UNDERWRITING AGREEMENT
Dated: [EFFECTIVE DATE]
▇.▇. ▇▇▇▇▇▇ & CO., INC.
AS REPRESENTATIVE OF THE
UNDERWRITERS NAMED IN
SCHEDULE I HERETO
▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
GENERAL BEARING CORPORATION, a Delaware corporation (the "Company"),
proposes to issue and sell to the one or more Underwriters named in Schedule I
hereto (the "Underwriters"), including ▇.▇. ▇▇▇▇▇▇ & Co., Inc. (the
"Representative" or "you"), the Representative of the several Underwriters,
pursuant to this Underwriting Agreement (this "Agreement"), 900,000 shares of
the Common Stock, $.01 par value, of the Company (the "Common Stock"). In
addition, the Company proposes to grant to the Underwriters the Over-Allotment
Option, referred to and defined in Section 2(c), to purchase all or any part of
an aggregate of 135,000 additional shares of Common Stock, and to issue to you
the Representative's Warrant, referred to and defined in Section 12, to purchase
certain further additional shares of Common Stock.
The 900,000 shares of Common Stock to be sold by the Company, together
with the 135,000 additional shares of Common Stock that are the subject of the
Over-Allotment Option, are herein collectively called the "Shares." The Shares
and the shares of Common Stock issuable upon exercise of the Representative's
Warrant, are herein collectively called the "Securities." The term
"Representative's Counsel" shall mean the firm of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇,
counsel to the Representative, and the term "Company Counsel" shall mean the
firm of ▇▇▇▇ & Priest, LLP, counsel to the Company. Unless the context otherwise
requires, all references herein to a "Section" shall mean the appropriate
Section of this Agreement.
You have advised the Company that the Underwriters desire to purchase
the Shares as herein provided, and that you have been authorized to execute this
Agreement as representative of the Underwriters. The Company confirms the
agreements made by it with respect to the purchase of the Shares by the
Underwriters, as follows:
1. REPRESENTATIONS AND WARRANTIES.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each Underwriter that:
(A) REGISTRATION STATEMENT; PROSPECTUS. A registration state-
ment (File No. 333-15477) on Form S-1 relating to the public offering of the
Shares (the "Offering"), including a preliminary form of prospectus, copies of
which have heretofore been delivered to you, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations of the Securities and Exchange Commission
(the "Commission") promulgated thereunder (the "Rules and Regulations"), and has
been filed with the Commission under the Act. As used herein, the term
"Preliminary Prospectus" shall mean each prospectus filed pursuant to Rule 430
or Rule 424(a) of the Rules and Regulations. The Preliminary Prospectus bore the
legend required by Item 501 of Regulation S-K under the Act and the Rules and
Regulations. Such registration statement (including all financial statements,
schedules and exhibits) as amended at the time it becomes effective and the
final prospectus included therein are herein respectively called the
"Registration Statement" and the "Prospectus," except that (i) if the prospectus
first filed by the Company pursuant to Rule 424(b) or Rule 430A of the Rules and
Regulations shall differ from such final prospectus as then amended, then the
term "Prospectus" shall instead mean the prospectus first filed pursuant to said
Rule 424(b) or Rule 430A, and (ii) if such registration statement is amended or
such prospectus is amended or supplemented after the effective date of such
registration statement and prior to the Option Closing Date (as defined in
Section 2(c)), then (unless the context necessarily requires otherwise) the term
"Registration Statement" shall include such registration statement as so
amended, and the term "Prospectus" shall include such prospectus as so amended
or supplemented, as the case may be.
(B) CONTENTS OF REGISTRATION STATEMENT. On the Effective Date,
and at all times subsequent thereto for so long as the delivery of a prospectus
is required in connection with the offering or sale of any of the Securities,
(i) the Registration Statement and the Prospectus shall in all material respects
conform to the requirements of the Act and the Rules and Regulations, and (ii)
neither the Registration Statement nor the Prospectus shall include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make statements therein not misleading; provided,
however, that the Company makes no representations, warranties or agreements as
to information contained in or omitted from the Registration Statement or
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Underwriters specifically for
use in the preparation thereof. It is understood that the statements set forth
in the Prospectus with respect to stabilization, the material set forth under
the caption "UNDERWRITING," and the identity of counsel to the Representative
under the caption "LEGAL MATTERS," constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the Registration
Statement and Prospectus, as the case may be.
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(C) ORGANIZATION, STANDING, ETC. The Company and each subsidiary
of the Company (a "Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full power and corporate authority to own its properties and
conduct its business as described in the Prospectus, and is duly qualified or
licensed to do business as a foreign corporation and is in good standing in each
other jurisdiction in which the nature of its business or the character or
location of its properties requires such qualification, except where failure so
to qualify will not materially affect the business, properties or financial
condition of the Company or such Subsidiary, as the case may be.
(D) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company as of the date of the Prospectus is as set forth in
the Prospectus under the caption "CAPITALIZATION" and consists of 19,000,000
shares of Common Stock, $.01 par value, of which no more than 3,500,000 shares,
options, and Common Stock equivalents will be issued and outstanding or reserved
for issuance immediately prior to the First Closing Date. Except as set forth in
the Prospectus, no more than 500,000 shares of Common Stock will be reserved for
issuance under an employee stock option plan. The shares of Common Stock issued
and outstanding on the Effective Date have been duly authorized, validly issued
and are fully paid and nonassessable. 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 issued by
or to which the Company or any Subsidiary is a party or bound, any shares of
capital stock of the Company or any Subsidiary. The Securities conform in all
material respects, issued by on to which the Company or any Subsidiary is a
party or bound to all statements relating thereto contained in the Registration
Statement or the Prospectus.
(E) SECURITIES. The Shares and the Representative's Warrant have
been duly authorized and, when issued and delivered against payment therefor
pursuant to this Agreement, the Shares will be duly authorized, validly issued,
fully paid and non-assessable and free of preemptive rights of any security
holder of the Company and the Representative's Warrant will be a valid and
binding obligation of the Company. Neither the filing of the Registration
Statement nor the offering or sale of any of the Shares or the Representative's
Warrant as contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the registration
of any securities of the Company, except as described in the Registration
Statement.
(F) AUTHORITY, ETC. This Agreement, the Representative's
Warrant, the Financial Consulting Agreement, and the M/A Agreement (each as
hereinafter defined) have been duly and validly authorized, executed and
delivered by the Company and, assuming due execution of this Agreement and such
other agreements by the other party or parties hereto and thereto, constitute
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar
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laws relating to or affecting creditors' rights generally or by general
equitable principles. The Company has full right, power and lawful authority to
authorize, issue and sell the Shares and the Representative's Warrant on the
terms and conditions set forth herein. All consents, approvals, authorizations
and orders of any court or governmental authority which are required in
connection with the authorization, execution and delivery of such agreements,
the authorization, issue and sale of the Shares and the Representative's
Warrant, and the consummation of the transactions contemplated hereby have been
obtained.
(G) NO CONFLICT. Except as described in the Prospectus, neither
the Company nor any Subsidiary is in violation, breach or default of or under,
and consummation of the transactions hereby contemplated and fulfillment of the
terms of this Agreement will not conflict with or result in a breach of, any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance pursuant to the terms
of, any contract, indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or such Subsidiary is a
party or by which the Company or such Subsidiary may be bound or to which any of
the property or assets of the Company or such Subsidiary are subject, nor will
such action result in any violation of the provisions of the Certificate of
Incorporation or the By-laws of the Company or any Subsidiary, or any statute,
order, rule or regulation applicable to the Company or any Subsidiary of any
court or governmental authority.
(H) ASSETS. Subject to the qualifications stated in the
Prospectus: (i) the Company and each Subsidiary, as the case may be, has good
and marketable title to all properties and assets described in the Prospectus as
owned by it, including without limitation intellectual property, free and clear
of all liens, charges, encumbrances or restrictions, except such as are not
materially significant or important in relation to its business or described in
or contemplated by the Prospectus; (ii) all of the material leases and subleases
under which the Company or any Subsidiary is the lessor or sublessor of
properties or assets or under which the Company or any Subsidiary holds
properties or assets as lessee or sublessee, as described in the Prospectus, are
in all material respects in full force and effect and, except as described in
the Prospectus, neither the Company nor any Subsidiary is in default in any
material respect with respect to any of the terms or provisions of any of such
leases or subleases, and, to the Company's knowledge, no claim has been asserted
in writing by any party adverse to the rights of the Company or such Subsidiary
as lessor, sublessor, lessee or sublessee under any such lease or sublease, or
affecting or questioning the right of the Company or such Subsidiary to
continued possession of the leased or subleased premises or assets under any
such lease or sublease, except as described or referred to in the Prospectus;
and (iii) the Company and each Subsidiary, as the case may be, owns or leases
all such properties, described in the Prospectus, as are reasonably necessary to
its operations as now conducted and, except as otherwise stated in the
Prospectus, as proposed to be conducted as set forth in the Prospectus.
(I) INDEPENDENT ACCOUNTANTS. BDO ▇▇▇▇▇▇▇, L.L.P. and Ferro,
Berndon & Company, L.L.P., who have each given their report on certain financial
statements filed
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or to be filed with the Commission as a part of the Registration Statement, and
which are included in the Prospectus, are with respect to the Company,
independent public accountants as required by the Act and the Rules and
Regulations.
(J) FINANCIAL STATEMENTS. The financial statements and
schedules, together with related notes, set forth in the Registration Statement
and the Prospectus present fairly the financial position, results of operations
and cash flows of the Company on the basis stated in the Registration Statement,
at the respective dates and for the respective periods to which they apply. Such
financial statements, schedules and related notes have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except to the extent disclosed
therein. The audited financial statements, together with the related notes and
schedules and the unaudited financial information for each of the periods
presented in the Registration Statement and the Prospectus fairly present a true
and complete statement of the financial position of the Company at the dates
indicated and the results of their operations for the periods then ended. The
Summary Financial Information and Selected Financial Data included in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement and the Prospectus.
(K) NO MATERIAL CHANGE. Except as otherwise set forth in the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, neither the Company nor any
Subsidiary has: (i) incurred any liability or obligation, direct or contingent,
or entered into any transaction, which is material to its business; (ii)
effected or experienced any change in its capital stock; (iii) issued any
options, warrants or other rights to acquire its capital stock; (iv) declared,
paid or made any dividend or distribution of any kind on its capital stock; or
(v) effected or experienced any material adverse change, or development
involving a prospective material adverse change, in its business, property,
operations, condition (financial or otherwise) or earnings.
(L) LITIGATION. Except as set forth in the Prospectus, there is
not now pending nor, to the best knowledge of the Company, threatened, any
action, suit or proceeding (including any related to environmental matters or
discrimination on the basis of age, sex, religion or race), whether or not in
the ordinary course of business, to which the Company or any Subsidiary is a
party or its business or property is subject, before or by any court or
governmental authority, which might result in any material adverse change in the
business, property, operations, condition (financial or otherwise) or earnings
of the Company or such Subsidiary; and no labor disputes involving the employees
of the Company or any Subsidiary exist which might be expected to affect
materially adversely the business, property, operations, condition (financial or
otherwise) or earnings of the Company or such Subsidiary.
(M) NO UNLAWFUL PROSPECTUSES. The Company has not distributed
any prospectus or other offering material in connection with the Offering
contemplated herein,
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other than any Preliminary Prospectus, the Prospectus or other material
permitted by the Act and the Rules and Regulations.
(N) TAXES. Except as disclosed in the Prospectus, the Company
and each Subsidiary has filed all necessary federal, state, local and foreign
income and franchise tax returns and has paid all taxes shown as due thereon or
has requested extension thereof, except in any case in which the failure so to
file or request an extension would not have a material adverse effect on the
Company; and there is no tax deficiency which has been or, to the best knowledge
of the Company, might be asserted against the Company or any Subsidiary.
(O) LICENSES, ETC. The Company and each Subsidiary has in effect
all necessary and material licenses, permits and other governmental
authorizations currently required for the conduct of its business or the
ownership of its property, as described in the Prospectus, and is in all
material respects in compliance therewith, except in any case in which the
failure to so comply would not have a material adverse effect. The Company owns
or possesses adequate rights to use all material patents, patent applications,
trademarks, ▇▇▇▇ registrations, copyrights and licenses disclosed in the
Prospectus and/or which are necessary for the conduct of such business, and
except as disclosed in the Prospectus has not received any notice in writing of
conflict with the asserted rights of others in respect thereof. To the best
knowledge of the Company, none of the activities or business of the Company or
any Subsidiary is in violation of, or would cause the Company or such Subsidiary
to violate, any law, rule, regulation or order of the United States, any state,
county or locality, the violation of which would have a material adverse effect
upon the business, property, operations, condition (financial or otherwise) or
earnings of the Company or such Subsidiary.
(P) NO PROHIBITED PAYMENTS. Neither the Company nor any
Subsidiary have, directly or indirectly at any time: (i) made any contribution
to any candidate for political office, or failed to disclose fully any such
contribution in violation of law; or (ii) made any payment to any federal,
state, local or foreign governmental officer or official, or other person
charged with similar public or quasi-public duties, other than payments or
contributions required or allowed by applicable law. The Company's internal
accounting controls and procedures are sufficient to cause the Company to comply
in all material respects with the Foreign Corrupt Practices Act of 1977, as
amended.
(Q) TRANSFER TAXES. On the Closing Dates (as defined in Section
2(d)), all transfer and other taxes (including franchise, capital stock and
other tax, other than income taxes, imposed by any jurisdiction), if any, which
are required to be paid in connection with the sale and transfer by the Company
of the Securities to the Underwriters hereunder shall have been fully paid or
provided for by the Company, and all laws imposing such taxes shall have been
fully complied with by the Company; it being expressly understood and agreed
that no representation or warranty is made hereby as to sales or transfers by
any underwriter.
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(R) EXHIBITS. All contracts and other documents of the Company
or any Subsidiary which are, under the Rules and Regulations, required to be
filed as exhibits to the Registration Statement have been so filed.
(S) SUBSIDIARIES. Except as described in the Prospectus, the
Company has no significant Subsidiaries, as defined under Section 1-02 of
Regulation S-X. All of the capital stock of each Subsidiary is owned by the
Company.
(T) SHAREHOLDER AGREEMENTS, REGISTRATION RIGHTS. Except as
described in the Prospectus, no security holder of the Company has any rights
with respect to the purchase, sale or registration of any Securities, and all
registration rights with respect to the Offering have been effectively waived.
2. PURCHASE, DELIVERY AND SALE OF SHARES.
(A) PURCHASE PRICE FOR SHARES. The Shares of Common Stock
shall be sold to and purchased by the Underwriters hereunder at the purchase
price of $6.37 per Share (that being the public offering price of $7.00 per
Share less an underwriting discount of 9.0 percent) (the "Purchase Price").
(B) FIRM SHARES.
(i) Subject to the terms and conditions of this Agreement,
and on the basis of the representations, warranties and agreements herein
contained the Company agrees to issue and sell to the Underwriters, severally
and not jointly, and each of the Underwriters agrees, severally and not jointly,
to buy from the Company at the Purchase Price, the number of Shares set forth
opposite such Underwriter's name in Schedule I hereto (the "Firm Shares").
(ii) Delivery of the Firm Shares against payment therefor
shall take place at the offices of the Representative, ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Representative's Offices") (or at such other
place as may be designated by agreement between you and the Company) at 10:00
a.m., New York time, on February , 1997, or at such later time and date, not
later than ten banking days after the Effective Date, as you may designate (such
time and date of payment and delivery for the Firm Shares being herein called
the "First Closing Date"). Time shall be of the essence and delivery of the Firm
Shares at the time and place specified in this Section 2(b)(ii) is a further
condition to the obligations of the Underwriters hereunder.
(C) OPTION SHARES.
(i) In addition, subject to the terms and conditions of
this Agreement, and on the basis of the representations, warranties and
agreements herein contained, the Company hereby grants to the Underwriters an
option (the "Over-Allotment
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Option") to purchase from the Company all or any part of an aggregate of an
additional 180,000 Shares at the Purchase Price (the "Option Shares"). In the
event that the Over-Allotment Option is exercised by the Underwriters in whole
or in part, each Underwriter shall purchase Option Shares in the same proportion
as the number of Firm Shares purchased by it bore to the total number of Firm
Shares, unless you and the other Underwriters shall otherwise agree.
(ii) The Over-Allotment Option may be exercised by the
Underwriters, in whole or in part, within 45 days after the Effective Date, upon
notice by you to the Company advising it of the number of Option Shares as to
which the Over-Allotment Option is being exercised, the names and denominations
in which the certificates for the Shares comprising such Option Shares are to be
registered, and the time and date when such certificates are to be delivered.
Such time and date shall be determined by you but shall not be less than four
nor more than ten banking days after exercise of the Over-Allotment Option, nor
in any event prior to the First Closing Date (such time and date being herein
called the "Option Closing Date"). Delivery of the Option Shares against payment
therefor shall take place at the Representative's Offices. Time shall be of the
essence and delivery at the time and place specified in this Section 2(c)(ii) is
a further condition to the obligations of the Underwriters hereunder.
(iii) The Over-Allotment Option may be exercised only to
cover over-allotments in the sale by the Underwriters of Firm Shares.
(D) DELIVERY OF CERTIFICATES; PAYMENT.
(i) The Company shall make the certificates for the Shares
to be purchased hereunder available to you for checking at least one banking day
prior to the First Closing Date or the Option Closing Date (each, a "Closing
Date"), as the case may be. The certificates shall be in such names and
denominations as you may request at least two banking days prior to the relevant
Closing Date. Time shall be of the essence and the availability of the
certificates at the time and place specified in this Section 2(d)(i) is a
further condition to the obligations of the Underwriters hereunder.
(ii) On the First Closing Date: (A) the Company shall
deliver to you for the several accounts of the Underwriters definitive engraved
certificates in negotiable form representing all of the Firm Shares to be sold
by the Company, against payment of the Purchase Price therefor by you for the
several accounts of the Underwriters, by certified or bank cashier's checks
payable in next day funds to the order of the Company, such payment to be made
not later than ten days after the Effective Date.
(iii) In addition, if and to the extent that the
Underwriters exercise the Over-Allotment Option, then on the Option Closing
Date: (A) the Company shall deliver to you for the several accounts of the
Underwriters definitive engraved certificates in negotiable form representing
the Shares comprising the Option Shares to be sold by the Company,
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against payment of the Purchase Price therefor by you for the several accounts
of the Underwriters, by certified or bank cashier's checks payable in next day
funds to the order of the Company.
(iv) It is understood that the Underwriters propose to
offer the Shares to be purchased hereunder to the public, upon the terms and
conditions set forth in the Registration Statement, after the Registration
Statement becomes effective.
3. COVENANTS.
COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Underwriter that:
(A) REGISTRATION.
(i) The Company shall use its best efforts to cause the
Registration Statement to become effective and, upon notification from the
Commission that the Registration Statement has become effective, shall so advise
you and shall not at any time, whether before or after the Effective Date, file
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus of which you shall not previously have been advised and furnished
with a copy, or to which you or Representative's Counsel shall have objected in
writing, or which is not in compliance in all material respects with the Act and
the Rules and Regulations. At any time prior to the later of (A) the completion
by the Underwriters of the distribution of the Shares contemplated hereby (but
in no event more than nine months after the Effective Date), and (B) 25 days
after the Effective Date, the Company shall prepare and file with the
Commission, promptly upon your request, any amendments to the Registration
Statement or any amendments or supplements to the Prospectus which, in your
reasonable opinion, may be necessary or advisable in connection with the
distribution of the Shares.
(ii) Promptly after you or the Company shall have been
advised thereof, you shall advise the Company or the Company shall advise you,
as the case may be, and confirm such advice in writing, of (A) the receipt of
any comments of the Commission, (B) the effectiveness of any post-effective
amendment to the Registration Statement, (C) the filing of any supplement to the
Prospectus or any amended Prospectus, (D) any request made by the Commission for
amendment of the Registration Statement or amendment or supplementing of the
Prospectus, or for additional information with respect thereto, or (E) the
issuance by the Commission or any state or regulatory body of any stop order or
other order denying or suspending the effectiveness of the Registration
Statement, or preventing or suspending the use of any Preliminary Prospectus, or
suspending the qualification of the Securities for offering in any jurisdiction,
or otherwise preventing or impairing the Offering, or the institution or threat
of any proceeding for any of such purposes. The Company and you shall not
acquiesce in such order or proceeding, and shall
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instead actively defend such order or proceeding, unless the Company and you
agree in writing to such acquiescence.
(iii) The Company has caused to be delivered to you copies
of each Preliminary Prospectus, and the Company has consented and hereby
consents to the use of such copies for the purposes permitted by the Act. The
Company authorizes the Underwriters and selected dealers to use the Prospectus
in connection with the sale of the Shares for such period as in the opinion of
Representative's Counsel the use thereof is required to comply with the
applicable provisions of the Act and the Rules and Regulations. In case of the
happening, at any time within such period as a prospectus is required under the
Act to be delivered in connection with sales by an underwriter or dealer, of any
event of which the Company has knowledge and which materially affects the
Company or the Securities, or which in the opinion of Company Counsel or of
Representative's Counsel should be set forth in an amendment to the Registration
Statement or an amendment or supplement to the Prospectus in order to make the
statements made therein not then misleading, in light of the circumstances
existing at the time the Prospectus is required to be delivered to a purchaser
of the Shares, or in case it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the Rules and Regulations, the Company
shall notify you promptly and forthwith prepare and furnish to the Underwriters
copies of such amended Prospectus or of such supplement to be attached to the
Prospectus, in such quantities as you may reasonably request, in order that the
Prospectus, as so amended or supplemented, shall not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements in the Prospectus, in the light of the
circumstances under which they are made, not misleading. The preparation and
furnishing of each such amendment to the Registration Statement, amended
Prospectus or supplement to be attached to the Prospectus shall be without
expense to the Underwriters, except that in the case that the Underwriters are
required, in connection with the sale of the Shares, to deliver a prospectus
nine months or more after the Effective Date, the Company shall upon your
request and at the expense of the Underwriters, amend the Registration Statement
and amend or supplement the Prospectus, or file a new registration statement on
Form SB-2 (if applicable) or Form S-1, if necessary, and furnish the
Underwriters with reasonable quantities of prospectuses complying with section
10(a)(3) of the Act.
(iv) The Company shall comply with the Act, the Rules and
Regulations, and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder in connection with
the offering and issuance of the Securities.
(B) BLUE SKY. The Company shall, at its own expense, use its
best efforts to qualify or register the Securities for sale under the securities
or "blue sky" laws of such jurisdictions as you may designate, and shall make
such applications and furnish such information to Representative's Counsel as
may be required for that purpose, and shall comply with such laws; provided,
however, that the Company shall not be required to qualify as a foreign
corporation or a dealer in securities or to execute a general consent to
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service of process in any jurisdiction in any action other than one arising out
of the offering or sale of the Shares. The Company shall bear all of the expense
of such qualifications and registrations, including without limitation the legal
fees and disbursements of Representative's Counsel, which fees, exclusive of
disbursements, shall not exceed $25,000 (unless otherwise agreed). After each
Closing Date the Company shall, at its own expense, from time to time prepare
and file such statements and reports as may be required to continue each such
qualification in effect for so long a period as you may reasonably request.
(C) EXCHANGE ACT REGISTRATION. The Company shall, at its own
expense, prepare and file with the Commission a registration statement (on Form
8-A) under section 12(g) or 12(b) of the Exchange Act and will use its best
efforts to have such registration statement declared effective by the Commission
concurrently with the Registration Statement being declared effective. The
Company shall use its best efforts to cause such registration statement to be
declared effective and maintained in effect for at least five years from the
Effective Date.
(D) PROSPECTUS COPIES. The Company shall deliver to you on or
before the First Closing Date two signed copies of the Registration Statement
including all financial statements, schedules and exhibits filed therewith, and
of all amendments thereto. The Company shall deliver to or on the order of the
Underwriters, from time to time until the Effective Date, as many copies of any
Registration Statement, Preliminary Prospectus and related exhibits filed with
the Commission prior to the Effective Date as the Underwriters may reasonably
request. The Company shall deliver to the Underwriters on the Effective Date,
and thereafter for so long as a prospectus is required to be delivered under the
Act, from time to time, as many copies of the Registration Statement,
Prospectus, and related exhibits in final form, or as thereafter amended or
supplemented, as the Underwriters may from time to time reasonably request.
(E) AMENDMENTS AND SUPPLEMENTS. The Company shall, promptly upon
your request, prepare and file with the Commission any amendments to the
Registration Statement, and any amendments or supplements to the Preliminary
Prospectus or the Prospectus, and take any other action which in the reasonable
opinion of Representative's Counsel may be reasonably necessary or advisable in
connection with the distribution of the Shares, and shall use its best efforts
to cause the same to become effective as promptly as possible.
(F) CERTAIN MARKET PRACTICES. The Company has not taken, and
shall not take, directly or indirectly, any action designed, or which might
reasonably be expected, to cause or result in, or which has constituted, the
stabilization or manipulation of the price of the Securities to facilitate the
sale or resale thereof.
(G) CERTAIN REPRESENTATIONS. Neither the Company nor any
representative of the Company has made or shall make any written or oral
representation in connection with the Offering and sale of the Shares or the
Representative's Warrant which is not contained in
- 11 -
the Prospectus, which is otherwise inconsistent with or in contravention of any
thing contained in the Prospectus, or which shall constitute a violation of the
Act, the Rules and Regulations, the Exchange Act or the rules and regulations
promulgated under the Exchange Act.
(H) CONTINUING REGISTRATION OF WARRANTS AND UNDERLYING COMMON
STOCK. For so long as any portion of the Representative's Warrant is
outstanding, the Company shall, at its own expense: (i) use its best efforts to
cause post-effective amendments to the Registration Statement, or new
registration statements (which may be on Forms ▇▇-▇, ▇-▇, ▇-▇ or S-3, as the
case may be) relating to the Representative's Warrant and the Common Stock
underlying the Representative's Warrants to become effective in compliance with
the Act and without any lapse of time between the effectiveness of the
Registration Statement and of any such post-effective amendment or new
registration statement; (ii) cause a copy of each Prospectus, as then amended,
to be delivered to each holder of record of any portion of the Representative's
Warrant; (iii) furnish to the Underwriters and dealers as many copies of each
such Prospectus as the Underwriters or dealers may reasonably request; and (iv)
maintain the "blue sky" qualification or registration of the Representative's
Warrant and the Common Stock underlying the Representative's Warrant, or have a
currently available exemption therefrom, in each jurisdiction in which the
Securities were so qualified or registered for purposes of the Offering. In
addition, for so long as the Representative's Warrant is outstanding, the
Company shall promptly notify you of any material change in the business,
financial condition or prospects of the Company.
(I) USE OF PROCEEDS. The Company shall apply the net proceeds
from the sale of the Shares for the purposes set forth in the Prospectus under
the caption "USE OF PROCEEDS," and shall file such reports with the Commission
with respect to the sale of the Shares and the application of the proceeds
therefrom as may be required pursuant to Rule 463 of the Rules and Regulations.
(J) TWELVE MONTHS' EARNINGS STATEMENT. The Company shall make
generally available to its security holders and deliver to you as soon as it is
practicable so to do, but in no event later than 90 days after the end of twelve
months after the close of its current fiscal quarter, an earnings statement
(which need not be audited) covering a period of at least twelve consecutive
months beginning after the Effective Date, which shall satisfy the requirements
of section 11(a) of the Act and may be made available in accordance with Rule
158 of the Rules and Regulations.
(K) NASDAQ, EXCHANGE LISTINGS, ETC. The Company shall
immediately make all filings required to seek approval for the quotation of the
Securities on The Nasdaq SmallCap Market System ("NASDAQ") and shall use
reasonable efforts to effect and maintain such approval for at least five years
from the Effective Date. The Company shall also use its reasonable efforts to
cause the Shares to be accepted for listing on the Pacific Stock Exchange,
and/or such other exchange acceptable to you, prior to the Effective Date or,
failing that, as soon as is possible after the First Closing Date, and to
maintain such
- 12 -
listings for five years. Within 10 days after the Effective Date, the Company
shall also use its best efforts to list itself in ▇▇▇▇▇'▇ OTC Industrial Manual
and to cause such listing to be maintained for at least five years from the
Effective Date.
(L) BOARD OF DIRECTORS. The Company shall maintain a Board of
Directors comprised of a minimum of five and a maximum of eleven directors, at
least a majority of whom shall be neither employed by nor otherwise affiliated
with the Company. The Board of Directors shall hold at least four meetings
annually.
(M) PERIODIC REPORTS. For so long as the Company is a reporting
company under section 12(g) or section 15(d) of the Exchange Act, the Company
shall, at its own expense, furnish to its shareholders an annual report
(including financial statements audited by certified public accountants)
complying with the requirements of Section 14a-3 under the Exchange Act or any
successor provision. In addition, during the period ending five years from the
date hereof, the Company shall, at its own expense, furnish to you: (i) within
90 days of the end of each fiscal year, a balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, together with statements of
income, stockholders' equity and cash flows of the Company and its Subsidiaries
as at the end of such fiscal year, all in reasonable detail and accompanied by a
copy of the certificate or report thereon of certified public accountants; (ii)
as soon as they are available, a copy of all reports (financial or otherwise)
distributed to security holders; and (iii) as soon as they are available, a copy
of all non-confidential reports and financial statements furnished to or filed
with the Commission; and (iv) such other information as you may from time to
time reasonably request. The financial statements referred to herein shall be on
a consolidated basis to the extent the accounts of the Company and its
Subsidiaries are consolidated in reports furnished to its shareholders
generally. In addition, during the period ending one year from the date hereof,
the Company shall, at its own expense, furnish you monthly with Depository Trust
Company stock transfer sheets.
(N) CERTAIN OPTIONS. For a period of 90 days following the First
Closing Date, the Company shall not, without your prior written consent, grant
any options, warrants or other rights to purchase shares of Common Stock at a
price less than the initial public Offering price of the Shares.
(O) FORM S-8 REGISTRATIONS. For a period of one year following
the First Closing Date, the Company shall not register or otherwise facilitate
the registration of any of its securities issuable upon the exercise of options,
warrants (other than the Representative's Warrant) or other rights, whether by
means of a Registration Statement on Form S-8 or otherwise, without your prior
written consent.
(P) FUTURE SALES. For a period of 12 months following the
Effective Date, the Company shall not sell or otherwise dispose of any
securities of the Company without your prior written consent, which consent
shall not be unreasonably withheld; provided, however, that the Company may at
any time issue shares of Common Stock pursuant to the
- 13 -
exercise of the Representative's Warrant, and options, warrants or other
convertible securities issued and outstanding prior to the Effective Date and
described in the Prospectus, and with respect to any acquisition or joint
venture by the Company. In addition, for a period of three years following the
First Closing Date, the Company shall not sell or otherwise dispose of any
shares of Preferred Stock without your prior written consent. Furthermore, for a
period of 18 months from the Effective Date, the Company shall not sell or issue
any securities pursuant to Regulation S under the Act without your prior written
consent.
(Q) RULE 144 SALES. The Company shall cause each of its officers
and directors to provide you the right, for a period of three years following
the First Closing Date, to purchase for your own account, or to sell for the
account of such person, all securities of the Company sold by such person
pursuant to Rule 144 of the Rules and Regulations. The Company shall use its
reasonable efforts to cause each of the other beneficial holders as of the date
hereof of at least 5 percent of the Company's securities to provide you the
right, for a period of three years following the First Closing Date, to purchase
for your own account, or to sell for the account of such holder, all securities
of the Company sold by such holder pursuant to said Rule 144.
(R) AVAILABLE SHARES. The Company shall reserve and at all times
keep available that maximum number of its authorized but unissued shares of
Common Stock which are issuable upon exercise of the Representative's Warrant,
taking into account the anti-dilution provisions thereof.
(S) AGREEMENT OF MANAGEMENT AND SHAREHOLDERS. On or before the
Effective Date, the Company shall cause the parties named therein to execute and
deliver to you an agreement, in the form previously delivered to the Company by
you, regarding certain undertakings by such parties in connection with the
Offering (the "Agreement of Management and Shareholders").
(T) FINANCIAL CONSULTING AGREEMENT. On the First Closing Date
and simultaneously with the delivery of the Firm Shares, the Company shall
execute and deliver to you an agreement with you, in the form previously
delivered to the Company by you, regarding your services as a financial
consultant to the Company (the "Financial Consulting Agreement").
(U) M/A AGREEMENT. On the First Closing Date and simultaneously
with the delivery of the Firm Shares, the Company shall execute and deliver to
you an agreement with you, in the form previously delivered to the Company by
you, regarding mergers, acquisitions, joint ventures and certain other forms of
transactions (the "M/A Agreement").
(V) MANAGEMENT. On each Closing Date, management of the Company
shall consist of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Chairman of the Board, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as
President, and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as Vice President-Finance. Prior to the
Effective Date the
- 14 -
Company shall have obtained "key man" life insurance coverage on the lives of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, naming the Company as beneficiary and
having a face value of at least $1,000,000, for terms, and with an insurance
agency, mutually agreed upon by the Company and you. The Company shall use its
best efforts to maintain such insurance during the three-year period commencing
on the First Closing Date.
(W) PUBLIC RELATIONS. Prior to the Effective Date the Company
shall have retained a public relations firm reasonably acceptable to you, and
shall continue to retain such firm, or an alternate firm acceptable to you, for
a minimum period of two years on such terms as are acceptable to you.
(X) BOUND VOLUMES. Within 90 days from the First Closing Date,
the Company shall deliver to you, at the Company's expense, three bound volumes
in form and content acceptable to you, containing the Registration Statement and
all exhibits filed therewith and all amendments thereto, and all other
agreements, correspondence, filings, certificates and other documents filed and
delivered in connection with the Offering.
(Y) BOARD OBSERVER. For a period of 36 months from the Effective
Date, the Company shall allow an observer designated by you and acceptable to
the Company, to receive notice of and to attend all meetings of the Board of
Directors of the Company. Such observer shall have no voting rights, and shall
be reimbursed by the Company for all reasonable out-of-pocket expenses incurred
in attending such meetings. The Company shall hold at least four meetings per
year and the observer will be indemnified by the Company (to the same extent the
Company provides for indemnification of its directors) against any claims
arising out of his participation at Board meetings.
(Z) CHIEF FINANCIAL OFFICER. Prior to the Effective Date, the
Company shall have hired a Chief Financial Officer or have made other
arrangements satisfactory to you, and shall retain an individual in such
position for a minimum period of three years following the Effective Date.
(AA) STOCK TRANSFER SHEETS. The Company shall supply you with
DTC Stock Transfer sheets on a weekly basis for the first six weeks following
the First Closing Date, and for six weeks following the Option Closing Date, and
on a monthly basis thereafter.
4. CONDITIONS TO UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Shares which they have agreed
to purchase hereunder are subject to the accuracy (as of the date hereof and as
of each Closing Date) of and compliance with the representations and warranties
of the Company contained herein, the performance by the Company of all of its
respective obligations hereunder, and the Agreement of Management and
Shareholders, and the following further conditions:
- 15 -
(A) EFFECTIVE REGISTRATION STATEMENT; NO STOP ORDER. The
Registration Statement shall have become effective and you shall have received
notice thereof not later than 6:00 p.m., New York time, on the date of this
Agreement, or at such later time or on such later date as to which you may agree
in writing. In addition, on each Closing Date (i) no stop order denying or
suspending the effectiveness of the Registration Statement shall be in effect,
and no proceedings for that or any similar purpose shall have been instituted or
shall be pending or, to your knowledge or to the knowledge of the Company, shall
be contemplated by the Commission, and (ii) all requests on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of Representative's Counsel.
(B) OPINION OF COMPANY COUNSEL. On the First Closing Date, you
shall have received the opinion, dated as of the First Closing Date, of Company
Counsel, in form and substance satisfactory to Representative's Counsel, to the
effect that:
(i) the Company and each Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the Prospectus, and, to
such counsel's knowledge, is duly qualified or licensed to do business as a
foreign corporation and is in good standing in each other jurisdiction in which
the nature of its business or the character or location of its properties
requires such qualification, except where failure so to qualify will not
materially affect the business, properties or financial condition of the Company
or such Subsidiary;
(ii) (A) the authorized capitalization of the Company as of
the date of the Prospectus was as is set forth in the Prospectus under the
caption "CAPITALIZATION;" (B) all of the shares of Common Stock now outstanding
have been duly authorized and validly issued, are fully paid and non-assessable,
conform in all material respects to the description thereof contained in the
Prospectus, have not been issued in violation of the preemptive rights of any
shareholder and, to such counsel's knowledge, except as described in the
Prospectus, are not subject to any restrictions upon the voting or transfer
thereof under the Delaware General Corporation Law; (C) all of the Shares have
been duly authorized and, when paid for as provided herein, shall be validly
issued, fully paid and non-assessable, shall not have been issued in violation
of the preemptive rights of any shareholder, and no personal liability shall
attach to the ownership thereof; (D) the shareholders of the Company do not have
any preemptive rights or, to such counsel's knowledge, other rights to subscribe
for or purchase, and there are no restrictions upon the voting or transfer of,
any of the Shares and the shares of Common Stock underlying the Representative's
Warrant other than any such restrictions created by agreement of the
Representative or its transferees,
- 16 -
federal and state securities laws and the By-laws of the National Association of
Securities Dealers, Inc.; (E) the Shares and the Representative's Warrant
conform to their respective descriptions thereof contained in the Prospectus;
(F) to such counsel's knowledge, all prior sales of the Company's securities
have been made in compliance with, or under an exemption from, the Act; (G) a
sufficient number of shares of Common Stock have been reserved for issuance,
upon exercise of the Representative's Warrant is outstanding; and (H) to the
knowledge of such counsel, neither the filing of the Registration Statement nor
the offering or sale of the Shares as contemplated by this Agreement gives rise
to any registration rights or other rights, other than those which have been
effectively waived or satisfied, for or relating to the registration of any
securities of the Company;
(iii) the certificates evidencing the Shares are each in
valid and proper legal form under the Delaware General Corporation Law; and the
Representative's Warrant is exercisable for shares of Common Stock in accordance
with its terms and at the prices therein provided for;
(iv) this Agreement, the Representative's Warrant, the
Financial Consulting Agreement and the M/A Agreement have been duly and validly
authorized, executed and delivered by the Company and (assuming due execution
and delivery thereof by each party thereto other than the Company all of such
agreements are, or when duly executed shall be, the valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms (except as enforceability may be limited by bankruptcy, insolvency or
other laws affecting the rights of creditors generally); provided, however, that
no opinion need be expressed as to the enforceability of the indemnity
provisions contained in Section 6 or the contribution provisions contained in
Section 7;
(v) to the knowledge of such counsel, (A) other than as
described or referred to in the Registration Statement there is no legal or
governmental proceeding pending or threatened in writing affecting the Company
or any Subsidiary which could materially and adversely affect the business,
property, operations, condition (financial or otherwise) or earnings of the
Company or such Subsidiary, or which questions the validity of the Offering, the
Securities, this Agreement, the Representative's Warrant, the Financial
Consulting Agreement or the M/A Agreement, or of any action taken or to be taken
by the Company pursuant thereto; and (B) there is no legal or governmental
proceeding or regulation required to be described or referred to in the
Registration Statement which is not so described or referred to;
(vi) to the knowledge of such counsel, the execution and
delivery hereof and the Representative's Warrant, the Financial Consulting
- 17 -
Agreement or the M/A Agreement and the incurrence of the obligations herein and
therein set forth and the consummation of the transactions herein or therein
contemplated shall not result in a violation of, or constitute a default under,
the Certificate of Incorporation or By-laws of the Company, or, to such
counsel's knowledge, any material obligation, agreement, covenant or condition
contained in any bond, debenture, note or other evidence of indebtedness, or in
any material contract, indenture, mortgage, loan agreement, lease, joint venture
or other agreement or instrument to which the Company is a party or by which its
assets are bound, or any material order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or court;
(vii) the Registration Statement has become effective under
the Act, and to the best knowledge of such counsel, no stop order denying or
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for that or any similar purpose have been instituted or are pending
before or threatened by the Commission;
(viii) the Registration Statement and the Prospectus
(except for the financial statements, notes thereto and other financial
information and statistical data contained therein, as to which no opinion need
be rendered), comply as to form in all material respects with the Act and the
Rules and Regulations;
(ix) all descriptions contained in the Registration
Statement or the Prospectus of contracts and other documents are accurate and
fairly present the information required to be described in all material
respects, and such counsel is familiar with all contracts and other documents
referred to in the Registration Statement and the Prospectus or filed as
exhibits to the Registration Statement and, to the best knowledge of such
counsel, no contract or document of a character required to be summarized or
described therein or to be filed as an exhibit thereto is not so summarized,
described or filed;
(x) the descriptions contained in the Registration
Statement and the Prospectus which purport to summarize the provisions of
statutes, rules and regulations are accurate summaries in all material respects,
and such descriptions fairly present in all material respects the information
shown, and the descriptions contained in the Registration Statement and the
Prospectus that concern matters of law or legal conclusions have been reviewed
by such counsel and are correct in all material respects;
(xi) The Agreement of Management and Shareholders has been
duly and validly executed and delivered by each party thereto (other than
American Stock Transfer & Trust Company); and
- 18 -
(xii) except for registration under the Act and
registration or qualification of the Securities under applicable state or
foreign securities or blue sky laws (as to which no opinion is rendered), no
authorization, approval, consent or license of any governmental or regulatory
authority or agency is necessary in connection with: (A) the authorization,
issuance, sale, transfer or delivery of the Securities by the Company; (B) the
execution, delivery and performance of this Agreement by the Company or the
taking of any action contemplated herein; (C) the issuance of the
Representative's Warrant or the Shares of Common Stock issuable upon exercise
thereof; or (D) the execution, delivery and performance of this Agreement by the
Company or the taking of any action contemplated herein.
We have participated in conferences with officers and other representatives of
the Company, the Representatives of the Underwriters and their counsel and
representatives of the independent certified public accountants of the Company,
at which the contents of the Registration Statement and the Prospectus and
related matters were discussed and although we have not verified or checked the
accuracy, completeness or fairness of the statements and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, on the basis of the
foregoing, no fact has come to our attention which causes us to believe that, at
the time the Registration Statement became effective and at all times subsequent
thereto up to and on the Closing Date, the Registration Statement and any
amendment or supplement thereto contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact necessary to make
the statements therein not misleading, or that the Prospectus as of this date or
at the Closing Date, included or includes any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that we express no comment or belief with
respect to the financial statements or other financial data set forth in the
Registration Statement and in the Prospectus. Such opinion shall also cover such
matters incident to the transactions contemplated hereby as you or
Representative's Counsel shall reasonably request. In rendering such opinion,
Company Counsel may rely as to matters of fact upon certificates of officers of
the Company, and of public officials and may rely as to all matters of law other
than the law of the United States or the States of Delaware or New York upon
opinions of counsel satisfactory to you, in which case the opinion shall state
that they have no reason to believe that you and they are not entitled so to
rely.
(C) CORPORATE PROCEEDINGS. All corporate proceedings and other
legal matters relating to this Agreement, the Registration Statement, the
Prospectus and other related matters shall be reasonably satisfactory to or
approved by Representative's Counsel, and you shall have received from such
counsel a signed opinion, dated as of the First Closing Date, with respect to
the validity of the issuance of the Securities, the form of the Registration
Statement and Prospectus (other than the financial statements and other
financial or statistical data contained therein), the execution of this
Agreement and other related
- 19 -
matters as you may reasonably require. The Company shall have furnished to
Representative's Counsel such documents as they may reasonably request for the
purpose of enabling them to render such opinion.
(D) COMFORT LETTER. Prior to the Effective Date, and again on
and as of the First Closing Date, you shall have received letters from BDO
▇▇▇▇▇▇▇ LLP and Ferro, Berndon & Company, L.L.P., certified public accountants
for the Company, substantially in the form approved by you with respect to the
unaudited financial statements and other financial information and other data
contained in the Registration Statement with regard to the period from the date
of the audited financial statements to a date not more than five days prior to
the Effective Date, the First Closing Date and the Option Closing Date,
respectively.
(E) BRING DOWN. At each of the Closing Dates, (i) the
representations and warranties of the Company contained in this Agreement shall
be true and correct with the same effect as if made on and as of such Closing
Date, and the Company shall have performed all of its respective obligations
hereunder and satisfied all the conditions to be satisfied at or prior to such
Closing Date; (ii) the Registration Statement and the Prospectus shall contain
all statements which are required to be stated therein in accordance with the
Act and the Rules and Regulations, and shall in all material respects conform to
the requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading; (iii) there
shall have been, since the respective dates as of which information is given, no
material adverse change in the business, property, operations, condition
(financial or otherwise), earnings, capital stock, long-term or short-term debt
or general affairs of the Company from that set forth in the Registration
Statement and the Prospectus, except changes which the Registration Statement
and Prospectus indicate might occur after the Effective Date, and the Company
shall not have incurred any material liabilities nor entered into any material
agreement other than as referred to in the Registration Statement and
Prospectus; and (iv) except as set forth in the Prospectus, no action, suit or
proceeding shall be pending or threatened against the Company which would be
required to be disclosed in the Registration Statement, and no proceedings shall
be pending or threatened against the Company before or by any commission, board
or administrative agency in the United States or elsewhere, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
business, property, operations, condition (financial or otherwise), earnings or
general affairs of the Company. In addition, you shall have received, at the
First Closing Date, a certificate signed by the principal executive officer and
by the principal financial officer of the Company, dated as of the First Closing
Date, evidencing compliance with the provisions of this Section 4(e), evidencing
as to him compliance with the provisions of this Section 4(e).
(F) TRANSFER AND WARRANT AGENT. On or before the Effective Date,
the Company shall have appointed American Stock Transfer & Trust Company (or
other agent mutually acceptable to the Company and you), as its transfer agent
and warrant agent to
- 20 -
transfer all of the Shares issued in the Offering, as well as to transfer other
shares of the Common Stock outstanding from time to time, including those
issuable upon exercise of the Representative's Warrant.
(G) CERTAIN FURTHER MATTERS. On each Closing Date,
Representative's Counsel shall have been furnished with all such other documents
and certificates as they may reasonably request for the purpose of enabling them
to render their legal opinion to the Underwriter and in order to evidence the
accuracy and completeness of any of the representations, warranties or
statements, the performance of any of the covenants, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company on
or prior to each of the Closing Dates in connection with the authorization,
issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Representative's Counsel.
(H) ADDITIONAL CONDITIONS. Upon exercise of the Over-Allotment
Option, the Underwriters' obligations to purchase and pay for the Option Shares
shall be subject (as of the date hereof and as of the Option Closing Date) to
the following additional conditions:
(i) The Registration Statement shall remain effective at the
Option Closing Date, no stop order denying or suspending the effectiveness
thereof shall have been issued, and no proceedings for that or any similar
purpose shall have been instituted or shall be pending or, to your knowledge or
the knowledge of the Company, shall be contemplated by the Commission, and all
reasonable requests on the part of the Commission for additional information
shall have been complied with to the satisfaction of Representative's Counsel.
(ii) On the Option Closing Date there shall have been
delivered to you the signed opinion of Company Counsel, dated as of the Option
Closing Date, in form and substance satisfactory to Representative's Counsel,
which opinion shall be substantially the same in scope and substance as the
opinion furnished to you on the First Closing Date pursuant to Section 4(b),
except that such opinion, where appropriate, shall cover the Option Shares
rather than the Firm Shares. If the First Closing Date is the same as the Option
Closing Date, such opinions may be combined.
(iii) All proceedings taken at or prior to the Option
Closing Date in connection with the sale and issuance of the Option Shares shall
be reasonably satisfactory in form and substance to you, and you and
Representative's Counsel shall have been furnished with all such documents,
certificates and opinions as you may request in connection with this transaction
in order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company or its compliance with
any of the covenants or conditions contained herein.
(iv) On the Option Closing Date there shall have been
delivered to you a letter in form and substance satisfactory to you from BDO
▇▇▇▇▇▇▇ LLP and Ferro, Berndon & Company, L.L.P. dated the Option Closing Date
and addressed to you,
- 21 -
confirming the information in their letter referred to in Section 4(d) as of the
date thereof and stating that, without any additional investigation required,
nothing has come to their attention during the period from the ending date of
their review referred to in such letter to a date not more than five banking
days prior to the Option Closing Date which would require any change in such
letter if it were required to be dated the Option Closing Date.
(v) On the Option Closing Date there shall have been
delivered to you a certificate signed by the principal executive officer and by
the principal financial or accounting officer of the Company, dated the Option
Closing Date, in form and substance satisfactory to Representative's Counsel,
substantially the same in scope and substance as the certificate furnished to
you on the First Closing Date pursuant to Section 4(e).
(I) CANCELLATION. If any of the conditions provided by this
Section 4 shall not have been completely fulfilled as of the date indicated,
then this Agreement and all obligations of the Underwriters hereunder may be
cancelled at, or at any time prior to, either Closing Date by your notifying the
Company of such cancellation in writing or by telegram at or prior to the
applicable Closing Date. Any such cancellation shall be without liability of the
Underwriters to the Company, except as otherwise provided herein.
5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of
the Company to sell and deliver the Shares are subject to the following
conditions:
(A) EFFECTIVE REGISTRATION STATEMENT. The Registration Statement
shall have become effective not later than 6:00 p.m. New York time, on the date
of this Agreement, or at such later time or on such later date as the Company
and you may agree in writing.
(B) NO STOP ORDER. On the applicable Closing Date, no stop order
denying or suspending the effectiveness of the Registration Statement shall have
been issued under the Act or any proceedings therefor initiated or threatened by
the Commission.
(C) PAYMENT FOR SHARES. On the applicable Closing Date, you
shall have made payment, for the several accounts of the Underwriters, of the
aggregate Purchase Price for the Shares then being purchased, by certified or
bank cashier's checks payable in next day funds to the order of the Company.
If the conditions to the obligations of the Company provided by this Section 5
have been fulfilled on the First Closing Date but are not fulfilled after the
First Closing Date and prior to the Option Closing Date, then only the
obligation of the Company to sell and deliver the Option Shares upon exercise of
the Over-Allotment Option shall be affected.
- 22 -
6. INDEMNIFICATION.
(A) INDEMNIFICATION BY THE COMPANY. As used in this Agreement,
the term "Liabilities" shall mean any and all losses, claims, damages and
liabilities, and actions and proceedings in respect thereof (including without
limitation all reasonable costs of defense and investigation and all attorneys'
fees) including without limitation those asserted by any party to this Agreement
against any other party to this Agreement. The Company hereby indemnifies and
holds harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act, from and against all Liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act or otherwise, insofar as such Liabilities arise
out of or are based upon: (i) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement or any
amendment thereto, or the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto, or (B) any "blue sky" application or other
document executed by the Company specifically for that purpose, or based upon
written information furnished by the Company, filed in any state or other
jurisdiction in order to qualify any or all of the Securities under the
securities laws thereof (any such application, document or information being
herein called a "Blue Sky Application"); or (ii) the omission or alleged
omission to state in the Registration Statement or any amendment thereto, or the
Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, or in any Blue Sky Application, a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that the Company shall not be liable in any such case to the extent,
but only to the extent, that (i) any such Liabilities arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to the Company through you by or on behalf of any Underwriter
specifically for use in the preparation of the Registration Statement or any
such amendment thereto, or (ii) the Prospectus or any such Preliminary
Prospectus, or any such amendment or supplement thereto, or any such Blue Sky
Application in or with respect to any untrue statement or material omission in a
Preliminary Prospectus to the extent such misstatement or omission is corrected
in the Prospectus or any amendment or supplement thereto and any underwriter
fails to deliver such Prospectus, supplement or amendment. The foregoing
indemnity shall be in addition to any other liability which the Company may
otherwise have.
(B) INDEMNIFICATION BY UNDERWRITERS. Each Underwriter, severally
and not jointly, hereby indemnifies and holds harmless the Company, each of its
directors, each nominee (if any) for director named in the Prospectus, each of
its officers who have signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of the Act, from and against
all Liabilities to which the Company or any such director, nominee, officer or
controlling person may become subject under the Act or otherwise, insofar as
such Liabilities arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, or the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material
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fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that any
such Liabilities arise out of or are based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement or any amendment thereto, or the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company through you, by or
on behalf of such Underwriter, specifically for use in the preparation thereof.
In no event shall any Underwriter be liable or responsible for any amount in
excess of the compensation received by such Underwriter, in the form of
underwriting discounts or otherwise, pursuant to this Agreement or any other
agreement contemplated hereby. The foregoing indemnity shall be in addition to
any other liability which any Underwriter may otherwise have.
(C) PROCEDURE. Promptly after receipt by an indemnified party
under this Section 6 of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify in writing the indemnifying
party of the commencement thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 6. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
subject to the provisions hereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. The indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the defense of the
action with counsel reasonably satisfactory to the indemnified party; provided,
however, that if the indemnified party is any Underwriter or a person who
controls any Underwriter within the meaning of the Act, the fees and expenses of
such counsel shall be at the expense of the indemnifying party if (i) the
employment of such counsel has been specifically authorized in writing by the
indemnifying party, or (ii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the indemnifying party and, indemnified party is advised by counsel that it has
separate defenses (in which case the indemnifying party shall not have the right
to assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys). No settlement of any
action against an indemnified party shall be
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made without the consent of the indemnified party, which shall not be
unreasonably withheld in light of all factors of importance to such indemnified
party.
7. CONTRIBUTION. In order to provide for just and equitable
contribution under the Act in any case in which (a) any indemnified party makes
claims for indemnification pursuant to Section 6 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right of appeal)
that such indemnification may not be enforced in such case, notwithstanding the
fact that the express provisions of Section 6 provide for indemnification in
such case, or (b) contribution under the Act may be required on the part of any
indemnified party, then such indemnified party and each indemnifying party (if
more than one) shall contribute to the aggregate Liabilities to which it may be
subject, in either such case (after contribution from others) in such
proportions that the Underwriters are responsible in the aggregate for that
portion of such Liabilities represented by the percentage that the underwriting
discount per Share plus the (i) non-accountable expense allowance and (ii)
amount of financial consulting agreement appearing on the cover page of the
Prospectus bears to the public Offering price per Share appearing thereon, and
the Company shall be responsible for the remaining portion; provided, however,
that if such allocation is not permitted by applicable law, then the relative
fault of the Company, and the Underwriters in connection with the statements or
omissions which resulted in such Liabilities and other relevant equitable
considerations shall also be considered. The relative fault shall be determined
by reference to, among other things, whether in the case of an untrue statement
of a material fact or the omission to state a material fact, such statement or
omission relates to information supplied by the Company or the Underwriters, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if the respective
obligations of the Company and the Underwriters to contribute pursuant to this
Section 7 were to be determined by pro rata or per capita allocation of the
aggregate Liabilities (even if the Underwriters were to be treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this Section 7. In addition, the contribution of any Underwriter shall not be in
excess of its proportionate share of the portion of such Liabilities for which
such Underwriter is responsible. No person guilty of a fraudulent
misrepresentation (within the meaning of section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. As used in this Section 7, the term "Company" shall include
any officer, director or person who controls the Company within the meaning of
section 15 of the Act. The Underwriters' obligations under this Section 7 to
contribute are several in proportion to their respective underwriting
obligations and not joint. If the full amount of the contribution specified in
this Section 7 is not permitted by law, then each indemnified party and each
person who controls an indemnified party shall be entitled to contribution from
each indemnifying party to the full extent permitted by law. The foregoing
contribution agreement shall in no way affect the contribution liabilities of
any persons having liability under section 11 of the Act other than the Company
and Underwriters. No contribution shall be requested with regard to the
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settlement of any matter from any party who did not consent to the settlement;
provided, however, that such consent shall not be unreasonably withheld in light
of all factors of importance to such party.
8. COSTS AND EXPENSES.
(A) CERTAIN COSTS AND EXPENSES. Whether or not this Agreement
becomes effective or the sale of the Shares to the Underwriters is consummated,
the Company shall pay all costs and expenses incident to the issuance, offering,
sale and delivery of the Shares and the performance of its obligations under
this Agreement, including without limitation: (i) all fees and expenses of the
Company's legal counsel and accountants; (ii) all costs and expenses incident to
the preparation, printing, filing and distribution of the Registration Statement
(including the financial statements contained therein and all exhibits and
amendments thereto), each Preliminary Prospectus and the Prospectus, each as
amended or supplemented, this Agreement and the other agreements and documents
referred to herein, each in such quantities as you shall deem necessary; (iii)
all fees of NASD required in connection with the filing required by NASD to be
made by the Representative with respect to the Offering; (iv) all expenses,
including fees (but not in excess of the amount set forth in Section 3(b)) and
disbursements of Representative's Counsel in connection with the qualification
of the Securities under the "blue sky" laws which you shall designate; (v) all
costs and expenses of printing the respective certificates representing the
Shares; (vi) the expense of placing one or more "tombstone" advertisements or
promotional materials as directed by you (provided, however, that the aggregate
amount thereof shall not exceed $10,000); (vii) all costs and expenses of the
Company and its employees (but not of the Representative or its employees)
associated with due diligence meetings and presentations; (viii) all costs and
expenses associated with the preparation of a seven to ten minute professional
video presentation concerning the Company, its products and its management for
broker due diligence purposes; (ix) any and all taxes (including without
limitation any transfer, franchise, capital stock or other tax imposed by any
jurisdiction) on sales of the Shares to the Underwriters hereunder; and (x) all
costs and expenses incident to the furnishing of any amended Prospectus or any
supplement to be attached to the Prospectus as required by Sections 3(a) and
3(d), except as otherwise provided by said Sections.
(B) REPRESENTATIVE'S EXPENSE ALLOWANCE. In addition to the
expenses described in Section 8(a), the Company shall on the First Closing Date
pay to you, based on the number of Firm Shares to be sold by the Company and
each SELLING SHAREHOLDER, the balance of a non-accountable expense allowance
(which shall include fees of Representative's Counsel exclusive of the fees
referred to in Section 3(b)) of $157,500 (that being an amount equal to 2.5
percent of the gross proceeds received upon sale of the Firm Shares), of which
$20,000 has been paid to you prior to the date hereof. In the event that the
Over-Allotment Option is exercised, then the Company shall on the Option Closing
Date pay to you, based on the number of Option Shares to be sold by the Company,
an additional amount equal to 2.5 percent of the gross proceeds received upon
sale of any of the Option Shares. In the event that the transactions
contemplated hereby fail to be consummated for any reason, then
- 26 -
you shall return to the Company that portion of the $20,000 heretofore paid by
the Company to the extent that it has not been utilized by you in connection
with the Offering for accountable out-of-pocket expenses; provided, however,
that if such failure is due to a breach by the Company of any covenant,
representation or warranty contained herein or because any other condition to
the Underwriters' obligations hereunder required to be fulfilled by the Company
is not fulfilled, then the Company shall be liable for your accountable
out-of-pocket expenses to the full extent thereof (with credit given to the
$20,000 paid).
(C) NO FINDERS. No person is entitled either directly or
indirectly to compensation from the Company, the Underwriters or any other
person for services as a finder in connection with the Offering, and the Company
hereby indemnifies and holds harmless the Underwriters, and the Underwriters
hereby indemnify and hold harmless the Company from and against all Liabilities,
joint or several, to which the indemnified party may become subject insofar as
such Liabilities arise out of or are based upon the claim of any person (other
than an employee of the party claiming indemnity) or entity that he or it is
entitled to a finder's fee in connection with the Offering by reason of such
person's or entity's influence or prior contact with the indemnifying party. The
Representative may compensate any of its personnel as it shall determine in its
sole discretion.
9. SUBSTITUTION OF UNDERWRITERS.
(A) SUBSTITUTION. If any Underwriter defaults in its obligation
to purchase the numbers of Shares which it has agreed to purchase under this
Agreement, you shall be obligated to purchase all of the Shares not purchased by
the defaulting Underwriter unless such purchase shall cause you to be in
violation of the net capital requirements of Rule 15c3- 1 of the Exchange Act,
in which case you, and any other Underwriters satisfactory to you who so agree,
shall have the right, but shall not be obligated, to purchase (in such
proportions as may be agreed upon among them) all of the Shares. If you or the
other Underwriters satisfactory to you do not elect to purchase the Shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase, then
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except for (i) the payment by the
Company of expenses as provided by Section 8(a), (ii) the payment by the Company
of accountable expenses as provided by Section 8(b), and (iii) the indemnity and
contribution agreements of the Company and the Underwriters provided by Sections
6 and 7.
(B) FURTHER MATTERS. Nothing contained herein shall relieve a
defaulting Underwriter of any liability it may have for damages caused by its
default. If the other Underwriters satisfactory to you are obligated or agree to
purchase the Shares of a defaulting Underwriter, either you or the Company may
postpone the First Closing Date for up to seven banking days in order to effect
any changes that may be necessary in the Registration Statement, any Preliminary
Prospectus or the Prospectus or in any other document or agreement, and to file
promptly any amendments to the Registration Statement, or any
- 27 -
amendments or supplements to any Preliminary Prospectus or the Prospectus, which
in your opinion may thereby be made necessary.
10. EFFECTIVE DATE. The Agreement shall become effective upon
its execution, except that you may, at your option, delay its effectiveness
until 10:00 a.m., New York time, on the first full business day following the
Effective Date, or at such earlier time after the Effective Date as you in your
discretion shall first commence the initial public Offering by the Underwriters
of any of the Shares. The time of the initial public offering shall mean the
time of release by you of the first newspaper advertisement with respect to the
Shares, or the time when the Shares are first generally offered by you to
dealers by letter or telegram, whichever shall first occur. This Agreement may
be terminated by you at any time before it becomes effective as provided above,
except that the provisions of Sections 6, 7, 8, 13, 14, 15 and 16 shall remain
in effect notwithstanding such termination.
11. TERMINATION.
(A) GROUNDS FOR TERMINATION. This Agreement, except for Sections
6, 7, 8, 13, 14, 15 and 16, may be terminated at any time prior to the First
Closing Date, and the Over-Allotment Option, if exercised, may be cancelled at
any time prior to the Option Closing Date, by you if in your sole judgment it is
impracticable to offer for sale or to enforce contracts made by the Underwriters
for the resale of the Shares agreed to be purchased hereunder, by reason of: (i)
the Company having sustained a material loss, whether or not insured, by reason
of fire, earthquake, flood, accident or other calamity, or from any labor
dispute or court or government action, order or decree; (ii) trading in
securities on the New York Stock Exchange or the American Stock Exchange having
been suspended or limited; (iii) material governmental restrictions having been
imposed on trading in securities generally which are not in force and effect on
the date hereof; (iv) a banking moratorium having been declared by federal or
New York State authorities; (v) an outbreak or significant escalation of major
international hostilities or other national or international calamity having
occurred; (vi) the passage by the Congress of the United States or by any state
legislature, of any act or measure, or the adoption of any order, rule or
regulation by any governmental body or any authoritative accounting institute or
board, or any governmental executive, which is reasonably believed by you likely
to have a material adverse effect on the business, property, operations,
condition (financial or otherwise) or earnings of the Company; (vii) any
material adverse change in the financial or securities markets beyond normal
fluctuations in the United States having occurred since the date of this
Agreement; or (viii) any material adverse change having occurred since the
respective dates for which information is given in the Registration Statement
and Prospectus, in the business, property, operations, condition (financial or
otherwise), earnings or business prospects of the Company, whether or not
arising in the ordinary course of business.
(B) NOTIFICATION. If you elect to prevent this Agreement from
becoming effective or to terminate this Agreement as provided by this Section 11
or by Section 10, the
- 28 -
Company shall be promptly notified by you, by telephone or telegram, and
confirmed by letter.
12. REPRESENTATIVE'S WARRANT. On the First Closing Date, the Company
shall issue and sell to you, for a total purchase price of $5.00, and upon the
terms and conditions set forth in the form of Representative's Warrant filed as
an exhibit to the Registration Statement, a warrant entitling you to purchase
90,000 Shares (the "Representative's Warrant"). In the event of conflict in the
terms of this Agreement and the Representative's Warrant, the terms and
conditions of the Representative's Warrant shall control.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties, covenants and
other statements of the Company and the Underwriters set forth in or made
pursuant to this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any other party, and shall survive
delivery of and payment for the Shares and the termination of this Agreement.
The Company hereby indemnifies and holds harmless the Underwriters from and
against all Liabilities, joint or several, to which the Underwriters may become
subject insofar as such Liabilities arise out of or are based upon the breach or
failure of any representation, warranty or covenant of the Company contained in
this Agreement.
14. NOTICES. All communications hereunder shall be in writing and,
except as otherwise expressly provided herein, if sent to you, shall be mailed,
delivered or telegraphed and confirmed to you at ▇.▇. ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with a copy sent to ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇; or if sent to the Company, shall be mailed, delivered, or telegraphed and
confirmed to it at General Bearing Corporation, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, with a copy sent to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇ & Priest,
L.L.P., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
15. PARTIES IN INTEREST. This Agreement is made solely for the benefit
of the Underwriters, the Company, and to the extent expressed, any person
controlling the Company or an Underwriter, as the case may be, and the directors
of the Company, nominees for directors of the Company (if any) named in the
Prospectus, officers of the Company who have signed the Registration Statement,
and their respective executors, administrators, successors and assigns; and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser, as
such, from an Underwriter of the Shares.
16. APPLICABLE LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made and to be performed entirely within such State, without reference to such
State's principals regarding the conflict of laws.
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17. COUNTERPARTS. This Agreement may be executed in two or more
counterpart copies, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return this Agreement, whereupon it will become a
binding agreement between the Company and the Underwriters in accordance with
its terms.
Yours very truly,
GENERAL BEARING CORPORATION
By:________________________
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
▇.▇. ▇▇▇▇▇▇ & CO., INC.
AS REPRESENTATIVE OF THE
SEVERAL UNDERWRITERS NAMED
IN SCHEDULE I HERETO
By:____________________________
Name:
Title:
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SCHEDULE I
UNDERWRITING AGREEMENT DATED [EFFECTIVE DATE]
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
▇.▇. ▇▇▇▇▇▇ & Co., Inc.
TOTAL --------
900,000
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