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EXHIBIT 1.1
1,650,000 Shares
ATL Products, Inc.
Class A Common Stock
UNDERWRITING AGREEMENT
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March , 1997
▇▇▇▇▇▇▇▇▇▇ SECURITIES
CRUTTENDEN ▇▇▇▇ INCORPORATED
As Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1
INTRODUCTORY
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ATL Products, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell 1,650,000 shares of its authorized but unissued Class A
Common Stock, par value $.0001 per share (the "Class A Common Stock"), to the
several underwriters named in Schedule A annexed hereto (the "Underwriters"),
for whom you are acting as Representatives. Said aggregate of 1,650,000
shares are herein called the "Firm Common Shares." In addition, the Company
proposes to grant to the Underwriters an option to purchase up to 245,000
additional shares of Class A Common Stock (the "Optional Common Shares"), as
provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares." The shares of Class A Common Stock and
Class B Common Stock, par value $.0001 per share (the "Class B Common Stock"),
of the Company are hereinafter referred to as the "Common Stock."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the registration statement hereinafter referred to, or as
soon thereafter as in your judgment is advisable.
The Company and Odetics, Inc., the Company's parent (the "Parent"),
hereby confirm their respective agreements with respect to the purchase of the
Common Shares by the Underwriters as follows:
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SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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AND THE PARENT
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The Company and the Parent, jointly and severally, represent and
warrant to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-18537) with
respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, and has been filed with
the Commission. The Company has prepared and has filed or proposes to file
prior to the effective date of such registration statement an amendment or
amendments to such registration statement. There have been delivered to you two
signed copies of such registration statement. Conformed copies of such
registration statement and amendments (but without exhibits) and of the
related preliminary prospectus have been delivered to you in such reasonable
quantities as you have requested for each of the Underwriters. The Company
will next file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment thereto,
including the form of final prospectus, or (ii) a final prospectus in accordance
with Rules 430A and 424(b) of the Rules and Regulations. As filed, such
amendment and form of final prospectus, or such final prospectus, shall include
all Rule 430A Information (as hereinafter defined) and, except to the extent
that you shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the date and time that this
Agreement was executed and delivered by the parties hereto, or, to the extent
not completed at such date and time, shall contain only such specific
additional information and other changes (beyond that contained in the latest
preliminary prospectus) as the Company shall have previously advised you in
writing would be included or made therein as the Representative shall have
approved.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include (i) all Rule 430A Information deemed to be included in
such registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) a
registration statement, if any, filed pursuant to Rule 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in the preceding paragraph
and any preliminary prospectus included in the Registration Statement at the
time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to
the Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no filing pursuant
to Rule 424(b) of the Rules and Regulations is required, shall mean the form of
final prospectus included in the Registration Statement at the time such
registration statement becomes effective. The term "Rule 430A Information"
means information with respect to the Common Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the
Act and the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to and
including each Closing Date hereinafter mentioned, the Registration Statement
and the Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, no representation or
warranty contained in this subsection 2(b) shall be applicable to information
contained in or omitted from any Preliminary Prospectus, the Registration
Statement, the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof.
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(c) The Company does not own or control, directly or indirectly,
any corporation, association or other entity, other than the Company's wholly
owned Subsidiary, ATL Products Limited (the "Subsidiary"). The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware. The Subsidiary has been duly formed
and is validly existing as a private limited liability company under the laws
of the United Kingdom. The Company and the Subsidiary have all requisite
corporate power and authority to own and lease its respective properties and
conduct its respective business as described in the Prospectus; the Company and
the Subsidiary are in possession of and operating in compliance with all
authorizations, licenses, permits, consents, certificates and orders which are
material to the conduct of its business as currently conducted, all of which are
valid and in full force and effect except where the failure to hold such
authorizations, licenses, permits, consents, certificates and orders would not
have a material and adverse effect on the Company's business, results and
operations and financial condition; the Company and each Subsidiary is duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction in which the ownership or leasing of properties or the conduct of
its business requires such qualification, except for jurisdictions in which the
failure to so qualify would not have a material adverse effect upon the Company
and the Subsidiary taken as a whole; and no proceeding has been instituted in
any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification. The Company owns
all outstanding shares of capital stock of each Subsidiary, free and clear of
any claim, lien or encumbrance of any kind except for liens described in the
Prospectus.
(d) The Company has an authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been, and the issued and outstanding
shares of Common Stock immediately prior to Closing will be duly authorized and
validly issued, fully paid and nonassessable, issued in compliance with all
federal and state securities laws, not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and in conformance with the description thereof contained in the Prospectus.
Prior to the Offering, all outstanding shares of Common Stock of the Company
are owned by the Parent. Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, the Company has, and immediately prior to the Closing will
have, no outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus accurately describes such plans or
arrangements in all material respects.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in or
incorporated by reference in the Prospectus. No preemptive rights or other
rights to subscribe for or purchase exist with respect to the issuance and sale
of the Common Shares by the Company pursuant to this Agreement. No stockholder
of the Company has any right which has not been waived to require the Company
to register the sale of any shares owned by such stockholder under the Act in
the public offering contemplated by this Agreement. No further approval or
authority of the stockholder or the Board of Directors of the Company will be
required for the issuance and sale of the Common Shares to be sold by the
Company as contemplated herein.
(f) The Class A Common Stock has been approved for quotation on
the Nasdaq National Market, subject to official notice of issuance.
(g) The Company and the Parent each has full legal right, power
and authority to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and the Parent and constitutes a valid and binding
obligation of each of the Company and the Parent, enforceable in accordance with
its terms except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally. The execution and delivery of this
Agreement by the Company and the Parent and the consummation of the transactions
herein contemplated will not violate any provisions of the certificate of
incorporation, bylaws or other organizational documents, of the Company or the
Parent, and will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under (i) any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Company or the
Parent is a party or by which the Company or the Parent or any of their
respective properties may be bound or affected, or (ii) any statute or any
authorization, judgment, decree, order, rule or regulation of any court or any
regulatory body, administrative agency or other governmental body applicable to
the Company or the Parent or any of their respective properties. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except as has been obtained or except for
compliance with the Act, the
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Blue Sky laws applicable to the public offering of the Common Shares by the
several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(h) Ernst & Young LLP, who have expressed their opinion with
respect to the financial statements and schedules filed with the Commission as
a part of the Registration Statement and included in the Prospectus and in the
Registration Statement, are independent accountants to the Company as required
by the Act and the Rules and Regulations.
(i) The financial statements and schedules of the Company, and the
related notes thereto, included in the Registration Statement and the Prospectus
present fairly the financial position of the Company as of the respective dates
of such financial statements and schedules, and the results of operations and
changes in financial position of the Company for the respective periods
presented, provided, however, that the unaudited quarterly and unaudited interim
financials are condensed, but include all adjustments (consisting of only normal
recurring adjustments) that the Company considers necessary for a fair
presentation of the Company's financial position, operating results and cash
flows for the interim periods. Such statements, schedules and related notes
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by the independent accountants named
in subsection 2(h), provided, however, that the unaudited quarterly and
unaudited interim financials are condensed, but include all adjustments
(consisting of only normal recurring adjustments) that the Company considers
necessary for a fair presentation of the Company's financial position,
operating results and cash flows for the interim periods. No other financial
statements or schedules are required to be included in the Registration
Statement or incorporated by reference therein. The selected financial data
set forth in the Prospectus under the captions "Capitalization" and "Selected
Consolidated Financial Data" fairly present the information set forth therein
on the basis stated in the Registration Statement. The Company has no
long-term or short-term indebtedness other than the promissory note in the
amount of $[.] million payable to the Parent, trade payables in the ordinary
course of business and other indebtedness set forth in the financial
statements of the Company included in the Prospectus.
(j) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The representations and warranties given by the Company and/or
its officers to independent public accountants for the purpose of supporting
the letters referred to in Section 8(c)(vi) are true and correct.
(k) Neither the Company nor the Subsidiary is (i) in violation or
default of any provision of its certificate of incorporation or bylaws, or
other organizational documents, or (ii) in breach of or default with respect to
any provision of any agreement, judgment, decree, order, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to
which it is a party or by which it or any of its properties are bound, except
where a violation, breach or default with respect to clauses (i) and (ii)
would not have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company and the
Subsidiary taken as a whole; and there does not exist any state of facts which
constitutes an event of default on the part of the Company or the Subsidiary
as defined in such documents or which, with notice or lapse of time or both,
would constitute such an event of default.
(l) There are no contracts or other documents which are required
to be described in the Registration Statement or to be filed as exhibits to the
Registration Statement or by the Rules and Regulations which have not been
accurately described or filed as required. Neither the Company nor its
Subsidiary nor, to the best knowledge of the Company or the Parent (as the
case may be), any other party is in breach of or default under any of such
contracts filed as exhibits to the Prospectus, except where a breach or
default would not have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company and the Subsidiary
taken as a whole.
(m) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings (including those related to
environmental or discrimination matters) pending, or to the best knowledge of
the Company or the Parent (as the case may be), threatened, as to which the
Company or the Subsidiary taken as a whole is or may be a party or of which
property owned or leased by the Company or the Subsidiary is or may be the
subject, which actions, suits or proceedings could reasonably be expected to,
individually or in the aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, business or results of
operations of the Company and the Subsidiary taken as a whole; and no labor
disturbance by the employees of the Company or the Subsidiary exists or is
imminent which could reasonably be expected to affect materially and adversely
such condition, properties, business or results of operations. Neither the
Company nor the Subsidiary is a party or subject to the provisions of
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any material injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body.
(n) The Company and the Subsidiary have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except (i) those,
if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not
adversely affect the use made and proposed to be made of such property by the
Company or its Subsidiary, as the case may be. The Company and the Subsidiary
hold their respective leased properties under valid and binding leases, except
where such leases are not material to the business of the Company and the
Subsidiaries, taken as a whole. Except as disclosed in the Prospectus, the
Company and the Subsidiary own or lease all such properties as are necessary
to their respective operations as now conducted or as proposed to be conducted.
(o) The Company and the Subsidiary are in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA") and with all requirements
prescribed by any and all statutes, orders, government rules and regulations
including the Internal Revenue Code of 1986, as amended, currently in effect
with respect to employee benefit plans; no "reportable event" (as defined in
ERISA) nor any event described in Sections 4062, 4063 or 4041(c) of ERISA has
occurred for which the Company would have any liability; neither the Company
nor any Subsidiary has incurred and does not expect to incur material liability
under (i) Title IV of ERISA other than premium payments to the Pension Benefit
Guaranty Corporation arising in the ordinary course or (ii) Section 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any Subsidiary would have any material liability that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service and nothing
has occurred, whether by action or by failure to act, which would cause the
loss of such determination letter. Neither the Company nor any Subsidiary has
incurred any material liability or penalty under Sections 4975 through 4980 of
the Code or under Title I of ERISA. All contributions, premiums or other
payments (including all employer contributions and employee salary reduction
contributions) which are due have been paid to each "pension plan" and all
contributions, premiums or other payments for any period ending on or before
the Closing Date which are not yet due have been paid to each such "pension
plan" or accrued in accordance with the past custom and practice of the
Company. No suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of any plan activities) has been brought, or to
the knowledge of the Company or the Parent is threatened, against or with
respect to any employee benefit plan of the Company or any Subsidiary. All
"pension plans" and other employee-related plans of the Company and each
Subsidiary are fully funded.
(p) Since the respective dates as of which information is given in
the Registration Statement and Prospectus: (i) neither the Company nor the
Subsidiary has incurred any material liabilities or obligations, indirect,
direct or contingent, or entered into any material verbal or written agreement
or other transaction in any such case which is not in the ordinary course of
business; (ii) neither the Company nor the Subsidiary has sustained any
material loss or interference with its business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance;
(iii) except as specifically contemplated by the Prospectus, the Company has
not paid or declared any dividends or other distributions with respect to its
capital stock; (iv) neither the Company nor the Subsidiary is in default in the
payment of principal or interest on any outstanding debt obligations; (v) there
has not been any change in the capital stock or indebtedness material to the
Company and the Subsidiary taken as a whole (other than in the ordinary
course of business); and (vi) there has not been any material adverse change in
the condition (financial or otherwise), business, properties or results of
operations of the Company or the Subsidiary.
(q) The Company has sufficient trademarks, trade names, patent
rights, mask works, copyrights, licenses, approvals and governmental
authorizations to conduct its business as now conducted; and, except as
disclosed in the Prospectus, neither the Company nor the Parent has any
knowledge of any material infringement by the Company or the Subsidiary of any
trademark, trade name rights, patent rights, mask works, copyrights, licenses,
trade secret or other similar rights of others, and there is no claim being
made against the Company or the Subsidiary regarding trademark, trade name,
patent, mask work, copyright, license, trade secret or other infringement which
could have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and the Subsidiary, taken as
a whole.
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(r) The Company and the Subsidiary are each conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not materially adversely affect the
condition (financial or otherwise), business or results of operations of the
Company and the Subsidiary, taken as a whole.
(s) All necessary federal, state and foreign income and franchise
tax returns have been filed by the Company and the Subsidiary, except where
the failure to file would not have a material adverse effect on the condition
(financial or otherwise), business or results of operations of the Company and
the Subsidiary, taken as a whole, and to the Company's knowledge, all such tax
returns are complete and correct in all material respects, and all taxes shown
as due thereon have been paid. Neither the Company nor the Parent has any
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or the Subsidiary which could reasonably be
expected to materially and adversely affect the business, operations or
properties of the Company and the Subsidiary taken as a whole.
(t) The Company is not, and upon the closing of the offering
contemplated hereby will not be, an "investment company" or a company
"controlled by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(u) Neither the Company nor the Parent has distributed and will
not distribute prior to the First Closing Date any offering material in
connection with the offering and sale of the Common Shares other than the
Preliminary Prospectus, the Prospectus, the Registration Statement or any other
materials permitted by the Act.
(v) The Company and the Subsidiary maintain liability, property
and casualty insurance in an amount and or such terms as are reasonable and
customary for businesses similar to the Company, including against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect.
(w) Neither the Company, the Parent nor, to the knowledge of the
Company and the Parent, any of their respective employees or agents has at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(x) Neither the Company nor the Parent has taken, and neither will
take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Class A Common Stock to facilitate the sale or resale of the
Common Shares.
(y) The Company and the Parent have caused each of its respective
executive officers and directors as set forth in the Prospectus to furnish to
the Representatives an agreement in the form attached hereto, pursuant to which
each such party has agreed that during the period of 180 days after the first
date that any of the Common Shares are released by you for sale to the public,
without the prior written consent of ▇▇▇▇▇▇▇▇▇▇ Securities, which consent may
be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇ Securities, such party will
not directly or indirectly offer, sell, contract to sell or otherwise dispose
of any shares of the Company's Common Stock or securities convertible into or
exchangeable for, or any rights to purchase or acquire, the Company's Common
Stock (including without limitation, Common Stock of the Company which may be
deemed to be beneficially owned in accordance with the rules and regulations of
the Commission); provided, however, that bona fide gift transactions may be
permitted if the donee agrees in writing, prior to the consummation of the
gift, to be bound by the provisions applicable to the share in the hands of the
donor.
(z) The Company's acquisition (the "Acquisition") of the assets of
ATL Customer Service ("ASC"), a subdivision of the Parent, as contemplated by
the ▇▇▇▇ of Sale dated December 31, 1996 was completed on December 31, 1996, and
pursuant to the Acquisition, the Company has acquired all assets necessary to
operate its service business as currently conducted. All assets acquired
pursuant to the Acquisition have been acquired free and clear of any lien,
mortgage, pledge, security interest or other encumbrance, except for liens
granted pursuant to the Loan Agreement as described in the Registration
Statement. The Acquisition did not violate any provision of the certificate of
incorporation, bylaws or other organizational documents of the Company or the
Parent, and will not conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any agreement, mortgage, deed of trust, lease, franchise,
indenture, permit or other instrument to which the Company or the Parent is a
party or by which the Company or the Parent or any of their respective
properties may be bound or affected, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory
body, administrative agency or other governmental body applicable to the
Company or the Parent or any of their respective properties.
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SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
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OF THE PARENT
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The Parent represents and warrants to, and agrees with, the several
Underwriters that the Parent will not offer to sell, sell or contract to sell
or otherwise dispose of any shares of Common Stock or securities convertible
into or exchangeable for any shares of Common Stock, for a period of 180 days
after the first date that any of the Common Shares are released by you for
sale to the public, without the prior written consent of ▇▇▇▇▇▇▇▇▇▇ Securities,
which consent may be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇ Securities.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS
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The Representatives, on behalf of several Underwriters, represent and
warrant to the Company and to the Parent that the information set forth (i) on
the cover page of the Prospectus with respect to price, underwriting discounts
and commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and
the Prospectus and is correct in all material respects. The Representatives
represent and warrant that, except as expressly provided herein, it has been
authorized by each of the other Underwriters as the Representatives to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5
PURCHASE, SALE AND DELIVERY OF COMMON SHARES
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On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters 1,650,000 Firm Common
Shares and the Underwriters agree, severally and not jointly, to purchase from
the Company the number of Firm Common Shares described below. The purchase
price per share to be paid by the several Underwriters to the Company shall be
$[.] per share.
The obligation of each Underwriter to the Company shall be to purchase
from the Company that number of full shares which (as nearly as practicable, as
determined by you) bears to 1,650,000 the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of
▇▇▇▇▇▇▇▇▇▇ Securities, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (or
such other place as may be agreed upon by the Company and the Underwriters) at
such time and date, not later than the third (or, if the Firm Common Shares are
priced as contemplated by Rule 15c6-1(c) of the Exchange Act, after 4:30 p.m.
Washington, D.C. time, the fourth) full business day following the first date
that any of the Common Shares are released by you for sale to the public, as
you shall designate by at least 48 hours prior notice to the Company (or at
such other time and date, not later than one week after such third or fourth,
as the case may be, full business day as may be agreed upon by the Company and
the Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public,
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the First Closing Date shall occur upon the later of the third or fourth, as
the case may be, full business day following the first date that any of the
Common Shares are released by you for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters with respect to the Firm Common Shares to be sold by the Company
against payment by you, for the accounts of the several Underwriters, of the
purchase price therefor by wire transfer of federal funds to an account
designated in writing by the Company. The certificates for the Firm Common
Shares shall be registered in such names and denominations as you shall have
requested at least two full business days prior to the First Closing Date, and
shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase up to 245,000 Optional Common Shares; in each case at the purchase
price per share to be paid for the Firm Common Shares, for use solely to
cover any over-allotments made by you for the account of the Underwriters in
the sale and distribution of the Firm Common Shares. The options granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the first date that any of the Common Shares are released by you for sale
to the public, upon notice by you to the Company setting forth the aggregate
number of Optional Common Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date shall not be earlier than three full business days after delivery of such
notice of exercise. The number of Optional Common Shares to be purchased by
each Underwriter shall be determined by multiplying the aggregate number of
Optional Common Shares to be sold by the Company pursuant to such notice of
exercise by a fraction, the numerator of which is the number of Firm Common
Shares to be purchased by such Underwriter as set forth opposite its name in
Schedule A and the denominator of which is 1,650,000 (subject to such
adjustments to eliminate any fractional share purchases as you in your
discretion may make). Certificates for the Optional Common Shares will be made
available for checking and packaging on the business day preceding the Second
Closing Date at a location in New York, New York, as may be designated by you.
The manner of payment for and delivery of the Optional Common Shares shall be
the same as for the Firm Common Shares purchased from the Company as specified
in the two preceding paragraphs. At any time before lapse of the options, you
may cancel both such options by giving written notice of such cancellation to
the Company. If the options are canceled or expire unexercised in whole or in
part, the Company will deregister under the Act the number of Optional Common
Shares as to which the options has not been exercised.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Common Shares, to make payment and to receipt
therefor. You may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by you by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Underwriters is advisable and at the public offering price set forth on
the cover page of and on the terms set forth in the Prospectus.
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SECTION 6
COVENANTS OF THE COMPANY AND THE PARENT
---------------------------------------
The Company and the Parent each covenants and agrees that:
(a) The Company and the Parent will each use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A of the Rules and Regulations, or the
filing of the Prospectus is otherwise required under Rule 424(b) of the Rules
and Regulations, the Company will file the Prospectus, properly completed,
pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly advise
you in writing (i) of the receipt of any comments of the Commission, (ii) of
any request of the Commission for amendment of or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus or for additional information, (iii)
when the Registration Statement shall have become effective and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time, the
Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or
supplement to the Registration Statement (either before or after it becomes
effective), any Preliminary Prospectus or the Prospectus of which you have not
been furnished with a copy a reasonable time prior to such filing or to which
you reasonably object or which is not in compliance with the Act and the Rules
and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, a registration statement pursuant to Rule 462(b) of
the Rules and Regulations related to the Common Shares and any amendments or
supplements to the Registration Statement or the Prospectus which in your
judgment may be necessary or advisable to enable the several Underwriters to
continue the distribution of the Common Shares and will use its best efforts to
cause the same to become effective as promptly as possible. The Company will
fully and completely comply with the provisions of Rule 430A of the Rules and
Regulations with respect to information omitted from the Registration Statement
in reliance upon such Rule.
(c) The Company will immediately notify you in writing if, at any
time prior to the earliest of (i) the Second Closing Date on which all
remaining Optional Common Shares are purchased, (ii) the cancellation of the
options to purchase the Optional Common Shares as provided herein and (iii) the
expiration of the options to purchase the Optional Common Shares as provided
herein, any representation or warranty of the Company set forth herein shall
not be true and accurate in all material respects or, without limiting the
foregoing, if there shall have been any material adverse change, or a
development involving a material adverse change, in the condition (financial or
otherwise), properties, business or results of operations of the Company.
(d) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the Act any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary at any time to amend the Prospectus,
including any amendments or supplements, to comply with the Act or the Rules
and Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case any
Underwriter is required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of such Underwriter, will promptly
prepare such amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(e) As soon as practicable, but not later than 45 days after the
end of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
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(f) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the nine-month period referred to in Section 10(a)
(3) of the Act, will furnish to you or mail to your order copies of the
Registration Statement, the Prospectus, the Preliminary Prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may reasonably request, for the purposes
contemplated by the Act.
(g) The Company shall cooperate with you and your counsel in order
to qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky laws of such jurisdictions as you
designate, will comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required for the
distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation. The Company will
advise you promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your cooperation,
will use its best efforts to obtain the withdrawal thereof.
(h) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon the request of the Representatives, to
each of the other Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholder's equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(i) During the period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, the Company will
not, without the prior written consent of ▇▇▇▇▇▇▇▇▇▇ Securities (which consent
may be withheld at the sole discretion of ▇▇▇▇▇▇▇▇▇▇ Securities), issue, offer,
sell, grant options to purchase or otherwise dispose of any of the Company's
equity securities or any other securities convertible into or exchangeable with
its Common Stock or other equity security, other than pursuant to the Company's
stock plans disclosed in the Prospectus or in connection with the Company's
acquisition of complementary technologies or businesses.
(j) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
(k) The Company will use its best efforts to qualify or register
its Class A Common Stock for sale in nonissuer transactions under (or obtain
exemptions from the application of) the Blue Sky laws of the State of
California (and thereby permit market making transactions and secondary trading
in the Company's Class A Common Stock in California), will comply with such
Blue Sky laws and will continue such qualifications, registrations and
exemptions in effect for a period of five years after the date hereof.
(l) The Company will maintain a transfer agent and registrar for
its Class A Common Stock.
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 7
PAYMENT OF EXPENSES
-------------------
Whether or not the transactions contemplated hereunder are consummated
or this Agreement becomes effective or is terminated, the Company and, unless
otherwise paid by the Company, the Parent agree to pay in such proportions as
they may
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agree upon among themselves all costs, fees and expenses incurred in connection
with the performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Class A Common Stock, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent accountants,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations related to the Common Shares, this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Underwriters' Questionnaire,
the Underwriters' Power of Attorney and the Blue Sky memorandum, (vi) all
filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under state Blue Sky and foreign securities
laws, (vii) all filing fees of the National Association of Securities Dealers,
Inc. and (viii) all other fees, costs and expenses referred to in Item 13 of
the Registration Statement. The Company shall be the primary obligor with
respect to all costs, fees and expenses to be paid by the Company and by the
Parent. Except as provided in this Section 7, Section 9 and Section 11
hereof, the Underwriters shall pay all of their own expenses, including the
fees and disbursements of their counsel (excluding those relating to
qualification, registration or exemption under state Blue Sky and foreign
securities laws and the Blue Sky memorandum referred to above). This Section 7
shall not affect any agreements relating to the payment of expenses between the
Company and the Parent.
The Company and the Parent will pay (directly or by reimbursement) all
fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to any fees and expenses of counsel for the Parent.
SECTION 8
CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS
-------------------------------------------------
The obligations of the several Underwriters to purchase and pay for
the Firm Common Shares on the First Closing Date and the Optional Common Shares
on the Second Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Parent herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company's
officers and the Parent made pursuant to the provisions hereof, to the
performance by the Company and the Parent of their respective obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m.(or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 p.m.), Washington, D.C. Time, on the date of this Agreement,
or at such later time as shall have been consented to by you; if the filing of
the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b)
of the Rules and Regulations, the Prospectus shall have been filed in the
manner and within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, the Parent or you, shall be contemplated by
the Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus, (i)
except as disclosed in the Prospectus, there shall not have been any change in
the capital stock or any material change in the indebtedness (other than in the
ordinary course of business) of the Company, (ii) except as set forth or
contemplated by the Registration Statement or the Prospectus, no material
verbal or written agreement or other transaction shall have been entered into
by the Company, which is not in the ordinary course of business, (iii) no loss
or damage (whether or not insured) to the property of the Company shall have
been sustained which materially and adversely affects the condition
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(financial or otherwise), business or results of operations of the Company,
(iv) no legal or governmental action, suit or proceeding affecting the Company
which is material to the Company or which affects or could reasonably be
expected to affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material
change in the condition (financial or otherwise), business, management or
results of operations of the Company which makes it impractical or inadvisable
in the reasonable judgment of the Representatives to proceed with the public
offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you on each Closing Date,
in form and substance satisfactory to you, except as otherwise expressly
provided below:
(i) An opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
counsel for the Company and the Parent, addressed to the Underwriters
and dated the First Closing Date or the Second Closing Date, as the
case may be, to the effect that:
(1) The Company has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the State of Delaware. The Subsidiary is duly formed
and validly existing under the laws of the United Kingdom. The
Company is duly qualified to do business as a foreign corporation
in the State of California. To our knowledge, there are no other
jurisdictions where the ownership or leasing of properties or the
conduct of its business requires such qualification, except for
jurisdictions in which the failure to so qualify would not have a
material adverse effect on the business, results and operations or
the financial condition of the Company and the Subsidiary, taken
as a whole. The Company has corporate power and authority to own
its properties and conduct its business as described in the
Registration Statement;
(2) The authorized issued and outstanding
capital stock of the Company conforms in all material respects to
the description of the capital stock set forth under the caption
"Capitalization" in the Prospectus; immediately upon consummation
of the Offering, to our knowledge, the Parent will own all the
issued and outstanding shares of Common Stock which are not sold
in the Offering; all necessary and proper corporate proceedings
have been taken in order to validly authorize such Common Stock;
all outstanding shares of Common Stock (including the Firm Common
Shares and any Optional Common Shares) have been duly and validly
issued, are fully paid and nonassessable, have been issued in
compliance with the registration and qualification requirements of
federal and state securities laws (other than as may be required
by state securities laws for the Common Shares, as to which such
counsel need express no opinion), were not issued in violation of
or subject to any preemptive rights or, to such counsel's
knowledge, other rights to subscribe for or purchase any of the
Common Shares to be sold by the Company hereunder;
(3) The certificates evidencing the Common
Shares to be delivered hereunder are in due and proper form under
Delaware law, and when duly countersigned by the Company's
transfer agent and registrar, and delivered to you or upon your
order against payment of the agreed consideration therefor in
accordance with the provisions of this Agreement, the Common
Shares represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, and will conform in all
respects to the description thereof set forth under the caption
"Description of Securities" in the Prospectus;
(4) Except as disclosed in or specifically
contemplated by the Prospectus, to such counsel's knowledge, there
are no outstanding options, warrants or other rights calling for
the issuance of, and no commitments, plans or arrangements to
issue, any shares of capital stock (including, without limitation,
the Common Shares) of the Company or any security convertible into
or exchangeable for capital stock of the Company;
(5) (a) The Registration Statement has become
effective under the Act, and to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
or preventing the use of the Prospectus has been issued and no
proceedings for that purpose have been instituted or are pending
or threatened by the Commission; any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) and
462(b) of the Rules and Regulations has been made in the manner
and within the time period required by such Rule 424(b) or 462(b);
(b) The Registration Statement and the
Prospectus (except for the financial statements and schedules and
other financial and statistical data included therein as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Rules
and Regulations;
(c) To such counsel's knowledge, there
are no franchises, leases, contracts, agreements or documents
which are of a character required to be disclosed in the
Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement, which are not disclosed or filed as
required; and
(d) To such counsel's knowledge, there
are no legal or governmental actions, suits or proceedings
pending or threatened against the Company which are required to
be described in the Prospectus which are not described as
required.
(6) The Company has all requisite corporate
power and authority to enter into this Agreement and to sell and
deliver the Common Shares to be sold by it to the several
Underwriters; this Agreement has been duly and validly authorized
by all necessary corporate action by the Company, has been duly
and validly executed and delivered by and on behalf of the
Company, and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as enforceability
may be limited by general equitable principles, bankruptcy,
insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and except as to those provisions
relating to indemnity or contribution for liabilities arising
under the Act as to which no opinion need be expressed; and no
approval, authorization, order, consent, filing, license or permit
of or with any court, regulatory, administrative or other
governmental body is required for the execution and delivery of
this Agreement by the Company or the performance by the Company of
its obligations contemplated by this Agreement to be performed at
the time of closing, except such as have been obtained and are in
full force and effect under the Act and such as may be required
under applicable Blue Sky laws in connection with the purchase and
distribution of the Common Shares by the Underwriters and the
clearance of such offering with the NASD;
(7) The execution and delivery of this
Agreement by the Company and the Parent and the performance by the
Company of its obligations thereunder contemplated by the
Agreement to be performed at the time of the closing will not
conflict with, result in the breach of, or constitute, either by
itself or upon notice or the passage of time or both, a default
under, any agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument filed as an exhibit
to the Registration Statement or violate any of the provisions of
the certificate of incorporation or bylaws of the Company or, to
such counsel's knowledge, violate any (i) judgment, decree or
order, which has been entered against the Company or (ii) any
statute, rule or regulation of any court or governmental body
having jurisdiction over the Company or any of its properties;
(8) To such counsel's knowledge, the Company
is not in violation of its certificate of incorporation or any
material provision if its bylaws;
(9) To such counsel's knowledge, no holders
of securities of the Company have rights which have not been
waived to the registration of shares of Common Stock or other
securities, because of the filing of the Registration Statement by
the Company or the offering contemplated by the Agreement;
(10) The statements in the Registration
Statement and Prospectus under the captions "Management,"
"Relationship between the Company and Odetics" and "Description of
Securities" and in the Registration Statement in Items 14 and 15,
insofar as they are descriptions of contracts, agreements or other
legal documents are accurate descriptions of such documents in all
material respects;
(11) The statements in the Registration
Statement and Prospectus under the captions "Shares Eligible for
Future Sale" and "Description of Securities" insofar as they
constitute matters of law, are an accurate summary in all material
respects;
(12) The Parent has all requisite corporate
power and authority to enter into this Agreement. This Agreement
has been duly authorized, executed and delivered by or on behalf
of the Parent; the execution and performance of this Agreement by
the Parent and the consummation of the transactions to be
performed by Parent at the time of closing will not violate any
provision of the Certificate of Incorporation or Bylaws of the
Parent and no approval, authorization, order or consent of any
court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of
this Agreement or the performance by the Parent of its obligations
contemplated by this Agreement to be performed at the time of
closing, except such as have been obtained and are in full force
and effect under the Act and such as may be required under the
rules of the NASD and applicable Blue Sky laws;
(13) This Agreement constitutes a valid and
binding agreement of the Parent, enforceable in accordance with
its terms, except as enforceability may be limited by general
equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and
except with respect to those provisions relating to indemnities or
contributions for liabilities under the Act as to which no opinion
need be expressed.
In rendering such opinion, such counsel may rely as to matters of
local law on opinions of local counsel, and as to matters of fact on
certificates of officers of the Parent and of the Company and of governmental
officials, in which case their opinion is to state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates are to be attached to the opinion.
Such counsel shall also include a statement to the effect that nothing has come
to such counsel's attention that would lead such counsel to believe that either
at the effective date of the Registration Statement or at the applicable Closing
Date the Registration Statement or the Prospectus, or any such amendment or
supplement thereto, except for the financial statements and schedules and other
financial and statistical data included therein as to which such counsel need
express no opinion, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
(ii) Such opinion or opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel for the Underwriters dated the First
Closing Date or the Second Closing Date, as the case may be, with
respect to the incorporation of the Company, the sufficiency of all
corporate proceedings and other legal matters relating to this
Agreement, the validity of the Common Shares, the Registration
Statement and the Prospectus and other related matters as you may
reasonably require, and the Company and the Parent shall have
furnished to such counsel such documents and shall have exhibited to
them such papers and records as they may reasonably request for the
purpose of enabling them to pass upon such matters. In connection
with such opinions, such counsel may rely on representations or
certificates of officers of the Company and governmental officials.
(iii) A certificate of the Company executed by the
Chairman of the Board or President and the Chief Financial Officer
of the Company, dated the First Closing Date or the Second Closing
Date, as the case may be, to the effect that:
(1) The representations and warranties
of the Company set forth in Section 2 of this Agreement are
true and correct as of the date of this Agreement and as of
the First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any
order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the respective
signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Act;
(3) Each of the respective signers of
the certificate has carefully examined the Registration
Statement and the Prospectus; in his or her opinion and to the
best of his or her knowledge, the Registration Statement and
the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein regarding
the Company; and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or
oral, transaction or event has occurred which should have been
set forth in an amendment to the Registration Statement or in
a supplement to or amendment of any prospectus which has not
been disclosed in such a supplement or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as disclosed in the Prospectus,
there has not been any material adverse change or a
development involving a material adverse change in the
condition (financial or otherwise),
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business, properties, results of operations or management of
the Company; and there has been no legal or governmental
action, suit or proceeding is pending or, to such person's
knowledge, threatened against the Company which is material to
the Company, whether or not arising from transactions in the
ordinary course of business, or which could reasonably be
expected to adversely affect the transactions contemplated by
this Agreement; since such dates the Company has not entered
into any verbal or written agreement or other transaction
which is not in the ordinary course of business or incurred
any material liability or obligation, direct, contingent or
indirect which is not in the ordinary course of business, made
any change in its capital stock, made any material change in
its short-term debt or funded debt or repurchased or otherwise
acquired any of the Company's capital stock; and the Company
has not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the First Closing
Date or Second Closing Date; and
(6) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, the Company has not sustained a material loss
or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(iv) A certificate of the Parent executed
by the Chairman of the Board or President and the Chief Financial
Officer of the Parent, dated the First Closing Date or the Second
Closing Date, as the case may be, to the effect that:
(1) The representations and warranties
of the Parent set forth in Section 2 of this Agreement are
true and correct as of the date of this Agreement and as of
the First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any
order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the knowledge of the respective signers, no
proceedings for that purpose have been institute or are
pending or contemplated under the Act;
(3) Each of the respective signers of
the certificate has carefully examined the Registration
Statement and the Prospectus; in his or her opinion and to the
best of his or her knowledge, the Registration Statement and
the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein regarding
the Company; and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or
oral, transaction or event has occurred which should have been
set forth in an amendment to the Registration Statement or in
a supplement to or amendment of any prospectus which has not
been disclosed in such a supplement or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as disclosed in the Prospectus,
there has not been any material adverse change or a
development involving a material adverse change in the
condition (financial or otherwise), business, properties,
results of operations or management of the Company; and there
has been no legal or governmental action, suit or proceeding
is pending or, to such person's knowledge, threatened against
the Company which is material to the Company, whether or not
arising from transactions in the ordinary course of business,
or which could reasonably be expected to adversely affect the
transactions contemplated by this Agreement; since such dates
the Company has not entered into any material verbal or written
agreement or other transaction which is not in the ordinary
course of business or incurred any material liability or
obligation, direct, contingent or indirect which is not in the
ordinary course of business, made any change in its capital
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stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the
Company's capital stock; and the Company has not declared or
paid any dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of record on
a date prior to the First Closing Date or Second Closing Date;
and
(6) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, the Company has not sustained a material loss
or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(v) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing Date, a
letter addressed to you from Ernst & Young LLP, independent
accountants, the first one to be dated the day before the date of this
Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a Second Closing) to be dated the Second
Closing Date, in form and substance reasonably satisfactory to you.
(vi) On or before the First Closing Date, letters
from the Parent and each director and executive officer of the
Company, in form and substance satisfactory to you, confirming that
for a period of 180 days after the first date that any of the Common
Shares are released by you for sale to the public, such person or
entity will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right to
acquire any such shares without the prior written consent of
▇▇▇▇▇▇▇▇▇▇ Securities, which consent may be withheld at the sole
discretion of ▇▇▇▇▇▇▇▇▇▇ Securities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., counsel for the Underwriters. The
Company and Parent shall furnish you with such manually signed or conformed
copies of such opinions, certificates, letters and documents as you request.
Any certificate signed by any officer of the Company or Parent (as the case may
be) and delivered to the Underwriters or to counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company or Parent (as the
case may be) to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you to the
Company and the Parent without liability on the part of any Underwriter or the
Company or the Parent except for the expenses to be paid or reimbursed by the
Company and by the Parent pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof.
SECTION 9
REIMBURSEMENT OF UNDERWRITERS' EXPENSES
---------------------------------------
Notwithstanding any other provisions hereof, if this Agreement shall
be terminated by you pursuant to Section 8, or if the sale to the Underwriters
of the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Parent to
perform any agreement herein or to comply with any provision hereof, the
Company agrees to reimburse you and the other Underwriters upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by you and them
in connection with the proposed purchase and the sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, telegraph charges and telephone charges
relating directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 7 and Section 11 shall at all
times be effective and shall apply.
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SECTION 10
EFFECTIVENESS OF REGISTRATION STATEMENT
---------------------------------------
You, the Company and the Parent will use your, its and their best
efforts to cause the Registration Statement to become effective, to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 11
INDEMNIFICATION
---------------
(a) The Company and the Parent, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the statements
in any of them not misleading, or arise out of or are based in whole or in part
on any inaccuracy in the representations and warranties of the Company or the
Parent contained herein or any failure of the Company or the Parent to perform
their respective obligations hereunder or under law; and will reimburse each
Underwriter and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that (i) neither the Company nor the Parent will be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with the information furnished to the Company by
the Underwriters pursuant to Section 4 hereof and (ii) with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
Preliminary Prospectus, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased Common Shares to the extent
that any such loss, claim, damage or liability of such Underwriter results from
the fact that a copy of the Prospectus was not sent or given to such person at
or prior to the written confirmation of the sale of such Shares to such person
as required by the Act, provided the untrue statement or omission concerned has
been corrected in the Prospectus, unless such failure is the result of
noncompliance by the Company with Section 6(e) hereof. The Company and the
Parent may agree, as among themselves and without limiting the rights of the
Underwriters under this Agreement, as to their respective amounts of such
liability for which they each shall be responsible. In addition to their other
obligations, under this Section 11(a), the Company and the Parent agree that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any misstatement or
omission, or any alleged misstatement or omission, or any inaccuracy in the
representations and warranties of the Company or the Parent herein or failure to
perform their obligations hereunder, all as described in this Section 11(a),
they will reimburse each Underwriter on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's or the Parent's obligation to reimburse each
Underwriter for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, each Underwriter shall promptly return it to the Company and the
Parent together with interest, compounded daily, determined on the basis of the
prime rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by Bank of America NT&SA, San Francisco,
California (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter within 30 days of a request for reimbursement,
shall bear interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which the Company or
the Parent may otherwise have.
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(b) Each Underwriter will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, the Parent and each person, if any, who controls the
Company or the Parent within the meaning of the Act ("controlling person"),
against any losses, claims, damages, liabilities or expenses to which the
Company, or any such director, officer, the Parent or controlling person may
become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company by the Underwriters
pursuant to Section 4 hereof; and will reimburse the Company, or any such
director, officer, the Parent or controlling person for any legal and other
expense reasonably incurred by the Company, or any such director, officer, the
Parent or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that no Underwriter shall be required to
contribute any amount in excess of the amount of the total underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. In addition to its other
obligations under this Section 11(b), each Underwriter severally agrees that, as
an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 11(b)
which relates to information furnished to the Company by the Underwriters
pursuant to Section 4 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director, the Parent or controlling person)
on a quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, the Parent or controlling person) for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director, the Parent or
controlling person) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within 30 days
of a request for reimbursement, shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained in
this Section to the extent it is not prejudiced as a proximate result of
such failure. In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying
parties similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a),
representing the
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indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Parent and the Underwriters from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company, the Parent and the Underwriters in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The respective
relative benefits received by the Company, the Parent and the Underwriters
shall be deemed to be in the same proportion, in the case of the Company
as the total price paid to the Company for the Common Shares sold by it to the
Underwriters, in the case of Parent as the amount of proceeds received by the
Company which are paid to the Parent upon consummation of the offering, for
repayment of indebtedness, and in the case of the Underwriters as the
underwriting commissions received by them bears to the total of such amounts
paid to the Company and received by the Underwriters as underwriting
commissions. The relative fault of the Company, the Parent and the
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company, the Parent or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
subparagraph (c) of this Section 11, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in subparagraph (c) of this
Section 11 with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this subparagraph (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (c) for purposes of
indemnification. The Company, the Parent and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 11
were determined solely by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 11, no Underwriter shall be required to contribute any amount in excess
of the amount of the total underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(e) Notwithstanding the provisions of this Section 11, on and
after the date upon which the Parent completes the distribution to the Parent's
stockholders of all shares of Common Stock of the Company owned by the Parent,
the Parent's total indemnification and contribution obligation under this
Section 11 shall not exceed the amount of proceeds from the Offering received
by the Company that are paid to the Parent for repayment of indebtedness, which
amount shall be equal to the lesser of (i) 40% of the net proceeds of the
offering before deducting estimated offering expenses or (ii) $10 million.
(f) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 11(a) and 11(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of Governors of
the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service of a
written demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 11(a) and 11(b) hereof.
(g) The Parent shall not be required to provide indemnification
pursuant to this Section 11 unless the Underwriter or controlling person
seeking indemnification shall have first made a written demand for payment to
the Company with respect to any losses, claims, damages, liabilities or
expenses for which the Parent and the Company shall be required to indemnify
the Underwriters pursuant to this Section 11 and the Company shall have failed
to make such demanded payment within sixty (60) days after receipt thereof.
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SECTION 12
DEFAULT OF UNDERWRITERS
-----------------------
It shall be a condition to this Agreement and the obligation of the
Company to sell and deliver the Common Shares hereunder, and of each
Underwriter to purchase the Common Shares in the manner as described
herein, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all the Common Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Underwriters of all
such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Common Shares hereunder
on either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the nondefaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which
such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number
of Common Shares with respect to which such default occurs is more than the
above percentage and arrangements satisfactory to the Underwriters and the
Company for the purchase of such Common Shares by other persons are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any nondefaulting Underwriter or the Company or the
Parent except for the expenses to be paid by the Company and the Parent
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Common Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties,
the Underwriters or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
SECTION 13
EFFECTIVE DATE
--------------
This Agreement shall become effective immediately as to Sections 7, 9,
11, 14 and 15 and, as to all other provisions, (i) if, at the time of execution
of this Agreement, the Registration Statement has not become effective, at 2:00
P.M., California time, on the first full business day following the
effectiveness of the Registration Statement, or (ii) if, at the time of
execution of this Agreement, the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 13, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of fax (i) advising
Underwriters that the Common Shares are released for public offering, or
(ii) offering the Common Shares for sale to securities dealers, whichever may
occur first.
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SECTION 14
TERMINATION
-----------
Without limiting the right to terminate this Agreement pursuant to any
other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you and the Parent or by you by notice to the Company and the Parent at any
time prior to the time this Agreement shall become effective as to all its
provisions, and any such termination shall be without liability on the part of
the Company or the Parent to any Underwriter (except for the expenses to be
paid or reimbursed by the Company and the Parent pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof) or of any
Underwriter to the Company or the Parent (except to the extent provided in
Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over the counter market by the NASD,
or trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect adversely
the marketability of the Common Shares, (iii) if any adverse event shall have
occurred or shall exist which makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or which is not reflected in the Registration Statement or
Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv)
if there shall be any action, suit or proceeding pending or threatened, or
there shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the reasonable judgment
of the Underwriters, may materially and adversely affect the Company's business
or earnings and makes it impracticable or inadvisable to offer or sell the
Common Shares. Any termination pursuant to this subsection (b) shall be without
liability on the part of any Underwriter to the Company or the Parent or on the
part of the Company or the Parent to any Underwriter (except for expenses to be
paid or reimbursed by the Company and the Parent pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof).
(c) This Agreement shall also terminate at 5:00 P.M., California
time, on the tenth full business day after the Registration Statement shall
have become effective if the initial public offering price of the Common Shares
shall not then as yet have been determined as provided in Section 5 hereof.
Any termination pursuant to this subsection (c) shall be without liability on
the part of any Underwriter to the Company or the Parent or on the part of the
Company or the Parent to any Underwriter (except for expenses to be paid or
reimbursed by the Company and the Parent pursuant to Sections 7 and 9 hereof
and except to the extent provided in Section 11 hereof).
SECTION 15
REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY
---------------------------------------------------
The respective indemnities, agreements, representations, warranties
and other statements of the Company, of its officers, of the Parent and of the
several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Parent, as the case may
be, and will survive delivery of and payment for the Common Shares sold
hereunder and any termination of this Agreement.
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SECTION 16
NOTICES
-------
All communications hereunder shall be in writing and, if sent to the
Underwriters shall be mailed, delivered or telegraphed and confirmed to you at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.; and if
sent to (i) the Company shall be mailed, delivered or telegraphed and confirmed
to the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇ or (ii) the Parent shall be mailed, delivered or
telegraphed and confirmed to the Parent at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, in either instance
with a copy to ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The Company, the
Parent or you may change the address for receipt of communications hereunder by
giving notice to the others.
SECTION 17
SUCCESSORS
----------
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 12
hereof, and to the benefit of the officers and directors and controlling
persons referred to in Section 11, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party
of its obligations hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 18
PARTIAL UNENFORCEABILITY
------------------------
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 19
APPLICABLE LAW
--------------
This Agreement shall be governed by and construed in accordance with
the internal laws (and not the laws pertaining to conflicts of laws) of the
State of California.
SECTION 20
GENERAL
-------
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in several counterparts, each one of
which shall be an original, and all of which shall constitute one and the same
document.
-20-
21
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company, the Parent and you.
-21-
22
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement among the Company, the Parent and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
ATL PRODUCTS, INC.
By:
----------------------------------
Title:
------------------------------
ODETICS, INC.
By:
----------------------------------
Title:
-----------------------------
The foregoing Underwriting Agreement is
hereby confirmed and accepted by us in
San Francisco, California as of the date
first above written.
▇▇▇▇▇▇▇▇▇▇ SECURITIES
By:
------------------------------------
Title:
---------------------------------
-22-
23
SCHEDULE A
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------------------------------------ ---------------
▇▇▇▇▇▇▇▇▇▇ Securities . . . . . . . . . . . . .
Cruttenden ▇▇▇▇ Incorporated. . . . . . . . . .
---------
TOTAL . . . . . . . . . . . 1,650,000
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B-1
24
EXHIBIT I
FORM OF OPINION OF ▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇
B-2