EXHIBIT 1.1
1,000,000 SHARES
IBIS TECHNOLOGY CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
August 3, 1999
SOUNDVIEW TECHNOLOGY GROUP, INC.
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Ladies and Gentlemen:
1. DESCRIPTION OF SHARES.
Ibis Technology Corporation, a Massachusetts corporation (the
"Company"), proposes to sell, upon the terms and subject to the conditions of
this Agreement, to SoundView Technology Group, Inc. (the "Underwriter"), an
aggregate of 1,000,000 shares (the "Shares") of the Company's common stock, par
value $.008 per share ("Common Stock").
2. REGISTRATION STATEMENT AND PROSPECTUS.
A registration statement (File No. 333-82497) on Form S-3
relating to the Common Stock, and such amendments to such registration statement
as may have been required to the date of this Agreement, has been prepared by
the Company under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (collectively referred to as
the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. Such
registration statement, including any documents incorporated therein by
reference and any exhibits, financial statements and schedules thereto, together
with any registration statement filed pursuant to Rule 462(b), is herein
referred to as the "Registration Statement." The form of prospectus dated July
26, 1999 included in the Registration Statement, as supplemented by the
prospectus supplement, dated the date of this Agreement, relating to the
offering of the Shares and filed by the Company with the Commission pursuant to
Rule 424(b), are herein referred to collectively as the "Prospectus." Each
preliminary prospectus supplement or amendment thereto relating to the Shares
being issued and sold pursuant to this Agreement is herein referred to as a
"Preliminary Prospectus." Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, as of the date of such
Registration Statement, Preliminary Prospectus or Prospectus, as the case may
be, and, in the case of any reference herein to any Prospectus, also shall be
deemed to include any documents incorporated by reference therein, and any
supplements or amendments relating to the Shares being issued and sold pursuant
hereto, filed with the Commission under Rule 424(b), and prior to the
termination of the offering of the Shares by the Underwriter.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to, and agrees with, the
Underwriter that:
(a) SECURITIES ACT AND EXCHANGE ACT COMPLIANCE.
The Registration Statement has been declared effective by
the Commission under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this Agreement. The
Commission has not issued or, to the Company's knowledge, threatened to issue
any order preventing or suspending the use of any Prospectus or Preliminary
Prospectus relating to the proposed offering of the Shares. The Registration
Statement contains and the Prospectus and any amendments or supplements
thereto conforms or will conform, as the case may be, in all material
respects with the requirements of the Securities Act and the Rules and
Regulations. The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply, as the case may be, in all
material respects with the applicable requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder. Neither the Registration Statement nor any amendment thereto, and
neither the Prospectus nor any supplement thereto, including any documents
incorporated by reference therein, contains or will contain, as the case may
be, any untrue statement of a material fact or omits or will omit, as the
case may be, to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to information contained in
or omitted from the Registration Statement or the Prospectus, or incorporated
by reference or any such amendment or supplement or any documents
incorporated by reference therein, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of the
Underwriter, specifically for use in the preparation thereof. There is no
contract, agreement, lease, franchise or document required to be described in
the Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described therein or filed therewith as
required, and all descriptions of any such contracts, agreements, leases,
franchises or documents contained in the Registration Statement are fair
summaries of such documents in all material respects.
(b) ORGANIZATION, GOOD STANDING AND QUALIFICATION.
The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own or lease
its properties and to conduct its business as described in the Prospectus. The
Company is duly qualified to do business and in good standing as a foreign
corporation in all other jurisdictions where its ownership or leasing of
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect
(as defined below). The Company has obtained and is in material compliance with
all necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public regulatory or
governmental agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, except where the failure to obtain any of the
foregoing would not have a material adverse effect on the condition (financial
or otherwise), prospects or results of operations of the Company ("Material
Adverse Effect"), and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
(c) SUBSIDIARIES.
The Company does not have any subsidiaries and does not own or
control, directly or indirectly, any interest in any other corporation,
association or other business entity.
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(d) NO CHANGES.
Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Company has not incurred any liabilities or
obligations nor entered into any transactions not in the ordinary course of
business, and there has not been any Material Adverse Effect, or any material
adverse change in the capital stock, short-term or long-term debt of the
Company.
(e) VALID ISSUANCE OF THE SHARES.
The Shares to be issued and sold by the Company to the
Underwriter hereunder have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights and will conform in all material respects to the description thereof in
the Prospectus.
(f) AUTHORIZATION.
The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Shares), and this Agreement has been duly and
validly authorized, executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditor's rights
generally, (ii) as the enforceability of any indemnification provision may be
limited under federal or state securities laws or as a matter of public policy
or (iii) as the remedy of specific performance or other forms of equitable
relief may be subject to equitable defenses and the discretion of the court
before which any proceeding may be brought (collectively, the "Enforceability
Exceptions").
(g) COMPLIANCE WITH OTHER INSTRUMENTS.
The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not result in a
breach of any of the terms or provisions of, constitute a default under or
result in the creation of any lien under any indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which the Company is
a party or by which the Company or any of its property is bound, the Articles of
Organization, By-laws or other organizational documents of the Company, or any
law, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its property.
(h) LEGAL COMPLIANCE.
The Company is in compliance with and conducts its business in
conformity with all applicable federal, state, local and foreign laws, rules and
regulations of any court or governmental agency or body except where the failure
to so comply or conform will not have a Material Adverse Effect, and, to the
knowledge of the Company, except as set forth in the Registration Statement and
the Prospectus, no prospective change in any of such federal or state laws,
rules or regulations has been adopted which, when made effective, would have a
Material Adverse Effect.
(i) GOVERNMENTAL CONSENTS.
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, except such as may be required
by the National Association of Securities Dealers, Inc. (the "NASD") or under
federal or state securities laws in connection with the purchase and
distribution of the Shares by the Underwriter.
(j) FINANCIAL STATEMENTS.
The financial statements, together with the related notes and
schedules, set forth or incorporated by reference in the Prospectus and in the
Registration Statement fairly present, on the basis stated in the Registration
Statement, the financial condition and the results of
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operations of the Company at the respective dates or for the respective
periods therein specified. Such statements and related notes and schedules
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as may be set forth in the
Prospectus. The selected financial data set forth in the Prospectus under the
caption "Selected Financial Data" fairly present, on the basis stated in the
Registration Statement, the information set forth therein.
(k) INDEPENDENT AUDITORS.
KPMG LLP, who have expressed their opinions on the audited
financial statements and related schedules included in the Registration
Statement and the Prospectus, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(l) CAPITALIZATION.
The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Date, as set forth under the heading
"Capitalization" in the Prospectus and conforms in all material respects to the
description thereof set forth under the heading "Description of Securities" in
the Prospectus. The outstanding shares of Common Stock (i) conform in all
material respects to the description thereof in the Prospectus, (ii) have been
duly authorized and validly issued and are fully paid and nonassessable, (iii)
have been issued in compliance with all federal and state securities laws, and
(iv) were not issued in violation of or subject to any preemptive rights or
similar rights to subscribe for or purchase securities. Except as disclosed in
the Prospectus and the financial statements of the Company and related notes
thereto included in the Prospectus, the Company does not have outstanding any
options or warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations, except for
options granted subsequent to the date of information provided in the Prospectus
pursuant to the Company's 1993 Employee, Director and Consultant Stock Option
Plan, 1997 Employee, Director and Consultant Stock Option Plan and 1998 Stock
Option Plan (the "Stock Option Plans"), as disclosed in the Prospectus. The
description of the Stock Option Plans and the options or other rights granted or
exercised thereunder, as set forth in the Prospectus, accurately and fairly
presents the information required to be disclosed with respect to such Stock
Option Plans, options and rights.
(m) LITIGATION.
There is no legal or governmental action, suit, proceeding
or investigation pending to which the Company or any of its affiliates is a
party or to which any property of the Company or any affiliate is subject,
which, if determined adversely to the Company or any such affiliate, might
individually or in the aggregate (i) prevent or adversely affect the
transactions contemplated by this Agreement, (ii) suspend the effectiveness
of the Registration Statement, (iii) prevent or suspend the use of the
Preliminary Prospectus in any jurisdiction, or (iv) have a Material Adverse
Effect, and, to the best of the Company's knowledge, no such action, suit,
proceeding or investigation is threatened or contemplated against the Company
or any affiliate by governmental authorities or others. The Company is not a
party to or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body or other governmental agency or
body.
(n) TAX RETURNS AND PAYMENTS.
The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns, except where the
failure to file would not have a Material Adverse Effect, and has paid all taxes
shown as due thereon, and there is no tax deficiency that has been, or, to the
knowledge of the Company, is likely to be asserted against the Company or any of
its property or assets that would have a Material Adverse Effect. All
distributions to the stockholders of the Company prior to the date hereof have
been made in compliance with applicable law and have not exceeded the amounts to
which such stockholders were legally entitled.
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(o) REGISTRATION RIGHTS.
No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company as a result of the
filing or effectiveness of the Registration Statement which right has not been
waived and, in any event, except as set forth in the Prospectus, no person or
entity has the right to require registration of shares of Common Stock or other
securities of the Company.
(p) PRICE STABILIZATION AND MANIPULATION.
Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security of
the Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation
of the price of any security of the Company.
(q) PATENTS AND TRADEMARKS.
The Company owns or otherwise possesses or has the right to
use all patents, trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights either (i) described in the Prospectus as being owned by it or (ii)
to the Company's knowledge, necessary for the conduct of its business as so
described, as now conducted or as proposed to be conducted. The Company is not
aware of any claim to the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. To the Company's knowledge,
the Company's business as now conducted does not infringe or conflict with in
any material respect any trademarks, service marks, trade names, copyrights,
trade secrets, licenses, U.S. patents or other intellectual property or
franchise rights or foreign patents of any person.
(r) MATERIAL CONTRACTS.
The Company has performed all material obligations required
to be performed by it under all contracts required by Item 601(b)(10) of
Regulation S-K under the Securities Act to be filed as exhibits to the
Registration Statement, and neither the Company nor, to the knowledge of the
Company, any other party to such contract is in default under or in breach of
any such obligations, except with respect to any defaults or breaches which,
singly or in the aggregate, will not result in a Material Adverse Effect. The
Company has not received any notice of such default or breach.
(s) LABOR AGREEMENTS AND ACTIONS.
The Company is not involved in any labor dispute and, to the
Company's knowledge, no such dispute is threatened. The Company is not aware
that (i) any executive, key employee or significant group of employees of the
Company plans to terminate employment with the Company, or (ii) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the Company. The
Company does not have or expect to have any liability for any prohibited
transaction or funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other plan which is
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), to which the Company makes or ever has made a contribution and in
which any employee of the Company is or has ever been a participant, except
where such liability would not have a Material Adverse Effect. With respect to
such plans, the Company is in compliance in all material respects with all
applicable provisions of ERISA.
(t) LOCK-UP AGREEMENTS.
The Company has obtained the written agreement, in
substantially the form attached hereto as Schedule A, from each of its officers
and directors.
(u) TITLE TO PROPERTY AND ASSETS.
The Company has and, as of the Closing Date, will have good
and marketable title in fee simple to all real property and good and marketable
title to all
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personal property owned by it which is material to the business of the
Company, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as would not have a
Material Adverse Effect. Any real property and buildings held under lease by
the Company described in the Prospectus are, or will be as of the Closing
Date, held by it under valid, subsisting and enforceable leases with such
exceptions as would not have a Material Adverse Effect, in each case except
as described in or contemplated by the Prospectus.
(v) INSURANCE.
The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as the Company
believes are reasonable with respect to the business in which it is engaged or
proposes to engage, and the Company has no reason to believe that it will not be
able to renew any such 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 have a Material Adverse
Effect.
(w) BROKERS.
Except as may be set forth in the Prospectus, there is no
broker, finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or similar fee or commission as a result of any of the
transactions contemplated by this Agreement.
(x) INTERNAL ACCOUNTING CONTROLS.
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(y) DISTRIBUTION OF OFFERING MATERIALS.
The Company has not distributed and will not distribute prior
to the later of (i) the Closing Date and (ii) the completion of the distribution
of the Shares, any offering material in connection with the offering and sale of
the Shares other than any Preliminary Prospectus, the Prospectus, the
Registration Statement and other materials, if any, permitted by the Securities
Act and the use of which has been approved in advance in writing by the
Underwriter.
(z) PAYMENT OR RECEIPT OF FUNDS.
Except as set forth in the Prospectus, neither the Company
nor, to the Company's knowledge, any employee or agent of the Company has made
any payment of funds of the Company or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.
(aa) INVESTMENT COMPANY.
The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(bb) ENVIRONMENTAL LAWS.
The Company is in compliance with the terms and conditions of
all applicable federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), except
where the failure to be in compliance would not have a Material Adverse Effect.
The Company has not received notice from any governmental authority of any claim
under any Environmental Laws that could result in a Material Adverse Effect. No
property that is
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owned, leased or occupied by the Company has been designated as a Superfund
site pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (420 U.S.C. (S) 9601 et seq.), or otherwise
designated as a contaminated site under applicable state or local laws.
(cc) EMPLOYMENT MATTERS.
To the Company's knowledge, the Company has not violated any
federal or state law relating to discrimination in the hiring, promotion or pay
of employees nor any applicable federal or state wages and hours laws, nor any
provisions of ERISA or the rules and regulations promulgated thereunder, which
in each case might have a Material Adverse Effect.
(dd) CERTIFICATES.
Each certificate signed by any officer of the Company and
delivered to the Underwriter or counsel for the Underwriter pursuant to this
Agreement or in connection with the offering contemplated hereby shall be deemed
to be a representation and warranty of the Company to the Underwriter as to the
matters covered thereby.
4. PURCHASE AND SALE OF THE SHARES.
The Company agrees, to sell to the Underwriter the Shares, and
on the basis of the representations, warranties, covenants and agreements herein
contained, but upon the terms and subject to the conditions herein set forth,
the Underwriter agrees, to purchase the Shares from the Company.
(a) PURCHASE PRICE.
The purchase price per Share to be paid by the Underwriter to
the Company will be $27.7175 per share (the "Purchase Price").
(b) CLOSING.
The Company will deliver the Shares to the Underwriter in the
form of definitive certificates, issued in such names and in such denominations
as the Underwriter may direct by notice in writing to the Company given at or
prior to 10:00 a.m., New York time, on the second full business day preceding
the Closing Date (as defined below) or, if no such direction is received, in the
name of the Underwriter (solely for the purpose of administrative convenience)
and in such denominations as the Underwriter may determine, against payment of
the aggregate Purchase Price therefor in Federal or other immediately available
funds, by certified or official bank check or checks payable to the order of the
Company or by wire transfer to accounts designated by the Company, all at the
offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Such delivery and
closing shall occur at 10:00 a.m., New York time, on the fourth business day
after the date of this Agreement (the "Closing Date"). The Closing Date and the
location of delivery of, and the form of payment for, the Shares may be varied
by agreement between the Company and the Underwriter.
(c) CERTIFICATES FOR THE SHARES.
The Company shall make the certificates for the Shares
available to the Underwriter not later than 12:00 p.m., New York time, on the
business day preceding the Closing Date at such location within New York City as
may be designated by the Underwriter. If the Underwriter so elects, delivery of
the Shares may be made by credit through full fast transfer to the accounts at
The Depository Trust Company designated by the Underwriter.
(d) PUBLIC OFFERING.
The Underwriter agrees to make a public offering of the Shares
at the public offering price of $27.00 per share as soon after the execution and
delivery of this Agreement as, in its judgment, is advisable. The Underwriter
shall promptly advise the Company of the making of the public offering. After
the public offering, the Underwriter may, in its discretion, vary the public
offering price.
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5. COVENANTS AND AGREEMENTS OF THE COMPANY.
The Company covenants and agrees with the Underwriter that:
(a) PROSPECTUS SUPPLEMENT.
The Company will (A) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a prospectus
supplement setting forth the information and the terms of the offering
contemplated by Section 4 hereof, (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by reference
therein of which the Underwriter shall not previously have been advised and
furnished with a copy or to which the Underwriter shall have reasonably objected
in writing or which is not in compliance with the Rules and Regulations and (C)
file on a timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission subsequent to
the date of the Prospectus and prior to the termination of the offering of the
Shares by the Underwriter.
(b) AMENDMENTS AND REPORTS.
The Company will advise the Underwriter promptly of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, or of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose, and the Company will use all reasonable efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) PROSPECTUS.
If, at any time after the date of this Agreement when a
prospectus relating to the Shares is required to be delivered under the
Securities Act, any event relating to or affecting the Company occurs as a
result of which the Prospectus or any other prospectus 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, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Securities Act, the Company will
promptly notify the Underwriter thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission; provided,
however, that if such event or development occurs after nine months after the
date hereof and the Company would not otherwise be required to file a report
under the Exchange Act with respect thereto, the Underwriter shall bear the
expense (including reasonable attorney's fees) associated with such prospectus
amendment or supplement.
(d) COPIES OF REGISTRATION STATEMENT AND PROSPECTUS.
The Company will deliver to the Underwriter, at or before the
Closing Date, conformed copies of the Registration Statement, and each amendment
thereto, including all financial statements and exhibits thereto, and will
deliver to the Underwriter such number of copies of the Registration Statement,
including such financial statements but without exhibits, and all amendments
thereto, as the Underwriter may reasonably request. The Company will deliver or
mail to or upon the order of the Underwriter as many copies of the Preliminary
Prospectus as the Underwriter may reasonably request. The Company will deliver
or mail to or upon the order of the Underwriter on the date of the public
offering, and thereafter from time to time during the period when delivery of a
prospectus relating to the Shares is required under the Securities Act, as many
copies of the Prospectus, in final form or as thereafter amended or supplemented
as the Underwriter may reasonably request.
(e) SECTION 11(A) EARNINGS STATEMENT.
The Company will make generally available to its Stockholders
as soon as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earnings statement which will
be in reasonable detail (but which need not
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be audited) and which will comply with Section 11(a) of the Securities Act,
covering a period of at least twelve (12) months beginning after the
"effective date" (as defined in Rule 158 under the Securities Act) of the
Registration Statement, provided that compliance with Rule 158 shall satisfy
this subsection (e).
(f) BLUE SKY QUALIFICATION.
The Company will cooperate with the Underwriter to enable the
Shares to be registered or qualified for offering and sale by the Underwriter
and by dealers under the securities laws of such jurisdictions as the
Underwriter may reasonably request.
(g) NASDAQ NATIONAL MARKET.
The Company will use its best efforts to maintain the listing
of the Common Stock on the Nasdaq National Market for a period of five (5) years
after the effective date of the Registration Statement.
(h) USE OF PROCEEDS.
The Company will apply the net proceeds from the sale of the
Shares substantially in conformity with the description set forth under the
heading "Use of Proceeds" in the Prospectus.
(i) SEC CORRESPONDENCE.
The Company will supply the Underwriter with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Shares under the Securities Act.
(j) FINANCIAL STATEMENTS.
Prior to the Closing Date the Company will furnish to the
Underwriter, as soon as they have been prepared, copies of any unaudited interim
financial statements of the Company for any periods subsequent to the periods
covered by the financial statements appearing in the Registration Statement and
the Prospectus.
(k) REPORTS TO UNDERWRITER.
During the period of three (3) years from the date hereof,
the Company will furnish to the Underwriter, (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal
year and statements of income, Stockholder's equity and cash flows for the
year then ended and the opinion thereon of the Company's independent public
accountants, (ii) as soon as practicable after the filing thereof, copies of
each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Report on Form 8-K or other report filed by the Company with the
Commission, Nasdaq or any securities exchange, (iii) as soon as available,
copies of any report or communication of the Company mailed generally to
holders of its Common Stock, and (iv) such other information concerning the
Company as the Underwriter may reasonably request from time to time.
(l) COMPANY LOCK-UP.
No offering, sale or other disposition of any Common Stock or
any other securities convertible or exchangeable or exercisable for Common Stock
or derivatives of Common Stock, will be made for a period of 90 days after the
date of this Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of SoundView Technology Group, Inc.,
except that the Company may, without such consent, (i) issue shares upon the
exercise of options outstanding on the date of this Agreement or otherwise
pursuant to the Company's Stock Option Plans or upon the exercise of warrants
outstanding as of the date hereof, or (ii) issue options to purchase Common
Stock under the Stock Option Plans.
6. PAYMENT OF EXPENSES.
The Company will pay, either directly or by reimbursement, all
costs, fees and expenses incurred in connection with the performance of the
obligations of the Company under this Agreement,
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including, but not limited to, (i) all expenses and taxes incident to the
issuance and delivery of the Shares to the Underwriter, (ii) all expenses
incident to the registration of the Shares under the Securities Act, (iii)
all costs of preparing stock certificates, including printing and engraving
costs, (iv) all fees and expenses of the registrar and transfer agent of the
Shares, (v) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Shares to the Underwriter, (vi) all fees
and expenses of the Company's counsel and the Company's independent
accountants, (vii) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement, each Preliminary Prospectus and the Prospectus, including all
exhibits and financial statements, and (subject to the proviso in Section
5(c) hereof) all amendments and supplements provided for herein, the Blue Sky
memoranda and this Agreement, (viii) all filing fees and attorneys' fees and
expenses incurred by the Company or the Underwriter in connection with
exemptions from qualifying or registering (or obtaining qualification or
registration of) all or any part of the Shares for offer and sale and
determination of its eligibility for investment under the Blue Sky or other
securities laws of such jurisdictions as the Underwriter may designate, and
(ix) all filing fees paid or incurred in connection with filings made with
the NASD.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY.
The Company agrees to indemnify and hold harmless the
Underwriter, each person, if any, who controls the Underwriter within the
meaning of the Securities Act and the respective officers, directors,
partners, employees, and agents of the Underwriter and controlling person
(collectively, the "Underwriter Indemnified Parties" and, each, an
"Underwriter Indemnified Party") against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and fees of one counsel incurred in
connection therewith), joint or several, which may be based upon the
Securities Act, the Exchange Act, or any other federal, state, local or
foreign statute or regulation, or at common law, on the ground or alleged
ground that any Preliminary Prospectus, the Registration Statement or the
Prospectus (or any Preliminary Prospectus, the Registration Statement or the
Prospectus as from time to time amended or supplemented) includes or
allegedly includes an untrue statement of a material fact or omits or
allegedly omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Company by the Underwriter, directly or
through the Underwriter, specifically for use in the preparation thereof. The
Company will be entitled to participate at its own expense in the defense or,
if it so elects, to assume the defense of any suit brought to enforce any
such liability, but, if the Company elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event the Company
elects to assume the defense of any such suit and retain such counsel, any
Underwriter Indemnified Parties may retain additional counsel but shall bear
the fees and expenses of such counsel unless (i) the Company shall have
specifically authorized the retaining of such counsel, or (ii) the parties to
such suit include any such Underwriter Indemnified Parties, and the Company
and such Underwriter Indemnified Parties have been advised by counsel to the
Underwriter that one or more legal defenses may be available to it or them
which may not be available to the Company, in which case counsel selected by
the Underwriter Indemnified Parties shall participate in such suit with
respect to those defenses, provided that the Company shall not be required to
bear the reasonable fees and expenses of more than one such counsel. The
Company shall not be liable to indemnify any person for any settlement of any
such claim effected without the Company's consent. This indemnity agreement
is not exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to each Underwriter Indemnified
Party.
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(b) INDEMNIFICATION BY UNDERWRITER.
The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties") against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter elects to assume the defense, the
reasonable cost of investigating and defending against any claims therefor
and fees of counsel incurred in connection therewith), joint or several,
which arise out of or are based in whole or in part upon the Securities Act,
the Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preliminary Prospectus, the Registration Statement or the Prospectus (or any
such document, as from time to time amended and supplemented) includes or
allegedly includes an untrue statement of a material fact or omits or
allegedly omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, but only insofar as
any such statement or omission was made in reliance upon, and in conformity
with, written information furnished to the Company by the Underwriter,
directly or through an agent of the Underwriter, specifically for use in the
preparation thereof, and the parties acknowledge and agree that the only
information furnished by the Underwriter to the Company for inclusion in any
Preliminary Prospectus, the Registration Statement or the Prospectus, as from
time to time amended or supplemented, is the information under the caption
"Underwriting" in the Prospectus that does not describe this Agreement;
provided, however, that in no case is the Underwriter to be liable with
respect to any claims made against any Company Indemnified Party against whom
the action is brought unless such Company Indemnified Party shall have
notified the Underwriter in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Company Indemnified Party, but failure
to notify the Underwriter of such claim shall not relieve it from any
liability which it may have to any Company Indemnified Party except to the
extent such failure prejudices the Underwriter's defense of such action or
otherwise than on account of its indemnity agreement contained in this
paragraph. The Underwriter shall be entitled to participate at its own
expense in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but, if the Underwriter elects to
assume the defense, such defense shall be conducted by counsel chosen by it.
In the event that the Underwriter elects to assume the defense of any such
suit and retain such counsel, the Company Indemnified Parties or controlling
person or persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional counsel retained by them, respectively. The
Underwriter shall not be liable to indemnify any person for any settlement of
any such claim effected without the Underwriter's consent. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Underwriter might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to any Company
Indemnified Party.
(c) CONTRIBUTION.
If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Underwriter,
respectively, from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand, and the Underwriter on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses (or actions in respect thereof), as well as any other
11
relevant equitable considerations. The relative benefits received by the Company
on the one hand, and the Underwriter on the other hand, shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriter agree that it would not be just and equitable if
contribution were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending, settling or compromising any such claim. Notwithstanding the
provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which the Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) LIMITATION OF LIABILITY.
Notwithstanding any provision herein to the contrary, (i)
the indemnity agreements contained in Section 7(a) and Section 7(b) with
respect to any Preliminary Prospectus shall not inure to the benefit of the
Underwriter (or any person controlling the Underwriter) from whom the person
asserting any such loss, claim, damage, liability or expense purchased the
Shares which are the subject thereof if, at or prior to the written
confirmation of the sale of such Shares, a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such
person (excluding the documents incorporated therein by reference), and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented), and such failure to send or deliver a copy of the Prospectus
(or the Prospectus as amended or supplemented) was not the result of the
Company's non-compliance with the provisions of Section 5(d).
8. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC.
Unless this Agreement is terminated in accordance with Section
11 hereof, the respective indemnities, covenants, agreements, representations,
warranties and other statements of the Company and the Underwriter, as set forth
in this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Underwriter or the Company or any of its officers or
directors or any controlling person, and shall survive delivery of and payment
for the Shares.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the Underwriter hereunder shall be subject
to the material accuracy, as of the date hereof (except as otherwise stated
herein) and as of the Closing Date, of the representations and warranties made
herein by the Company, to compliance as of the Closing Date by the Company with
12
its covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Date, and to the following additional
conditions:
(a) EFFECTIVE REGISTRATION STATEMENT.
The Registration Statement shall have become effective 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 the Underwriter, shall be threatened by the Commission, and any
request for additional information on the part of the Commission (to be included
in the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Underwriter. Any filings of
the Prospectus, or any supplement thereto, required pursuant to Rule 424(b) or
Rule 434 of the Rules and Regulations, shall have been made in the manner and
within the time period required by Rule 424(b) and Rule 434 of the Rules and
Regulations, as the case may be.
(b) CHANGES.
The Underwriter shall have been reasonably satisfied that
there shall not have occurred any change prior to the Closing Date in the
condition (financial or otherwise), properties, business, prospects, net worth
or results of operations of the Company, or any material adverse change in the
capital stock, short-term or long-term debt of the Company, such that (i) the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, contains an untrue statement of fact which, in the reasonable opinion
of the Underwriter, is material, or omits to state a fact which, in the
reasonable opinion of the Underwriter, is required to be stated therein or is
necessary to make the statements therein not misleading, or (ii) it is
impracticable in the reasonable judgment of the Underwriter to proceed with the
public offering or to purchase the Shares as contemplated hereby.
(c) LITIGATION.
The Underwriter shall be satisfied that no legal or governmental action, suit,
proceeding or investigation affecting the Company which may have a Material
Adverse Effect or may affect the Company's ability to perform its respective
obligations under this Agreement shall have been instituted or threatened, and
there shall have occurred no material adverse development in any existing such
action, suit, proceeding or investigation.
(d) COMFORT LETTER.
Prior to the execution of this Agreement, the Underwriter
shall have received from KPMG LLP, independent certified public accountants, a
letter, dated the date hereof, in form and substance reasonably satisfactory to
the Underwriter.
(e) BRING-DOWN.
The Underwriter shall have received from KPMG LLP, independent
certified public accountants, a letter, dated the Closing Date, to the effect
that such accountants reaffirm, as of the Closing Date, and as though made on
the Closing Date, the statements made in the letter furnished by such
accountants pursuant to Section 10(d); provided, however, that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than the
date hereof.
(f) LEGAL OPINION OF COUNSEL FOR THE COMPANY.
The Underwriter shall have received from Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Company, an opinion, dated the
Closing Date, which opinion shall be rendered to the Underwriter at the request
of the Company (and shall so state therein) to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the
corporate power and authority required to carry on its
business and to own, lease and operate its property as
described in the Prospectus;
13
(ii) the Company is duly qualified and is in good
standing as a foreign corporation authorized to do business in
each jurisdiction in which its ownership or leasing of
property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(iii) all of the outstanding shares of Common Stock
have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or
similar rights, except as disclosed in the Prospectus;
(iv) the Shares to be issued and sold by the Company
hereunder have been duly authorized, and when issued and
delivered to the Underwriter against payment therefor as
provided by this Agreement, will have been validly issued and
will be fully paid and non-assessable, and the issuance of
such shares is not subject to any preemptive or similar
rights;
(v) this Agreement has been duly and validly
authorized, executed and delivered by the Company;
(vi) the authorized capital stock of the Company,
including the Common Stock, conforms in all material respects
to the description thereof contained in the Prospectus;
(vii) The conditions for the use of Form S-3 as the
proper form for the Registration Statement have been
satisfied.
(viii) the Registration Statement has become
effective under the Securities Act and, to such counsel's
knowledge, no stop order suspending its effectiveness has been
issued and no proceedings for that purpose are, to the
knowledge of such counsel, pending before or contemplated by
the Commission;
(ix) the Company is not in violation of its Articles
of Organization or By-laws and, to such counsel's knowledge,
the Company is not in default in the performance of any
obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in
any other agreement, indenture or instrument material to the
conduct of the business of the Company, to which the Company
is a party or by which it or its property is bound;
(x) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or order of any court or governmental agency or
body (except such as may be required by the NASD or under
federal or state securities laws in connection with the
purchase and distribution of the Shares by the Underwriter)
and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the Articles
of Organization, By-laws or other organizational documents of
the Company, or any agreement, indenture or other instrument
known to such counsel to which the Company is a party or by
which the Company or its property is bound, or, to such
counsel's knowledge, violate or conflict with any laws,
administrative regulations or rulings or court decrees
applicable to the Company or its property;
14
(xi) to such counsel's knowledge, there is no legal
or governmental proceeding pending or threatened to which the
Company is a party or to which any of its property is subject
which is required to be described in the Registration
Statement or the Prospectus and is not so described, or any
contract or other document which is required to be described
in the Registration Statement or the Prospectus or is required
to be filed as an exhibit to the Registration Statement which
is not described or filed as required;
(xii) the Company is not an "investment company" or a
company "controlled" by an "investment company," as defined in
the Investment Company Act of 1940, as amended;
(xiii) to such counsel's knowledge, except as
otherwise set forth in the Registration Statement, no holder
of any security of the Company has any right to require
registration of shares of Common Stock or any other security
of the Company; and
(xiv) (A) the Registration Statement (including any
Registration Statement filed under Rule 462(b) under the
Securities Act, if any), all Preliminary Prospectuses
and the Prospectus and any supplement or amendment thereto
(except for financial statements, schedules and reports
thereon, and other financial and statistical data included
therein, as to which no opinion need be expressed) comply as
to form in all material respects with the Securities Act and
the Rules and Regulations, (B) each document incorporated by
reference in the Registration Statement, all Preliminary
Prospectuses, the Prospectus and each amendment or supplement
thereto filed with the Commission on or prior to the date of
such opinion complied as to form at the time of such filing in
all material respects with the applicable requirements (if
any) of the Exchange Act and the applicable rules and
regulations thereunder in effect as of the date of such filing
(except that such counsel need express no opinion as to the
financial statements, schedules and other financial
information included therein).
Nothing has come to the attention of such counsel which has
caused it to believe that (except for financial statements, schedules and
reports thereon, and other financial and statistical data included therein as
aforesaid) the Registration Statement and the prospectus included therein at the
time the Registration Statement became effective 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, as amended or supplemented, if applicable (except for financial
statements, schedules and reports thereon, and other financial and statistical
data included therein as aforesaid) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(g) LEGAL OPINION OF COUNSEL FOR THE UNDERWRITER.
The Underwriter shall have received from ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel for the Underwriter, their opinion or opinions, dated the Closing Date,
with respect to the validity of the Shares, the Registration Statement and the
Prospectus and such other related matters as they may reasonably request, and
the Company shall have furnished to such counsel such documents as they may
request for the purpose of enabling them to pass upon such matters.
15
(h) OFFICERS' CERTIFICATE.
The Underwriter shall have received a certificate, dated the
Closing Date, of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the knowledge
of the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act;
(ii) Neither any Preliminary Prospectus, as of its
date, nor the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(iii) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects at and as of the Closing Date, and the
Company has substantially complied with all of the agreements
and substantially performed or satisfied all of the conditions
on its part to be performed or satisfied at or prior to the
Closing Date; and
(iv) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by the
Prospectus, (A) there has not been any material adverse change
or a development involving a material adverse change in the
condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of
the Company, (B) the business and operations conducted by the
Company have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not insured) of such a
character as to interfere materially with the conduct of the
business and operations of the Company, (C) no legal or
governmental action, suit, proceeding or investigation is
pending or threatened against the Company which is material to
the Company, whether or not arising from transactions in the
ordinary course of business, or which may materially and
adversely affect the transactions contemplated by this
Agreement, (D) since such dates and except as so disclosed,
the Company has not incurred any material liability or
obligation, direct, contingent or indirect, made any change in
its capital stock (except pursuant to its Stock Option Plans),
made any material change in its short-term or funded debt or
repurchased or otherwise acquired any of the Company's capital
stock, (E) the Company has not declared or paid any dividend,
or made any other distribution, upon its outstanding capital
stock payable to Stockholders of record on a date prior to the
Closing Dates, and (F) the Company has not entered into any
material transactions not in the ordinary course of business.
(i) ADDITIONAL CERTIFICATES.
The Company shall have furnished to the Underwriter such
additional certificates as the Underwriter may have reasonably requested as to
the accuracy, as of the Closing Date, of the representations and warranties made
herein by it and as to compliance as of the Closing Date by it with its
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to the Closing Date, and as to satisfaction of the other
conditions to the obligations of the Underwriter hereunder.
16
(j) SATISFACTION.
All opinions, certificates, letters and other documents will
be in compliance with the provisions hereunder only if they are reasonably
satisfactory in form and substance to the Underwriter. The Company will furnish
to the Underwriter such number of original and conformed copies of such
opinions, certificates, letters and other documents as the Underwriter shall
reasonably request. If any of the conditions hereinabove provided for in this
Section 9 shall not have been satisfied when and as required by this Agreement,
this Agreement may be terminated by the Underwriter by notifying the Company of
such termination in writing or by telegram at or prior to the Closing Date, but
the Underwriter shall be entitled to waive any of such conditions.
10. EFFECTIVE DATE.
This Agreement shall become effective upon execution and
delivery by all the parties hereto.
11. TERMINATION.
The Underwriter shall have the right to terminate this
Agreement by giving notice to the Company as hereinafter specified at any time
at or prior to the Closing Date (a) if the Company shall have failed, refused or
been unable to perform any agreement on its part to be performed, or because any
other condition of the Underwriter's obligations hereunder required to be
fulfilled is not fulfilled, including, without limitation, any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company from that set forth in the Registration Statement or
Prospectus, which, in the sole reasonable judgment of the Underwriter, is
material and adverse, or (b) if additional material governmental restrictions,
not in force and effect on the date hereof, shall have been imposed upon trading
in securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange, Nasdaq or the American Stock
Exchange or in the over-the-counter market by the NASD, or trading in securities
generally shall have been suspended on any such exchange or in the
over-the-counter market by the NASD, or if a banking moratorium shall have been
declared by federal or New York authorities, or (c) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or (d) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in the
reasonable judgment of the Underwriter makes it inadvisable or impracticable to
proceed with the offering, sale and delivery of the Shares, or (e) if there
shall have been an outbreak or escalation of hostilities or of any other
insurrection or armed conflict or the declaration by the United States of a
national emergency which, in the reasonable opinion of the Underwriter, makes it
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus. In the event of termination pursuant to this
Section 11 the Company shall remain obligated to pay costs and expenses pursuant
to Section 6 and Section 7 hereof. If the Underwriter elects to terminate this
Agreement as provided in this Section 11, the Underwriter shall promptly notify
the Company by telephone, facsimile or telegraph, in each case confirmed by
letter.
12. REIMBURSEMENT OF UNDERWRITER.
Notwithstanding any other provisions hereof, if this Agreement
shall be terminated by the Underwriter pursuant to Section 11(a) or 11(c), the
Company will bear and pay the expenses specified in Section 6 hereof and, in
addition to its obligations pursuant to Section 7 hereof, the Company will
reimburse the reasonable out-of-pocket expenses of the Underwriter (including
reasonable fees and disbursements of counsel for the Underwriter) incurred in
connection with this Agreement and
17
the proposed purchase of the Shares, and promptly upon demand the Company
will pay such amounts to the Underwriter.
13. NOTICES.
All communications hereunder shall be in writing and, (a)
if sent to the Underwriter, shall be mailed, delivered, transmitted by
facsimile or telegraphed and confirmed to Soundview Technology Group, Inc.,
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or (b) if
sent to the Company, shall be mailed, delivered, transmitted by facsimile or
telegraphed and confirmed to the Company, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attn: Chief Executive Officer (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy
to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇).
Mailed communications shall be deemed given on the second business day after
the day the communication is delivered to the U.S. Postal Service; facsimile
communications shall be deemed given upon electronic confirmation of receipt.
14. SUCCESSORS.
This Agreement shall inure to the benefit of and be binding
upon the Underwriter, and the Company and their respective successors and legal
representatives. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person other than the persons mentioned in the
preceding sentence any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person, except that the representations, warranties, covenants, agreements and
indemnities of the Company contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control the Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the indemnities of the Underwriter shall also be for the benefit of each
director of the Company, each of its officers who has signed the Registration
Statement and the person or persons, if any, who control the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
15. APPLICABLE LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of laws.
16. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any section, paragraph
or provision of this Agreement shall not affect the validity or enforceability
of any other section, paragraph or provision hereof. If any section, paragraph
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
17. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
18
18. GENERAL.
In this Agreement, the masculine, feminine and neuter genders
and the singular and the plural include one another. The section headings in
this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company, and the Underwriter.
19. COUNTERPARTS.
This Agreement may be signed in two (2) or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
19
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
IBIS TECHNOLOGY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
Agreed to and accepted as
of the date first set forth
above:
SOUNDVIEW TECHNOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
20
SCHEDULE A
LOCK-UP AGREEMENT
SOUNDVIEW TECHNOLOGY GROUP, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned is a director, officer and/or securityholder
of Ibis Technology Corporation (the "Company") and wishes to facilitate the
proposed public offering (the "Offering") of the Company's common stock ("Common
Stock") pursuant to a registration statement on Form S-3 (the "Registration
Statement") previously filed with the Securities and Exchange Commission (the
"SEC").
The undersigned recognizes and agrees that the Offering will
benefit the undersigned as a director, officer or securityholder of the Company.
In consideration of the foregoing, and in order to induce the underwriter to act
as such in connection with the Offering, the undersigned hereby irrevocably
agrees not to, directly or indirectly, offer, sell, contract to sell, transfer
the economic risk of ownership in, make any short sale, pledge, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, grant any option to sell, transfer
or otherwise dispose of any shares of Common Stock, or any securities
convertible into or exchangeable or exercisable for or any rights to purchase or
acquire Common Stock, or publicly announce the undersigned's intention to do any
of the foregoing, without the prior written consent of SoundView Technology
Group, Inc. (the "Underwriter"), for a period commencing on the date hereof and
terminating ninety (90) days after the date of the Prospectus Supplement (the
"Lock-Up Period).
Notwithstanding the foregoing, if the undersigned is an
individual, he or she may transfer any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock either during
his or her lifetime or on death by will or intestacy to his or her immediate
family or to a trust if the beneficiaries of such trust are exclusively the
undersigned and/or a member or members of his or her immediate family; provided,
however, that prior to any such transfer each transferee shall execute an
agreement, satisfactory to the Underwriter, pursuant to which each transferee
shall agree to receive and hold such shares of Common Stock, or securities
convertible into or exchangeable or exercisable for Common Stock, subject to the
provisions hereof, and there shall be no further transfer except in accordance
with the provisions hereof. In addition, if the undersigned is a partnership,
the partnership may transfer any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock to a partner of
such partnership, to a retired partner of such partnership, or to the estate of
any such partner or retired partner, and any such partner who is an individual
may transfer such shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock by gift, will or intestacy to a
member or members of his or her immediate family; provided, however, that prior
to any such transfer each transferee shall execute an agreement, satisfactory to
the Underwriter, pursuant to which each transferee shall agree to receive and
hold such shares of Common Stock or securities convertible into or exchangeable
or exercisable for Common Stock, subject to the provisions hereof, and there
shall be no further transfer except in accordance with the provisions hereof.
For purposes of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor.
In addition, the undersigned agrees that, without the prior
written consent of the Underwriter, the undersigned will not, during the Lock-Up
Period, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
The undersigned confirms that he or she understands that the
Underwriter and the Company will rely upon the representations set forth in this
agreement in proceeding with the Offering. The undersigned further confirms that
this agreement is irrevocable and shall be binding upon the undersigned's heirs,
legal representatives, successors and assigns so long as the closing of the
Offering occurs on or prior to August 31, 1999. The undersigned agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of Common Stock or other securities of the Company
held by the undersigned except in compliance with this agreement.
Dated: ___________, __ 1999.
Name of Securityholder
By:
Name:
Title: