be
required to qualify as a foreign corporation or a dealer in
securities or to execute a general consent to service of process
in any jurisdiction in any action other than one arising out of
the offering or sale of the Shares. The Company shall bear all
of the expense of such qualifications and registrations,
including without limitation the legal fees and disbursements of
Representative's Counsel, which fees, exclusive of disbursements,
shall not exceed $25,000 (unless otherwise agreed). After each
Closing Date the Company shall, at its own expense, from time to
time prepare and file such statements and reports as may be
required to continue each such qualification in effect for so
long a period as you may reasonably request.
(C) EXCHANGE ACT REGISTRATION. The Company shall, at
its own expense, prepare and file with the Commission a
registration statement (on Form 8-A) under section 12(g) or 12(b)
of the Exchange Act and will use its best efforts to have such
registration statement declared effective by the Commission
concurrently with the Registration Statement being declared
effective. The Company shall use its best efforts to cause such
registration statement to be declared effective and maintained in
effect for at least five years from the Effective Date.
(D) PROSPECTUS COPIES. The Company shall deliver to
you on or before the First Closing Date two signed copies of the
Registration Statement including all financial statements,
schedules and exhibits filed therewith, and of all amendments
thereto. The Company shall deliver to or on the order of the
Underwriters, from time to time until the Effective Date, as many
copies of any Registration Statement, Preliminary Prospectus and
related exhibits filed with the Commission prior to the Effective
Date as the Underwriters may reasonably request. The Company
shall deliver to the Underwriters on the Effective Date, and
thereafter for so long as a prospectus is required to be
delivered under the Act, from time to time, as many copies of the
Registration Statement, Prospectus, and related exhibits in final
form, or as thereafter amended or supplemented, as the
Underwriters may from time to time reasonably request.
(E) AMENDMENTS AND SUPPLEMENTS. The Company shall,
promptly upon your request, prepare and file with the Commission
any amendments to the Registration Statement, and any amendments
or supplements to the Preliminary Prospectus or the Prospectus,
and take any other action which in the reasonable opinion of
Representative's Counsel may be reasonably necessary or advisable
in connection with the distribution of the Shares, and shall use
its best efforts to cause the same to become effective as
promptly as possible.
(F) CERTAIN MARKET PRACTICES. The Company has not
taken, and shall not take, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or
result in, or which has constituted, the stabilization or
manipulation of the price of the Securities to facilitate the
sale or resale thereof.
(G) CERTAIN REPRESENTATIONS. Neither the Company nor
any representative of the Company has made or shall make any
written or oral representation in connection with the Offering
and sale of the Shares or the Representative's Warrant which is
not contained in the Prospectus, which is otherwise inconsistent
with or in contravention of any thing contained in the
Prospectus, or which shall constitute a violation of the Act, the
Rules and Regulations, the Exchange Act or the rules and
regulations promulgated under the Exchange Act.
(H) CONTINUING REGISTRATION OF WARRANTS AND UNDERLYING
COMMON STOCK. For so long as any portion of the Representative's
Warrant is outstanding, the Company shall, at its own expense:
(i) use its best efforts to cause post-effective amendments to
the Registration Statement, or new registration statements (which
may be on Forms ▇▇-▇, ▇-▇, ▇-▇ or S-3, as the case may be)
relating to the Representative's Warrant and the Common Stock
underlying the Representative's Warrants to become effective in
compliance with the Act and without any lapse of time between the
effectiveness of the Registration Statement and of any such
post-effective amendment or new registration statement; (ii)
cause a copy of each Prospectus, as then amended, to be delivered
to each holder of record of any portion of the Representative's
Warrant; (iii) furnish to the Underwriters and dealers as many
copies of each such Prospectus as the Underwriters or dealers may
reasonably request; and (iv) maintain the "blue sky"
qualification or registration of the Representative's Warrant and
the Common Stock underlying the Representative's Warrant, or have
a currently available exemption therefrom, in each jurisdiction
in which the Securities were so qualified or registered for
purposes of the Offering. In addition, for so long as the
Representative's Warrant is outstanding, the Company shall
promptly notify you of any material change in the business,
financial condition or prospects of the Company.
(I) USE OF PROCEEDS. The Company shall apply the net
proceeds from the sale of the Shares for the purposes set forth
in the Prospectus under the caption "USE OF PROCEEDS," and shall
file such reports with the Commission with respect to the sale of
the Shares and the application of the proceeds therefrom as may
be required pursuant to Rule 463 of the Rules and Regulations.
(J) TWELVE MONTHS' EARNINGS STATEMENT. The Company
shall make generally available to its security holders and
deliver to you as soon as it is practicable so to do, but in no
event later than 90 days after the end of twelve months after the
close of its current fiscal quarter, an earnings statement (which
need not be audited) covering a period of at least twelve
consecutive months beginning after the Effective Date, which
shall satisfy the requirements of section 11(a) of the Act and
may be made available in accordance with Rule 158 of the Rules
and Regulations.
(K) NASDAQ, EXCHANGE LISTINGS, ETC. The Company shall
immediately make all filings required to seek approval for the
quotation of the Securities on The Nasdaq SmallCap Market System
("NASDAQ") and shall use reasonable efforts to effect and
maintain such approval for at least five years from the Effective
Date. The Company shall also use its reasonable efforts to cause
the Shares to be accepted for listing on the Pacific Stock
Exchange, and/or such other exchange acceptable to you, prior to
the Effective Date or, failing that, as soon as is possible after
the First Closing Date, and to maintain such listings for five
years. Within 10 days after the Effective Date, the Company
shall also use its best efforts to list itself in ▇▇▇▇▇'▇ OTC
Industrial Manual and to cause such listing to be maintained for
at least five years from the Effective Date.
(L) BOARD OF DIRECTORS. The Company shall maintain a
Board of Directors comprised of a minimum of five and a maximum
of eleven directors, at least a majority of whom shall be neither
employed by nor otherwise affiliated with the Company. The Board
of Directors shall hold at least four meetings annually.
(M) PERIODIC REPORTS. For so long as the Company is a
reporting company under section 12(g) or section 15(d) of the
Exchange Act, the Company shall, at its own expense, furnish to
its shareholders an annual report (including financial statements
audited by certified public accountants) complying with the
requirements of Section 14a-3 under the Exchange Act or any
successor provision. In addition, during the period ending five
years from the date hereof, the Company shall, at its own
expense, furnish to you: (i) within 90 days of the end of each
fiscal year, a balance sheet of the Company and its Subsidiaries
as at the end of such fiscal year, together with statements of
income, stockholders' equity and cash flows of the Company and
its Subsidiaries as at the end of such fiscal year, all in
reasonable detail and accompanied by a copy of the certificate or
report thereon of certified public accountants; (ii) as soon as
they are available, a copy of all reports (financial or
otherwise) distributed to security holders; and (iii) as soon as
they are available, a copy of all non-confidential reports and
financial statements furnished to or filed with the Commission;
and (iv) such other information as you may from time to time
reasonably request. The financial statements referred to herein
shall be on a consolidated basis to the extent the accounts of
the Company and its Subsidiaries are consolidated in reports
furnished to its shareholders generally. In addition, during the
period ending one year from the date hereof, the Company shall,
at its own expense, furnish you monthly with Depository Trust
Company stock transfer sheets.
(N) CERTAIN OPTIONS. For a period of 90 days
following the First Closing Date, the Company shall not, without
your prior written consent, grant any options, warrants or other
rights to purchase shares of Common Stock at a price less than
the initial public Offering price of the Shares.
(O) FORM S-8 REGISTRATIONS. For a period of one year
following the First Closing Date, the Company shall not register
or otherwise facilitate the registration of any of its securities
issuable upon the exercise of options, warrants (other than the
Representative's Warrant) or other rights, whether by means of a
Registration Statement on Form S-8 or otherwise, without your
prior written consent.
(P) FUTURE SALES. For a period of 12 months following
the Effective Date, the Company shall not sell or otherwise
dispose of any securities of the Company without your prior
written consent, which consent shall not be unreasonably
withheld; provided, however, that the Company may at any time
issue shares of Common Stock pursuant to the exercise of the
Representative's Warrant, and options, warrants or other
convertible securities issued and outstanding prior to the
Effective Date and described in the Prospectus, and with respect
to any acquisition or joint venture by the Company. In addition,
for a period of three years following the First Closing Date, the
Company shall not sell or otherwise dispose of any shares of
Preferred Stock without your prior written consent. Furthermore,
for a period of 18 months from the Effective Date, the Company
shall not sell or issue any securities pursuant to Regulation S
under the Act without your prior written consent.
(Q) FUTURE OFFERINGS. For a period of three years
following the First Closing Date, you shall have the right of
first refusal to act as underwriter or agent for any public or
private offering or sale of the securities of the Company, or of
any successor to the Company, made by the Company, such successor
or any officer or director of the Company, provided such offering
or sale is within the typical offering size of the underwriter at
the time of such offering. In addition, the Company shall use
its best efforts to assure that for a period of three years
following the First Closing Date, you shall have the right of
first refusal to act as underwriter or agent for any public or
private offering or sale of the securities of the Company, or of
any successor to the Company, made by any other shareholder
owning beneficially at least 5 percent of such securities.
(R) RULE 144 SALES. The Company shall cause each of
its officers and directors to provide you the right, for a period
of three years following the First Closing Date, to purchase for
your own account, or to sell for the account of such person, all
securities of the Company sold by such person pursuant to Rule
144 of the Rules and Regulations. The Company shall use its best
efforts to cause each of the other beneficial holders as of the
date hereof of at least 5 percent of the Company's securities to
provide you the right, for a period of three years following the
First Closing Date, to purchase for your own account, or to sell
for the account of such holder, all securities of the Company
sold by such holder pursuant to said Rule 144.
(S) AVAILABLE SHARES. The Company shall reserve and
at all times keep available that maximum number of its authorized
but unissued shares of Common Stock which are issuable upon
exercise of the Representative's Warrant, taking into account the
anti-dilution provisions thereof.
(T) AGREEMENT OF MANAGEMENT AND SHAREHOLDERS. On or
before the Effective Date, the Company shall cause the parties
named therein to execute and deliver to you an agreement, in the
form previously delivered to the Company by you, regarding
certain undertakings by such parties in connection with the
Offering (the "Agreement of Management and Shareholders").
(U) FINANCIAL CONSULTING AGREEMENT. On the First
Closing Date and simultaneously with the delivery of the Firm
Shares, the Company shall execute and deliver to you an agreement
with you, in the form previously delivered to the Company by you,
regarding your services as a financial consultant to the Company
(the "Financial Consulting Agreement").
(V) M/A AGREEMENT. On the First Closing Date and
simultaneously with the delivery of the Firm Shares, the Company
shall execute and deliver to you an agreement with you, in the
form previously delivered to the Company by you, regarding
mergers, acquisitions, joint ventures and certain other forms of
transactions (the "M/A Agreement").
(W) MANAGEMENT. On each Closing Date, management of
the Company shall consist of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Chairman of the
Board, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as President, and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
Vice President-Finance. Prior to the Effective Date the Company
shall have obtained "key man" life insurance coverage on the
lives of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, naming the Company
as beneficiary and having a face value of at least $1,000,000,
for terms, and with an insurance agency, mutually agreed upon by
the Company and you. The Company shall use its best efforts to
maintain such insurance during the three-year period commencing
on the First Closing Date.
(X) PUBLIC RELATIONS. Prior to the Effective Date the
Company shall have retained a public relations firm reasonably
acceptable to you, and shall continue to retain such firm, or an
alternate firm acceptable to you, for a minimum period of two
years on such terms as are acceptable to you.
(Y) BOUND VOLUMES. Within 90 days from the First
Closing Date, the Company shall deliver to you, at the Company's
expense, three bound volumes in form and content acceptable to
you, containing the Registration Statement and all exhibits filed
therewith and all amendments thereto, and all other agreements,
correspondence, filings, certificates and other documents filed
and delivered in connection with the Offering.
(AA) For a period of 36 months from the Effective Date,
the Company shall allow an observer designated by you and
acceptable to the Company, to receive notice of and to attend all
meetings of the Board of Directors of the Company. Such observer
shall have no voting rights, and shall be reimbursed by the
Company for all reasonable out-of-pocket expenses incurred in
attending such meetings. The Company shall hold at least four
meetings per year and the observer will be indemnified by the
Company (to the same extent the Company provides for
indemnification of its directors) against any claims arising out
of his participation at Board meetings.
(BB) Prior to the Effective Date, the Company shall
have hired a Chief Financial Officer or have made other
arrangements satisfactory to you, and shall retain an individual
in such position for a minimum period of three years following
the Effective Date.
(CC) The Company shall supply you with DTC Stock
Transfer sheets on a weekly basis for the first six weeks
following the First Closing Date, and for six weeks following the
Option Closing Date, and on a monthly basis thereafter.
4. CONDITIONS TO UNDERWRITERS' OBLIGATIONS. The
obligations of the several Underwriters to purchase and pay for
the Shares which they have agreed to purchase hereunder are
subject to the accuracy (as of the date hereof and as of each
Closing Date) of and compliance with the representations and
warranties of the Company contained herein, the performance by
the Company of all of its respective obligations hereunder, and
the Agreement of Management and Shareholders, and the following
further conditions:
(A) EFFECTIVE REGISTRATION STATEMENT; NO STOP ORDER.
The Registration Statement shall have become effective and you
shall have received notice thereof not later than 6:00 p.m., New
York time, on the date of this Agreement, or at such later time
or on such later date as to which you may agree in writing. In
addition, on each Closing Date (i) no stop order denying or
suspending the effectiveness of the Registration Statement shall
be in effect, and no proceedings for that or any similar purpose
shall have been instituted or shall be pending or, to your
knowledge or to the knowledge of the Company, shall be
contemplated by the Commission, and (ii) all requests on the part
of the Commission for additional information shall have been
complied with to the reasonable satisfaction of Representative's
Counsel.
(B) OPINION OF COMPANY COUNSEL. On the First Closing
Date, you shall have received the opinion, dated as of the First
Closing Date, of Company Counsel, in form and substance
satisfactory to Representative's Counsel, to the effect that:
[NOTE: OPINION MAY BE EXPANDED AFTER DUE DILIGENCE IS COMPLETED.]
(i) the Company and each Subsidiary has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
State of Delaware, with full corporate power and
authority to own its properties and conduct its
business as described in the Prospectus, and, to such
counsel's knowledge, is duly qualified or licensed to
do business as a foreign corporation and is in good
standing in each other jurisdiction in which the nature
of its business or the character or location of its
properties requires such qualification, except where
failure so to qualify will not materially affect the
business, properties or financial condition of the
Company or such Subsidiary;
(ii) (A) the authorized capitalization of
the Company as of the date of the Prospectus was as is
set forth in the Prospectus under the caption
"CAPITALIZATION;" (B) all of the shares of Common Stock
now outstanding have been duly authorized and validly
issued, are fully paid and non-assessable, conform in
all material respects to the description thereof
contained in the Prospectus, have not been issued in
violation of the preemptive rights of any shareholder
and, to such counsel's knowledge, except as described
in the Prospectus, are not subject to any restrictions
upon the voting or transfer thereof under the Delaware
General Corporation Law; (C) all of the Shares have
been duly authorized and, when paid for as provided
herein, shall be validly issued, fully paid and non-
assessable, shall not have been issued in violation of
the preemptive rights of any shareholder, and no
personal liability shall attach to the ownership
thereof; (D) the shareholders of the Company do not
have any preemptive rights or other rights to subscribe
for or purchase, and there are no restrictions upon the
voting or transfer of, any of the Shares and the shares
of Common Stock underlying the Representative's
Warrant; (E) the Shares and the Representative's
Warrant conform to their respective descriptions
thereof contained in the Prospectus; (F) all prior
sales of the Company's securities have been made in
compliance with, or under an exemption from, the Act;
(G) a sufficient number of shares of Common Stock have
been reserved for issuance, upon exercise of the
Representative's Warrant is outstanding; and (H) to the
best knowledge of such counsel, neither the filing of
the Registration Statement nor the offering or sale of
the Shares as contemplated by this Agreement gives rise
to any registration rights or other rights, other than
those which have been effectively waived or satisfied,
for or relating to the registration of any securities
of the Company;
(iii) the certificates evidencing the
Shares are each in valid and proper legal form under
the Delaware General Corporation Law; and the
Representative's Warrant is exercisable for shares of
Common Stock in accordance with its terms and at the
prices therein provided for;
(iv) this Agreement, the Representative's
Warrant, the Financial Consulting Agreement and the M/A
Agreement have been duly and validly authorized,
executed and delivered by the Company and (assuming due
execution and delivery thereof by each party thereto
other than the Company all of such agreements are, or
when duly executed shall be, the valid and legally
binding obligations of the Company, enforceable in
accordance with their respective terms (except as
enforceability may be limited by bankruptcy, insolvency
or other laws affecting the rights of creditors
generally); provided, however, that no opinion need be
expressed as to the enforceability of the indemnity
provisions contained in Section 6 or the contribution
provisions contained in Section 7;
(v) to the best knowledge of such counsel,
(A) there is no pending, threatened or contemplated
legal or governmental proceeding pending or threatened
in writing affecting the Company or any Subsidiary
which could materially and adversely affect the
business, property, operations, condition (financial or
otherwise) or earnings of the Company or such
Subsidiary, or which questions the validity of the
Offering, the Securities, this Agreement, the
Representative's Warrant, the Financial Consulting
Agreement or the M/A Agreement, or of any action taken
or to be taken by the Company pursuant thereto; and
(B) there is no legal or governmental proceeding or
regulation required to be described or referred to in
the Registration Statement which is not so described or
referred to;
(vi) to the best knowledge of such counsel,
(A) the Company is not in violation of or default under
this Agreement, the Representative's Warrant, the
Financial Consulting Agreement or the M/A Agreement;
and (B) the execution and delivery hereof and thereof
and the incurrence of the obligations herein and
therein set forth and the consummation of the
transactions herein or therein contemplated shall not
result in a violation of, or constitute a default
under, the Certificate of Incorporation or By-laws of
the Company, or, to our knowledge, any material
obligation, agreement, covenant or condition contained
in any bond, debenture, note or other evidence of
indebtedness, or in any material contract, indenture,
mortgage, loan agreement, lease, joint venture or other
agreement or instrument to which the Company is a party
or by which its assets are bound, or any material
order, rule, regulation, writ, injunction or decree of
any government, governmental instrumentality or court;
(vii) the Registration Statement has become
effective under the Act, and to the best knowledge of such
counsel, no stop order denying or suspending the
effectiveness of the Registration Statement is in effect,
and no proceedings for that or any similar purpose have been
instituted or are pending before or threatened by the
Commission;
(viii) the Registration Statement and the
Prospectus (except for the financial statements, notes
thereto and other financial information and statistical data
contained therein, as to which no opinion need be rendered),
comply as to form in all material respects with the Act and
the Rules and Regulations;
(ix) all descriptions contained in the
Registration Statement or the Prospectus of contracts
and other documents are accurate and fairly present the
information required to be described in all material
respects, and such counsel is familiar with all
contracts and other documents referred to in the
Registration Statement and the Prospectus or filed as
exhibits to the Registration Statement and, to the best
knowledge of such counsel, no contract or document of a
character required to be summarized or described
therein or to be filed as an exhibit thereto is not so
summarized, described or filed;
(x) the descriptions contained in the
Registration Statement and the Prospectus which purport
to summarize the provisions of statutes, rules and
regulations are accurate summaries in all material
respects, and such descriptions fairly present in all
material respects the information shown, and the
descriptions contained in the Registration Statement
and the Prospectus that concern matters of law or legal
conclusions have been reviewed by such counsel and are
correct in all material respects;
(xi) The Agreement of Management and
Shareholders has been duly and validly executed and
delivered by each party thereto (other than American
Stock Transfer & Trust Company); and
(xii) except for registration under the
Act and registration or qualification of the Securities
under applicable state or foreign securities or blue
sky laws (as to which no opinion is rendered), no
authorization, approval, consent or license of any
governmental or regulatory authority or agency is
necessary in connection with: (A) the authorization,
issuance, sale, transfer or delivery of the Securities
by the Company; (B) the execution, delivery and
performance of this Agreement by the Company or the
taking of any action contemplated herein; (C) the
issuance of the Representative's Warrant or the Shares
of Common Stock issuable upon exercise thereof; or
(D) the execution, delivery and performance of this
Agreement by the Company or the taking of any action
contemplated herein.
We have participated in conferences with officers and other
representatives of the Company, the Representatives of the
Underwriters and their counsel and representatives of the
independent certified public accountants of the Company, at which
the contents of the Registration Statement and the Prospectus and
related matters were discussed and although we have not verified
or checked the accuracy, completeness or fairness of the
statements and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, on the basis of the
foregoing, no fact has come to our attention which causes us to
believe that, at the time the Registration Statement became
effective and at all times subsequent thereto up to and on the
Closing Date, the Registration Statement and any amendment or
supplement thereto contained or contains any untrue statement of
a material fact or omitted or omits to state any material fact
necessary to make the statements therein not misleading, or that
the Prospectus as of this date or at the Closing Date, included
or includes any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that we
-------- -------
express no comment or belief with respect to the financial
statements or other financial data set forth in the Registration
Statement and in the Prospectus. Such opinion shall also cover
such matters incident to the transactions contemplated hereby as
you or Representative's Counsel shall reasonably request. In
rendering such opinion, Company Counsel may rely as to matters of
fact upon certificates of officers of the Company, and of public
officials and may rely as to all matters of law other than the
law of the United States or the States of Delaware or New York
upon opinions of counsel satisfactory to you, in which case the
opinion shall state that they have no reason to believe that you
and they are not entitled so to rely.
(C) CORPORATE PROCEEDINGS. All corporate proceedings
and other legal matters relating to this Agreement, the
Registration Statement, the Prospectus and other related matters
shall be reasonably satisfactory to or approved by
Representative's Counsel, and you shall have received from such
counsel a signed opinion, dated as of the First Closing Date,
with respect to the validity of the issuance of the Securities,
the form of the Registration Statement and Prospectus (other than
the financial statements and other financial or statistical data
contained therein), the execution of this Agreement and other
related matters as you may reasonably require. The Company shall
have furnished to Representative's Counsel such documents as they
may reasonably request for the purpose of enabling them to render
such opinion.
(D) COMFORT LETTER. Prior to the Effective Date, and
again on and as of the First Closing Date, you shall have
received letters from BDO ▇▇▇▇▇▇▇ LLP and Ferro, Berndon &
Company, L.L.P., certified public accountants for the Company,
substantially in the form approved by you with respect to the
unaudited financial statements and other financial information
and other data contained in the Registration Statement with
regard to the period from the date of the audited financial
statements to a date not more than five days prior to the
Effective Date, the First Closing Date and the Option Closing
Date, respectively.
(E) BRING DOWN. At each of the Closing Dates, (i) the
representations and warranties of the Company contained in this
Agreement shall be true and correct with the same effect as if
made on and as of such Closing Date, and the Company shall have
performed all of its respective obligations hereunder and
satisfied all the conditions to be satisfied at or prior to such
Closing Date; (ii) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations,
and shall in all material respects conform to the requirements of
the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus shall contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein not misleading; (iii) there shall have
been, since the respective dates as of which information is
given, no material adverse change in the business, property,
operations, condition (financial or otherwise), earnings, capital
stock, long-term or short-term debt or general affairs of the
Company from that set forth in the Registration Statement and the
Prospectus, except changes which the Registration Statement and
Prospectus indicate might occur after the Effective Date, and the
Company shall not have incurred any material liabilities nor
entered into any material agreement other than as referred to in
the Registration Statement and Prospectus; and (iv) except as set
forth in the Prospectus, no action, suit or proceeding shall be
pending or threatened against the Company which would be required
to be disclosed in the Registration Statement, and no proceedings
shall be pending or threatened against the Company before or by
any commission, board or administrative agency in the United
States or elsewhere, wherein an unfavorable decision, ruling or
finding would materially adversely affect the business, property,
operations, condition (financial or otherwise), earnings or
general affairs of the Company. In addition, you shall have
received, at the First Closing Date, a certificate signed by the
principal executive officer and by the principal financial
officer of the Company, dated as of the First Closing Date,
evidencing compliance with the provisions of this Section 4(e),
evidencing as to him compliance with the provisions of this
Section 4(e).
(F) TRANSFER AND WARRANT AGENT. On or before the
Effective Date, the Company shall have appointed American Stock
Transfer & Trust Company (or other agent mutually acceptable to
the Company and you), as its transfer agent and warrant agent to
transfer all of the Shares issued in the Offering, as well as to
transfer other shares of the Common Stock outstanding from time
to time, including those issuable upon exercise of the
Representative's Warrant.
(G) CERTAIN FURTHER MATTERS. On each Closing Date,
Representative's Counsel shall have been furnished with all such
other documents and certificates as they may reasonably request
for the purpose of enabling them to render their legal opinion to
the Underwriter and in order to evidence the accuracy and
completeness of any of the representations, warranties or
statements, the performance of any of the covenants, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company on or prior to each of the
Closing Dates in connection with the authorization, issuance and
sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Representative's
Counsel.
(H) ADDITIONAL CONDITIONS. Upon exercise of the Over-
Allotment Option, the Underwriters' obligations to purchase and
pay for the Option Shares shall be subject (as of the date hereof
and as of the Option Closing Date) to the following additional
conditions:
(i) The Registration Statement shall remain
effective at the Option Closing Date, no stop order denying or
suspending the effectiveness thereof shall have been issued, and
no proceedings for that or any similar purpose shall have been
instituted or shall be pending or, to your knowledge or the
knowledge of the Company, shall be contemplated by the
Commission, and all reasonable requests on the part of the
Commission for additional information shall have been complied
with to the satisfaction of Representative's Counsel.
(ii) On the Option Closing Date there shall have
been delivered to you the signed opinion of Company Counsel,
dated as of the Option Closing Date, in form and substance
satisfactory to Representative's Counsel, which opinion shall be
substantially the same in scope and substance as the opinion
furnished to you on the First Closing Date pursuant to
Section 4(b), except that such opinion, where appropriate, shall
cover the Option Shares rather than the Firm Shares. If the
First Closing Date is the same as the Option Closing Date, such
opinions may be combined.
(iii) All proceedings taken at or prior to the
Option Closing Date in connection with the sale and issuance of
the Option Shares shall be satisfactory in form and substance to
you, and you and Representative's Counsel shall have been
furnished with all such documents, certificates and opinions as
you may request in connection with this transaction in order to
evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company or its
compliance with any of the covenants or conditions contained
herein.
(iv) On the Option Closing Date there shall have
been delivered to you a letter in form and substance satisfactory
to you from BDO ▇▇▇▇▇▇▇ LLP and Ferro, Berndon & Company, L.L.P.
dated the Option Closing Date and addressed to you, confirming
the information in their letter referred to in Section 4(d) as of
the date thereof and stating that, without any additional
investigation required, nothing has come to their attention
during the period from the ending date of their review referred
to in such letter to a date not more than five banking days prior
to the Option Closing Date which would require any change in such
letter if it were required to be dated the Option Closing Date.
(v) On the Option Closing Date there shall have
been delivered to you a certificate signed by the principal
executive officer and by the principal financial or accounting
officer of the Company, dated the Option Closing Date, in form
and substance satisfactory to Representative's Counsel,
substantially the same in scope and substance as the certificate
furnished to you on the First Closing Date pursuant to
Section 4(e).
(I) CANCELLATION. If any of the conditions provided
by this Section 4 shall not have been completely fulfilled as of
the date indicated, then this Agreement and all obligations of
the Underwriters hereunder may be cancelled at, or at any time
prior to, either Closing Date by your notifying the Company of
such cancellation in writing or by telegram at or prior to the
applicable Closing Date. Any such cancellation shall be without
liability of the Underwriters to the Company, except as otherwise
provided herein.
5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to sell and deliver the Shares are
subject to the following conditions:
(A) EFFECTIVE REGISTRATION STATEMENT. The
Registration Statement shall have become effective not later than
6:00 p.m. New York time, on the date of this Agreement, or at
such later time or on such later date as the Company and you may
agree in writing.
(B) NO STOP ORDER. On the applicable Closing Date, no
stop order denying or suspending the effectiveness of the
Registration Statement shall have been issued under the Act or
any proceedings therefor initiated or threatened by the
Commission.
(C) PAYMENT FOR SHARES. On the applicable Closing
Date, you shall have made payment, for the several accounts of
the Underwriters, of the aggregate Purchase Price for the Shares
then being purchased, by certified or bank cashier's checks
payable in next day funds to the order of the Company.
If the conditions to the obligations of the Company provided by
this Section 5 have been fulfilled on the First Closing Date but
are not fulfilled after the First Closing Date and prior to the
Option Closing Date, then only the obligation of the Company to
sell and deliver the Option Shares upon exercise of the Over-
Allotment Option shall be affected.
6. INDEMNIFICATION.
(A) INDEMNIFICATION BY THE COMPANY. As used in this
Agreement, the term "Liabilities" shall mean any and all losses,
claims, damages and liabilities, and actions and proceedings in
respect thereof (including without limitation all reasonable
costs of defense and investigation and all attorneys' fees)
including without limitation those asserted by any party to this
Agreement against any other party to this Agreement. The Company
hereby indemnifies and holds harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning
of the Act, from and against all Liabilities, joint or several,
to which such Underwriter or such controlling person may become
subject, under the Act or otherwise, insofar as such Liabilities
arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of any material fact contained in
(A) the Registration Statement or any amendment thereto, or the
Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto, or (B) any "blue sky" application or other
document executed by the Company specifically for that purpose,
or based upon written information furnished by the Company, filed
in any state or other jurisdiction in order to qualify any or all
of the Securities under the securities laws thereof (any such
application, document or information being herein called a "Blue
Sky Application"); or (ii) the omission or alleged omission to
state in the Registration Statement or any amendment thereto, or
the Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto, or in any Blue Sky Application, a material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
Company shall not be liable in any such case to the extent, but
only to the extent, that any such Liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company
through you by or on behalf of any Underwriter specifically for
use in the preparation of the Registration Statement or any such
amendment thereto, or the Prospectus or any such Preliminary
Prospectus, or any such amendment or supplement thereto, or any
such Blue Sky Application in or with respect to any untrue
statement or material omission in a Preliminary Prospectus to the
extent such misstatement or omission is corrected in the
Prospectus and any underwriter fails to deliver such Prospectus.
The foregoing indemnity shall be in addition to any other
liability which the Company may otherwise have.
(B) INDEMNIFICATION BY UNDERWRITERS. Each
Underwriter, severally and not jointly, hereby indemnifies and
holds harmless the Company, each of its directors, each nominee
(if any) for director named in the Prospectus, each of its
officers who have signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of
the Act, from and against all Liabilities to which the Company or
any such director, nominee, officer or controlling person may
become subject under the Act or otherwise, insofar as such
Liabilities arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto,
or the Prospectus or any Preliminary Prospectus, or any amendment
or supplement thereto, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that any such Liabilities arise out of or are based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any
amendment thereto, or the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the
Company through you, by or on behalf of such Underwriter,
specifically for use in the preparation thereof. In no event
shall any Underwriter be liable or responsible for any amount in
excess of the compensation received by such Underwriter, in the
form of underwriting discounts or otherwise, pursuant to this
Agreement or any other agreement contemplated hereby. The
foregoing indemnity shall be in addition to any other liability
which any Underwriter may otherwise have.
(C) PROCEDURE. Promptly after receipt by an
indemnified party under this Section 6 of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify in writing the indemnifying
party of the commencement thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under
this Section 6. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the
defense thereof, subject to the provisions hereof, with counsel
reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation. The indemnified
party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees
and expenses of such counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the
indemnified party; provided, however, that if the indemnified
party is any Underwriter or a person who controls any Underwriter
within the meaning of the Act, the fees and expenses of such
counsel shall be at the expense of the indemnifying party if
(i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party, or (ii) the
named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person
and the indemnifying party and, indemnified party is advised by
counsel that it has separate defenses (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, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one
separate firm of attorneys). No settlement of any action against
an indemnified party shall be made without the consent of the
indemnified party, which shall not be unreasonably withheld in
light of all factors of importance to such indemnified party.
7. CONTRIBUTION. In order to provide for just and
equitable contribution under the Act in any case in which (a) any
indemnified party makes claims for indemnification pursuant to
Section 6 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such
case, notwithstanding the fact that the express provisions of
Section 6 provide for indemnification in such case, or
(b) contribution under the Act may be required on the part of any
indemnified party, then such indemnified party and each
indemnifying party (if more than one) shall contribute to the
aggregate Liabilities to which it may be subject, in either such
case (after contribution from others) in such proportions that
the Underwriters are responsible in the aggregate for that
portion of such Liabilities represented by the percentage that
the underwriting discount per Share plus the (i) non-accountable
expense allowance and (ii) amount of financial consulting
agreement appearing on the cover page of the Prospectus bears to
the public Offering price per Share appearing thereon, and the
Company shall be responsible for the remaining portion; provided,
however, that if such allocation is not permitted by applicable
law, then the relative fault of the Company, and the Underwriters
in connection with the statements or omissions which resulted in
such Liabilities and other relevant equitable considerations
shall also be considered. The relative fault shall be determined
by reference to, among other things, whether in the case of an
untrue statement of a material fact or the omission to state a
material fact, such statement or omission relates to information
supplied by the Company or the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and
equitable if the respective obligations of the Company and the
Underwriters to contribute pursuant to this Section 7 were to be
determined by pro rata or per capita allocation of the aggregate
Liabilities (even if the Underwriters were to be treated as one
entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations
referred to in the first sentence of this Section 7. In
addition, the contribution of any Underwriter shall not be in
excess of its proportionate share of the portion of such
Liabilities for which such Underwriter is responsible. No person
guilty of a fraudulent misrepresentation (within the meaning of
section 11(f) of the Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent
misrepresentation. As used in this Section 7, the term "Company"
shall include any officer, director or person who controls the
Company within the meaning of section 15 of the Act. The
Underwriters' obligations under this Section 7 to contribute are
several in proportion to their respective underwriting
obligations and not joint. If the full amount of the
contribution specified in this Section 7 is not permitted by law,
then each indemnified party and each person who controls an
indemnified party shall be entitled to contribution from each
indemnifying party to the full extent permitted by law. The
foregoing contribution agreement shall in no way affect the
contribution liabilities of any persons having liability under
section 11 of the Act other than the Company and Underwriters.
No contribution shall be requested with regard to the settlement
of any matter from any party who did not consent to the
settlement; provided, however, that such consent shall not be
unreasonably withheld in light of all factors of importance to
such party.
8. COSTS AND EXPENSES.
(A) CERTAIN COSTS AND EXPENSES. Whether or not this
Agreement becomes effective or the sale of the Shares to the
Underwriters is consummated, the Company shall pay all costs and
expenses incident to the issuance, offering, sale and delivery of
the Shares and the performance of its obligations under this
Agreement, including without limitation: (i) all fees and
expenses of the Company's legal counsel and accountants; (ii) all
costs and expenses incident to the preparation, printing, filing
and distribution of the Registration Statement (including the
financial statements contained therein and all exhibits and
amendments thereto), each Preliminary Prospectus and the
Prospectus, each as amended or supplemented, this Agreement and
the other agreements and documents referred to herein, each in
such quantities as you shall deem necessary; (iii) all fees of
NASD required in connection with the filing required by NASD to
be made by the Representative with respect to the Offering;
(iv) all expenses, including fees (but not in excess of the
amount set forth in Section 3(b)) and disbursements of
Representative's Counsel in connection with the qualification of
the Securities under the "blue sky" laws which you shall
designate; (v) all costs and expenses of printing the respective
certificates representing the Shares; (vi) the expense of placing
one or more "tombstone" advertisements or promotional materials
as directed by you (provided, however, that the aggregate amount
thereof shall not exceed $10,000); (vii) all costs and expenses
of the Company and its employees (but not of the Representative
or its employees) associated with due diligence meetings and
presentations; (viii) all costs and expenses associated with the
preparation of a seven to ten minute professional video
presentation concerning the Company, its products and its
management for broker due diligence purposes; (ix) any and all
taxes (including without limitation any transfer, franchise,
capital stock or other tax imposed by any jurisdiction) on sales
of the Shares to the Underwriters hereunder; and (x) all costs
and expenses incident to the furnishing of any amended Prospectus
or any supplement to be attached to the Prospectus as required by
Sections 3(a) and 3(d), except as otherwise provided by said
Sections.
(B) REPRESENTATIVE'S EXPENSE ALLOWANCE. In addition
to the expenses described in Section 8(a), the Company shall on
the First Closing Date pay to you, based on the number of Firm
Shares to be sold by the Company and each SELLING SHAREHOLDER,
the balance of a non-accountable expense allowance (which shall
include fees of Representative's Counsel exclusive of the fees
referred to in Section 3(b)) of $300,000 (that being an amount
equal to 3.0 percent of the gross proceeds received upon sale of
the Firm Shares), of which $20,000 has been paid to you prior to
the date hereof. In the event that the Over-Allotment Option is
exercised, then the Company shall on the Option Closing Date pay
to you, based on the number of Option Shares to be sold by the
Company, an additional amount equal to 3.0 percent of the gross
proceeds received upon sale of any of the Option Shares. In the
event that the transactions contemplated hereby fail to be
consummated for any reason, then you shall return to the Company
that portion of the $20,000 heretofore paid by the Company to the
extent that it has not been utilized by you in connection with
the Offering for accountable out-of-pocket expenses; provided,
however, that if such failure is due to a breach by the Company
of any covenant, representation or warranty contained herein or
because any other condition to the Underwriters' obligations
hereunder required to be fulfilled by the Company is not
fulfilled, then the Company shall be liable for your accountable
out-of-pocket expenses to the full extent thereof (with credit
given to the $20,000 paid).
(C) NO FINDERS. No person is entitled either directly
or indirectly to compensation from the Company, the Underwriters
or any other person for services as a finder in connection with
the Offering, and the Company hereby indemnifies and holds
harmless the Underwriters, and the Underwriters hereby indemnify
and hold harmless the Company from and against all Liabilities,
joint or several, to which the indemnified party may become
subject insofar as such Liabilities arise out of or are based
upon the claim of any person (other than an employee of the party
claiming indemnity) or entity that he or it is entitled to a
finder's fee in connection with the Offering by reason of such
person's or entity's influence or prior contact with the
indemnifying party. The Representative may compensate any of its
personnel as it shall determine in its sole discretion.
9. SUBSTITUTION OF UNDERWRITERS.
(A) SUBSTITUTION. If any Underwriter defaults in its
obligation to purchase the numbers of Shares which it has agreed
to purchase under this Agreement, you shall be obligated to
purchase all of the Shares not purchased by the defaulting
Underwriter unless such purchase shall cause you to be in
violation of the net capital requirements of Rule 15c3-1 of the
Exchange Act, in which case you, and any other Underwriters
satisfactory to you who so agree, shall have the right, but shall
not be obligated, to purchase (in such proportions as may be
agreed upon among them) all of the Shares. If you or the other
Underwriters satisfactory to you do not elect to purchase the
Shares which the defaulting Underwriter or Underwriters agreed
but failed to purchase, then this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter
or the Company, except for (i) the payment by the Company of
expenses as provided by Section 8(a), (ii) the payment by the
Company of accountable expenses as provided by Section 8(b), and
(iii) the indemnity and contribution agreements of the Company
and the Underwriters provided by Sections 6 and 7.
(B) FURTHER MATTERS. Nothing contained herein shall
relieve a defaulting Underwriter of any liability it may have for
damages caused by its default. If the other Underwriters
satisfactory to you are obligated or agree to purchase the Shares
of a defaulting Underwriter, either you or the Company may
postpone the First Closing Date for up to seven banking days in
order to effect any changes that may be necessary in the
Registration Statement, any Preliminary Prospectus or the
Prospectus or in any other document or agreement, and to file
promptly any amendments to the Registration Statement, or any
amendments or supplements to any Preliminary Prospectus or the
Prospectus, which in your opinion may thereby be made necessary.
10. EFFECTIVE DATE. The Agreement shall become effective
upon its execution, except that you may, at your option, delay
its effectiveness until 10:00 a.m., New York time, on the first
full business day following the Effective Date, or at such
earlier time after the Effective Date as you in your discretion
shall first commence the initial public Offering by the
Underwriters of any of the Shares. The time of the initial public
offering shall mean the time of release by you of the first
newspaper advertisement with respect to the Shares, or the time
when the Shares are first generally offered by you to dealers by
letter or telegram, whichever shall first occur. This Agreement
may be terminated by you at any time before it becomes effective
as provided above, except that the provisions of Sections 6, 7,
8, 13, 14, 15 and 16 shall remain in effect notwithstanding such
termination.
11. TERMINATION.
(A) GROUNDS FOR TERMINATION. This Agreement, except
for Sections 6, 7, 8, 13, 14, 15 and 16, may be terminated at any
time prior to the First Closing Date, and the Over-Allotment
Option, if exercised, may be cancelled at any time prior to the
Option Closing Date, by you if in your sole judgment it is
impracticable to offer for sale or to enforce contracts made by
the Underwriters for the resale of the Shares agreed to be
purchased hereunder, by reason of: (i) the Company having
sustained a material loss, whether or not insured, by reason of
fire, earthquake, flood, accident or other calamity, or from any
labor dispute or court or government action, order or decree;
(ii) trading in securities on the New York Stock Exchange or the
American Stock Exchange having been suspended or limited;
(iii) material governmental restrictions having been imposed on
trading in securities generally which are not in force and effect
on the date hereof; (iv) a banking moratorium having been
declared by federal or New York State authorities; (v) an
outbreak or significant escalation of major international
hostilities or other national or international calamity having
occurred; (vi) the passage by the Congress of the United States
or by any state legislature, of any act or measure, or the
adoption of any order, rule or regulation by any governmental
body or any authoritative accounting institute or board, or any
governmental executive, which is reasonably believed by you
likely to have a material adverse effect on the business,
property, operations, condition (financial or otherwise) or
earnings of the Company; (vii) any material adverse change in the
financial or securities markets beyond normal fluctuations in the
United States having occurred since the date of this Agreement;
or (viii) any material adverse change having occurred since the
respective dates for which information is given in the
Registration Statement and Prospectus, in the business, property,
operations, condition (financial or otherwise), earnings or
business prospects of the Company, whether or not arising in the
ordinary course of business.
(B) NOTIFICATION. If you elect to prevent this
Agreement from becoming effective or to terminate this Agreement
as provided by this Section 11 or by Section 10, the Company
shall be promptly notified by you, by telephone or telegram, and
confirmed by letter.
12. REPRESENTATIVE'S WARRANT. On the First Closing Date,
the Company shall issue and sell to you, for a total purchase
price of $5.00, and upon the terms and conditions set forth in
the form of Representative's Warrant filed as an exhibit to the
Registration Statement, a warrant entitling you to purchase
100,000 Shares (the "Representative's Warrant"). In the event of
conflict in the terms of this Agreement and the Representative's
Warrant, the terms and conditions of the Representative's Warrant
shall control.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The respective indemnities, agreements,
representations, warranties, covenants and other statements of
the Company and the Underwriters set forth in or made pursuant to
this Agreement shall remain in full force and effect regardless
of any investigation made by or on behalf of any other party, and
shall survive delivery of and payment for the Shares and the
termination of this Agreement. The Company hereby indemnifies
and holds harmless the Underwriters from and against all
Liabilities, joint or several, to which the Underwriters may
become subject insofar as such Liabilities arise out of or are
based upon the breach or failure of any representation, warranty
or covenant of the Company contained in this Agreement.
14. NOTICES. All communications hereunder shall be in
writing and, except as otherwise expressly provided herein, if
sent to you, shall be mailed, delivered or telegraphed and
confirmed to you at ▇.▇. ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with a copy sent to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; or if sent to the Company, shall be
mailed, delivered, or telegraphed and confirmed to it at General
Bearing Corporation, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
with a copy sent to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇ & Priest,
L.L.P., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
15. PARTIES IN INTEREST. This Agreement is made solely for
the benefit of the Underwriters, the Company, and to the extent
expressed, any person controlling the Company or an Underwriter,
as the case may be, and the directors of the Company, nominees
for directors of the Company (if any) named in the Prospectus,
officers of the Company who have signed the Registration
Statement, and their respective executors, administrators,
successors and assigns; and no other person shall acquire or have
any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as
such, from an Underwriter of the Shares.
16. APPLICABLE LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New
York applicable to agreements made and to be performed entirely
within such State, without reference to such State's principals
regarding the conflict of laws.
17. COUNTERPARTS. This Agreement may be executed in two or
more counterpart copies, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return this Agreement, whereupon
it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
Yours very truly,
GENERAL BEARING CORPORATION
By:
----------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
▇.▇. ▇▇▇▇▇▇ & CO., INC.
AS REPRESENTATIVE OF THE
SEVERAL UNDERWRITERS NAMED
IN SCHEDULE I HERETO
By:
----------------------------
Name:
Title:
[page break]
SCHEDULE I
UNDERWRITING AGREEMENT DATED [EFFECTIVE DATE]
Number of
Firm Shares
Underwriter to be Purchased
▇.▇. ▇▇▇▇▇▇ & Co., Inc.
-----------
TOTAL 1,000,000