Exhibit 10.3

 

3,000,000 Shares*

 

SYPRIS SOLUTIONS, INC.

 

Common Stock

 

UNDERWRITING AGREEMENT

 

March 12, 2004

 

Needham & Company, Inc.

Robert W. Baird & Co. Incorporated

Raymond James & Associates, Inc.

As Representatives of the several Underwriters

c/o Needham & Company, Inc.

445 Park Avenue

New York, New York 10022

 

Ladies and Gentlemen:

 

Sypris Solutions, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell 3,000,000 shares (the “Firm Shares”) of the Company’s common
stock, $.01 par value per share (the “Common Stock”), to you and to the several
other Underwriters named in Schedule I hereto (collectively, the
“Underwriters”), for whom you are acting as representatives (the
“Representatives”). The Company has also agreed to grant to you and the other
Underwriters an option (the “Option”) to purchase up to an additional 450,000
shares of Common Stock, on the terms and for the purposes set forth in Section
1(b) (the “Option Shares”). The Firm Shares and the Option Shares are referred
to collectively herein as the “Shares.”

 

The Company confirms as follows its agreement with the Representatives and the
several other Underwriters.

 

1. Agreement to Sell and Purchase.

 

(a) On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to issue and sell the Firm Shares to the
several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company the respective number of Firm
Shares set forth opposite that

 

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* Plus an option to purchase up to an additional 450,000 shares to cover
over-allotments.

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Underwriter’s name in Schedule I hereto, at the purchase price of $ 16.10 for
each Firm Share.

 

(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to 450,000 Option Shares at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telegraphic
notice (the “Option Shares Notice”) by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the “Option Closing Date”), setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.

 

2. Delivery and Payment

 

Delivery of the Firm Shares shall be made to the Representatives for the
accounts of the Underwriters against payment of the purchase price by wire
transfer payable in same-day funds to a bank account specified by the Company to
the order of the Company at the office of Needham & Company, Inc., 445 Park
Avenue, New York, New York 10022 (or the offices of its counsel, Piper Rudnick
LLP, 1251 Avenue of the Americas, New York, New York 10020), at 10:00 a.m., New
York City time, on the third (or, if the purchase price set forth in Section
1(a) hereof is determined after 4:30 p.m., Washington D.C. time, the fourth)
business day following the commencement of the offering contemplated by this
Agreement, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the “Closing
Date”).

 

To the extent the Option is exercised, delivery of the Option Shares against
payment by the Underwriters (in the manner specified above) will take place at
the offices specified above for the Closing Date at the time and date (which may
be the Closing Date) specified in the Option Shares Notice.

 

Certificates evidencing the Shares shall be in definitive form and shall be
registered in such names and in such denominations as the Representatives shall
request at least two business days prior to the Closing Date or the Option
Closing Date, as the case may be, by written notice to the Company. For the
purpose of expediting the checking and packaging of certificates for the Shares,
the Company agrees to make such certificates available for inspection at the
offices specified above at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.

 

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The cost of original issue tax stamps and other transfer taxes, if any, in
connection with the issuance and delivery of the Firm Shares and Option Shares
by the Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Shares.

 

3. Representations and Warranties of the Company

 

The Company represents, warrants and covenants to each Underwriter that:

 

(a) The Company meets the requirements for use of Form S-3 and a registration
statement (Registration No. 333-112760) on Form S-3 relating to the Shares,
including a preliminary prospectus and such amendments to such registration
statement as may have been required to the date of this Agreement, has been
prepared by the Company under the provisions of the Securities Act of 1933, as
amended (the “Act”), and the rules and regulations (collectively referred to as
the “Rules and Regulations”) of the Securities and Exchange Commission (the
“Commission”) thereunder, and has been filed with the Commission. The term
“preliminary prospectus” as used herein means a preliminary prospectus,
including the documents incorporated by reference therein, as contemplated by
Rule 430 or Rule 430A of the Rules and Regulations included at any time as part
of the registration statement. Copies of such registration statement and
amendments and of each related preliminary prospectus have been delivered to the
Representatives. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing information
permitted to be omitted at the time of effectiveness by Rule 430A of the Rules
and Regulations will be filed promptly by the Company with the Commission in
accordance with Rule 424(b) of the Rules and Regulations. The term “Registration
Statement” means the registration statement as amended at the time it becomes or
became effective (the “Effective Date”), including all documents incorporated by
reference therein, financial statements and all exhibits and schedules thereto
and any information deemed to be included by Rule 430A, and includes any
registration statement relating to the offering contemplated by this Agreement
and filed pursuant to Rule 462(b) of the Rules and Regulations. The term
“Prospectus” means the prospectus, including the documents incorporated by
reference therein, as first filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations or, if no such filing is required, the form of final
prospectus, including the documents incorporated by reference therein, included
in the Registration Statement at the Effective Date. Any reference herein to the
terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the filing of any document under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), after the Effective Date, the date of any
preliminary prospectus or the date of the Prospectus, as the case may be, and
through and

 

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including the Closing Date and, if later, the Option Closing Date and deemed to
be incorporated therein by reference.

 

(b) No order preventing or suspending the use of any preliminary prospectus has
been issued by the Commission, and no stop order suspending the effectiveness of
the Registration Statement (including any related registration statement filed
pursuant to Rule 462(b) under the Act) or any post-effective amendment thereto
has been issued, and no proceeding for that purpose has been initiated or
threatened by the Commission. On the Effective Date, the date the Prospectus is
first filed with the Commission pursuant to Rule 424(b) (if required), at all
times thereafter during the period through and including the Closing Date and,
if later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply in all material
respects with all applicable provisions of the Act, the Exchange Act, the rules
and regulations under the Exchange Act (the “Exchange Act Rules and
Regulations”), and the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes effective, no
part of the Registration Statement, the Prospectus or any such amendment or
supplement thereto did or will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. At the Effective Date, the
date the Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date and, if later, the Option Closing
Date, the Prospectus did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section 3(b) do
not apply to any statements or omissions made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the Company
by the Representatives specifically for inclusion in the Registration Statement
or Prospectus or any amendment or supplement thereto. The Company acknowledges
that the statements set forth in the material included in the table under the
first paragraph, the information related to the selling concession and dealer
allowance in the second paragraph, paragraphs eight through thirteen and the
last two paragraphs, in each case under the heading “Underwriting” in the
Prospectus, constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement. In connection with this offering, some
of the underwriters and selling group members, if any, or their affiliates may
engage in passive market making transactions in our common stock on the Nasdaq
National Market immediately prior to the commencement of sales in this offering,
in accordance with Rule 103 of Regulation M under the Exchange Act. Passive
market making may stabilize or maintain the market price of our common stock at
a level above that which might otherwise prevail and, if commenced, may be
discontinued at any time.

 

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(c) The documents that are incorporated by reference in the preliminary
prospectus and the Prospectus or from which information is so incorporated by
reference, and any amendments thereto, when they became or become effective or
were or are filed with the Commission, as the case may be, complied or will
comply in all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the Rules and Regulations or the Exchange Act Rules and
Regulations, as applicable; and any documents so filed and incorporated by
reference subsequent to the Effective Date shall, when they are filed with the
Commission, comply in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the Rules and Regulations or the Exchange
Act Rules and Regulations, as applicable.

 

(d) The Company does not own, and at the Closing Date and, if later, the Option
Closing Date, will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any corporation, limited liability company, firm, partnership, joint
venture, association or other entity, other than (i) the subsidiaries listed in
Exhibit 21 to the Company’s Form 10-K for the year ended December 31, 2003 and
(ii) other subsidiaries individually and collectively not material to the
Company and its business or financial condition (the “Subsidiaries”). The
Company and each of its Subsidiaries is, and at the Closing Date and, if later,
the Option Closing Date, will be, a corporation or limited liability company
duly organized or formed, as the case may be, validly existing and in good
standing under the laws of its jurisdiction of incorporation or formation. The
Company and each of its Subsidiaries has, and at the Closing Date and, if later,
the Option Closing Date, will have, full power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by it
and to conduct its business as described in the Registration Statement and the
Prospectus. The Company and each of its Subsidiaries is, and at the closing Date
and, if later, the Option Closing Date, will be, duly licensed or qualified to
do business and in good standing as a foreign corporation or limited liability
company, as the case may be, in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or leased by it
makes such license or qualification necessary, except to the extent that the
failure to be so licensed or qualified or be in good standing would not
materially and adversely affect the Company or its business, properties,
condition (financial or other) or results of operations. All of the outstanding
shares of capital stock, units or other ownership interests of each Subsidiary
have been duly authorized and validly issued and are fully paid and
nonassessable, and owned by the Company free and clear of all claims, liens,
charges and encumbrances, except any lien or security interest in such shares,
units or other ownership interests pursuant to the principal credit facility of
the Company described in the Prospectus (the “Credit Facility”); there are no
securities outstanding that are convertible into or exercisable or exchangeable
for capital stock, units or other ownership interest of any Subsidiary. The
Company and its Subsidiaries are not, and at the Closing Date and, if later, the
Option Closing Date, will not be, engaged in any discussions or a party to any
agreement or understanding, written or oral, regarding the acquisition of an
interest in any corporation, firm, partnership, joint venture, association or
other entity where such discussions, agreements or understandings would require
amendment to the Registration Statement pursuant to applicable securities laws.
Complete and correct copies of the certificate of incorporation and of the
by-laws or other comparable governing documents

 

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of the Company and each of its Subsidiaries and all amendments thereto have been
delivered to the Representatives, and no changes therein will be made subsequent
to the date hereof and prior to the Closing Date or, if later, the Option
Closing Date.

 

(e) The Company has authorized, issued and outstanding capital stock as set
forth under the caption “Capitalization” in the Prospectus as of the date set
forth therein. All of the outstanding shares of capital stock of the Company
have been duly authorized, validly issued and are fully paid and nonassessable
and were issued in compliance with all applicable state and Federal securities
laws; the Shares have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and nonassessable; no
preemptive or similar rights exist with respect to any of the Shares or the
issue and sale thereof. The description of the capital stock of the Company
incorporated by reference in the Registration Statement and the Prospectus is,
and at the Closing Date and, if later, the Option Closing Date, will be,
complete and accurate in all material respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date and,
if later, the Option Closing Date, will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of capital stock, or any such warrants, convertible securities or
obligations. No further approval or authority of stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares as contemplated herein. The certificates evidencing the Shares are in due
and proper legal form and have been duly authorized for issuance by the Company.

 

(f) The financial statements and schedules included or incorporated by reference
in the Registration Statement or the Prospectus present fairly the financial
condition of the Company and its consolidated Subsidiaries as of the respective
dates thereof and the results of operations and cash flows of the Company and
its consolidated Subsidiaries for the respective periods covered thereby, all in
conformity with United States generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. No other financial statements or schedules of the
Company are required by the Act, the Exchange Act, the Exchange Act Rules and
Regulations or the Rules and Regulations to be included in the Registration
Statement or the Prospectus. Ernst & Young LLP (the “Accountants”), who have
reported on such financial statements and schedules, are independent accountants
with respect to the Company as required by the Act and the Rules and
Regulations. The summary and selected consolidated financial and statistical
data included in the Registration Statement present fairly the information shown
therein as at the respective dates and for the respective periods specified and
have been compiled on a basis consistent with the audited financial statements
presented in the Registration Statement. There are no pro forma or as adjusted
financial statements which are required to be included or incorporated by
reference in the Registration Statement and the Prospectus in accordance with
Regulation S-X which have not been included as so required.

 

(g) Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus and prior to or on the Closing Date
and,

 

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if later, the Option Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and will not
have been any change in the capitalization of the Company (other than in
connection with the exercise of options to purchase the Company’s Common Stock
granted pursuant to the Company’s stock option and equity incentive plans from
the shares reserved therefor as described in the Registration Statement), or any
material adverse change in the business, properties, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, arising for any reason whatsoever, (ii) neither the Company nor any
of its Subsidiaries has incurred nor will any of them incur, except in the
ordinary course of business as described in the Prospectus, any material
liabilities or obligations, direct or contingent, nor has the Company or any of
its Subsidiaries entered into nor will any of them enter into, except in the
ordinary course of business as described in the Prospectus, any material
transactions other than pursuant to this Agreement and the transactions referred
to herein, and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.

 

(h) The Company is not and will not become as a result of the transactions
contemplated hereby an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended, and is not and will not be an entity
“controlled” by an “investment company” within the meaning of such act.

 

(i) Except as set forth in the Registration Statement and the Prospectus, there
are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company, or any of its Subsidiaries
or any of their officers in their capacity as such, nor to the knowledge of the
Company is there any basis therefor, before or by any Federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding might
materially and adversely affect the Company and its Subsidiaries taken as a
whole or the business, properties, condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries taken as a whole.

 

(j) The Company and each Subsidiary has, and at the Closing Date and, if later,
the Option Closing Date, will have, performed in all material respects all the
obligations required to be performed by it, and is not, and at the Closing Date,
and, if later, the Option Closing Date, will not be, in default, under any
contract or other instrument to which it is a party or by which its property is
bound or affected, which default might reasonably be expected to materially and
adversely affect the Company or the business, properties, condition (financial
or other) or results of operations of the Company and its Subsidiaries taken as
a whole. To the best knowledge of the Company, no other party under any contract
or other instrument to which it or any of its Subsidiaries is a party is in
default in any respect thereunder, which default might reasonably be expected to
materially and adversely affect the Company and its Subsidiaries taken as a
whole or the business, properties, condition (financial or other) or results of
operations of the Company and its Subsidiaries taken as a whole. Neither the
Company nor any of its Subsidiaries is, and at the Closing Date and, if later,
the Option Closing Date, will be, in

 

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violation of any provision of its certificate of incorporation or by-laws or
other organizational documents.

 

(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under foreign securities laws, state securities or Blue
Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the “NASD”) in connection with the purchase and distribution by
the Underwriters of the Shares.

 

(l) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof except (i)
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles and (ii) to the
extent that rights to indemnity or contribution under this Agreement may be
limited by Federal and state securities laws or the public policy underlying
such laws. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the certificate or articles of
incorporation, by-laws or other organizational documents of the Company or any
of its Subsidiaries, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company, any of
its Subsidiaries or any of their properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company or any of its Subsidiaries.

 

(m) The Company and its Subsidiaries have good and, in the case of real
property, marketable title to all properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus or are not
material to the business of the Company and its Subsidiaries taken as a whole.
The Company and its Subsidiaries have valid, subsisting and enforceable leases
for the properties described in the Prospectus as leased by them. The Company
and its Subsidiaries own or lease all such properties as are necessary to their
operations as now conducted or as proposed to be conducted, except where the
failure to so own or lease would not materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and, its Subsidiaries taken as a whole.

 

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(n) There is no document, contract, permit or instrument of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed or
incorporated by reference as required. All such contracts to which the Company
or any of its Subsidiaries is a party have been duly authorized, executed and
delivered by the Company or such Subsidiary, constitute valid and binding
agreements of the Company or such Subsidiary and are enforceable against and by
the Company or such Subsidiary in accordance with the terms thereof except (i)
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles and (ii) to the
extent that rights to indemnity or contribution under this Agreement may be
limited by Federal and state securities laws or the public policy underlying
such laws.

 

(o) No statement, representation, warranty or covenant made by the Company in
this Agreement or made in any certificate or document required by Section 4 of
this Agreement to be delivered to the Representatives was or will be, when made,
inaccurate, untrue or incorrect in any material respect.

 

(p) The Company has not distributed and will not distribute prior to the later
of (i) the Closing Date or, if later, the Option Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act. Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.

 

(q) No holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement,
which rights have not been waived by the holder thereof as of the date hereof.

 

(r) The Common stock is registered under Section 12(g) of the Exchange Act, and
the Company has filed an application to list the Shares on the Nasdaq National
Market (“NNM”) and has received notification that the listing has been approved,
subject to notice of issuance of the Shares. The Company has taken all necessary
actions to ensure that, upon the NNM approving the Shares for inclusion, it will
be in compliance with all applicable corporate governance requirements set forth
in the Nasdaq Marketplace Rules that are then in effect and is actively taking
steps to ensure that it will be in compliance with other applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules not currently
in effect upon the effectiveness of such requirements.

 

(s) Except as disclosed in or specifically contemplated by the Prospectus (i)
the Company and its Subsidiaries have sufficient trademarks, trade names,
patents, patent rights, mask works, copyrights, licenses, approvals and
governmental

 

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authorizations necessary to conduct their businesses as now conducted, and to
the Company’s knowledge, none of the foregoing intellectual property rights
owned or licensed by the Company is invalid or unenforceable, (ii) the Company
has no knowledge of any infringement by it or any of its Subsidiaries of
trademarks, trade name rights, patents, patent rights, mask work rights,
copyrights, licenses, trade secrets or other similar rights of others, where
such infringement could have a material and adverse effect on the Company, and
its Subsidiaries taken as a whole or the business, properties, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, (iii) the Company is not aware of any
infringement, misappropriation or violation by others of, or conflict by others
with rights of the Company or any of its Subsidiaries with respect to, any of
the foregoing intellectual property rights, and (iv) no claim has been made
against the Company or any of its Subsidiaries, or to the best of the Company’s
knowledge, any employee of the Company or any of its Subsidiaries, regarding
trademark, trade name, patent, mask work, copyright, license, trade secret or
other infringement which could have a material and adverse effect on the Company
and its Subsidiaries taken as a whole or the business, properties, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.

 

(t) The Company and each of its Subsidiaries has filed all Federal, state, local
and foreign income tax returns which have been required to be filed and has paid
all taxes and assessments received by it to the extent that such taxes or
assessments have become due. Neither the Company nor any of its Subsidiaries has
any tax deficiency which has been or, to the best knowledge of the Company,
might be asserted or threatened against it which could have a material and
adverse effect on the business, properties, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a whole.

 

(u) The Company or its Subsidiaries owns or possesses all authorizations,
approvals, orders, licenses, registrations, other certificates and permits of
and from all governmental regulatory officials and bodies, necessary to conduct
their respective businesses as contemplated in the Prospectus, except where the
failure to own or possess all such authorizations, approvals, orders, licenses,
registrations, other certificates and permits would not materially and adversely
affect the Company and its Subsidiaries taken as a whole or the business,
properties condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole. There is no proceeding pending
or, to the knowledge of the Company, threatened (or any basis therefor known to
the Company) which may cause any such authorization, approval, order, license,
registration, certificate or permit to be revoked, withdrawn, cancelled,
suspended or not renewed; and the Company and each of its Subsidiaries is
conducting its business in compliance with all laws, rules and regulations
applicable thereto (including, without limitation, all applicable Federal, state
and local environmental laws and regulations) except where such noncompliance
would not materially and adversely affect the Company, and its Subsidiaries
taken as a whole or the business, properties condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a whole.

 

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(v) The Company and each of its Subsidiaries maintains insurance of the types
and in the amounts generally deemed adequate for its business, including, but
not limited to, insurance covering real and personal property owned or leased by
the Company and its Subsidiaries 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 nor any of its Subsidiaries has nor, to the best of the
Company’s knowledge, any of its or their respective employees or agents 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) The books, records and accounts of the Company and its Subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company
and its Subsidiaries. The Company and each of its Subsidiaries maintains (i)
systems of internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with management’s
general or specific authorizations, (B) transactions are recorded as necessary
to permit preparation of the Company’s consolidated financial statements in
accordance with United States generally accepted accounting principles and to
maintain asset accountability, (C) access to assets is permitted only in
accordance with management’s general or specific authorization and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, and (ii) disclosure controls and procedures (as defined in Rule
13a-14(c) under the Exchange Act).

 

(y) No labor disturbance by the employees of the Company or any Subsidiary
exists or, to the best of the Company’s knowledge, is imminent which, in either
case (individually or in the aggregate), would materially and adversely affect
the Company and its Subsidiaries taken as a whole or the business, properties,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole.

 

(z) No “prohibited transaction” (as defined in either Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”) or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”)), “accumulated funding deficiency” (as defined in Section 302 of ERISA)
or other event of the kind described in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred or is expected to occur with respect to any
employee benefit plan for which the Company, or any other entity which, with the
Company, would be treated as one employer (as described in Code Section 414
(“ERISA Affiliate”)) has or could have any

 

11

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liability which would materially and adversely affect the Company and its
Subsidiaries taken as a whole or the business, properties, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole; each employee benefit plan for which the Company or any ERISA
Affiliate has or could have any liability is in compliance in all material
respects with applicable law, including (without limitation) ERISA and the Code;
neither the Company nor any ERISA Affiliate has incurred nor does any expect to
incur any material liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan subject to ERISA, including
any multiemployer plan; and each plan for which the Company could have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or by failure to act,
which could cause the loss of such qualification.

 

(aa) There has been no storage, generation, transportation, handling, treatment,
disposal, discharge, emission or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by, the Company or
any Subsidiary (or, to the Company’s knowledge, any other entity for whose acts
or omissions the Company is or may be liable) upon any property now or
previously owned or leased by the Company or any Subsidiary, or upon any other
property, which would be a violation of or give rise to any liability under any
applicable law, rule, regulation, order, judgment, decree or permit relating to
pollution or protection of human health and the environment (“Environmental
Law”), except as disclosed, or not required to be disclosed, in the Prospectus.
Neither the Company nor any Subsidiary has agreed to assume, undertake or
provide indemnification for any liability of any other person under any
Environmental Law, including any obligation for cleanup or remedial action,
except as disclosed, or not required to be disclosed, in the Prospectus. Except
as disclosed, or not required to be disclosed, in the Prospectus, there is no
pending or, to the best of the Company’s knowledge, threatened administrative,
regulatory or judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any Subsidiary.

 

(bb) Neither the Company nor, to the knowledge of the Company, any of its
officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the price
of any security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.

 

(cc) No relationship, direct or indirect, exists between or among the Company on
the one hand, and the directors, officers, stockholders, customers or suppliers
of the Company on the other hand, which is required to be described in the
Prospectus and which is not so described.

 

(dd) Neither the Company nor any of its Subsidiaries own any “margin securities”
as that term is defined in Regulation U of the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”), and none of the proceeds of the
sale of the Shares will be used, directly or indirectly, for the purpose of
purchasing or

 

12

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carrying any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Shares to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.

 

(ee) The Company is in compliance in all material respects with all applicable
provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and all
rules and regulations promulgated thereunder that are then in effect, is
implementing the provisions thereof in accordance thereof, and is actively
taking steps to ensure that it will be in compliance with other applicable
provisions of the Sarbanes-Oxley Act not currently in effect upon the
effectiveness of such provisions.

 

(ff) Neither the Company nor any of its Subsidiaries is a party to any contract,
agreement or understanding with any person that would give rise to a valid claim
against the Company or the Underwriters for a brokerage commission, finder’s fee
or like payment in connection with the offering and sale of the Stock other than
this Agreement.

 

4. Agreements of the Company

 

The Company covenants and agrees with the several Underwriters as follows:

 

(a) The Company will not, either prior to the Effective Date or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or dealer, file any
amendment or supplement to the Registration Statement or the Prospectus, unless
a copy thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have objected thereto in good faith.

 

(b) The Company will use its best efforts to cause the Registration Statement to
become effective, and will notify the Representatives promptly, and, will
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective, (ii)
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
or the threat thereof, (iv) of the happening of any event during the period
mentioned in the second sentence of Section 4(e) that in the judgment of the
Company makes any statement made in the Registration Statement or the Prospectus
contain an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading and (v) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every

 

13

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reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and notify the Representatives
promptly of all such filings. If the Company elects to rely upon Rule 462(b)
under the Act, the Company shall file a registration statement under Rule 462(b)
with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for such Rule 462(b)
registration statement or give irrevocable instructions for the payment of such
fee pursuant to the Rules and Regulations.

 

(c) The Company will furnish to each Representative, without charge, one signed
copy of each of the Registration Statement and of any pre- or post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto and will furnish to the Representatives, without charge, for
transmittal to each of the other Underwriters, a copy of the Registration
Statement and any pre- or post-effective amendment thereto, including financial
statements and schedules but without exhibits.

 

(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.

 

(e) On the Effective Date, and thereafter from time to time, so long as delivery
of a prospectus by an Underwriter or dealer is, in the reasonable opinion of the
Underwriters, required by the Act or the Rules and Regulations, the Company will
deliver to each of the Underwriters, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such period
of time any event shall occur the result of which in the judgment of the Company
or counsel to the Underwriters results or would result in the Prospectus, as
then amended or supplemented, including an untrue statement of material fact or
omitting to state any material fact necessary in order to make any statement
therein, in the light of the circumstances under which it was made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Act or other applicable securities laws, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of the Underwriters, without charge,
such number of copies of such supplement or amendment to the Prospectus as the
Representatives may reasonably request. The Company will not file any document
under the Exchange Act or the Exchange Act Rules and Regulations before the
termination of the offering of the Shares by the Underwriters, if such document
would be deemed to be incorporated by reference into the Prospectus, that is not
approved by the Representatives after reasonable notice thereof.

 

14

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(f) Prior to any public offering of the Shares, the Company will cooperate with
the Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to taxation or general service of process in any
jurisdiction where it is not now so subject.

 

(g) The Company will, so long as required under the Rules and Regulations,
furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of income,
stockholders’ equity and cash flow of the Company and its consolidated
Subsidiaries, if any, certified by independent public accountants).

 

(h) During the period of three years commencing on the Effective Date, the
Company will furnish to the Representatives and each other Underwriter who may
so request a copy of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to the holders
of any class of its capital stock, and will furnish to the Representatives and
each other Underwriter who may so request a copy of each annual or other report
it shall be required to file with the Commission.

 

(i) The Company will make generally available to holders of its securities as
soon as may be practicable but in no event later than the Availability Date (as
defined below) an earnings statement (which need not be audited but shall be in
reasonable detail) covering a period of 12 months commencing after the Effective
Date which will satisfy the provisions of Section 11(a) of the Act (including
Rule 158 of the Rules and Regulations). For the purpose of the preceding
sentence, “Availability Date” means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective Date,
except that if such fourth fiscal quarter is the last quarter of the Company’s
fiscal year, “Availability Date” means the 90th day after the end of such fourth
fiscal quarter.

 

(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or reimburse
if paid by the Representatives all costs and expenses incident to the
performance of the obligations of the Company under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing and filing
of the Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters’ Questionnaires, any
Underwriters’ Powers of Attorney, and any invitation letters to prospective
Underwriters, (iv) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the

 

15

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Underwriters or by dealers to whom Shares may be sold, (v) the listing of the
Shares on the NNM, (vi) any filings required to be made by the Underwriters with
the NASD, and the reasonable fees, disbursements and other charges of counsel
for the Underwriters in connection therewith, (vii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(f), including the
reasonable fees, disbursements and other charges of counsel to the Underwriters
in connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) fees, disbursements and other
charges of counsel to the Company (but not those of counsel for the
Underwriters, except as otherwise provided herein), (ix) the transfer agent for
the Shares and (x) any travel expenses of the Company’s officers, directors and
employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Shares.

 

(k) The Company will not at any time, directly or indirectly, take any action
designed or which might reasonably be expected to cause or result in, or which
will constitute, stabilization of the price of the shares of Common Stock to
facilitate the sale or resale of any of the Shares.

 

(l) The Company will apply the net proceeds from the offering and sale of the
Shares to be sold by the Company in the manner set forth in the Prospectus under
“Use of Proceeds.”

 

(m) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, without the prior
written consent of Needham & Company, Inc., the Company will not (1) offer,
sell, contract to sell, pledge, grant options, warrants or rights to purchase,
or otherwise dispose of any equity securities of the Company or any other
securities convertible into or exchangeable for its Common Stock or other equity
security (other than pursuant to employee stock option or equity incentive plans
disclosed in the Prospectus or pursuant to the conversion of convertible
securities or the exercise of warrants in each case outstanding on the date of
this Agreement), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise.

 

(n) The Company will cause each of its officers, directors and certain
stockholders designated by the Representatives to, enter into lock-up agreements
with the Representatives to the effect that they will not, without the prior
written consent of Needham & Company, Inc., sell, contract to sell or otherwise
dispose of any shares of Common Stock or rights to acquire such shares according
to the terms set forth in Schedule II hereto.

 

5. Conditions of the Obligations of the Underwriters

 

16

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The obligations of each Underwriter hereunder are subject to the following
conditions:

 

(a) Notification that the Registration Statement has become effective shall be
received by the Representatives not later than 10:00 p.m., New York City time,
on the date of this Agreement or at such later date and time as shall be
consented to in writing by the Representatives and all filings required by Rule
424 and Rule 430A of the Rules and Regulations shall have been made. If the
Company has elected to rely upon Rule 462(b), the registration statement filed
under Rule 462(b) shall have become effective by 10:00 p.m., New York City time,
on the date of this Agreement.

 

(b) (i) No stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall be pending or
threatened by the Commission, (ii) no order suspending the effectiveness of the
Registration Statement or the qualification or registration of the Shares under
the securities or Blue Sky laws of any jurisdiction shall be in effect and no
proceeding for such purpose shall be pending before or threatened by the
Commission or the authorities of any such jurisdiction, (iii) any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities, (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have been filed
unless a copy thereof was first submitted to the Representatives and the
Representatives do not object thereto in good faith, and (v) the Representatives
shall have received certificates, dated the Closing Date and, if later, the
Option Closing Date and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii) of this paragraph.

 

(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the business, properties, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as described in or contemplated by the
Registration Statement and the Prospectus and (ii) the Company and the
Subsidiaries shall not have sustained any material loss or interference with the
business or properties of the Company and the Subsidiaries, taken as a whole,
from fire, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not described in the Registration
Statement and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the initial public offering price.

 

(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company, any of its Subsidiaries, or
any of its or their officers or directors in their capacities as such, before or
by any Federal, state or local

 

17

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court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which litigation or proceeding an unfavorable
ruling, decision or finding would, in the judgment of the Representatives,
materially and adversely affect the business, properties, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole or, if, in the judgment of the Representatives, any such development
makes it impracticable or inadvisable to consummate the sale and delivery of the
Shares by the Underwriters at the public offering price.

 

(e) Each of the representations and warranties of the Company contained herein
shall be true and correct in all respects (in the case of any representation and
warranty containing a materiality or material adverse effect qualification) or
in all material respects at the Closing Date and, with respect to the Option
Shares, at the Option Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company and all conditions contained
herein to be fulfilled or complied with by the Company at or prior to the
Closing Date and, with respect to the Option Shares, at or prior to the Option
Closing Date, shall have been duly performed, fulfilled or complied with.

 

(f) The Representatives shall have received an opinion, dated the Closing Date
and, with respect to the Option Shares, the Option Closing Date, satisfactory in
form and substance to the Representatives and counsel for the Underwriters from
Wyatt, Tarrant & Combs, LLP, counsel to the Company, with respect to the
following matters:

 

(i) Each of the Company and its subsidiaries listed in Exhibit 21 to the
Company’s Form 10-K for the year ended December 31, 2003 (the “Principal
Subsidiaries”) is a corporation or other entity duly incorporated or formed,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization; has full corporate or other entity power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owed or leased by it and to conduct its business as described in the
Registration Statement and Prospectus; and is duly licensed or qualified to do
business and is in good standing, where applicable, as a foreign entity in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it of which such counsel has
knowledge after due inquiry makes such license or qualification necessary and
where the failure to be licensed or qualified would have a material and adverse
effect on the business or financial condition of the Company and Principal
Subsidiaries, taken as a whole.

 

(ii) All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued and are fully paid and nonassessable and, to
such counsel’s knowledge after due inquiry, were not issued in violation of or
subject to any preemptive or, to such counsel’s knowledge after due inquiry,
similar rights.

 

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(iii) The specimen certificate evidencing the Common Stock filed or incorporated
by reference as an exhibit to the Registration Statement is in due and proper
form under Delaware law, the Shares have been duly authorized and, when issued
and paid for as contemplated by this Agreement, will be validly issued, fully
paid and nonassessable; and no statutory or, to such counsel’s knowledge after
due inquiry, contractual preemptive or similar rights exist with respect to any
of the Shares or the issue and sale thereof.

 

(iv) To such counsel’s knowledge, the Company does not own or control, directly
or indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any corporation,
firm, partnership, joint venture, association or other entity other than (i) the
Principal Subsidiaries, and (ii) other subsidiaries individually and
collectively not material to the Company and its business or financial
condition. All of the outstanding shares of capital stock, units or other equity
interests of each Principal Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable, and are owned of record by the
Company or one of the other Principal Subsidiaries to such counsel’s knowledge
after due inquiry free and clear of all claims, liens, charges and encumbrances,
except for any lien or security interest in such shares, units or other equity
interests pursuant to the Credit Facility; to such counsel’s knowledge, there
are no securities outstanding that are convertible into or exercisable or
exchangeable for capital stock, units or other equity interest of any Principal
Subsidiary.

 

(v) The authorized and outstanding capital stock of the Company is as set forth
in the Registration Statement and the Prospectus in the column entitled “Actual”
under the caption “Capitalization” (except for subsequent issuances, if any,
pursuant to this Agreement or pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities, options or warrants
referred to in the Prospectus). To such counsel’s knowledge, except as disclosed
in or specifically contemplated by the Prospectus, 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 of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company. The description of the capital stock of the
Company incorporated by reference in the Registration Statement and the
Prospectus conforms in all material respects to the terms thereof.

 

(vi) To such counsel’s knowledge, there are no legal or governmental proceedings
pending or threatened to which the Company or any of its Principal Subsidiaries
is a party or to which any of their respective properties is subject that are
required to be described in the Registration Statement or the Prospectus but are
not so described.

 

(vii) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated under

 

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this Agreement, except such as have been obtained or made under the Act or the
Rules and Regulations and such as may be required under foreign or state
securities or Blue Sky laws, as to which foreign or state securities or Blue Sky
laws such counsel renders no opinion, or the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Shares.

 

(viii) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company.

 

(ix) The execution and delivery of this Agreement, the compliance by the Company
with all of the terms hereof and the consummation of the transactions
contemplated hereby does not contravene any provision of United States Federal
or Kentucky law, or the Delaware General Corporation Law, or the Certificate of
Incorporation or By-Laws of the Company or the organizational and governing
documents of any of its Subsidiaries, and to the best of such counsel’s
knowledge after due inquiry will not result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms and provisions of, result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any party a right to terminate any of its obligations under, or result
in the acceleration of any obligation under, any indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other agreement or
instrument known to such counsel to which the Company or any of its Principal
Subsidiaries is a party or by which the Company, any of its Principal
Subsidiaries, or any of their respective properties is bound or affected, or
violate or conflict with (i) any judgment, ruling, decree or order known to such
counsel which breach, violation or conflict would have a material adverse effect
on the Company and its Principal Subsidiaries, taken as a whole, or (ii) any
United States Federal or Kentucky law or the Delaware General Corporation Law,
or to such counsel’s knowledge any other state statute, rule or regulation of
any governmental agency or body, applicable to the business or properties of the
Company or any of its Principal Subsidiaries which breach, violation or conflict
would have a material adverse effect on the Company and its Principal
Subsidiaries, taken as a whole.

 

(x) To such counsel’s knowledge, there is no document or contract of a character
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not described or
filed or incorporated by reference as required, and each description of such
contracts and documents that is contained in the Registration Statement and
Prospectus fairly presents in all material respects the information required
under the Act and the Rules and Regulations.

 

(xi) The statements under the captions “Risk Factors—Our stock price may decline
if additional shares are sold in the market after the offering” and “Risk
Factors—Our anti-takeover provisions and the concentration of ownership of

 

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our common stock may deter potential acquirers and may depress our stock price”
(relating to shares eligible for future sale and anti-takeover provisions),
“Certain Relationships and Related Transactions”, “Description of Capital Stock”
and “Shares Eligible for Future Sale” in the Prospectus or incorporated by
reference therein, insofar as the statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly and
correctly present, in all material respects, the information called for with
respect to such documents and matters of law (provided, however, that such
counsel may rely on representations of the Company with respect to the factual
matters contained in such statements, and provided further that such counsel
shall state that nothing has come to the attention of such counsel which leads
them to believe that such representations are not true and correct in all
material respects).

 

(xii) The Company is not an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

 

(xiii) Such counsel has received oral notification from the NNM that the Shares
have been duly authorized for listing on the NNM, subject to notice of issuance.

 

(xiv) To such counsel’s knowledge, no holder of securities of the Company has
rights, which have not been waived, to require the Company to register with the
Commission shares of Common Stock or other securities, as part of the offering
contemplated hereby.

 

(xv) Based on a telephonic communication with the Commission, the Registration
Statement has become effective under the Act, and to the best of such counsel’s
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or is pending, or threatened.

 

(xvi) The Registration Statement and the Prospectus, as of their respective
effective or issue dates, appeared to be appropriately responsive in all
material respects to the requirements of the Act and the Rules and Regulations
(other than the financial statements, schedules and other financial data
contained or incorporated by reference in the Registration Statement or the
Prospectus, as to which such counsel need express no opinion).

 

(xvii) Such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the Representatives and
representatives of the independent accountants of the Company, at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed. Although such counsel is not passing upon, and is not assuming
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, on the basis of the
foregoing, no facts have come to the attention of such counsel which leads such
counsel to believe that, as of the Effective Date the Registration Statement
(other

 

21

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than the financial statements, schedules and other financial data contained or
incorporated by reference therein, as to which such counsel need express no
opinion), contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, or any amendment or
supplement thereto, as of its date, contained any untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial statements, schedules and other
financial data contained or incorporated by reference therein, as to which such
counsel need express no opinion).

 

(xviii) The documents incorporated by reference in the Prospectus (other than
the financial statements, schedules and other financial data contained therein,
as to which such counsel need express no opinion), subject to any amendments
thereto and any subsequently filed documents which supersede such documents,
when they were filed with the Commission appeared to be appropriately responsive
in all material respects with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations.

 

In rendering such opinion, such counsel may rely, as to matters of local law, on
opinions of counsel satisfactory in form and substance to the Representatives
and counsel, for the Underwriters, provided that the opinion of counsel, to the
Company shall state that they are doing so, that they have no reason to believe
that they and the Underwriters are not entitled to rely on such opinions and
that copies of such opinions are to be attached to the opinion.

 

(g) The Representatives shall have received an opinion, dated the Closing Date
and the Option Closing Date, from Piper Rudnick LLP, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.

 

(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its Subsidiaries as required by the
Act and the Exchange Act and the Rules and Regulations and with respect to
certain financial and other statistical and numerical information contained or
incorporated by reference in the Registration Statement. At the Closing Date
and, as to the Option Shares, the Option Closing Date, the Accountants shall
have furnished to the Representatives a letter, dated the date of its delivery,
which shall confirm, on the basis of a review in accordance with the procedures
set forth in the letter from the Accountants, that nothing has come to their
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than three days prior to
the Closing Date and the Option Closing Date, as the case may be, which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date

 

22

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(i) At the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall be furnished to the Representatives a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that;

 

(i) Each signer of such certificate has carefully examined the Registration
Statement and the Prospectus (including any documents filed under the Exchange
Act and deemed to be incorporated by reference into the Prospectus) and (A) as
of the date of such certificate, such documents are true and correct in all
material respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue or
misleading in any material respect and (B) in the case of the certificate
delivered at the Closing Date and the Option Closing Date, since the Effective
Date no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not untrue or
misleading in any material respect.

 

(ii) Each of the representations and warranties of the Company contained in this
Agreement were, when originally made, and are, at the time such certificate is
delivered, true and correct.

 

(iii) Each of the covenants required to be performed by the Company herein on or
prior to the date of such certificate has been duly, timely and fully performed
and each condition herein required to be satisfied or fulfilled on or prior to
the date of such certificate has been duly, timely and fully satisfied or
fulfilled.

 

(j) On or prior to the Closing Date, the Representatives shall have received the
executed agreements referred to in Section 4(n).

 

(k) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.

 

(l) Prior to the Closing Date, the Shares shall have been duly authorized for
listing on the NNM upon official notice of issuance.

 

6. Indemnification.

 

(a) Company will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at

 

23

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common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading in the light of the circumstances in
which they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company contained herein
or any failure of the Company to perform its obligations hereunder or under law
in connection with the transactions contemplated hereby; provided, however, that
(i) the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission, or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of any Underwriter, expressly for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus and (ii) the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, or damage arising out of or based on any untrue statement or omission
or alleged untrue statement or omission or alleged omission to state a material
fact in the preliminary prospectus which is corrected in the Prospectus if the
person asserting any such loss, claim, liability, expense or damage purchased
Shares from such Underwriter but was not sent or given a copy of the Prospectus
at or prior to the written confirmation of the sale of such Shares to such
person and if copies of the Prospectus were timely delivered to such Underwriter
pursuant to Section 5 hereof. The Company acknowledges that the statements set
forth in the third to last sentence of Section 3(b) of this Agreement constitute
the only information relating to any Underwriter furnished in writing to the
Company by the Representatives on behalf of the Underwriters expressly for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. This indemnity agreement will be in addition to any liability that
the Company might otherwise have.

 

(b) Each Underwriter will indemnify and hold harmless the Company, each director
of the Company, each officer of the Company who signs the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, as set forth in
Section 6(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company acknowledges that the statements set forth in the third to last sentence
of Section 3(b) of this Agreement constitute the only information relating to
any Underwriter furnished in writing to the Company by the Representatives on
behalf of the Underwriters expressly for inclusion in the Registration
Statement, the preliminary

 

24

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prospectus or the Prospectus. This indemnity will be in addition to any
liability that each Underwriter might otherwise have.

 

(c) Any party that proposes to assert the right to be indemnified under this
Section 6 shall, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been, authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based on advice of counsel) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (iv) the indemnifying party has not in fact employed
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on

 

25

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behalf of an indemnified party. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent (which
consent will not be unreasonably withheld or delayed).

 

(d) If the indemnification provided for in this Section 6 is applicable in
accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and
(c) of this Section 6 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) by such indemnified party as a result of
such losses, claims, liabilities, expenses and damages in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
6(d) were to be determined by pro rata allocation (even if the Underwriters were
created as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss claim, liability, expense or damage, or action in respect thereof, referred
to above in this Section 6(d) shall be deemed to include, for purposes of this
Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such

 

26

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fraudulent misrepresentation. The Underwriters’ obligations to contribute as
provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not joint. For purposes of this Section 6(d), any
person who controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each director and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against any such party in respect of which a claim
for contribution may be made under this Section 6(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d). No party will
be liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).

 

(e) The indemnity and contribution agreements contained in this Section 6 and
the representations and warranties of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Underwriters, (ii) acceptance of any
of the Shares and payment therefor or (iii) any termination of this Agreement.

 

7. Reimbursement of Certain Expenses

 

In addition to its other obligations under Section 6(a) of this Agreement, the
Company hereby agrees to reimburse on a quarterly basis the Underwriters for all
reasonable legal and other expenses incurred in connection with investigating or
defending any claim, action, investigation, inquiry or other proceeding arising
out of or based upon, in whole or in part, any statement or omission or alleged
statement or omission, or any inaccuracy in the representations and warranties
of the Company contained herein or failure of the Company to perform its or
their respective obligations hereunder or under law, all as described in Section
6(a), notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 7 and the
possibility that such payment might later be held to be improper; provided,
however, that, to the extent any such payment is ultimately held to be improper,
the persons receiving such payments shall promptly refund them.

 

8. Termination

 

The obligations of the several Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from the Representatives, without liability on the part of any Underwriter to
the Company if, prior to delivery and payment for the Firm Shares or Option
Shares, as the case may be, in the sole judgment of the Representatives, (i)
trading in any of the equity securities of the Company shall have been suspended
by the Commission or by the NNM, (ii) trading in securities generally on the NNM
shall have been suspended or limited or minimum or maximum prices shall have
been generally established on such exchange, or additional

 

27

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material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such exchange,
by order of the Commission or any court or other governmental authority, or by
the NNM, (iii) a general banking moratorium shall have been declared by either
Federal or New York State authorities or any material disruption of the
securities settlement or clearance services in the United States shall have
occurred or (iv) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities
involving the United States, a declaration of national emergency or war by the
United States, or other calamity or crisis, either within or outside the United
States, shall have occurred, the effect of which is such as to make it, in the
sole judgment of the Representatives, impracticable or inadvisable to proceed
with completion of the public offering or the delivery of and payment for the
Shares.

 

If this Agreement is terminated pursuant to Section 9 hereof, the Company shall
be under no liability to any Underwriter except as provided in Sections 4(j), 6
and 7 hereof; but, if for any other reason the purchase of the Shares by the
Underwriters is not consummated or if for any reason the Company shall fail,
refuse or be unable to perform its obligations hereunder, the Company will
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees, disbursements and other charges of counsel to the Underwriters) incurred
by them in connection with the offering of the Shares.

 

9. Substitution of Underwriters

 

If any one or more of the Underwriters shall fail or refuse to purchase any of
the Firm Shares which it or they have agreed to purchase hereunder, and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, the other Underwriters shall be
obligated, severally, to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase, in the
proportions which the number of Firm Shares which they have respectively agreed
to purchase pursuant to Section 1 bears to the aggregate number of Firm Shares
which all such non-defaulting Underwriters have so agreed to purchase, or in
such other proportions as the Representatives may specify; provided that in no
event shall the maximum number of Firm Shares which any Underwriter has become
obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by more than one-ninth of such number of Firm Shares without the prior
written consent of such Underwriter. In any such case either the Representatives
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than five business days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or in any other documents
or arrangements may be effected. If any Underwriter or Underwriters shall fail
or refuse to purchase any Firm Shares and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter and the

 

28

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Company for the purchase or sale of any Shares under this Agreement. Any action
taken pursuant to this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.

 

10. Miscellaneous

 

Notice given pursuant to any of the provisions of this Agreement shall be in
writing and, unless otherwise specified, shall be mailed or delivered (a) if to
the Company, at the office of the Company, 101 Bullitt Lane, Suite 450,
Louisville, Kentucky 40222, Attention: Jeffrey T. Gill, with a copy to Wyatt,
Tarrant & Combs, LLP, 500 West Jefferson Street, 28th Floor, Louisville, KY
40207, Attention: Robert A. Heath, Esq., or (b) if to the Underwriters, to the
Representatives at the offices of Needham, & Company, Inc., 445 Park Avenue, New
York, New York 10022, Attention: Corporate Finance Department, with a copy to
Piper Rudnick LLP, 1251 Avenue of the Americas, New York, New York 10020,
Attention: Michael Hirschberg, Esq. Any such notice shall be effective only upon
receipt.

 

This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, and the controlling persons, directors and officers
referred to in Section 6, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term “successors and assigns” as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.

 

Any action required or permitted to be made by the Representatives under this
Agreement may be taken by them jointly or by Needham & Company, Inc.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State.

 

This Agreement may be signed in two or more counterparts with the same effect as
if the signatures thereto and hereto were upon the same instrument.

 

In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

The Company and the Underwriters each hereby waive any right they may have to a
trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.

 

[Remainder of page intentionally left blank.]

 

29

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Please confirm that the foregoing correctly sets forth the agreement among the
Company and the several Underwriters.

 

Very truly yours,

SYPRIS SOLUTIONS, INC.

By:

 

/s/ David D. Johnson

--------------------------------------------------------------------------------

   

Name: David D. Johnson

   

Title: Vice President

 

Confirmed as of the date first

above mentioned:

Needham & Company, Inc.

Robert W. Baird & Co. Incorporated

Raymond James & Associates, Inc.

   

Acting on behalf of themselves

and as the Representatives of

the other several Underwriters

named in Schedule I hereto.

By:

 

Needham & Company, Inc.

   

By:

 

Janice L. Triolo

--------------------------------------------------------------------------------

       

Name: Janice L. Triolo

Title: Managing Director

 

 

30

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SCHEDULE I

 

UNDERWRITERS

 

     Number of
Firm Shares
to be Purchased

--------------------------------------------------------------------------------

Underwriters

--------------------------------------------------------------------------------

    

Needham & Company, Inc.

   1,475,000

Robert W. Baird & Co. Incorporated

   737,500

Raymond James & Associates, Inc.

   737,500

Stifel, Nicolaus & Company, Incorporated

   50,000     

--------------------------------------------------------------------------------

Total

   3,000,000     

--------------------------------------------------------------------------------

 

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