Exhibit 1.1
3,100,000 Shares of Common Stock
IAT MULTIMEDIA, INC.
UNDERWRITING AGREEMENT
Royce nvestment Group, Inc. March , 1997
As Representative of the Several Underwriters
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▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
IAT Multimedia, Inc., a Delaware corporation ( "IAT" or the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") of this Underwriting Agreement (the
"Agreement"), for whom you are acting as representative (the "Representative"),
an aggregate of 3,100,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"). In addition, IAT proposes to grant to the Underwriters (or, at
the Representative's option, the Representative, individually) the option
referred to in Section 2(b) to purchase all or any part of an aggregate of
465,000 additional shares of Common Stock.
The aggregate of 3,100,000 shares of Common Stock to be sold
by IAT, together with all or any part of the 465,000 shares of Common Stock
which the Underwriters have the option to purchase are herein called the
"Shares." The Common Stock of IAT to be outstanding after giving effect to the
sale of the Shares is herein called the "Common Stock."
You have advised IAT that you and the other Underwriters
desire to purchase, severally, the Shares, and that you have been authorized by
the Underwriters to execute this agreement on their behalf. IAT confirms the
agreements made by it with respect to the purchase of the Shares by the several
Underwriters on whose behalf you are signing this Agreement, as follows:
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) A registration statement (File No. 333-18529) on
Form S-1 relating to the public offering of the Shares, including a form of
prospectus subject to completion, copies of which have heretofore been delivered
to you, has been prepared by IAT in conformity with the applicable 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") thereunder, and has been filed with the Commission
under the Act and one or more amendments to such registration statement may have
been so filed. After the execution of this Agreement, IAT will file with the
Commission either (i) if such registration statement, as it may have been
amended, has been declared by the Commission to be effective under the Act,
either (A) if IAT relies on Rule 434 under the Act, a Term Sheet (as hereinafter
defined) relating to the Shares that shall identify the Preliminary Prospectus
(as hereinafter defined) that it supplements containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if IAT
does not rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act and in the case of either clause (i)(A) or (i)(B) of
this sentence, as have been provided to and approved by the Representative prior
to the execution of this Agreement, or (ii) if such registration statement, as
it may have been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration statement, including
a form of prospectus, a copy of which amendment has been furnished to and
approved by the Representative prior to the execution of this Agreement.
As used in this Agreement, the term "Registration Statement"
means such registration statement, as amended at the time when it was or is
declared effective, including all financial schedules and exhibits thereto and
including any information omitted therefrom pursuant to Rule 430A under the Act
and included in the Prospectus (as hereinafter defined); the term "Preliminary
Prospectus" means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); the term
"Prospectus" means (A) if IAT relies on Rule 434 under the Act, the Term Sheet
relating to the Shares that is first filed pursuant to Rule 424(b)(7) under the
Act, together with the Preliminary Prospectus identified therein that such Term
Sheet supplements; (B) if IAT does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b) under the Act
or (C) if IAT does not rely on Rule 434 under the Act and if no prospectus is
required to be filed pursuant to Rule 424(b) under the Act, such term means the
prospectus included in the Registration Statement; except that if such
registration statement or prospectus is amended or such prospectus is
supplemented, after the effective date of such registration statement and prior
to the Option Closing Date (as hereinafter defined), the terms "Registration
Statement" and "Prospectus" shall include such registration statement and
prospectus as so amended, and the term "Prospectus" shall include the prospectus
as so supplemented, or both, as the case may be; and the term "Term Sheet" means
any term sheet that satisfies the requirements of Rule 434 under the Act. Any
reference to the "date" of a Prospectus that includes a Term Sheet shall mean
the date of such Term Sheet.
(b) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus. At the time the
Registration Statement becomes effective and at all times subsequent thereto up
to and on the Closing Date (as hereinafter defined) or the Option Closing Date,
as the case may be, (i) the Registration Statement and Prospectus will in all
respects conform to the requirements of the Act and the Rules and Regulations;
and (ii) neither the Registration Statement nor the Prospectus will include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make statements therein not misleading;
provided, however, that IAT makes no representations, warranties or agreements
as to information contained in or omitted from the Registration Statement or
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Prospectus in reliance upon, and in conformity with, written information
furnished to IAT by or on behalf of the Underwriters specifically for use in the
preparation thereof. It is understood that the statements set forth in the
Prospectus in the last paragraph on the front cover, on page 2 with respect to
stabilization, under the heading "Underwriting" and the identity of counsel to
the Underwriters under the heading "Legal Matters" constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in the Registration Statement and Prospectus, as the case may be.
(c) Each of IAT and IAT AG ("IAT AG") and IAT
Deutschland GmbH Interactive Media Systeme ("IAT Germany" and together with IAT
AG, the "Subsidiaries"), 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 and other to own its
properties and conduct its business as described in the Prospectus and is duly
qualified to do business as a foreign corporation and is in good standing in all
other jurisdictions in which the nature of its business or the character or
location of its properties requires such qualification, except where failure to
so qualify will not materially affect IAT's or any of the Subsidiaries'
business, properties or financial condition.
(d) The authorized, issued and outstanding capital
stock of IAT as of December 31, 1996 is as set forth in the Prospectus under
"Capitalization"; the shares of issued and outstanding capital stock of IAT set
forth thereunder have been duly authorized, validly issued and are fully paid
and non-assessable; except as set forth in the Prospectus, no options, warrants,
or other rights to purchase, agreements or other obligations to issue, or
agreements or other rights to convert any obligation into, any shares of capital
stock of IAT have been granted or entered into by IAT; and the capital stock
conforms to all statements relating thereto contained in the Registration
Statement and Prospectus.
(e) The Shares are duly authorized, and when issued
and delivered pursuant to this Agreement, will be duly authorized, validly
issued, fully paid and non-assessable and free of preemptive rights of any
security holder of IAT. Neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated in this Agreement gives rise to
any rights, other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock, except as described
in the Registration Statement.
The Shares underlying the Share Purchase Option have been
reserved for issuance upon the exercise of the Share Purchase Option and when
issued and sold in accordance with the terms of the Share Purchase Option, will
be duly authorized, validly issued, fully paid and non-assessable and free of
preemptive rights and no personal liability will attach to the ownership
thereof.
(f) This Agreement, the Share Purchase Option, the
Escrow Agreement and the Merger and Acquisition Agreement have been duly and
validly authorized, executed and delivered by IAT. IAT has full power and lawful
authority to authorize, issue and sell the Shares to be sold by it hereunder on
the terms and conditions set forth herein, and no consent, approval,
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authorization or other order of any governmental authority is required in
connection with such authorization, execution and delivery or with the
authorization, issue and sale of the Shares or the Share Purchase Option, except
such as may be required for the registration of the Shares under the Act, by the
National Association of Securities Dealers, Inc. (the "NASD") or state
securities laws.
(g) IAT does not own, directly or indirectly, any
capital stock or other equity ownership or proprietary interests in any other
corporation, association, trust, partnership, joint venture or other entity
other than the Subsidiaries.
(h) Except as described in the Prospectus, neither
the Company nor any of the Subsidiaries is in violation, breach or default of or
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries may be bound or to which any of the
property or assets of the Company or any of the Subsidiaries is subject, which
violation, breach or default would have a material adverse effect on either the
Company or any of the Subsidiaries; and consummation of the transactions herein
contemplated and the fulfillment of the terms of this Agreement will not
conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition or any lien, charge or encumbrance upon any of the property or assets
of the Company or any of the Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Subsidiary is party or by which the
assets of the Company or any of the Subsidiaries is subject, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws (or other organizational documents) of the Company
or any of the Subsidiaries, as amended, or any statute or any order, rule or
regulation applicable to the Company or any of the Subsidiaries of any court or
of any regulatory authority or other governmental body having jurisdiction over
the Company or any of the Subsidiaries.
(i) Subject to the qualifications stated in the
Prospectus, each of IAT and the Subsidiaries has good and marketable title to
all properties and assets described in the Prospectus as owned by it, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
not materially significant or important in relation to its business; all of the
material leases and subleases under which IAT or any of the Subsidiaries is the
lessor or sublessor of properties or assets or under which IAT or any of the
Subsidiaries hold properties or assets as lessee or sublessee as described in
the Prospectus are in full force and effect, and, except as described in the
Prospectus, neither IAT nor any of the Subsidiaries is in default in any
material respect with respect to any of the terms or provisions of any of such
leases or subleases, and no claim has been asserted by anyone adverse to rights
of IAT or any of the Subsidiaries as lessor, sublessor, lessee or sublessee
under any of the leases or subleases mentioned above, or affecting or
questioning the right of IAT or any of the Subsidiaries to continued possession
of the leased or subleased premises or assets under any such lease or sublease
except as described or referred to in the Prospectus; and each of IAT and the
Subsidiaries owns or leases all such properties described in the Prospectus as
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are necessary to their respective operations as now conducted and, except as
otherwise stated in the Prospectus, as proposed to be conducted as set forth in
the Prospectus.
(j) ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ & Company, P.C., who has given
its reports on certain financial statements filed and to be filed with the
Commission as a part of the Registration Statement, which are incorporated in
the Prospectus, are with respect to the Company, independent public accountants
as required by the Act and the Rules and Regulations.
(k) The financial statements, together with related
notes, set forth in the Prospectus (or if the Prospectus is not in existence,
the most recent Preliminary Prospectus) present fairly the financial position
and results of operations and changes in cash flow position of IAT and the
Subsidiaries on the basis stated in the Registration Statement, at the
respective dates and for the respective periods to which they apply (subject in
the case of financial statements for interim periods, to normal and recurring
year-end adjustments). Said statements and related notes have been prepared in
accordance with generally accepted accounting principles applied on a basis
which is consistent during the periods involved. The information set forth under
the captions "Dilution", "Capitalization", and "Selected Financial Data" in the
Prospectus fairly present, on the basis stated in the Prospectus, the
information included therein. The pro forma financial information included in
the Prospectus (or the Preliminary Prospectus) has been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma financial
statements, and, in the opinion of the Company, includes all adjustments
necessary to present fairly the pro forma financial condition and results of
operations at the respective dates and for the respective periods indicated and,
in the opinion of the Company, all assumptions used in preparing such pro forma
financial statements are reasonable.
(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), neither
IAT nor any of the Subsidiaries has incurred any liabilities or obligations,
direct or contingent, not in the ordinary course of business, or entered into
any transaction not in the ordinary course of business, in either case which is
material to the business of IAT or any of the Subsidiaries, and there has not
been any change in the capital stock of, or any incurrence of short-term or
long-term debt by, the Company or any issuance of options, warrants or other
rights to purchase the capital stock of the Company or any adverse change or any
development involving, so far as the Company can now reasonably foresee a
prospective adverse change in the condition (financial or other), net worth,
results of operations, business, key personnel or properties of it which would
be material to the business or financial condition of IAT or any of the
Subsidiaries and neither IAT nor any of the Subsidiaries has become a party to,
and neither the business nor the property of IAT or any of the Subsidiaries has
become the subject of, any material litigation whether or not in the ordinary
course of business.
(m) Except as set forth in the Prospectus, there is
not now pending or, to the knowledge of IAT, threatened, any action, suit or
proceeding to which IAT or any of the Subsidiaries is a party before or by any
court or governmental agency or body, nor are there any actions, suits or
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proceedings related to environmental matters or related to discrimination on the
basis of age, sex, religion or race, in either case, which might result in any
material adverse change in the condition (financial or other), business
prospects, net worth, or properties of IAT or any of the Subsidiaries; and no
labor disputes involving the employees of IAT or any of the Subsidiaries exist
or are imminent which might be expected to materially adversely affect the
conduct of the business, property or operations or the financial condition or
results of operations of IAT or any of the Subsidiaries.
(n) Except as disclosed in the Prospectus, IAT and
each of the Subsidiaries have filed, or have duly obtained extensions of the
time for filing of, all necessary income and franchise tax returns with all
federal, state, local and foreign governmental agencies and have paid all taxes
shown as due thereon; and there is no tax deficiency which has been or to the
knowledge of IAT might be asserted against IAT or any of the Subsidiaries.
(o) IAT and each of the Subsidiaries have sufficient
licenses, permits and other governmental authorizations currently required for
the conduct of their business or the ownership of their properties as described
in the Prospectus and are in all material respects complying therewith. To the
best knowledge of IAT, none of the activities or business of IAT or any of the
Subsidiaries are in violation of, or cause IAT or any of the Subsidiaries to
violate, any law, rule, regulation or order of the United States, Switzerland or
Germany or any state, county or locality, or of any agency or body of the United
States, Switzerland or Germany or of any state, county or locality, the
violation of which would have a material adverse impact upon the condition
(financial or otherwise), business, property, prospective results of operations,
or net worth of IAT or any of the Subsidiaries.
(p) IAT and the Subsidiaries own or possess the right
to use all patents, trademarks, trademark registrations, service marks, service
▇▇▇▇ registrations, trade names, copyrights, licenses, inventions, trade secrets
and rights described in the Prospectus as are necessary for the conduct of their
respective businesses, and neither IAT nor any of the Subsidiaries is aware of
any claim to the contrary or any challenge by any other person to the rights of
IAT and the Subsidiaries with respect to the foregoing. To the Company's
knowledge, IAT's and the Subsidiaries' business as now conducted does not and
will not infringe or conflict in any material respect with patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any other person. Except as
described in the Prospectus, no claim has been made against IAT or any of the
Subsidiaries alleging the infringement by IAT or any of the Subsidiaries of any
patent, trademark, service ▇▇▇▇, trade name, copyright, trade secret, license in
or other intellectual property right or franchise right of any person.
(q) Neither IAT nor any of the Subsidiaries has,
directly or indirectly, at any time (i) made any contributions to any candidate
for political office, or failed to disclose fully any such contribution in
violation of law or (ii) made any payment to any state, federal or foreign
governmental officer or official, or other person charged with similar public or
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quasi-public duties, other than payments or contributions required or allowed by
applicable law each of IAT's and the Subsidiaries' internal accounting controls
and procedures are sufficient to cause each of IAT and the Subsidiaries to
comply in all material respects with the Foreign Corrupt Practices Act of 1977,
as amended.
(r) On the Closing Dates (hereinafter defined), all
transfer or other taxes, (including franchise, capital stock or other tax, other
than income taxes, imposed by any jurisdiction), if any, which are required to
be paid in connection with the sale and transfer of the Shares to the several
Underwriters hereunder will have been fully paid or provided for by IAT and all
laws imposing such taxes will have been fully complied with.
(s) All contracts and other documents of IAT or any
of the Subsidiaries which are, under the Rules and Regulations, required to be
filed as exhibits to the Registration Statement have been so filed.
(t) Neither IAT nor any of the Subsidiaries has taken
nor will take, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares hereby.
(u) Neither IAT nor any of the Subsidiaries has
entered into any agreement pursuant to which any person is entitled either
directly or indirectly to compensation from IAT or any of the Subsidiaries for
services as a finder in connection with the proposed public offering.
(v) Except as previously disclosed in writing by IAT
to the Representative, no officer, director or five percent stockholder of IAT
or any of the Subsidiaries has any affiliation or association with any member of
the National Association of Securities Dealers Inc. ("NASD").
(w) Neither IAT nor any of the Subsidiaries is, nor
upon receipt of the proceeds from the sale of the Shares will be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(x) Neither IAT nor any of the Subsidiaries has
distributed, nor will it distribute prior to the First Closing Date (as
hereinafter defined) any offering material in connection with the offering and
sale of the Shares other than the Preliminary Prospectus, the Prospectus, the
Registration Statement or the other materials permitted by the Act, if any.
(y) There are no business relationships or
related-party transactions of the nature described in Item 404 of Regulation S-K
involving IAT or any of the Subsidiaries and any person described in such Item
that are required to be disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and that have not been
so disclosed.
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(z) IAT and each of the Subsidiaries have complied
with all provisions of Section 517.075 Florida Statutes relating to doing
business with the government of Cuba or with any person or affiliate located in
Cuba.
2. Purchase, Delivery and Sale of the Shares.
(a) Subject to the terms and conditions of this
Agreement, and upon the basis of the representations, warranties, and agreements
herein contained, IAT agrees to issue and sell to the Underwriters, and each
such Underwriter agrees, severally and not jointly, to buy from IAT at $_______
per Share, at the place and time hereinafter specified, the respective number of
Shares set forth opposite the names of the Underwriters in Schedule A attached
hereto (the "First Shares") plus any additional Shares which such Underwriters
may become obligated to purchase pursuant to the provisions of Section 9 hereof.
The First Shares shall consist of 3,100,000 Shares to be purchased from IAT.
Delivery of the First Shares against payment therefor
shall take place at the offices of Royce Investment Group, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (or at such other place as may be designated by
agreement between you and IAT) at 10:00 a.m., New York time, on _____________,
1997, or at such later time and date as you may designate, such time and date of
payment and delivery for the First Shares being herein called the "First Closing
Date."
(b) In addition, subject to the terms and conditions
of this Agreement, and upon the basis of the representations, warranties and
agreements herein contained, IAT hereby grants an option to the several
Underwriters (or, at the Representative's option, to the Representative
individually) to purchase all or any part of an aggregate of an additional
465,000 Shares at the same price per Share as the Underwriters shall pay for the
First Shares being sold pursuant to the provisions of subsection (a) of this
Section 2 (such additional Shares being referred to herein as the "Option
Shares"). This option may be exercised within 45 days after the effective date
of the Registration Statement upon notice by the Representative to IAT advising
as to the amount of Option Shares as to which the option is being exercised, the
names and denominations in which the certificates for such Option Shares are to
be registered and the time and date when such certificates are to be delivered.
Such time and date shall be determined by the Representative but shall not be
earlier than four nor later than ten full business days after the exercise of
said option, nor in any event prior to the First Closing Date, and such time and
date is referred to herein as the "Option Closing Date." Delivery of the Option
Shares against payment therefor shall take place at the offices of Royce
Investment Group, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (or at
such other place as may be designated by agreement between you and IAT). The
number of Option Shares to be purchased by each Underwriter, if any, shall bear
the same percentage to the total number of Option Shares being purchased by the
several Underwriters pursuant to this subsection (b) as the number of Shares
such Underwriter is purchasing bears to the total number of the First Shares
being purchased pursuant to subsection (a) of this Section 2, as adjusted, in
each case by the Representative in such manner as the Representative may deem
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appropriate. The option granted hereunder may be exercised only to cover
overallotments in the sale by the Underwriters of First Shares referred to in
subsection (a) above. In the event IAT declares or pays a dividend or
distribution on its Common Stock, whether in the form of cash, shares of Common
Stock or any other consideration, prior to the Option Closing Date, such
dividend or distribution shall also be paid on the Option Shares on the Option
Closing Date.
(c) IAT will make the certificates for the securities
comprising the Shares to be purchased by the Underwriters hereunder available to
you for checking at least two full business days prior to the First Closing Date
or the Option Closing Date (which are collectively referred to herein as the
"Closing Dates"). The certificates shall be in such names and denominations as
you may request, at least two full business days prior to the Closing Dates.
Time shall be of the essence and delivery at the time and place specified in
this Agreement is a further condition to the obligations of each Underwriter.
Definitive certificates in negotiable form for the
Shares to be purchased by the Underwriters hereunder will be delivered by IAT to
you for the accounts of the several Underwriters against payment of the
respective purchase prices by the several Underwriters, by certified or bank
cashier's checks in New York Clearing House funds, payable to the order of IAT.
In addition, in the event the Underwriters (or the
Representative individually) exercise the option to purchase from IAT all or any
portion of the Option Shares pursuant to the provisions of subsection (b) above,
payment for such Shares shall be made to or upon the order of IAT by certified
or bank cashier's checks payable in New York Clearing House funds at the offices
of Royce Investment Group, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇ (or such other place as may be designated by agreement between you and
IAT) at the time and date of delivery of such Shares as required by the
provisions of subsection (b) above, against receipt of the certificates for such
Shares by the Representative for the respective accounts of the several
Underwriters registered in such names and in such denominations as the
Representative may request.
It is understood that you, individually and not as
Representative of the several Underwriters, may (but shall not be obligated to)
make any and all payments required pursuant to this Section 2 on behalf of any
Underwriters whose check or checks shall not have been received by the
Representative at the time of delivery of the 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. It is
also understood that you individually rather than all of the Underwriters may
(but shall not be obligated to) purchase the Option Shares referred to in
subsection (b) of this Section 2, but only to cover overallotments.
It is understood that the several Underwriters
propose to offer the Shares to be purchased hereunder to the public upon the
terms and conditions set forth in the Registration Statement, after the
Registration Statement becomes effective.
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3. Covenants of the Company. The Company covenants and
agrees with the several Underwriters that:
(a) IAT will use its best efforts to cause the
Registration Statement to become effective as promptly as possible. If required,
IAT will file the Prospectus or any Term Sheet that constitutes a part thereof
and any amendment or supplement thereto with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act. Upon
notification from the Commission that the Registration Statement has become
effective, IAT will so advise you and will not at any time, whether before or
after the effective date, file the Prospectus, Term Sheet or any amendment to
the Registration Statement or supplement to the Prospectus of which you shall
not previously have been advised and furnished with a copy or to which you or
your counsel shall have objected in writing or which is not in compliance with
the Act and the Rules and Regulations. At any time prior to the later of (A) the
completion by all of the Underwriters of the distribution of the Shares
contemplated hereby (but in no event more than nine months after the date on
which the Registration Statement shall have become or been declared effective)
and (B) 25 days after the date on which the Registration Statement shall have
become or been declared effective, IAT will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus which, in your opinion, may be necessary or
advisable in connection with the distribution of the Shares.
As soon as IAT is advised thereof, IAT will advise
you, and confirm the advice in writing, of the receipt of any comments of the
Commission, of the effectiveness of any post-effective amendment to the
Registration Statement, of the filing of any supplement to the Prospectus or any
amended Prospectus, of any request made by the Commission for amendment of the
Registration Statement or for supplementing of the Prospectus or for additional
information with respect thereto, of the issuance by the Commission or any state
or regulatory body of any stop order or other order or threat thereof suspending
the effectiveness of the Registration Statement or any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Shares for offering in any jurisdiction, or of the
institution of any proceedings for any of such purposes, and will use its best
efforts to prevent the issuance of any such order, and, if issued, to obtain as
soon as possible the lifting thereof.
IAT has caused to be delivered to you copies of each
Preliminary Prospectus, and IAT has consented and hereby consents to the use of
such copies for the purposes permitted by the Act. IAT authorizes the
Underwriters and dealers to use the Prospectus in connection with the sale of
the Shares for such period as in the opinion of counsel to the several
Underwriters the use thereof is required to comply with the applicable
provisions of the Act and the Rules and Regulations. In case of the happening,
at any time within such period as a Prospectus is required under the Act to be
delivered in connection with sales by an underwriter or dealer of any event of
which IAT has knowledge and which materially affects IAT or the securities of
IAT, or which in the opinion of counsel for IAT or counsel for the Underwriters
-10-
should be set forth in an amendment to the Registration Statement or a
supplement to the Prospectus in order to make the statements therein not then
misleading, in light of the circumstances existing at the time the Prospectus is
required to be delivered to a purchaser of the Shares or in case it shall be
necessary to amend or supplement the Prospectus to comply with law or with the
Rules and Regulations, IAT will notify you promptly and forthwith prepare and
furnish to you copies of such amended Prospectus or of such supplement to be
attached to the Prospectus, in such quantities as you may reasonably request, in
order that the Prospectus, as so amended or supplemented, will not contain any
untrue statement of a material fact or omit to state any material facts
necessary in order to make the statements in the Prospectus, in light of the
circumstances under which they are made, not misleading. The preparation and
furnishing of any such amendment or supplement to the Registration Statement or
amended Prospectus or supplement to be attached to the Prospectus shall be
without expense to the Underwriters, except that in case any Underwriter is
required, in connection with the sale of the Shares to deliver a Prospectus nine
months or more after the effective date of the Registration Statement, IAT will
upon request of and at the expense of the Underwriter, amend or supplement the
Registration Statement and Prospectus and furnish the Underwriter with
reasonable quantities of prospectuses complying with Section 10(a)(3) of the
Act.
The Company will comply with the Act, the Rules and
Regulations and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder in connection with the offering
and issuance of the Shares.
(b) IAT will use its best efforts to qualify to
register the Shares for sale under the securities or "blue sky" laws of such
jurisdictions as the Representative may designate and will make such
applications and furnish such information as may be required for that purpose
and to comply with such laws, provided IAT shall not be required to qualify as a
foreign corporation or a dealer in securities or to execute a general consent of
service of process in any jurisdiction in any action other than one arising out
of the offering or sale of the Shares. IAT will, from time to time, prepare and
file such statements and reports as are or may be required to continue such
qualification in effect for so long a period as the Underwriters may reasonably
request.
(c) If the sale of the Shares provided for herein is
not consummated for any reason caused by the Company, IAT shall pay all costs
and expenses incident to the performance of IAT's obligations hereunder,
including but not limited to, all of the expenses itemized in Section 8,
including the accountable out-of-pocket expenses of the Representative.
(d) IAT will use its best efforts to (i) cause a
registration statement under the Exchange Act to be declared effective
concurrently with the completion of this offering and will notify the
Representative in writing immediately upon the effectiveness of such
registration statement, and (ii) if requested by the Representative, to obtain a
listing on the Pacific Stock Exchange and to obtain and keep current a listing
in the Standard & Poors or ▇▇▇▇▇'▇ Industrial OTC Manual.
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(e) For so long as IAT is a reporting company under
either Section 12(g) or 15(d) of the Exchange Act, IAT, at its expense, will
furnish to its stockholders an annual report (including financial statements
audited by independent public accountants), in reasonable detail and at its
expense, will furnish to you during the period ending five (5) years from the
date hereof, (i) as soon as practicable after the end of each fiscal year, a
balance sheet of IAT and any of its subsidiaries as at the end of such fiscal
year, together with statements of income, surplus and cash flow of IAT and any
of its subsidiaries for such fiscal year, all in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
accountants; (ii) as soon as practicable after the end of each of the first
three fiscal quarters of each fiscal year, consolidated summary financial
information of IAT for such quarter in reasonable detail; (iii) as soon as they
are available, a copy of all reports (financial or other) mailed to security
holders; (iv) as soon as they are available, a copy of all non-confidential
reports and financial statements furnished to or filed with the Commission or
any securities exchange or automated quotation system on which any class of
securities of IAT is listed; and (v) such other information as you may from time
to time reasonably request.
(f) In the event IAT has an active subsidiary or
subsidiaries, such financial statements referred to in subsection (e) above will
be on a consolidated basis to the extent the accounts of IAT and its subsidiary
or subsidiaries are consolidated in reports furnished to its stockholders
generally.
(g) IAT will deliver to you at or before the First
Closing Date two signed copies of the Registration Statement including all
financial statements and exhibits filed therewith, and of all amendments
thereto, and will deliver to the several Underwriters such number of conformed
copies of the Registration Statement, including such financial statements but
without exhibits, and of all amendments thereto, as the several Underwriters may
reasonably request. IAT will deliver to you or upon the order of the several
Underwriters, from time to time until the effective date of the Registration
Statement, as many copies of any Preliminary Prospectus filed with the
Commission prior to the effective date of the Registration Statement as the
Underwriters may reasonably request. IAT will deliver to the Underwriters on the
effective date of the Registration Statement and thereafter for so long as a
Prospectus is required to be delivered under the Act, from time to time, as many
copies of the Prospectus, in final form, or as thereafter amended or
supplemented, as the Underwriters may from time to time reasonably request. IAT,
not later than (i) 5:00 p.m., New York City time, on the date of determination
of the public offering price, if such determination occurred at or prior to
12:00 noon, New York City time, on such date or (ii) 6:00 p.m., New York City
time, on the business day following the date of determination of the public
offering price, if such determination occurred after 12:00 noon, New York City
time, on such date, will deliver to the Underwriters, without charge, as many
copies of the Prospectus and any amendment or supplement thereto as the
Underwriters may reasonably request for purposes of confirming orders that are
expected to settle on the First Closing Date.
(h) IAT will make generally available to its security
holders and deliver to you as soon as it is practicable to do so but in no event
-12-
later than 90 days after the end of twelve months after its current fiscal
quarter, an earnings statement (which need not be audited) covering a period of
at least 12 consecutive months beginning after the effective date of the
Registration Statement, which shall satisfy the requirements of Section 11(a) of
the Act.
(i) IAT will apply the net proceeds from the sale of
the Shares for the purposes set forth under "Use of Proceeds" in the Prospectus,
and will file such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required pursuant
to Rule 463 under the Act.
(j) IAT will, promptly upon your request, prepare and
file with the Commission any amendments or supplements to the Registration
Statement, Preliminary Prospectus or Prospectus and take any other action, which
in the reasonable opinion of Bachner, Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to
the several Underwriters, may be reasonably necessary or advisable in connection
with the distribution of the Shares, and will use its best efforts to cause the
same to become effective as promptly as possible.
(k) IAT will reserve and keep available that maximum
number of its authorized but unissued securities which are issuable upon
exercise of the Share Purchase Options outstanding from time to time.
(l) The Company will deliver to the Representative
agreements to the effect that for a period of 24 months from the First Closing
Date, no officer, director or existing stockholder of IAT (such officers,
directors and stockholders being herein referred to as the "Principal
Stockholders"), will directly or indirectly, offer, sell (including any short
sale), grant any option for the sale of, acquire any option to dispose of, or
otherwise dispose of any securities of IAT. In order to enforce this covenant,
IAT shall impose stop-transfer instructions with respect to the securities owned
by the Principal Stockholders until the end of such period.
(m) Prior to completion of this offering, IAT will
make all filings required, including registration under the Exchange Act, to
obtain the listing of the Common Stock on the Nasdaq National Market (or a
listing on such other market or exchange as the Underwriters consent to), and
will effect and maintain such listing for at least five years from the date of
this Agreement.
(n) Each of IAT and the Principal Stockholders
represents that it or he has not taken and agrees that it or he will not take,
directly or indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of the Shares or to facilitate the sale or resale of
the Shares.
(o) On the Closing Date and simultaneously with the
delivery of the Shares, IAT shall execute and deliver to you, individually and
not as representative of the Underwriters, the Share Purchase Option. The Share
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Purchase Option will be substantially in the form of the Representative's Share
Purchase Option filed as an Exhibit to the Registration Statement.
(p) During the 18 month period commencing on the date
of this Agreement, IAT will not, without the prior written consent of the
Representative, grant options to purchase shares of Common Stock at an exercise
price less than the greater of (i) the initial public offering price of the
Shares or (ii) the fair market value of the Common Stock on the date of grant.
During the six month period commencing on the date of this Agreement, IAT will
not, without the prior written consent of the Representative, grant options to
any current officer of IAT. During the three year period from the First Closing
Date, IAT will not, without the prior written consent of the Representative,
offer or sell any of its securities pursuant to Regulation S under the Act.
(q) IAT will not, without the prior written consent
of the Representative, grant registration rights to any person which are
exercisable sooner than 13 months from the First Closing Date.
(r) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ shall be Co-Chairman of the
Board, Chief Executive Officer and President of IAT and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ shall
be the Chief Financial Officer and a director of IAT on the Closing Dates. IAT
has obtained key person life insurance in an amount of not less than $2 million
on the life of ▇▇. ▇▇▇▇▇▇ ▇▇▇▇ and such other individuals as designated by the
Representative, and will use its best efforts to maintain such insurance during
the three year period commencing with the First Closing Date. In the event that
▇▇. ▇▇▇▇'▇ employment with IAT is terminated prior to three years following the
First Closing Date, IAT will obtain a comparable policy on the life of his
successor for the balance of the three year period. For a period of thirteen
months from the First Closing Date, the compensation of the executive officers
of IAT shall not be increased from the compensation levels disclosed in the
Prospectus.
(s) For a period of five (5) years from the Effective
Date IAT (i) at its expense, shall cause its regularly engaged independent
certified public accountants to review (but not audit) IAT's financial
statements for each of the first three (3) fiscal quarters prior to the
announcement of quarterly financial information, the filing of IAT's 10-Q
quarterly report and the mailing of quarterly financial information to
stockholders and (ii) shall not change its accounting firm without the prior
written consent of the Chairman or the President of the Representative, which
consent shall not be unreasonably withheld.
(t) As promptly as practicable after the Closing
Date, IAT will prepare, at its own expense, hard cover "bound volumes" relating
to the offering, and will distribute at least four of such volumes to the
individuals designated by the Representative or counsel to the Underwriters.
(u) For a period of five years from the First Closing
Date (i) the Representative shall have the right, but not the obligation, to
designate a director to the Board of Directors of IAT and (ii) IAT shall engage
a public relations firm acceptable to the Representative.
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(v) IAT shall, for a period of six years after the
date of this Agreement, submit which reports to the Secretary of the Treasury
and to stockholders, as the Secretary may require, pursuant to Section 1202 of
the Internal Revenue Code, as amended, or regulations promulgated thereunder, in
order for IAT to qualify as a "small business" so that stockholders may realize
special tax treatment with respect to their investment in IAT.
(w) Except for the use of net proceeds from the sale
of the Shares for the repayment of up to an aggregate of $[1,250,000] of
outstanding loans owed to ▇▇. ▇▇▇▇▇- ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, none of
the net proceeds from the sale of the Shares will be used to repay any
obligations owed by IAT to any Principal Stockholder.
4. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares which they have
respectively agreed to purchase hereunder, are subject to the accuracy (as of
the date hereof, and as of the Closing Dates) of and compliance with the
representations and warranties of IAT herein, to the performance by IAT of its
obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become
effective and you shall have received notice thereof not later than 10:00 A.M.,
New York time, on the date on which the amendment to the registration statement
originally filed with respect to the Shares or to the Registration Statement, as
the case may be, containing information regarding the initial public offering
price of the Shares has been filed with the Commission, or at such later time
and date as shall have been agreed to by the Representative; if required, the
Prospectus or any Term Sheet that constitutes a part thereof and any amendment
or supplement thereto shall have been filed with the Commission in the manner
and within the time period required by Rule 434 and 424(b) under the Act; on or
prior to the Closing Dates no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that or a
similar purpose shall have been instituted or shall be pending or, to your
knowledge or to the knowledge of IAT, shall be contemplated by the Commission;
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of Bachner, Tally, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, counsel to the several Underwriters;
(b) At the First Closing Date, you shall have
received the opinions, addressed to the Underwriters, dated as of the First
Closing Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, counsel for IAT, and, with respect
to matters of foreign law, the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Zurich, counsel for
IAT AG and ▇▇. ▇▇▇▇▇▇▇▇ & Partners, Bremen, counsel for IAT Germany, in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) Each of IAT and Subsidiaries 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 corporate power and
authority to own its respective properties and conduct its respective business
-15-
as described in the Registration Statement and Prospectus and is duly qualified
or licensed to do business as a foreign corporation and is in good standing in
each jurisdiction in which the ownership or leasing of its properties or conduct
of its business requires such qualification, except where the failure to so
qualify or be so licensed would not have a material adverse affect on the
business, properties or financial condition of the Company and the Subsidiaries
taken as a whole;
(ii) to the knowledge of such counsel, (a) IAT and
each of the Subsidiaries have obtained, or are in the process of obtaining, all
licenses, permits and other governmental authorizations necessary to the conduct
of their respective business as described in the Prospectus, (b) such licenses,
permits and other governmental authorizations obtained are in full force and
effect, and (c) each of IAT and the Subsidiaries are in all material respects
complying therewith;
(iii) the authorized capitalization of IAT as of
December 31, 1996 is as set forth under "Capitalization" in the Prospectus; all
shares of IAT's outstanding stock requiring authorization for issuance by IAT's
board of directors have been duly authorized, validly issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock of IAT have not been issued
in violation of any statutory preemptive rights or, to the knowledge of such
counsel, any other preemptive rights, of any shareholder and the shareholders of
IAT do not have any preemptive rights or other rights to subscribe for or to
purchase, nor are there any restrictions upon the voting or transfer of any of
the Common Stock (except as described in the Prospectus and the Registration
Statement); the Common Stock and the Share Purchase Option conform to the
respective descriptions thereof contained in the Prospectus; the Shares have
been, and the shares of Common Stock to be issued upon exercise of the Share
Purchase Option, upon issuance in accordance with the terms of such Share
Purchase Option have been duly authorized and, when issued and delivered, will
be duly and validly issued, fully paid, non-assessable, free of any statutory
preemptive rights and no personal liability will attach to the ownership
thereof; all prior sales by IAT of IAT's securities have been made in compliance
with or under an exemption from registration under the Act and applicable state
securities laws and no shareholders of IAT have any rescission rights with
respect to the Company's securities; a sufficient number of shares of Common
Stock has been reserved for issuance upon exercise of the Share Purchase Option,
and to the best of such counsel's knowledge, neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any registration rights or other rights, other than
those which have been waived or satisfied for or relating to the registration of
any shares of Common Stock;
(iv) this Agreement, the Share Purchase Option, the
Escrow Agreement and the Merger and Acquisition Agreement have been duly and
validly authorized, executed and delivered by IAT and, assuming due execution by
each other party hereto or thereto, each constitutes a legal, valid and binding
obligation of IAT enforceable against IAT in accordance with its respective
terms (except as such enforceability may be limited by applicable bankruptcy,
-16-
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as rights to
indemnity or contribution may be limited by applicable law);
(v) the certificates evidencing the shares of Common
Stock are in valid and proper legal form; the Share Purchase Option will be
exercisable for shares of Common Stock of IAT in accordance with the terms of
the Share Purchase Option and at the price therein provided for; at all times
during the term of the Share Purchase Option the shares of Common Stock of IAT
issuable upon exercise of the Share Purchase Option have been duly authorized
and reserved for issuance upon such exercise and such shares, when issued upon
such exercise in accordance with the terms of the Share Purchase Option and at
the price provided for, will be duly and validly issued, fully paid an
non-assessable;
(vi) such counsel knows of no pending or threatened
legal or governmental proceedings to which either IAT or any of the Subsidiaries
is a party which could materially adversely affect the business, property,
financial condition or operations of IAT and the Subsidiaries taken as a whole;
or which question the validity of the Shares, this Agreement the Share Purchase
Option, the Escrow Agreement or the Merger and Acquisition Agreement, or of any
action taken or to be taken by either IAT or any of the Subsidiaries pursuant to
this Agreement, the Share Purchase Option, the Escrow Agreement or the Merger
and Acquisition Agreement; and no such proceedings are known to such counsel to
be contemplated against either IAT or any of the Subsidiaries; to the best of
such counsel's knowledge, there are no governmental proceedings or regulations
required to be described or referred to in the Registration Statement which are
not so described or referred to;
(vii) to such counsel's knowledge, neither IAT nor
any of the Subsidiaries has received notice of any claim or challenge regarding
its ownership of or its other rights to or under any patents, trademarks,
service marks, trade names, licenses, inventions or any other rights described
in the Prospectus. To such counsel's knowledge (i) no claim has been made
against IAT or any of the Subsidiaries alleging infringement by IAT or any of
the Subsidiaries of any patent, trademark, service ▇▇▇▇, trade name, trade
secret, license in or other intellectual property or franchise right of any
person, (ii) no legal or governmental proceedings are pending relating to the
foregoing, other than review of pending patent applications, and (iii) no such
proceedings are currently threatened by governmental authorities or others;
(viii) to such counsel's knowledge, except as
described in the Prospectus, neither the Company nor any of the Subsidiaries is
in violation, breach or default of or under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries may be bound or to which any of the property or assets of the
Company or any of the Subsidiaries is subject, which violation breach or default
would have a material adverse effect on the Company and the Subsidiaries taken
as a whole; nor will the execution and delivery of this Agreement, the Share
Purchase Option, the Escrow Agreement and the Merger and Acquisition Agreement
and the incurrence of the obligations herein and therein contemplated with or
-17-
without the giving of notice of the lapse of time, or both, result in a breach
or violation of, or constitute a default under the Certificate of Incorporation
or the By-Laws (or other organizational documents) of the Company or any of the
Subsidiaries, in the performance or observance of any material obligation,
agreement, covenant or condition contained in any bond, debentures, note or
other evidence of indebtedness or any contract, indenture, mortgage, loan
agreement, lease, joint venture or other agreement or instrument to which the
Company of any of the Subsidiaries is a party and by which it or any of their
respective properties may be bound or in violation of any material order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality or court, domestic or foreign, in each case which breach,
violation of default would have a material adverse effect on the Company and the
Subsidiaries taken as a whole;
(ix) the Registration Statement has become effective
under the Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for that purpose have been instituted or are pending before, or
threatened by, the Commission; the Registration Statement and the Prospectus
(except for the financial statements, notes thereto and other financial,
numerical, statistical and accounting data contained therein, or omitted
therefrom, as to which such counsel need express no opinion) comply as to form
in all material respects with the applicable requirements of the Act and the
Rules and Regulations;
(x) all descriptions in the Registration Statement
and the Prospectus, and any amendment or supplement thereto, of contracts and
other documents are accurate in all material respects and fairly present the
information required to be shown, and such counsel is familiar with all
contracts and other documents referred to in the Registration Statement and the
Prospectus and any such amendment or supplement or filed as exhibits to the
Registration Statement, and such counsel does not know of any contracts or
documents of a character required to be summarized or described therein or to be
filed as exhibits thereto which are not so summarized, described or filed;
(xi) no authorization, approval, consent, of license
of any governmental or regulatory authority or agency is necessary in connection
with the authorization, issuance, transfer, sale or delivery of the Shares by
IAT, in connection with the execution, delivery and performance of this
Agreement by IAT or in connection with the taking of any action contemplated
herein, or the issuance of the Share Purchase Option or the Shares underlying
the Share Purchase Option, other than registrations or qualifications of the
Shares under applicable state or foreign securities or Blue Sky laws and
registration under the Act or the NASD;
(xii) the statements in the Registration Statement
under the captions "Business", "Use of Proceeds", "Management", and "Description
of Securities" have been reviewed by such counsel and insofar as they refer to
descriptions of agreements, statements of law, descriptions of statutes,
licenses, rules or regulations or legal conclusions, are correct in all material
respects; and
-18-
(xiii) based upon letters received by the Company
from the Nasdaq Stock Market, the Common Stock has been duly authorized for
listing on the Nasdaq National Market.
In addition, such counsel's opinion shall state that such
counsel has participated in conferences with officers and other representatives
of the Company, representatives of the independent public accountants for the
Company, the representatives of the Underwriter and counsel to the Underwriters
at which the contents of the Registration Statement and Prospectus and related
matters were discussed and, although 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 and Prospectus (except as
otherwise expressly set forth in its opinion), on the basis of the foregoing, no
facts have come to the attention of such counsel that caused it to believe that
the Registration Statement (other than the financial statements and the notes
thereto and other financial numerical, statistical and accounting date included
therein, or omitted therefrom, as to which it expresses no opinion), as amended
or supplemented, at the time such Registration Statement became effective and as
of the Closing Dates, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus (other than
the financial statements and notes thereto and other financial, numerical,
statistical and accounting data included therein, or omitted therefrom as to
which it expresses no opinion), as amended or supplemented, as of its date and
the Closing Dates, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
Such opinions shall also cover such matters incident to the
transactions contemplated hereby as the Representative or counsel for the
Underwriters shall reasonably request. In rendering such opinions, such counsel
may rely upon certificates of any officer of IAT or the Subsidiaries or public
officials as to matters of fact; and may rely as to all matters of law other
than in the case of the opinion of counsel for IAT, the law of the United
States, the State of Delaware or the State of New York and, in the case of the
opinion of counsel for IAT AG, the laws of Switzerland, and in the case of the
opinion of counsel for IAT Germany, the laws of Germany, upon opinions of
counsel satisfactory to you, in which case the opinions shall state that they
have no reason to believe that you and they are not entitled to so rely.
(c) All corporate proceedings and other legal matters
relating to this Agreement, the Registration Statement, the Prospectus and other
related matters shall be reasonably satisfactory to or approved by Bachner,
Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the several Underwriters, and you shall
have received from such counsel a signed opinion, dated as of the First Closing
Date, together with copies thereof for each of the other Underwriters, with
respect to the validity of the issuance of the Shares, the form of the
Registration Statement and Prospectus (other than the financial statements and
other financial data contained therein), the execution of this Agreement and
other related matters as you may reasonably require. IAT and each of the
Subsidiaries shall have furnished to counsel for the several Underwriters such
documents as it may reasonably request for the purpose of enabling it to render
such opinion.
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(d) You shall have received a letter prior to the
effective date of the Registration Statement and again on and as of the First
Closing Date from ▇▇▇▇▇▇▇▇▇, Kass & Company, P.C., independent public
accountants for IAT, substantially in the form approved by you, and including
estimates of IAT's revenues and results of operations for the period ending at
the end of the month immediately preceding the effective date and results of the
comparable period during the prior fiscal year.
(e) At the Closing Dates, (i) the representations and
warranties of IAT contained in this Agreement shall be true and correct with the
same effect as if made on and as of the Closing Dates and IAT and each of the
Subsidiaries shall have performed all of its obligations hereunder and satisfied
all the conditions on its part to be satisfied at or prior to such Closing Date;
(ii) the Registration Statement and the Prospectus and any amendments or
supplements thereto shall contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations, and shall in
all material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; (iii) there shall have been, since the
respective dates as of which information is given, no material adverse change,
or any development involving a prospective material adverse change, in the
business, properties, condition (financial or otherwise), results of operations,
capital stock, long-term or short-term debt or general affairs of IAT or any of
the Subsidiaries from that set forth in the Registration Statement and the
Prospectus, except changes which the Registration Statement and Prospectus
indicate might occur after the effective date of the Registration Statement, and
IAT and each of the Subsidiaries shall not have incurred any material
liabilities or entered into any agreement not in the ordinary course of business
other than as referred to in the Registration Statement and Prospectus; and (iv)
except as set forth in the Prospectus, no action, suit or proceeding at law or
in equity shall be pending or threatened against IAT or any of the Subsidiaries
which would be required to be set forth in the Registration Statement, and no
proceedings shall be pending or threatened against IAT or any of the
Subsidiaries before or by any commission, board or administrative agency in the
United States, Switzerland, Germany or elsewhere, wherein an unfavorable
decision, ruling or finding would materially and adversely affect the business,
property, condition (financial or otherwise), results of operations or general
affairs of IAT or any of the Subsidiaries, and (v) you shall have received, at
the First Closing Date, a certificate signed by each of the Co-Chairmen of the
Board, Chief Executive Officer and President and the principal financial or
accounting officer of IAT, dated as of the First Closing Date, evidencing
compliance with the provisions of this subsection (e).
(f) Upon exercise of the option provided for in
Section 2(b) hereof, the obligations of the several Underwriters (or, at its
option, the Representative, individually) to purchase and pay for the Option
Shares referred to therein will be subject (as of the date hereof and as of the
Option Closing Date) to the following additional conditions:
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(i) The Registration Statement shall remain effective
at the Option Closing Date, and no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall have
been instituted or shall be pending, or, to your knowledge or the knowledge of
IAT, shall be contemplated by the Commission, and any reasonable request on the
part of the Commission for additional information shall have been complied with
to the satisfaction of Bachner, Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the
several Underwriters.
(ii) At the Option Closing Date there shall have been
delivered to you as Representative the signed opinions of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New
York, counsel for IAT, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Zurich, counsel for IAT AG and ▇▇.
▇▇▇▇▇▇▇▇ & Partners, Bremen, counsel for IAT Germany, dated as of the Option
Closing Date, in form and substance satisfactory to Bachner, Tally, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, counsel to the several Underwriters, together with copies of such
opinions for each of the other several underwriters, which opinions shall be
substantially the same in scope and substance as the opinions furnished to you
at the First Closing Date pursuant to Section 4(b) hereof, except that such
opinions, where appropriate, shall cover the Option Shares.
(iii) At the Option Closing Date there shall have
been delivered to you a letter in form and substance satisfactory to you from
▇▇▇▇▇▇▇▇▇, Kass & Company, P.C., dated the Option Closing Date and addressed to
the Underwriters confirming the information in their letter referred to in
Section 4(d) hereof and stating that nothing has come to their attention during
the period from the ending date of their review referred to in said letter to a
date not more than five business days prior to the Option Closing Date, which
would require any change in said letter if it were required to be dated the
Option Closing Date.
(iv) At the Option Closing Date there shall have been
delivered to you a certificate of each of the Co-Chairmen of the Board, Chief
Executive Officer and President and the principal financial or accounting
officer of IAT, dated the Option Closing Date, in form and substance
satisfactory to Bachner, Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the several
Underwriters, substantially the same in scope and substance as the certificates
furnished to you at the First Closing Date pursuant to Section 4(e) hereof.
(v) All proceedings taken at or prior to the Option
Closing Date in connection with the sale and issuance of the Option Shares shall
be satisfactory in form and substance to you, and you and Bachner, Tally,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to the several Underwriters, shall have been
furnished with all such documents, certificates, and opinions as you may
reasonably request in connection with this transaction in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements of IAT or its compliance with any of the covenants or conditions
contained herein.
(g) No action shall have been taken by the Commission
or the NASD, the effect of which would make it improper, at any time prior to
the Closing Date, for members of the NASD to execute transactions (as principal
or agent) in the Shares and no proceedings for the taking of such action shall
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have been instituted or shall be pending, or, to the knowledge of the
Representative or IAT, shall be contemplated by the Commission or the NASD. IAT
represents that at the date hereof it has no knowledge that any such action is
in fact contemplated by the Commission or the NASD. IAT and each of the
Subsidiaries shall have advised the Underwriters of any NASD affiliation of any
of its officers, directors, stockholders or their affiliates.
(h) If any of the conditions herein provided for in
this Section shall not have been fulfilled as of the date indicated, this
Agreement and all obligations of the several Underwriters under this Agreement
may be cancelled at, or at any time prior to, each Closing Date by the
Representative notifying the Company of such cancellation in writing or by
telegram at or prior to the applicable Closing Date. Any such cancellation shall
be without liability of the Underwriters to IAT.
5. Conditions of the Obligations of IAT. The obligation of IAT
to sell and deliver the Shares is subject to the following conditions:
(a) The Registration Statement shall have become
effective not later than 10:00 a.m. New York time, on the day following the date
of this Agreement, or on such later date as the Company and the Representative
may agree in writing; and
(b) At the Closing Dates, no stop orders suspending
the effectiveness of the Registration Statement shall have been issued under the
Act or any proceedings therefor initiated or threatened by the Commission.
If the conditions to the obligations of IAT provided for in
this Section have been fulfilled on the First Closing Date but are not fulfilled
after the First Closing Date and prior to the Option Closing Date, then only the
obligation of IAT to sell and deliver the Shares on exercise of the option
provided for in Section 2(b) hereof shall be affected.
6. Indemnification.
(a) IAT agrees to 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 (which shall, for all purposes of this Agreement, include, but not be
limited to, all reasonable costs of defense and investigation and all attorneys'
fees), to which such Underwriter or such controlling person may become subject,
under the Act or otherwise, and will reimburse, as incurred, such Underwriters
and such controlling persons for any legal or other expenses reasonably incurred
in connection with investigating, defending against or appearing as a third
party witness in connection with any losses, claims, damages or liabilities,
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 (A) the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto,
(B) any blue sky application or other document executed by the Company
-22-
specifically for that purpose or based upon written information furnished by the
Company filed in any state or other jurisdiction in order to qualify any or all
of the Shares under the securities laws thereof (any such application, document
or information being hereinafter called a "Blue Sky Application"), or arise out
of or are based upon the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, Prospectus, or any amendment
or supplement thereto, or in any Blue Sky Application, a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, that IAT will not be liable in any such case to the extent,
but only to the extent, that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Underwriters
specifically for use in the preparation of the Registration Statement or any
such amendment or supplement thereof or any such Blue Sky Application or any
such preliminary Prospectus or the Prospectus or any such amendment or
supplement thereto. This indemnity will be in addition to any liability which
IAT may otherwise have.
(b) Each Underwriter severally, but not jointly, will
indemnify and hold harmless IAT, each of its directors, each nominee (if any)
for director named in the Prospectus, each of its officers who have signed the
Registration Statement, and each person, if any, who controls IAT within the
meaning of the Act, against any losses, claims, damages or liabilities (which
shall, for all purposes of this Agreement, include, but not be limited to, all
costs of defense and investigation and all attorneys' fees) to which IAT or any
such director, nominee, 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 the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (i) in reliance upon and in conformity with written
information furnished to IAT by you or by any Underwriter through you
specifically for use in the preparation thereof and (ii) relates to the
transactions effected by the Underwriters in connection with the offer and sale
of the Shares contemplated hereby. This indemnity agreement will be in addition
to any liability which the Underwriters may otherwise have.
(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 in writing the indemnifying party of the
commencement thereof; 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 in,
-23-
and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, subject to the provisions
herein stated, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party 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. The indemnified
party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party; provided that if the indemnified party is an Underwriter
or a person who controls such Underwriter within the meaning of the Act, the
fees and expenses of such counsel shall be at the expense of the indemnifying
party if (i) the employment of such counsel has been specifically authorized in
writing by the indemnifying party or (ii) the named parties to any such action
(including any impleaded parties) include both such Underwriter or such
controlling person and the indemnifying party and in the judgment of the
Representative, it is advisable for the Representative or such Underwriters or
controlling persons to be represented by separate counsel (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such Underwriter or such controlling person, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm shall be
designated in writing by you). No settlement of any action against an
indemnified party shall be made without the consent of the indemnifying party,
which shall not be unreasonably withheld in light of all factors of importance
to such indemnifying party.
7. Contribution.
In order to provide for just and equitable contribution under
the Act in any case in which (i) any Underwriter makes claim for indemnification
pursuant to Section 6 hereof but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case, notwithstanding the fact that
the express provisions of Section 6 provide for indemnification in such case, or
(ii) contribution under the Act may be required on the part of any Underwriter,
then IAT and each person who controls IAT, in the aggregate, and any such
Underwriter shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) in either such case (after
contribution from others) in such proportions that all such Underwriters are
responsible in the aggregate for that portion of such losses, claims, damages or
liabilities represented by the percentage that the underwriting discount per
Share appearing on the cover page of the Prospectus bears to the public offering
price appearing thereon, and IAT shall be responsible for the remaining portion,
provided, however, that (a) if such allocation is not permitted by applicable
-24-
law then the relative fault of IAT and the Underwriters and controlling persons,
in the aggregate, in connection with the statements or omissions which resulted
in such damages and other relevant equitable considerations shall also be
considered. The relative fault shall be determined by reference to, among other
things, whether in the case of an untrue statement of a material fact or the
omission to state a material fact, such statement or omission relates to
information supplied by the Company or any of the Subsidiaries or the
Underwriters, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. IAT and
the Underwriters agree that it would not be just and equitable if the respective
obligations of IAT and the Underwriters to contribute pursuant to this Section 7
were to be determined by pro rata or per capita allocation of the aggregate
damages (even if the Underwriters in the aggregate were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this Section 7 and (b) that the contribution of each contributing Underwriter
shall not be in excess of its proportionate share (based on the ratio of the
number of Shares purchased by such Underwriter to the number of Shares purchased
by all contributing Underwriters) of the portion of such losses, claims, damages
or liabilities for which the Underwriters are responsible. No person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. As used in this paragraph, the word "Company"
includes any officer, director, or person who controls IAT within the meaning of
Section 15 of the Act. If the full amount of the contribution specified in this
paragraph is not permitted by law, then any Underwriter and each person who
controls any Underwriter shall be entitled to contribution from IAT, its
officers, directors and controlling persons to the full extent permitted by law.
The foregoing contribution agreement shall in no way affect the contribution
liabilities of any persons having liability under Section 11 of the Act other
than IAT and the Underwriters. No contribution shall be requested with regard to
the settlement of any matter from any party who did not consent to the
settlement; provided, however, that such consent shall not be unreasonably
withheld in light of all factors of importance to such party.
8. Costs and Expenses.
(a) Whether or not this Agreement becomes effective
or the sale of the Shares to the Underwriters is consummated, IAT will pay all
costs and expenses incident to the performance of this Agreement by the Company
including, but not limited to, the fees and expenses of counsel to the Company
and of the Company 's accountants; the costs and expenses incident to the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including the financial statements therein and all amendments and
exhibits thereto), Preliminary Prospectus and the Prospectus, as amended or
supplemented, or the Term Sheet, the fee of the NASD in connection with the
filing required by the NASD relating to the offering of the Shares contemplated
hereby; the costs of investigative reports regarding certain officers and
directors of IAT and the Subsidiaries; all expenses, including reasonable fees
and disbursements of counsel to the Underwriters, in connection with the
qualification of the Shares under the state securities or blue sky laws which
-25-
the Representative shall designate; the cost of printing and furnishing to the
several Underwriters copies of the Registration Statement, each Preliminary
Prospectus, the Prospectus, this Agreement, the Agreement Among Underwriters,
Selling Agreement, Underwriters' Questionnaire, Underwriters' Power of Attorney
and the Blue Sky Memorandum, any fees relating to the listing of the Common
Stock on the Nasdaq National Market or any other securities exchange, the cost
of printing the certificates representing the securities comprising the Shares,
the fees of the transfer agent, the cost of publication of at least three
"tombstones" of the offering (at least one of which shall be in national
business newspaper and one of which shall be in a major New York newspaper) and
the cost of preparing at least four hard cover "bound volumes" relating to the
offering, in accordance with the Underwriters' request. IAT shall pay any and
all taxes (including any transfer, franchise, capital stock or other tax imposed
by any jurisdiction) on sales to the Underwriters hereunder. IAT will also pay
all costs and expenses incident to the furnishing of any amended Prospectus or
of any supplement to be attached to the Prospectus as called for in Section 3(a)
of this Agreement except as otherwise set forth in said Section.
(b) In addition to the foregoing expenses IAT shall
at the First Closing Date pay to Royce Investment Group, Inc., in its individual
rather than representative capacity, a non-accountable expense allowance of
$_______ of which $50,000 has been paid. In the event the overallotment option
is exercised, IAT shall pay to Royce Investment Group, Inc. at the Option
Closing Date an additional amount equal to 2.5% of the gross proceeds received
upon exercise of the overallotment option. In the event the transactions
contemplated hereby are not consummated by reason of any action by the
Representative (except if such prevention is based upon a breach by the Company
or any Subsidiary of any covenant, representation or warranty contained herein
or because any other condition to the Underwriters' obligations hereunder
required to be fulfilled by the Company or any of the Subsidiaries is not
fulfilled) IAT shall be liable for only the amount (not less than $50,000) paid
by the Company to the Representation prior to such determination. In the event
the transactions contemplated hereby are not consummated by reason of any action
of the Company or any Subsidiary or because of a breach by the Company or any
Subsidiary of any covenant, representation or warranty herein, IAT shall be
liable for the accountable out-of-pocket expenses of the Representative,
including legal fees, up to a maximum of $100,000.
(c) No person is entitled either directly or
indirectly to compensation from the Company, from the Representative or from any
other person for services as a finder in connection with the proposed offering,
and IAT agrees to indemnify and hold harmless the Representative and the other
Underwriters, against any losses, claims, damages or liabilities, joint or
several (which shall, for all purposes of this Agreement, include, but not be
limited to, all costs of defense and investigation and all attorneys' fees), to
which the Representative or such other Underwriter or person may become subject
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon the claim of any person (other than an
employee of the party claiming indemnity) or entity that he or it is entitled to
a finder's fee in connection with the proposed offering by reason of such
person's or entity's influence or prior contact with the indemnifying party.
-26-
9. Substitution of Underwriters.
If any of the Underwriters shall for any reason not permitted
hereunder cancel their obligations to purchase the First Shares hereunder, or
shall fail to take up and pay for the number of First Shares set forth opposite
their respective names in Schedule A hereto upon tender of such First Shares in
accordance with the terms hereof, then:
(a) If the aggregate number of First Shares which
such Underwriter or Underwriters agreed but failed to purchase does not exceed
10% of the total number of First Shares, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the First Shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase.
(b) If any Underwriter or Underwriters so default and
the agreed number of First Shares with respect to which such default or defaults
occurs is more than 10% of the total number of First Shares, the remaining
Underwriters shall have the right to take up and pay for (in such proportion as
may be agreed upon among them) the First Shares which the defaulting Underwriter
or Underwriters agreed but failed to purchase. If such remaining Underwriters do
not, at the First Closing Date, take up and pay for the First Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase, the time
for delivery of the First Shares shall be extended to the next business day to
allow the remaining Underwriters the privilege of substituting within
twenty-four hours (including nonbusiness hours) another underwriter or
underwriters satisfactory to IAT. If no such underwriter or underwriters shall
have been substituted as aforesaid, within such twenty-four hour period, the
time of delivery of the First Shares may, at the option of IAT, be again
extended to the next following business day, if necessary, to allow IAT the
privilege of finding within twenty-four hours (including nonbusiness hours)
another underwriter or underwriters to purchase the First Shares which the
defaulting Underwriter or Underwriters agreed but failed to purchase. If it
shall be arranged for the remaining Underwriters or substituted Underwriters to
take up the First Shares of the defaulting Underwriter or Underwriters as
provided in this Section, (i) IAT or the Representative shall have the right to
postpone the time of delivery for a period of not more than seven business days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and IAT agrees promptly to file any amendments to the Registration
Statement or supplements to the Prospectus which may thereby be made necessary,
and (ii) the respective numbers of First Shares to be purchased by the remaining
Underwriters or substituted Underwriters shall be taken at the basis of the
underwriting obligation for all purposes of this Agreement.
If in the event of a default by one or more Underwriters and
the remaining Underwriters shall not take up and pay for all the First Shares
agreed to be purchased by the defaulting Underwriters or substitute another
underwriter or underwriters as aforesaid, IAT shall not find or shall not elect
to seek another underwriter or underwriters for such First Shares as aforesaid,
then this Agreement shall terminate.
-27-
If, following exercise of the option provided in Section 2(b)
hereof, any Underwriter or Underwriters shall for any reason not permitted
hereunder cancel their obligations to purchase Option Shares at the Option
Closing Date, or shall fail to take up and pay for the number of Option Shares,
which they become obligated to purchase at the Option Closing Date upon tender
of such Option Shares in accordance with the terms hereof, then the remaining
Underwriters or substituted Underwriters may take up and pay for the Option
Shares of the defaulting Underwriters in the manner provided in Section 9(b)
hereof. If the remaining Underwriters or substituted Underwriters shall not take
up and pay for all such Option Shares, the Underwriters shall be entitled to
purchase the number of Option Shares for which there is no default or, at their
election, the option shall terminate, the exercise thereof shall be of no
effect.
As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. In the event of
termination, there shall be no liability on the part of any nondefaulting
Underwriter to IAT, provided that the provisions of this Section 9 shall not in
any event affect the liability of any defaulting Underwriter to IAT arising out
of such default.
10. Effective Date.
The Agreement shall become effective upon its execution except
that you may, at your option, delay its effectiveness until 11:00 A.M., New York
time on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective date of the
Registration Statement as you in your discretion shall first commence the
initial public offering by the Underwriters of any of the Shares. The time of
the initial public offering shall mean the time of release by you of the first
newspaper advertisement with respect to the Shares, or the time when the Shares
are first generally offered by you to dealers by letter or telegram, whichever
shall first occur. This Agreement may be terminated by you at any time before it
becomes effective as provided above, except that Sections 3(c), 6, 7, 8, 13, 14,
15 and 16 shall remain in effect notwithstanding such termination.
11. Termination.
(a) This Agreement, except for Sections 3(c), 6, 7, 8, 13, 14,
15 and 16 hereof, may be terminated at any time prior to the First Closing Date,
and the option referred to in Section 2(b) hereof, if exercised, may be
cancelled at any time prior to the Option Closing Date, by you if in your
judgment it is impracticable to offer for sale or to enforce contracts made by
the Underwriters for the resale of the Shares agreed to be purchased hereunder
by reason of (i) the Company or any of the Subsidiaries having sustained a
material loss, whether or not insured, by reason of fire, earthquake, flood,
accident or other calamity, or from any labor dispute or court or government
action, order or decree; (ii) trading in securities on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq SmallCap Market or the Nasdaq
National Market having been suspended or limited; (iii) material governmental
restrictions having been imposed on trading in securities generally (not in
force and effect on the date hereof); (iv) a banking moratorium having been
declared by federal or New York state authorities; (v) an outbreak of
-28-
international hostilities or other national or international calamity or crisis
or change in economic or political conditions having occurred; (vi) a pending or
threatened legal or governmental proceeding or action relating generally to
IAT's or any of the Subsidiaries' business, or a notification having been
received by either IAT or any of the Subsidiaries of the threat of any such
proceeding or action, which could materially adversely affect IAT or any of the
Subsidiaries; (vii) except as contemplated by the Prospectus, IAT or any of the
Subsidiaries is merged or consolidated into or acquired by another company or
group or there exists a binding legal commitment for the foregoing or any other
material change of ownership or control occurs; (viii) the passage by the
Congress of the United States or by any state legislative body or federal or
state agency or other authority of any act, rule or regulation, measure, or the
adoption of any orders, rules or regulations by any governmental body or any
authoritative accounting institute or board, or any governmental executive,
which is reasonably believed likely by the Representative to have a material
impact on the business, financial condition or financial statements of the
Company or the market for the securities offered pursuant to the Prospectus;
(ix) any adverse change in the financial or securities markets beyond normal
market fluctuations having occurred since the date of this Agreement, or (x) any
material adverse change having occurred, since the respective dates of which
information is given in the Registration Statement and Prospectus, in the
earnings, business prospects or general condition of IAT or any of its
Subsidiaries, financial or otherwise, whether or not arising in the ordinary
course of business.
(b) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section 11 or in
Section 10, IAT shall be promptly notified by you, by telephone or telegram,
confirmed by letter.
12. Share Purchase Option.
At or before the First Closing Date, IAT will sell to the
Underwriters (or, at the Representative's option, the Representative,
individually), or their designees, as permitted by the NASD, for a consideration
of $310, and upon the terms and conditions set forth in the form of Share
Purchase Option annexed as an exhibit to the Registration Statement, a Share
Purchase Option to purchase an aggregate of 310,000 Shares. In the event of
conflict in the terms of this Agreement and the Share Purchase Option, the
language of the Share Purchase Option shall control.
13. Representations, Warranties and Agreements to Survive
Delivery.
The respective indemnities, agreements, representations,
warranties and other statements of IAT or its Principal Stockholders, where
appropriate, and the undertakings set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Underwriters, IAT or any of its officers or
directors or any controlling person and will survive delivery of and payment of
the Shares and the termination of this Agreement.
-29-
14. Notice.
Any communications specifically required hereunder to be in
writing, if sent to the Underwriters, will be mailed or delivered by facsimile
or overnight courier, and confirmed to them at Royce Investment Group, Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with a copy sent to Bachner,
Tally, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., or if sent to IAT, will be mailed, or delivered
by facsimile or overnight courier and confirmed to it at Geschaftschaus
Wasserschloss, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, Attention:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇ with a copy sent to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
15. Parties in Interest.
The Agreement herein set forth is made solely for the benefit
of the several Underwriters, the Company and, to the extent expressed, the
Principal Stockholders, any person controlling the Company or any of the several
Underwriters, and directors of IAT, nominees for directors (if any) named in the
Prospectus, its officers who have signed the Registration Statement, and their
respective executors, administrators, successors, assigns and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from any of the several Underwriters of the Shares. All of the obligations of
the Underwriters hereunder are several and not joint.
16. Applicable Law.
This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be entirely performed within New York.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return this agreement, whereupon it will become a
binding agreement between IAT and the several Underwriters in accordance with
its terms.
Very truly yours,
IAT MULTIMEDIA, INC.
By:
-----------------------------------------
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
ROYCE INVESTMENT GROUP, INC.
By:
-----------------------------------------
For itself and as Representative of the
several Underwriters
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SCHEDULE A
Underwriter Number of Shares to be Purchased
-------------------- --------------------------------
Royal Investment Group, Inc.
Continental Broker - Dealer Corporation
Total Shares: 3,100,000
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