EXHIBIT 1.1
W&C DRAFT OF December 12, 1997
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4,600,000 SHARES
PRINCETON VIDEO IMAGE, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
SELECTED DEALER AGREEMENT
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DECEMBER ___, 1997
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4,600,000 SHARES
PRINCETON VIDEO IMAGE, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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December ____, 1997
▇▇▇▇▇ & COMPANY INCORPORATED
BARINGTON CAPITAL GROUP, L.P.
As Representatives of the Several
Underwriters
c/▇ ▇▇▇▇▇ & Company Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Princeton Video Image, Inc., a New Jersey corporation (the "Company"),
hereby confirms its agreement with the several Underwriters named in SCHEDULE A
hereto (the "Underwriters"), for which you are acting as representatives (the
"Representatives"), as follows:
1. DESCRIPTION OF SECURITIES. The Company has authorized by appropriate
corporate action and proposes to issue and sell to the Underwriters its shares
of Common Stock, no par value per share. As further described in Section 3
hereof, 4,000,000 of such shares (the "Purchased Shares") are being sold by the
Company to the Underwriters and the Company is granting to the Underwriters an
option to purchase up to 600,000 additional shares (the "Option Shares"). The
Purchased Shares and Option Shares are herein collectively referred to as the
"Shares."
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2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. Any
representation, warranty, covenant and agreement of the Company relating to the
Subsidiary (as hereinafter defined) stated in this Agreement and each
certificate of the Company or its officers prepared hereunder to be "to the best
of the Company's knowledge," "to the knowledge of the Company" or similar
language, is so stated to reflect the fact that while the Company has no reason
to believe that the statement of such matter is inaccurate (based solely upon
written representations made by one or more officers of the Subsidiary in a
certificate to such effect), the Company has made no independent factual
investigation with respect to such statement or matter. The Company represents
and warrants to and agrees with each Underwriter that:
(a) A registration statement on Form SB-2 (File No. 333-37725) with
respect to the Shares, 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 (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Act, and has
been filed with the Commission under the Act; such amendment or amendments to
such registration statement, copies of which have heretofore been delivered to
you, as may have been made prior to the date of this Agreement have been so
prepared and filed; and the Company has so prepared and proposes so to file in a
timely manner after the effective date of such registration statement the final
form of prospectus. Such registration statement (including all exhibits
thereto), as finally amended and revised as of the time the Underwriters first
offer the Shares for sale to the public together with information, if any, which
is permitted to be, and is, subsequently filed pursuant to Rule 430A of the
Rules and Regulations, is herein referred to as the "Registration Statement."
Such prospectus in the form filed pursuant to Rule 424(b) of the Rules and
Regulations, or, if no final prospectus is filed with the Commission pursuant to
Rule 424(b), in such form as such final prospectus is included in the
Registration Statement, is herein referred to as the "Prospectus." Each
preliminary form of prospectus is herein referred to as a "Preliminary
Prospectus."
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. At the time of filing of each
Preliminary Prospectus, such prospectus did not include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. When the Registration Statement was or is declared effective
and at all times subsequent thereto up to and at each Closing Date (hereinafter
defined) (i) the Registration Statement contained or will contain as of its date
all material statements and information which are required to be included
therein in accordance with the Act and Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, and (ii) the Registration Statement did not or will not include as
of its date any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed with the Commission
pursuant
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to Rule 424(b) (or, if the Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective), on the date when the Prospectus is otherwise amended or
supplemented and on each Closing Date (as hereinafter defined), the Prospectus,
as amended or supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
Rules and Regulations and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties shall not
apply to information contained in or omitted from the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon, and in
conformity with, written information furnished to the Company by any Underwriter
through you specifically for use in the preparation thereof.
(c) Set forth on SCHEDULE B hereto is the name of the only subsidiary
of the Company (the "Subsidiary") which holds assets or conducts operations
which currently may be material to the condition (financial or otherwise),
results of operations, business or prospects of the Company and its subsidiaries
taken as a whole, and, unless otherwise indicated thereon, the Company holds all
right, title and interest in and to the entire equity interest in the
Subsidiary, free and clear of all material liens, encumbrances or claims.
Except as described 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, to the best of the Company's knowledge, the Subsidiary,
has incurred any direct or, to the best of the Company's knowledge, contingent
material liabilities or material obligations, or entered into any material
transactions or contracts not in the ordinary course of business, and there has
not been any change in its capital shares, options or warrants, nor any material
increase or decrease in the amount thereof outstanding or in any of its long-
term debt outstanding, except pursuant to the terms of the instruments governing
the same, or any material adverse change in the condition (financial or
otherwise), results of operations, business or prospects of the Company or the
Subsidiary, respectively.
(d) Except as set forth in the Prospectus, there is not now pending
or, to the knowledge of the Company, threatened, any action, suit or proceeding
to which the Company is a party before any court or governmental agency or body
which could reasonably be expected to result in any material adverse change in
the condition (financial or otherwise), results of operations, business or
prospects of the Company or could reasonably be expected to materially and
adversely affect the properties, assets or ability of the Company to do business
as contemplated in the Prospectus; and there are no contracts or documents
required to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations which have not been filed as exhibits to the
Registration Statement. Except as set forth in the Prospectus, to the best of
the Company's knowledge, there is not now pending or threatened, any action,
suit or proceeding to which the Subsidiary is a party before any court or
governmental agency or body which could
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reasonably be expected to result in a material adverse change in the condition
(financial or otherwise), results of operations, business or prospects of the
Subsidiary, or could reasonably be expected to materially and adversely affect
the properties, assets or ability of the Subsidiary to do business as
contemplated in the Prospectus.
(e) This Agreement has been duly authorized, executed and delivered
on behalf of the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
(1) that such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (2) as rights to indemnity or contribution
hereunder may be limited by federal or state securities laws; the execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any
term or provision of, or constitute a default under, (i) any indenture,
mortgage, deed of trust, note agreement or other agreement or instrument filed
as an exhibit to the Registration Statement or any other material indenture,
mortgage, deed of trust, note or agreement or other agreement or instrument to
which the Company is a party or by which it or its property is bound; (ii) the
charter or by-laws of the Company or (iii) to the best of the Company's
knowledge, any currently existing statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
over their properties; no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the Company
of the transactions on its part herein contemplated, except such as have been
obtained or such as may be required under the Act or as may be required under
state or other securities or blue sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. Neither the Company nor, to the
best of the Company's knowledge the Subsidiary, is now in default, and no event
has occurred which with the giving of notice or lapse of time or both would be a
default, under any contract, agreement, indenture, mortgage or other undertaking
to which such entity is a party and which is material to the condition
(financial or otherwise), results of operations, business or prospects of the
Company or the Subsidiary, respectively.
(f) Each of the Company and, to the best of the Company's knowledge,
the Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority, corporate or otherwise, to own its
properties and conduct its business as described and contemplated in the
Registration Statement and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where its operations or
ownership of property requires such qualifications and where failure so to
qualify would impair title to any material properties of the Company or its
rights to enforce contracts against others or expose it to liabilities material
to the Company or the Subsidiary, respectively.
(g) The Company has the authorized and outstanding capital stock set
forth in the Prospectus; the outstanding capital stock of the Company conforms,
and the
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Shares when issued and sold as herein contemplated will conform, in all material
respects to all statements in relation thereto contained in the Registration
Statement and the Prospectus; all such stock has been duly authorized and the
outstanding capital stock has been, and the Shares, when issued and delivered
against payment therefor as provided herein, will be, validly issued, fully-paid
and nonassessable; except as stated in the Prospectus, the stockholders of the
Company have no preemptive rights with respect to the Shares, and there are no
outstanding rights, options or warrants to acquire any securities of the
Company; to the extent that any rights, options or warrants to acquire any
securities of the Company are outstanding, except as otherwise set forth in the
Prospectus, the issuance of the Shares as described in the Prospectus will not
result in an adjustment of the exercise price or number of shares issuable upon
the exercise in respect of any such rights, options or warrants; and, except as
otherwise set forth in the Prospectus, the Company owns (directly or indirectly)
under valid title the respective outstanding shares of capital stock of the
Subsidiary, free and clear of any material liens, encumbrances or claims.
(h) Except as otherwise set forth in the Prospectus, each of the
Company and, to the best of the Company's knowledge, the Subsidiary, owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
licenses, trademarks, service marks and trade names necessary to carry on its
business as presently conducted, and except as set forth in the Prospectus,
neither the Company nor, to the best of the Company's knowledge, the Subsidiary,
has received any notice of infringement of or conflict with asserted rights of
others with respect to any patents, patent licenses, trademarks, service marks
or trade names which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could materially and adversely affect
the condition (financial or otherwise), earnings, affairs, business or prospects
of the Company or the Subsidiary, respectively.
(i) Except as set forth in the Prospectus, the Company and, to the
best of the Company's knowledge, the Subsidiary, hold in good standing or have
applied for all licenses, permits, authorizations, franchises, consents and
orders of all federal, state, local, and foreign governmental bodies necessary
to carry on their business as reflected or contemplated in the Prospectus;
except as stated in the Prospectus the Company has good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by it, in each case free and clear of all liens, encumbrances and
defects with such exceptions as are not material to the Company or the
Subsidiary, respectively; and the real property and personal property referred
to in the Prospectus as held under lease by the Company is held by it under
valid, subsisting and enforceable leases with only such exceptions as in the
aggregate are not material and do not materially interfere with the conduct of
the business of the Company as contemplated by the Prospectus.
(j) The Company is conducting and proposes to conduct its business so
as to comply in all material respects with all applicable federal, state, local
and foreign governmental statutes, rules and regulations; and except as set
forth in the Prospectus, neither the Company nor, to the best of the Company's
knowledge, the Subsidiary, is
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charged with, or, is under investigation with respect to, any violation of any
of such statutes, rules or regulations or, to the best of the Company's
knowledge, is the subject of any pending or threatened proceeding by a
governmental body or regulatory authority relating to any such violation.
(k) Except as set forth in the Registration Statement, the Company
and, to the best of the Company's knowledge, the Subsidiary, are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the business in which they
are engaged; and neither the Company nor any of the Subsidiaries has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the business or financial condition of the
Company or the Subsidiary, respectively, except as described or contemplated in
the Prospectus.
(l) Coopers & ▇▇▇▇▇▇▇, L.L.P., which has examined and expressed its
opinion on certain of the financial statements of the Company filed with the
Commission as a part of the Registration Statement, are, to the Company's best
knowledge, independent accountants with respect to the Company within the
meaning of the Act and the Rules and Regulations; the financial statements,
together with the related notes, forming part of the Registration Statement and
Prospectus fairly present the financial condition of the Company and its results
of operations as of the dates and for the periods described in such opinion in
the Prospectus; and, to the best of the Company's knowledge, such financial
statements have been prepared in accordance with the requirements of the
Commission.
(m) The Company and, and to the best of the Company's knowledge, the
Subsidiary, maintain a system of internal accounting controls sufficient to
provide reasonable assurances that transactions are executed in accordance with
management's general or specific authorizations and are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles.
(n) Except as stated in the Prospectus, the Company knows of no
outstanding claims for services, either in the nature of a finder's fee or
origination fee, with respect to the transactions contemplated hereby, and the
Company agrees to indemnify and hold the Underwriters harmless from any such
claim for any such services of such nature arising from the act of any person
other than any Underwriter.
(o) Except as set forth in the Registration Statement no person holds
a right to require or participate in the registration under the Act of the
Common Stock of the Company to be effected by the Registration Statement, which
right has not been effectively waived by the holder thereof as of the date
hereof.
(p) Each of the Company's shareholders and certain of its
warrantholders are party to an agreement that they will not, without the prior
written consent of the ▇▇▇▇▇
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& Company Incorporated on behalf of the Underwriters, sell, offer for sale,
contract to sell or otherwise dispose of any shares of the Company's Common
Stock or any securities exercisable for or convertible into its Common Stock or
any rights to acquire Common Stock for a period of 12 months from the First
Closing Date (as defined below).
3. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $______ per Share, the number of Shares
set forth opposite the name of such Underwriter in SCHEDULE A hereto.
The Company will deliver the Purchased Shares to you for the accounts
of the several Underwriters at the office of ▇▇▇▇▇ & Company Incorporated, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, against payment of the purchase price therefor
by certified or official bank check or checks in New York Clearing House funds,
payable to the order of Princeton Video Image, Inc., at 10:00 A.M., New York
Time, on December ____, 1997 or at such other time and date not later than five
full business days thereafter as you and the Company may determine, such time
and date of delivery and payment being herein called the "First Closing Date."
The certificates for the Purchased Shares to be so delivered will be made
available to you at such office for checking at least one full business day
prior to such Closing Date and will be in such names and denominations as you
may request in writing not less than two full business days prior to such
Closing Date.
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
grants to the Underwriters an option to purchase up to 600,000 Option Shares at
the same price per share as the Underwriters shall pay for the Purchased Shares.
Such option may be exercised only to cover over-allotments arising in connection
with the sale of Purchased Shares by the Underwriters, such exercise to be upon
written notice by you to the Company within 30 days of the date hereof setting
forth the number of Option Shares as to which the Underwriters are exercising
the option, the denominations and names in which certificates for such Shares
should be registered and the time and place at which such certificates are to be
delivered. Such time and place (unless such time is the First Closing Date),
herein referred to as the "Second Closing Date," shall be determined by you but
shall not be earlier than the First Closing Date, nor earlier than three full
business days or later than ten full business days after the exercise of such
option. The Company will deliver the Option Shares to you for the accounts of
the several Underwriters against payment of the purchase price therefor by
certified or official bank check or checks in New York Clearing House funds
payable to the order of Princeton Video Image, Inc. The number of Option Shares
to be purchased by each Underwriter shall be in the same proportion to the
aggregate number of Option Shares purchased as the number of Purchased Shares
set forth opposite the name of such Underwriter in SCHEDULE A hereto bears to
4,000,000.
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It is understood that you, individually and not as the Representatives
of the several Underwriters, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for Shares to be purchased by such
Underwriter or Underwriters. Any such payment by you shall not relieve any such
Underwriter or Underwriters of any of its or their obligations hereunder.
After the Registration Statement becomes effective, the several
Underwriters propose to offer the Shares to the public as set forth in the
Prospectus.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement and any subsequent amendment thereto to become effective as promptly
as possible; it will notify you, promptly after it shall receive notice thereof,
of the time when the Registration Statement or any subsequent amendment to the
Registration Statement has become effective or any supplement to the Prospectus
has been filed; it will notify you promptly of any request by the Commission for
the amending or supplementing of the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus which, in your reasonable opinion, may be necessary or advisable
in connection with the distribution of the Shares by the Underwriters; it will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading; in case any Underwriter
is required to deliver a prospectus after the nine-month period referred to in
Section 10(a)(3) of the Act in connection with sales of the Shares purchased by
the Underwriters from the Company pursuant to Section 3 or otherwise acquired by
the Underwriters during the distribution of the Shares in connection with
stabilization or otherwise, the Company will prepare and file with the
Commission promptly upon request of, but at the expense of, such Underwriter,
any amendments or supplements to the Registration Statement or Prospectus as may
be necessary, in such Underwriter's reasonable opinion, to permit the sale of
such Shares in the manner determined by such Underwriter, in compliance with the
requirements of the Act, including Section 10(a)(3) thereunder; and it will file
no amendment or supplement to the Registration Statement or Prospectus that
shall not previously have been submitted to you in writing a reasonable time
prior to the proposed filing thereof or to which you shall reasonably object in
writing.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending
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the effectiveness of the Registration Statement or of any order suspending
trading in the Shares or other of the Company's securities or of the initiation
or threat of any proceeding for that purpose; and it will use promptly its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal if
such a stop order should be issued.
(c) The Company will use its best efforts to qualify the Shares for
sale under the blue sky or securities laws of such jurisdictions as you may
reasonably designate and to continue such qualifications in effect for so long
as may be required for purposes of the distribution of the Shares, except that
the Company shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(d) The Company will furnish to you, as soon as available, copies of
the Registration Statement (two of which will include all exhibits), each
Preliminary Prospectus, the Prospectus, and any amendments or supplements to
such documents, including any prospectus prepared to permit compliance with
Section 10(a)(3) of the Act, all in such quantities as you may from time to time
reasonably request.
(e) The Company will make generally available to its security holders
as soon as practicable, an earnings statement (which will be in reasonable
detail but need not be audited) covering a 12-month period beginning after the
effective date of the Registration Statement which shall satisfy the provisions
of Section 11(a) of the Act.
(f) The Company agrees, during each fiscal year for a period of two
years from the date hereof, upon request by any stockholder, to furnish to such
stockholder as promptly as may be practicable an annual report (including
financial statements audited by independent public accountants), and a
quarterly report on Form 10-Q (including quarterly financial statements (which
need not be audited)) for each of the first three quarters of each fiscal year,
and to furnish, upon request, to each Underwriter hereunder (i) as soon as
practicable after the end of each of the first three quarters of each fiscal
year, the Company's quarterly report on Form 10-Q or statements of operations
and surplus of the Company for such quarter in reasonable detail and certified
by the Company's principal financial or accounting officer; (ii) as soon as
practicable after the end of each fiscal year, financial statements of the
Company as at the end of such fiscal year, including statements of operations,
retained earnings and changes in financial position of the Company for such
fiscal year, all in reasonable detail and accompanied by a copy of the report
thereon of independent public accountants or the Company's annual report on Form
10-K; and (iii) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission. During such
period, if and so long as the Company shall have active subsidiaries, the
foregoing financial statements shall be on a combined or consolidated basis to
the extent that the accounts of the Company and its subsidiaries are combined or
consolidated.
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(g) The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements, and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act; (ii) all other
expenses in connection with the preparation, printing, and filing of the
Registration Statement, each Preliminary Prospectus, and the Prospectus and
amendments and supplements thereto, and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) the cost of printing this
Agreement, the Selected Dealer Agreement, the Blue Sky Memorandum, and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iv) all costs and expenses in connection with the issuance and delivery
of the Shares hereunder to the Underwriters, including related transfer taxes,
if any; (v) all expenses in connection with the qualification of the Shares for
offering and sale under the securities laws of various jurisdictions, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky Survey; (vi) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vii) the costs
of preparing stock certificates; (viii) the cost and charges of any transfer
agent or registrar; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section 4. In addition to the foregoing, the Company shall
reimburse the Underwriters, upon request from time to time, for their reasonable
itemized out-of-pocket expenses up to a maximum of $300,000, including their
legal fees and disbursements and travel, roadshow and syndicate expenses, upon
the presentation of reasonable documentation thereof. If the Company determines
not to proceed with the offering for any reason, other than the Underwriters'
unwillingness to proceed on the terms and conditions set forth in this
Agreement, or if the Representatives exercise their right to terminate this
Agreement pursuant to Section 10(b)(i) hereof, the Company shall reimburse the
Underwriters for all reasonable out-of-pocket expenses including legal fees and
disbursements and travel, roadshow and syndicate expenses actually incurred by
the Underwriters. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
(h) The Company agrees that it will not, without the prior written
consent of ▇▇▇▇▇ & Company Incorporated on behalf of the Underwriters, which
consent shall not unreasonably be withheld, sell, offer for sale, contract to
sell or otherwise dispose of any shares of its Common Stock or any securities
exercisable for or convertible into shares of its Common Stock or any rights to
acquire Common Stock, other than Common Stock or options issued or granted
pursuant to existing stock options or other existing compensation plans, for a
period of 12 months after the First Closing Date. In addition, agreement, each
of the Company's officers and directors, shareholders and certain warrantholders
are party to an agreement that they will not, without the prior written consent
of ▇▇▇▇▇ & Company Incorporated, sell, offer for sale, contract to sell or
otherwise dispose of any of such Common Stock or any securities exercisable for
or convertible into shares of its Common
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Stock or any rights to acquire Common Stock held by such holder for a period of
12 months after the First Closing Date.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Purchased Shares on the First
Closing Date and the Option Shares on the Second Closing Date, as provided
herein shall be subject to the accuracy, as of the date hereof and such Closing
Date (as if made on and as of such Closing Date), of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., New York City Time, on the date of this Agreement, or such later
date as shall be consented to in writing by you; if required, the Prospectus and
any amendment or supplement thereto shall have been filed with the Commission in
the manner and within the time period required by Rule 424(b) under the Act; and
no stop order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Prior to such Closing Date, except as contemplated in the
Prospectus, there shall not have been any change in the capital shares, nor the
issuance of any rights, options, or warrants to purchase any capital shares, nor
any material increase or decrease in any long-term debt of the Company or any
material adverse change in the condition (financial or otherwise), results of
operations, business or prospects of the Company which in your reasonable
judgment renders it inadvisable to proceed with the offering and sale of the
Shares.
(c) You shall have received the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, in form and substance satisfactory to
you and dated such Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with full corporate power and authority
to own its properties and to conduct its business as described in the
Registration Statement and is duly qualified to do business as a
foreign corporation in each state or jurisdiction in the United States
where its operations and the ownership of its properties requires such
qualification, except with respect to qualification as a foreign
corporation in such jurisdictions in which the failure to so qualify
would not have a material adverse effect on the business of the
Company;
11
(ii) the Company has authorized capital stock as set forth in
the Prospectus; all shares of Common Stock, including the Shares,
conform as to legal matters in all material respects to the
appropriate descriptions thereof under the heading "Description of
Securities" in the Prospectus; and the issuance of the Shares has been
duly authorized and, when issued and delivered in accordance with this
Agreement, the Shares will be validly issued, fully paid and
non-assessable; and, except as described in the Prospectus, the
issuance of the Shares as described in the Prospectus will not result
in any adjustment of the exercise price or number of shares issuable
upon exercise in respect of any outstanding options or warrants of the
Company;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms, except that
(1) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and the exercise of
judicial discretion, and (2) rights to indemnity or contribution
hereunder may be limited by federal or state securities laws; the sale
of the Shares under this Agreement and the consummation of the
transactions herein contemplated do not result in a breach or
violation of any terms or provisions of, or constitute a default under
any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument filed as an exhibit to the Registration
Statement or otherwise known to counsel to which the Company is a
party or by which it or its properties are bound or affected, or to
which any of the material property or assets of the Company is
subject, the Company's certificate of incorporation and by-laws, or,
to the best of such counsel's knowledge, any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or over its properties;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement that has
not been obtained, except such as may be required under the Act or as
may be required under state securities or blue sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(v) the Registration Statement has become effective under the
Act, no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the best of such counsel's
knowledge, no proceedings for that purpose have been instituted or are
pending or threatened under the Act;
12
(vi) except as set forth in the Prospectus, to the best of
such counsel's knowledge, the Company holds in good standing all
material licenses, permits, authorizations, franchises, consents and
orders, of Federal, State or local, governmental bodies necessary to
carry on its business as reflected in the Registration Statement;
(vii) the agreements or documents to which the Company is a
party which are summarized under the headings "Management -
Employment Agreements," "Certain Transactions", "Description of
Securities," "Underwriting" and "Business -- License Grants" in the
Prospectus conform in all material respects to such summaries;
(viii) to the best of such counsel's knowledge after due inquiry
(it being understood that for purposes of this opinion, due inquiry
does not include any search of court or administrative records), there
are no legal or governmental proceedings pending or threatened to
which the Company is a party or to which any properties of the Company
are subject which is required to be described in the Registration
Statement or the Prospectus and is not so described;
(ix) the Registration Statement and the Prospectus, and any
further amendments or supplements thereto made by the Company prior to
the Closing Date, as of their respective effective or issue dates,
comply as to form in all material respects with the requirements of
the Act and the Rules and Regulations (except that such counsel need
express no opinion as to the financial statements, notes to financial
statements, related schedules or other financial data contained in the
Registration Statement or the Prospectus);
(x) to the best of such counsel's knowledge after due
inquiry, all contracts and documents pertaining to the Company
required to be filed as Exhibits to the Registration Statement have
been filed as required and all contracts and documents required to be
described in the Prospectus have been accurately described therein in
all material respects;
(xi) Such counsel shall also state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company
and the representatives of the Underwriters, at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon and does 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 (relying as to materiality
to a large extent upon the opinions of officers and other
representatives of the Company), no facts have come to
13
such counsel's attention which lead such counsel to believe that the
Registration Statement (except with respect to the financial
statements and schedules thereto and other financial or statistical
data, as to which such counsel need not make any statement), at the
time it became effective or at the Closing Date contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus (except with respect to
the financial statements and schedules thereto and other financial or
other statistical data, as to which such counsel need not make any
statement) on the date thereof or on the Closing Date contained any
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading.
In rendering the foregoing opinions, such counsel may rely as to
factual matters on certificates of officers and representatives of the Company
or any Subsidiary and of public officials and will not be required to
independently verify the accuracy or completeness of information or documents
furnished to it in respect to the Registration Statement or the Prospectus. To
the extent that such counsel's opinion relates to the laws of jurisdictions
other than New York or New Jersey, such counsel shall be permitted to rely on
the opinion of local counsel reasonably satisfactory to counsel for the several
Underwriters.
(d) You shall have received from ▇▇▇▇▇▇ & Carnelutti, a Professional
Corporation, counsel for the several Underwriters, an opinion or opinions, dated
such Closing Date, in form and substance satisfactory to you, with respect to
the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may have requested for the purpose of enabling them to pass
upon such matters.
(e) You shall have received, at the time of execution of this
Agreement and on such Closing Date from Coopers & ▇▇▇▇▇▇▇, L.L.P., independent
public accountants, a letter or letters, dated the date of delivery thereof,
substantially in the form and substance heretofore approved by you.
(f) You shall have received a certificate, dated such Closing Date,
of the Chairman of the Board of Directors and Treasurer of the Company,
delivered on behalf of the Company, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects as if made on
and as of such Closing Date; and the Company has in all material
respects complied
14
with all the agreements and satisfied all the conditions on its part
to be performed or satisfied at or prior to such Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and, to his knowledge, no
proceedings for that purpose have been instituted or are contemplated
by the Commission; and
(iii) except as contemplated in the Prospectus, the Company has
not incurred any direct or, to the best of the Company's knowledge,
contingent material liabilities or obligations, or entered into any
material transactions or contracts not in the ordinary course of
business, and there has not been any change in the capital shares of
the Company, nor the issuance of any rights, options, or warrants to
purchase any capital shares, nor any material increase or decrease in
any thereof or in any long-term debt or any material adverse change in
the condition (financial or otherwise) results of operations, business
or prospects of the Company.
(g) The Company shall have furnished to you such certificates, in
addition to those specifically mentioned herein, as you may have reasonably
requested, as to the accuracy and completeness at such Closing Date of any
statement in the Registration Statement or Prospectus, as to the accuracy at
such Closing Date of the representations and warranties of the Company herein,
as to the performance by the Company of its obligations hereunder, and as to the
fulfillment of the conditions concurrent and precedent to the obligations of the
Underwriters hereunder.
(h) The Company shall have furnished to you a copy of the agreements
described in Section 2(p) of this Agreement.
(i) The Company shall have issued and sold to the Representatives
warrants to purchase an aggregate of 400,000 shares of Common Stock at a
purchase price equal to 120% of the price at which the Shares are sold to the
public and on other terms reasonably satisfactory to the Company and the
Representatives.
6. INDEMNIFICATION. (a) The Company will indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such
15
Underwriter or such controlling person in connection with investigating or
defending against any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, such Preliminary Prospectus, the Prospectus
or such amendment or such supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through you
specifically for use therein; and provided further, that the foregoing indemnity
with respect to Preliminary Prospectuses shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) if
such untrue statement or omission or alleged untrue statement or omission made
in any Preliminary Prospectus is eliminated or remedied in the Prospectus and a
copy of the Prospectus has not been furnished to the person asserting any such
losses, claims, damages, or liabilities at or prior to the written confirmation
of the sale of such Shares to such person. Such indemnity obligation will be in
addition to any liability which the Company may otherwise have. The indemnity
agreement of the Company contained in this paragraph (a) and the representations
and warranties of the Company contained in Section 2 hereof shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the delivery of and
payment for the Shares.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers and each
additional employee who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer or controlling person may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, other
employee or controlling person in connection with investigating or defending
against any such loss, claim, damage, liability or action. Such indemnity
obligation will be in addition to any liability which such Underwriter may
otherwise have. The indemnity agreement of each Underwriter contained in this
paragraph (b) shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Shares.
16
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof.
Indemnification shall not be available to any party who shall fail so to give
notice, if the party to whom notice was required to be given was unaware of the
action, suit, investigation, inquiry or proceeding to which the notice would
have related, to the extent that such party was prejudiced by the failure to
give notice; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel chosen by
such indemnifying party which is 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 will not
be liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that (i) if the indemnified party reasonably determines that there may be a
conflict between the positions of the indemnifying party and of the indemnified
party in conducting the defense of such action, suit, investigation, inquiry or
proceeding or that there may be legal defenses available to such indemnified
party different from or in addition to those available to the indemnifying
party, then counsel for the indemnified party shall be entitled to conduct the
defense to the extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified party and (ii) in any event, the
indemnified party (at its own expense) shall be entitled to have counsel chosen
by such indemnified party participate in, but not conduct, the defense. No
indemnifying party shall be liable to any indemnified party in respect to any
settlement effected without its prior written consent, which consent shall not
be unreasonably withheld. In addition, the indemnifying party will not, without
the prior written consent of an indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not such indemnified party is a party to such claim, action or suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability arising out
of such claim, action, suit or proceeding.
7. CONTRIBUTION. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 6(a) or 6(b) hereof is for any
reason, other than the first proviso to Section 6(a), held to be unavailable,
the Company and the Underwriters shall contribute to the aggregate losses,
claims, damages and liabilities of the nature contemplated by such
indemnification provisions (including any investigation, legal and other
expenses incurred in connection with, any amount paid in settlement of, any
action, suit or proceeding or any claims asserted) to which the Company and one
or more of the
17
Underwriters may be subject, in such proportions so that the Underwriters are
responsible for that portion in each case represented by the percentage that the
respective underwriting discounts appearing on the cover page of the Prospectus
bear to the public offering price of the Shares, and the Company is responsible
for the remaining portion; provided, however, that (i) except as may be provided
in its Master Agreement Among Underwriters provided to ▇▇▇▇▇ & Company
Incorporated, in no case shall any Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act, each
officer and other employee of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same right to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 7. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 7, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section 7. No party shall be liable for contribution with respect to any action
or claim settled without its consent, which consent shall not be unreasonably
withheld.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements of the Company or of the Underwriters
herein or in certificates delivered pursuant hereto shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person, the Company, or any of its officers,
directors, or controlling persons, and shall survive delivery of the Shares to
the several Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
fail to take up and pay for the number of Shares to be purchased by such
Underwriter or Underwriters hereunder upon tender of such Shares in accordance
with the terms hereof, and if the aggregate number of Shares which such
defaulting Underwriter or Underwriters so agreed but failed to purchase does
not exceed 10% of the Shares, the remaining Underwriters shall be obligated
severally in proportion to their respective commitments hereunder to take up and
pay for the Shares of such defaulting Underwriter or Underwriters. If one or
more of the Underwriters shall fail or refuse (other than for a reason
sufficient to justify the termination of this Agreement) to purchase on any
Closing Date the aggregate number of Shares agreed to be purchased by such
Underwriter or Underwriters and the aggregate number of Shares agreed to be
purchased by such Underwriter or Underwriters shall exceed 10% of the aggregate
number of Shares to be
18
sold on any Closing Date hereunder by the Company to the Underwriters, then the
other Underwriters shall have the right to purchase, or procure one or more
other underwriters to purchase, in such proportions as they may agree upon and
upon the terms herein set forth, the Shares which such defaulting Underwriter or
Underwriters agreed to purchase, and this Agreement shall be carried out
accordingly. If such other Underwriters do not exercise such right within
thirty-six hours after receiving notice of any such default, which notice the
Representatives shall have also promptly delivered to the Company, then the
Company shall have the right to procure another party or parties reasonably
satisfactory to the Representatives to purchase or agree to purchase such Shares
on the terms herein set forth. If the Company is unable to procure another such
party, the Company may notify the Representatives that the non-defaulting
Underwriters are, by the giving of such notice, released from their obligations
to purchase such number of Shares being sold hereunder by the Company as are
indicated in such notice as, when subtracted from the total number of Shares
originally agreed to be purchased by all of the Underwriters hereunder, shall
leave a reduced number of Shares to be purchased by the non-defaulting
Underwriters not in excess of 111% of the aggregate number of Shares originally
contracted to be purchased hereunder by the non-defaulting Underwriters, and
each of them, in which event such non-defaulting Underwriters shall purchase
such reduced number of Shares. In any such case, either the Representatives or
the Company shall have the right to postpone any Closing Date for a period of
not more than seven business days in order that necessary changes and
arrangements may be effected by the Representatives and the Company. If neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the period stated for the purchase of the Shares which such defaulting
Underwriter or Underwriters agreed to purchase, including such arrangements for
the purchase of a reduced number of Shares as are provided for in this Section
9, then this Agreement shall terminate without liability on the part of any
non-defaulting Underwriters to the Company and without liability on the part of
the Company to the Underwriters.
In the event of any termination of this Agreement pursuant to the preceding
paragraph of this Section, the Company shall not be under any liability to any
Underwriter (except as provided in Section 4(g) and 6 hereof) nor shall any
Underwriter (other than an Underwriter who shall have failed, otherwise than for
some reason permitted under this Agreement, to purchase the number of Shares to
be purchased by such Underwriter hereunder, which Underwriter shall remain
liable to the Company and the other Underwriters for damages resulting from such
default) be under any liability to the Company (except as provided in Section 6
hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 9.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at the earlier of (i) 6:30
a.m., New York City Time, on the first full business day after the declaration
by the Commission of
19
the effectiveness of the Registration Statement, or (ii) the time at which you
in your discretion shall first release the Shares for sale to the public. For
the purposes of this Section, the Shares shall be deemed to have been released
for sale to the public upon release by you for publication of a newspaper
advertisement relating to the Shares or upon release by you of letters or
telegrams offering the Shares for sale to securities dealers, whichever shall
first occur. By giving notice as hereinafter specified before the time this
Agreement becomes effective, you, as Representatives of the several
Underwriters, or the Company may prevent this Agreement from becoming effective
without liability on the part of the Company to any Underwriter or of any
Underwriter to the Company, other than as provided in Sections 4(g) and 6
hereof.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date if: (i) the Company shall have
failed, refused or been unable, at or prior to the First Closing Date, to
perform any material agreement on its part to be performed, or because any other
material condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company is not fulfilled; (ii) trading on the New York Stock
Exchange shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange by the New York Stock Exchange or
by order of the Commission or any other governmental authority having
jurisdiction, since the execution of this Agreement; (iii) a banking moratorium
shall have been declared by Federal or New York authorities since the execution
of this Agreement; or (iv) an outbreak of major hostilities or other national
calamity shall have occurred. Any such termination shall be without liability on
the part of the Company to any Underwriter or of any Underwriter to the Company
other than as provided in Sections 4(g) and 6 hereof.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company shall elect to prevent this Agreement from becoming effective, you shall
be notified promptly by the Company by telephone or telegram, confirmed by
letter.
11. NOTICES. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered or telecopied and confirmed to you c/▇ ▇▇▇▇▇ & Company
Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with copy to ▇▇▇▇▇▇ &
Carnelutti, a Professional Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. or if sent to the Company shall be
mailed, delivered or telecopied and confirmed to the Company at ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Smith, ▇▇▇▇▇▇▇▇, Wise,
▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. Notice to any Underwriter pursuant to Section 6 shall be
mailed, delivered or telecopied and confirmed to such Underwriter's address as
set forth in its
20
Master Agreement Among Underwriters furnished to ▇▇▇▇▇ & Company Incorporated
and the Company.
12. PARTIES. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters and the Company and their respective successors
and assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person or corporation, other than the parties
hereto and their respective successors and assigns and the controlling persons,
officers and directors referred to in Section 6, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and said controlling persons
and said officers and directors, and for the benefit of no other person or
corporation. No purchaser of any of the Shares from any Underwriter shall be
construed a successor or assign merely by reason of such purchase.
In all dealings with the Company under this Agreement, you shall be
and are authorized to act on behalf of each of the several Underwriters, and the
Company shall be entitled to act and rely upon any statement request, notice or
agreement on behalf of each of the several Underwriters if the same shall have
been made or given in writing by you.
13. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made, and to be fully performed, therein.
21
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters.
Very truly yours,
PRINCETON VIDEO IMAGE, INC.
By: _________________________
Name:
Title:
Accepted as of the date
first above written:
▇▇▇▇▇ & COMPANY INCORPORATED
BARINGTON CAPITAL GROUP, L.P.
By: ▇▇▇▇▇ & COMPANY INCORPORATED
By: ___________________________
Name:
Title:
On behalf of each of the several
Underwriters named in SCHEDULE A hereto.
22
SCHEDULE A
NUMBER
OF
NAME OF UNDERWRITER SHARES
▇▇▇▇▇ & Company Incorporated .....................................
Barington Capital Group, L.P......................................
----------
Total..............................................................4,000,000
23
SCHEDULE B
SUBSIDIARIES OF THE COMPANY
Princeton Video Image, Inc. holds a fifty percent equity interest in, but has no
control over the day to day affairs of, Publicidad Virtual, S.A. de C.V., a
limited liability corporation formed under the laws of the Republic of Mexico
and domiciled in Mexico City, Federal District.
24
4,600,000 Shares
Common Stock
PRINCETON VIDEO IMAGE, INC.
SELECTED DEALER AGREEMENT
December ____, 1997
Ladies/Gentlemen:
1. PURCHASE OF SECURITIES BY THE SEVERAL UNDERWRITERS. The several
Underwriters named in the enclosed Prospectus, on whose behalf we are acting as
Representatives, have severally agreed to purchase from Princeton Video Image,
Inc. (the "Company") an offering of up to 4,600,000 Shares of the Company's
Common Stock (the "Shares"), as set forth in the Prospectus and subject to the
terms of the Underwriting Agreement between the several Underwriters and the
Company. The Shares are described in the Prospectus, additional copies of which
will be supplied in reasonable quantities upon request to us.
2. OFFERING TO SELECTED DEALERS. One or more of the several Underwriters
acting through us are severally offering a portion of the Shares to certain
dealers ("Selected Dealers") as principals, subject to the terms and conditions
of their purchase, to the terms and conditions hereof, and to the modification
or cancellation of the offering without notice, at the public offering price set
forth in the Prospectus, less a concession not in excess of $.____ per Share.
▇▇▇▇▇▇ purchased by the several Underwriters and not sold to the Selected
Dealers as aforesaid may be sold by the several Underwriters. Any of the
several Underwriters may be included among the Selected Dealers.
The offering of a portion of the Shares to Selected Dealers may be made on
the basis of reservations or allotments against subscription. We are advising
you by telegram of the method and terms of the offering. Acceptance of any
reserved Shares received by us at the office of ▇▇▇▇▇ & Company Incorporated,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, after the time specified therefor in
the telegrams, and any subscriptions for additional Shares, will be subject to
prior sale and allotment. Subscription books may be closed by us at any time
without notice, and the right is reserved to reject any subscriptions in whole
or in part.
3. OFFERING TO PUBLIC BY SELECTED DEALERS. Upon receipt of the
aforementioned telegram, the Shares purchased by you hereunder may be re-offered
to the public in conformity with the terms of offering set forth in the
Prospectus. You may, in accordance with the rules of the National Association of
Securities Dealers, Inc., reallow a concession of $.___ per Share sold by you to
any other dealer or broker who is a member of the National Association of
Securities Dealers, Inc., provided such discount is retained.
1
Neither you nor any other person is or has been authorized by the Company,
any of the several Underwriters or us to give information or make any
representations in connection with the sale of the Shares other than those
contained in the Prospectus.
In the event that during the term of this agreement we, as Representatives
for the account of the several Underwriters, shall purchase or contract to
purchase, at or below the original public offering price set forth in the
Prospectus, any of the Shares purchased by you hereunder (which Shares
theretofore were not effectively placed for investment by you, including Shares
represented by transfers), we may, at our election, either (a) require you to
repurchase such Shares at a price equal to the total cost of such Shares
purchased by us, including brokerage commissions, if any, and transfer taxes on
the redelivery, or (b) charge you with and collect from you an amount equal to
the selling concession with respect to the Shares so purchased by us.
4. PAYMENT AND DELIVERY. Payment for the Shares which you have agreed to
purchase hereunder shall be made by you on December ____, 1997, or such later
date as we may advise you, at 9:00 a.m., New York Time, at ▇▇▇▇▇ & Company
Incorporated's office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, by
certified or bank cashier's check payable in New York Clearing House funds to
the order of ▇▇▇▇▇ & Company Incorporated, against delivery of such Shares.
Delivery instructions must be in our hands at said address at such time as we
request.
Additional Shares confirmed to you shall be delivered on such date or dates
as we shall advise you.
5. BLUE SKY MATTERS. Neither we nor any of the several Underwriters
shall have any obligation or responsibility with respect to the right of any
dealer to sell the Shares in any jurisdiction, notwithstanding any information
which may be furnished as to the states under the securities laws of which it is
believed the Shares may be sold.
6. TERMINATION. This agreement shall terminate 20 full days after the
First Closing Date (as defined in the Underwriting Agreement) but may be
extended for a period or periods not exceeding in the aggregate 20 days as we
may determine. We may terminate this Agreement at any time without prior notice.
Notwithstanding the termination of this agreement, you shall remain liable for
your portion of any transfer tax or other liability which may be asserted or
assessed against us or any one or more of the several Underwriters or Selected
Dealers based upon the claim that the Selected Dealers or any of them constitute
a partnership, an association, an unincorporated business or other separate
entity.
7. OBLIGATIONS OF SELECTED DEALERS. Your acceptance hereof will
constitute an obligation on your part to purchase, upon the terms and conditions
hereof, the aggregate amount of the Shares reserved for and accepted by you and
to perform and observe all the terms and conditions hereof.
2
You are not authorized to act as agent for any of the several Underwriters
in offering Shares to the public or otherwise. Nothing contained herein shall
constitute the Selected Dealers an association, or partners with the several
Underwriters, with us, or with each other.
8. POSITION OF THE REPRESENTATIVES. We shall have full authority to take
such action as we may deem advisable in respect of all matters pertaining to the
offering or arising hereunder, but shall act only as Representatives of the
several Underwriters. Neither we nor any of the several Underwriters shall be
under any liability to you, except for our own want of good faith, obligations
assumed in this agreement, or any liabilities arising under the Securities Act
of 1933. No obligation not expressly assumed by us in this agreement shall be
implied hereby or inferred herefrom.
9. NOTICES. All communications from you should be addressed to us, c/▇
▇▇▇▇▇ & Company Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any
notice from us to you shall be deemed to have been duly given if mailed or
telegraphed to you at the address to which this letter is mailed.
Please confirm the foregoing by signing the duplicate copy of this
agreement enclosed herewith and returning it to us at the address in Section 9
above.
Very truly yours,
▇▇▇▇▇ & COMPANY INCORPORATED
BARINGTON CAPITAL GROUP, L.P.
By: ▇▇▇▇▇ & COMPANY INCORPORATED
By: _________________________
Name:
Title:
3
▇▇▇▇▇ & COMPANY INCORPORATED
BARINGTON CAPITAL GROUP, L.P.
As Representatives of the Several
Underwriters
c/▇ ▇▇▇▇▇ & Company Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Sirs:
We hereby confirm our agreement to purchase Shares of Princeton Video
Image, Inc. (the "Shares"), subject to your acceptance or rejection in whole or
in part in the case of a subscription subject to allotment or in excess of any
reservation, and subject to all the other terms and conditions stated in the
foregoing letter.
We hereby acknowledge receipt of the prospectus relating to the above
described Shares (the "Prospectus") and we further state that in purchasing the
Shares confirmed to us we have relied upon such Prospectus and on no other
statements whatsoever, written or oral.
We hereby represent that we are a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and agree to comply with the
provisions of Article III, Section 24 of the NASD's Rules of Fair Practice (the
"NASD Rules"), or, if we are not such a member, we are a foreign dealer or
institution that is not registered under Section 15(b) of the Securities
Exchange Act of 1934 and that hereby agrees (i) to make no sales within the
United States, its territories or its possessions or to persons who are citizens
thereof or residents therein, (ii) if the offering of the Shares is one within
the scope of the NASD's Interpretation with Respect to Free-Riding and
Withholding, not to make other sales of Shares to persons enumerated in
paragraphs "1" through "5" of such Interpretation or in a manner inconsistent
with paragraph "6" thereof and (iii) to comply with the provisions of Rules
2730, 2740, 2420 and 2750 of the NASD Conduct Rules.
Name of Selected Dealer
____________________________________
____________________________________
(Authorized Signature)
Dated: December ____, 1997