EX-10.1






Exhibit 10.1




Underwriting Agreement




August 10, 2009




Canaccord Adams Inc.


99 High Street, 12th Floor


Boston, MA 02110



Ladies and Gentlemen:



Metalico, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to
Canaccord Adams Inc. (the “Underwriter”) pursuant to this Underwriting Agreement (this
“Agreement”) an aggregate of 6,000,000 shares (the “Firm Shares”) of common stock,
$0.001 par value (the “Common Stock”), of the Company. In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the Underwriter the option to
purchase from the Company up to an additional 600,000 shares of Common Stock (the “Additional
Shares”). The Firm Shares and the Additional Shares are hereinafter collectively referred to
as the “Shares.” The Shares are described in the Prospectus which is referred to below.



The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the “Commission”) a registration statement on
Form S-3 (File No. 333-156026) under the Act (the “registration statement”), including a
prospectus, which registration statement incorporates by reference documents which the Company has
filed, or will file, in accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the “Exchange Act”). Such
registration statement has become effective under the Act.



Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such section applies to the Underwriter
(the “Effective Time”), including (i) all documents filed as a part thereof or incorporated
or deemed to be incorporated by reference therein and (ii) any information contained or
incorporated by reference in a prospectus filed with the Commission pursuant to Rule 424(b) under
the Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the
Act, to be part of the registration statement at the Effective Time.



Except where the context otherwise requires, “Basic Prospectus,” as used herein, means
the base prospectus included as part of the Registration Statement, in the form in which it has
most recently been filed with the Commission prior to the date of this Agreement. Except where the
context otherwise requires, “Prospectus Supplement,” as used herein, means the final
prospectus supplement, relating to the Shares, filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date hereof (or such
earlier time as may be required under the Act), in the form furnished by the Company to the
Underwriter for use by the Underwriter and by dealers in connection with the offering of the
Shares. Except where the context otherwise requires, “Prospectus,” as used herein, means
the Basic Prospectus as supplemented by the Prospectus Supplement.



“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule I attached hereto. The Underwriter has not offered or sold and will not offer or
sell, without the Company’s consent, any Shares by means of any “free writing prospectus” (as
defined in Rule 405 under the Act) that is required to be filed by the Underwriter with the
Commission pursuant to Rule 433 under the Act, other than a Permitted Free Writing Prospectus.



“Disclosure Package,” as used herein, means the Basic Prospectus, together with the
Permitted Free Writing Prospectuses, if any, and the information set forth on Schedule II
attached hereto, taken as a whole.



Any reference herein to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and
include the documents, if any, incorporated by reference, or deemed to be incorporated by
reference, therein (each an “Incorporated Document” and collectively, the “Incorporated
Documents”), including, unless the context otherwise requires, the documents, if any, filed as
exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, the Basic Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act on or after the initial effective date of
the Registration Statement, or the date of the Basic Prospectus, the Prospectus Supplement, the
Prospectus or such Permitted Free Writing Prospectus, as the case may be, and deemed to be
incorporated therein by reference.



As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange, Inc. is open for trading. The terms “herein,” “hereof,” “hereto,” “hereinafter” and
similar terms, as used in this Agreement, shall in each case refer to this Agreement as a whole and
not to any particular section, paragraph, sentence or other subdivision of this Agreement. The
term “or,” as used herein, is not exclusive.



The Company and the Underwriter agree as follows:



1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
Underwriter and the Underwriter agrees to purchase from the Company the Firm Shares, at a purchase
price of $4.18 per Share. The Company is advised by the Underwriter that the Underwriter intends
(i) to make a public offering of the Firm Shares as soon after the effectiveness of this Agreement
as in the Underwriter’s judgment is advisable and (ii) to offer the Firm Shares upon the terms set
forth in the Prospectus. The Underwriter may from time to time increase or decrease the public
offering price after the initial public offering to such extent as the Underwriter may determine.



In addition, the Company hereby grants to the Underwriter the option to purchase, and upon the
basis of the warranties and representations and subject to the terms and conditions herein set
forth, the Underwriter shall have the right to purchase from the Company, all or a portion of the
Additional Shares as may be necessary solely to cover over-allotments, if any, made in connection
with the offering of the Firm Shares, at the same purchase price per share to be paid by the
Underwriter to the Company for the Firm Shares. This option may be exercised by the Underwriter at
any time and from time to time on or before the thirtieth (30th) day following the date
hereof, by written notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred to as the
“Additional Time of Purchase”); provided, however, that the Additional Time of Purchase
shall not be earlier than the Time of Purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised.



2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by Federal Funds wire transfer against delivery of the certificates for the
Firm Shares to the Underwriter through the facilities of The Depository Trust Company
(“DTC”) for the account of the Underwriter. Such payment and delivery shall be made at
10:00 A.M., New York time, on August 14, 2009 (the “Closing Date”) (unless another time
shall be agreed to by the Underwriter and the Company). The time at which such payment and
delivery are to be made is hereinafter sometimes called the “Time of Purchase.” Electronic
transfer of the Firm Shares shall be made to the Underwriter at the Time of Purchase in such names
and in such denominations as the Underwriter shall specify.



Payment of the purchase price for the Additional Shares shall be made at the Additional Time
of Purchase in the same manner and at the same office as the payment for the Firm Shares.
Electronic transfer of the Firm Shares shall be made to the Underwriter at the Time of Purchase in
such names and in such denominations as the Underwriter shall specify. The Time of Purchase and
the Additional Time of Purchase are sometimes referred to herein as the “Closing Dates”.



Deliveries of the documents described in Section 5 hereof with respect to the purchase
of the Shares shall be made at the offices of Lowenstein Sandler P.C., counsel for the Company,
located at 65 Livingston Avenue, Roseland, New Jersey, at 10:00 A.M., New York time, on the date of
the closing of the purchase of the Shares.



3. Representations and Warranties of the Company. The Company represents and warrants
to and agrees with the Underwriter that:




(a) the Registration Statement has heretofore become effective under the Act; no stop
order of the Commission preventing or suspending the use of the Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus, or the
effectiveness of the Registration Statement, has been issued, and no proceedings for such
purpose have been instituted or, to the Company’s knowledge, are contemplated by the
Commission;




(b) the Registration Statement complied when it became effective, complies as of the
Effective Time and, as amended or supplemented, at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, and at all times during which a prospectus
is required by the Act to be delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with any sale of Shares, will
comply, in all material respects, with the requirements of the Act; the conditions to the
use of Form S-3 in connection with the offering and sale of the Shares as contemplated
hereby have been satisfied; the Registration Statement meets, and the offering and sale of
the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Act
(including, without limitation, Rule 415(a)(5) under the Act); the Registration Statement
did not, as of the Effective Time, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading; the Basic Prospectus complied as of its date and the date it was
filed with the Commission, complies as of the date hereof and, at the Time of Purchase and
at the Additional Time of Purchase, as the case may be, and at all times during which a
prospectus is required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of Shares, will
comply, in all material respects, with the requirements of the Act; the Disclosure Package
does not include an untrue statement of a material fact or omit 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; each of the Prospectus Supplement and the Prospectus
will comply, as of the date that it is filed with the Commission, the date of the Prospectus
Supplement, the Time of Purchase and the Additional Time of Purchase, as the case may be,
and at all times during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, in all material respects, with the requirements of the
Act (in the case of the Prospectus, including, without limitation, Section 10(a) of the
Act); at no time during the period that begins on the earlier of the date of the Prospectus
Supplement and the date the Prospectus Supplement is filed with the Commission and ends at
the later of the Time of Purchase, the Additional Time of Purchase and the end of the period
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares did or will any Prospectus Supplement or the Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit 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; each Permitted Free Writing Prospectus does not
conflict with the information contained in the Registration Statement, the Disclosure
Package or the Prospectus, and at no time during the period that begins on the date of such
Permitted Free Writing Prospectus and ends at the Time of Purchase and at the Additional
Time of Purchase, as the case may be, did or will any Permitted Free Writing Prospectus
include an untrue statement of a material fact or omit 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; provided, however, that the Company makes no
representation or warranty in this Section 3(b) with respect to any statement
contained in the Registration Statement, the Prospectus or any Permitted Free Writing
Prospectus in reliance upon and in conformity with information concerning the Underwriter
and furnished in writing by such Underwriter to the Company expressly for use in the
Registration Statement, the Prospectus or such Permitted Free Writing Prospectus, it being
understood and agreed that the only such information furnished by the Underwriter consists
of the information described as such in Section 7(g); each Incorporated Document, at
the time such document was filed with the Commission, complied, in all material respects,
with the requirements of the Exchange Act and did not include an untrue statement of a
material fact or omit 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;




(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the Basic Prospectus and the Permitted
Free Writing Prospectuses, if any; the Company has not, directly or indirectly, prepared,
used or referred to any Permitted Free Writing Prospectus except in compliance with Rule 163
or with Rules 164 and 433 under the Act; assuming that such Permitted Free Writing
Prospectus is so sent or given after the Registration Statement was filed with the
Commission (and after such Permitted Free Writing Prospectus was, if required pursuant to
Rule 433(d) under the Act, filed with the Commission), the sending or giving, by the
Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of
Rule 164 and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the
conditions set forth in one or more of subclauses (i) through (iv), inclusive, of
Rule 433(b)(1) under the Act are satisfied, and the registration statement relating to the
offering of the Shares contemplated hereby, as initially filed with the Commission, includes
a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act; neither the Company nor the Underwriter are
disqualified, by reason of subsection (f) or (g) of Rule 164 under the Act, from using, in
connection with the offer and sale of the Shares, “free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company is not an
“ineligible issuer” (as defined in Rule 405 under the Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Act with respect to the
offering of the Shares contemplated by the Registration Statement; the Company is subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act and is currently
eligible to use Form S-3 pursuant to General Instruction I.B.1. of Form S-3;




(d) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the Disclosure Package and, as of the Time of Purchase, the
Company shall have an authorized and outstanding capitalization as set forth in the
Disclosure Package (subject, in each case, to the issuance of shares of Common Stock upon
exercise of stock options and warrants and conversion of convertible notes disclosed as
outstanding in the Registration Statement (excluding the exhibits thereto) and the
Prospectus and the grant of options under existing stock option plans described in the
Registration Statement (excluding the exhibits thereto) and the Prospectus); all of the
issued and outstanding shares of capital stock, including the Shares, of the Company have
been duly authorized and validly issued and are fully paid and non-assessable, have been
issued in compliance with all applicable securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar right;




(e) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and conduct its business as described in
the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if
any, to execute and deliver this Agreement and to issue, sell and deliver the Shares as
contemplated herein;




(f) the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, (i) have a
material adverse effect on the business, properties, financial condition, or results of
operations of the Company and the Subsidiaries (as defined below) taken as a whole,
(ii) prevent or materially interfere with consummation of the transactions contemplated
hereby or (iii) result in the delisting of shares of Common Stock from the NYSE Amex (the
occurrence of any such effect or any such prevention or interference or any such result
described in the foregoing clauses (i), (ii) and (iii) being herein referred to as a
“Material Adverse Effect”);




(g) the Company has no subsidiaries (as defined under the Act) other than those listed
on Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31,
2008; except as disclosed in the Registration Statement, the Prospectus and the Permitted
Free Writing Prospectuses, if any, (i) the Company owns, directly or indirectly, all of the
issued and outstanding capital stock of each of the Subsidiaries, and (ii) the Company does
not own, directly or indirectly, any shares of stock or any other equity interests or
long-term debt securities of any corporation, firm, partnership, joint venture, association
or other entity; complete and correct copies of the charters and the bylaws of the Company
and the Subsidiaries and all amendments thereto have been made available to the Underwriter,
and no changes therein will be made on or after the date hereof through and including the
Time of Purchase and the Additional Time of Purchase, as the case may be; each Subsidiary
has been incorporated or organized and is validly existing as a corporation or limited
liability company, as the case may be, in good standing under the laws of the jurisdiction
of its incorporation, with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the
Prospectus and the Permitted Free Writing Prospectuses, if any; each Subsidiary is qualified
to do business as a foreign corporation or limited liability company, as the case may be,
and is in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or in the aggregate,
have a Material Adverse Effect; except as disclosed in the Registration Statement, the
Prospectus and the Permitted Free Writing Prospectuses, if any, all of the outstanding
            shares of capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, have been issued in compliance with all
applicable securities laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right and are owned by the Company subject to no
security interest, other encumbrance or adverse claims; except as disclosed in the
Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any,
no options, warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding; the Company has no “significant subsidiary,”
as that term is defined in Rule 1-02(w) of Regulation S-X under the Act, other than Metalico
Rochester, Inc., Metalico Buffalo, Inc., Mayco Industries, Inc., Federal Autocat Recycling,
LLC, Metalico Akron, Inc., American CatCon, Inc. and Metalico Pittsburgh, Inc.
(collectively, the “Subsidiaries”);




(h) the Shares have been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the Shares, when issued and delivered against
payment therefor as provided herein, will be free of any restriction upon the voting or
transfer thereof pursuant to the Delaware General Corporation Law or the Company’s charter
or bylaws or any agreement or other instrument to which the Company is a party;




(i) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained or incorporated by reference in the
Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any;




(j) this Agreement has been duly authorized, executed and delivered by the Company;




(k) neither the Company nor any of the Subsidiaries is in breach or violation of or in
default under (nor has any event occurred which, with notice, lapse of time or both, would
result in any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (A) its
charter or bylaws, or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which it is a party or by which it or any of its properties may
be bound or affected, or (C) any federal, state, local or foreign law, regulation or rule,
or (D) any rule or regulation of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations of the NYSE
Amex), or (E) any decree, judgment or order applicable to it or any of its properties;
except, in the cases of clause (B), (C), (D) and (E), where such occurrence would not,
individually or in the aggregate, have a Material Adverse Effect;




(l) the execution, delivery and performance of this Agreement, the issuance and sale of
the Shares and the consummation of the transactions contemplated hereby will not conflict
with, result in any breach or violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a person acting on
such holder’s behalf) the right to require the repurchase, redemption or repayment of all or
a part of such indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any Subsidiary pursuant
to) (A) the charter or bylaws of the Company or any of the Subsidiaries, or (B) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected, or (C) any federal, state, local or foreign
law, regulation or rule, or (D) any rule or regulation of any self-regulatory organization
or other non-governmental regulatory authority (including, without limitation, the rules and
regulations of the NYSE Amex), or (E) any decree, judgment or order applicable to the
Company or any of the Subsidiaries or any of their respective properties; except, in the
cases of clause (B), (C), (D) and (E), where such occurrence would not, individually or in
the aggregate, have a Material Adverse Effect;




(m) except for approvals or consents obtained on or prior to the date of this
Agreement, no approval, authorization, consent or order of or filing with any federal,
state, local or foreign governmental or regulatory commission, board, body, authority or
agency, or of or with any self-regulatory organization or other non-governmental regulatory
authority, or approval of the shareholders of the Company, is required in connection with
the issuance and sale of the Shares or the consummation by the Company of the transactions
contemplated hereby, other than (i) registration of the Shares under the Act, which has been
effected, (ii) any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the Underwriter; (iii) the
listing of the Shares on the NYSE Amex or (iv) under the Conduct Rules of the Financial
Industry Regulatory Authority, Inc. (“FINRA”);




(n) except as described in the Registration Statement (excluding the exhibits thereto)
and the Prospectus, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any other capital
stock or other equity interests of the Company, (ii) except for the holders of the Company’s
7.0% Senior Unsecured Convertible Notes due April 30, 2028, no person has any preemptive
rights, resale rights, rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock of or other equity interests in the
Company and (iii) no person has the right to act as an underwriter or as a financial advisor
to the Company in connection with the offer and sale of the Shares; no person has the right,
contractual or otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock of or other equity interests or securities
in the Company, or to include any such shares or interests or securities in the Registration
Statement or the offering contemplated thereby, other than such shares, interests or
securities that have already been registered by the Company;




(o) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings required under any
applicable law, regulation or rule, and has obtained all necessary licenses, authorizations,
consents and approvals from other persons, in order to conduct their respective businesses,
except where the failure to have or obtain such licenses, authorizations, consents and
approvals would not, individually or in the aggregate, have a Material Adverse Effect;
neither the Company nor any of the Subsidiaries is in violation of, or in default under, or
has received notice of any proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or any of the
Subsidiaries, except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;




(p) except as described in the Registration Statement (excluding the exhibits thereto)
and the Prospectus, there are no actions, suits, claims, investigations or proceedings
pending or, to the Company’s knowledge, threatened or contemplated to which the Company or
any of the Subsidiaries or any of their respective directors or officers is or would be a
party or of which any of their respective properties is or would be subject at law or in
equity, before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the NYSE Amex), except any such action, suit, claim, investigation or proceeding which, if
resolved adversely to the Company or any Subsidiary, would not, individually or in the
aggregate, have a Material Adverse Effect;




(q) Each of (i) McGladrey & Pullen LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is included or incorporated by reference in
the Registration Statement and the Prospectus, and (ii) J.H. Cohn LLP, are independent
registered public accountants with respect to the Company as required by the Act and by the
rules of the Public Company Accounting Oversight Board;




(r) the financial statements included or incorporated by reference in the Registration
Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, together with
the related notes and schedules, present fairly the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the consolidated results of
operations, cash flows and changes in shareholders’ equity of the Company for the periods
specified have been prepared in compliance with the requirements of the Act and Exchange Act
and in conformity with U.S. generally accepted accounting principles applied on a consistent
basis during the periods involved; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the Prospectus and the Permitted
Free Writing Prospectuses, if any, are accurately and fairly presented and prepared on a
basis consistent with the financial statements and books and records of the Company; there
are no financial statements (historical or pro forma) that are required to be included or
incorporated by reference in the Registration Statement or the Prospectus that are not
included or incorporated by reference as required; the Company and the Subsidiaries do not
have any material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not described in the Registration Statement (excluding the
exhibits thereto) and the Prospectus; and all disclosures contained or incorporated by
reference in the Registration Statement, the Prospectus and the Permitted Free Writing
Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K under the Act, to the extent applicable;




(s) subsequent to the respective dates as of which information is given in the
Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any,
in each case excluding any amendments or supplements to the foregoing made after the
execution of this Agreement, there has not been (i) any event or occurrence that has
resulted in a material adverse change in the business, properties, management, financial
condition, or results of operations of the Company and the Subsidiaries taken as a whole,
(ii) any transaction which is material to the Company and the Subsidiaries taken as a whole,
(iii) any obligation or liability, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or any Subsidiary, which is material to the Company
and the Subsidiaries taken as a whole, (iv) any change in the capital stock of the Company,
except for the issuance of stock pursuant to the exercise of stock options or warrants or
conversion of convertible notes outstanding, or pursuant to the stock option plans of the
Company in effect or pursuant to this Agreement, in each case, as of the dates as of which
information is given in the Registration Statement and the Prospectus, or outstanding
indebtedness of the Company or any Subsidiaries or (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any Subsidiary;




(t) the Company has obtained for the benefit of the Underwriter the agreement, in the
form set forth as Exhibit A hereto, of (i) each of its directors and “officers”
(within the meaning of Rule 16a-1(f) under the Exchange Act) listed on Schedule III
hereto and (ii) certain of its stockholders listed on Schedule III hereto (each a
“Lock-Up Agreement” and collectively, the “Lock-Up Agreements”);




(u) neither the Company nor any Subsidiary is, and at no time during which a prospectus
is required by the Act to be delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with any sale of Shares will
either of them be, and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, neither of them will be, an “investment company” or an
entity “controlled” by an “investment company,” as such terms are defined in the Investment
Company Act of 1940, as amended (the “Investment Company Act”);




(v) neither the Company nor any Subsidiary is and, after giving effect to the offering
and sale of the Shares, neither will be a “holding company” or a “subsidiary company” of a
“holding company” or an “affiliate” of a “holding company” or of a “subsidiary company,” as
such terms are defined in the Public Utility Holding Company Act of 1935, as amended;




(w) the Company and each of the Subsidiaries have good and marketable title to all
property (real and personal) described in the Registration Statement, the Prospectus and the
Permitted Free Writing Prospectuses, if any, as being owned by any of them, free and clear
of all liens, claims, security interests or other encumbrances, except such as are described
in the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses,
if any, or such as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and its
Subsidiaries; all the material property described in the Registration Statement, the
Prospectus and the Permitted Free Writing Prospectuses, if any, as being held under lease by
the Company or a Subsidiary is held thereby under valid, subsisting and enforceable leases;




(x) each material contract, agreement and license listed as an exhibit to, described in
or incorporated by reference in the Registration Statement, the Prospectus and the Permitted
Free Writing Prospectuses, if any, to which the Company or any of its Subsidiaries is bound
is legal, valid, binding, enforceable and in full force and effect against the Company or
such Subsidiary, and to the knowledge of the Company, each other party thereto, except to
the extent such enforceability is subject to (i) laws of general application relating to
bankruptcy, insolvency, moratorium and the relief of debtors and (ii) the availability of
specific performance, injunctive relief and other equitable remedies. Neither the Company
nor any of its Subsidiaries nor to the Company’s knowledge any other party is in material
breach or default with respect to any such contract, agreement and license. To the
Company’s knowledge, no event has occurred which with notice or lapse of time would
constitute a breach or default, or permit termination, modification, or acceleration, under
any such contract, agreement or license, except any such breach, default, termination,
modification, or acceleration which would not, individually or in the aggregate, have a
Material Adverse Effect. No party has repudiated any material provision of any such
contract, agreement or license;




(y) the Company and the Subsidiaries own, or have obtained valid and enforceable
licenses for, or other rights to use, the inventions, patent applications, patents,
trademarks (both registered and unregistered), tradenames, service names, copyrights, trade
secrets and other proprietary information described in the Registration Statement, the
Prospectus and the Permitted Free Writing Prospectuses, if any, as being owned or licensed
by them or which are necessary for the conduct of their respective businesses as currently
conducted or as proposed to be conducted, except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a Material Adverse Effect
(collectively, “Intellectual Property”); there are no third parties who have or, to
the Company’s knowledge, will be able to establish rights to any Intellectual Property,
except for, and to the extent of, the ownership rights of the owners of the Intellectual
Property which is licensed to the Company and the license rights of any third parties to
which the Intellectual Property is licensed; to the knowledge of the Company, there is no
infringement by third parties of any Intellectual Property; there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
Company’s rights in or to any Intellectual Property, except as would not, individually or in
the aggregate, have a Material Adverse Effect, and the Company is unaware of any facts which
could form a reasonable basis for any such action, suit, proceeding or claim; there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by
others challenging the validity, enforceability or scope of any Intellectual Property, and
the Company is unaware of any facts which could form a reasonable basis for any such action,
suit, proceeding or claim; there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any Subsidiary infringes or
otherwise violates, any patent, trademark, tradename, service name, copyright, trade secret
or other proprietary rights of others, and the Company is unaware of any facts which could
form a reasonable basis for any such action, suit, proceeding or claim; the Company and the
Subsidiaries have complied in all material respects with the terms of each agreement
pursuant to which Intellectual Property has been licensed to the Company or any Subsidiary,
and all such agreements are in full force and effect; to the knowledge of the Company, there
is no patent or patent application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property or that challenges the validity,
enforceability or scope of any of the Intellectual Property; and to the knowledge of the
Company, there is no prior art that may render any patent application within the
Intellectual Property unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office;




(z) to the Company’s knowledge, neither the Company nor any of the Subsidiaries is
engaged in any unfair labor practice; except for matters which would not, individually or in
the aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor practice
complaint pending or, to the Company’s knowledge, threatened against the Company or any of
the Subsidiaries before the National Labor Relations Board, and no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is pending or, to the
Company’s knowledge, threatened, (B) no strike, labor dispute, slowdown or stoppage pending
or, to the Company’s knowledge, threatened against the Company or any of the Subsidiaries
and (C) no union representation dispute currently existing concerning the employees of the
Company or any of the Subsidiaries, (ii) to the Company’s knowledge, no union organizing
activities are currently taking place concerning the employees of the Company or any of the
Subsidiaries and (iii) there has been no violation of any federal, state, local or foreign
law relating to discrimination in the hiring, promotion or pay of employees, any applicable
wage or hour laws, any provision of the Worker Adjustment and Retraining Notification Act of
1988, as amended (“WARN Act”) or the WARN Act’s state, foreign or local equivalent,
or any provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) or
the rules and regulations promulgated thereunder concerning the employees of the Company or
any of the Subsidiaries; the Company and each Subsidiary is in compliance with all presently
applicable provisions of ERISA, except where such non-compliance would not result in a
Material Adverse Effect; no material “reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in ERISA) to which the Company or any
Subsidiary contributes or which the Company or any Subsidiary maintains; the Company and
each Subsidiary has not incurred and does not expect to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “Code”); and each “pension
plan” for which the Company or any Subsidiary would have any liability that is intended to
be qualified under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause the loss of
such qualification;




(aa) except as described in the Registration Statement and the Prospectus, the Company
and the Subsidiaries and their respective properties, assets and operations are in
compliance with, and the Company and each of the Subsidiaries hold all permits,
authorizations and approvals required under, Environmental Laws (as defined below), except
to the extent that failure to so comply or to hold such permits, authorizations or approvals
would not, individually or in the aggregate, have a Material Adverse Effect; except as
described in the Registration Statement and the Prospectus, there are no past, present or,
to the Company’s knowledge, reasonably anticipated future events, conditions, circumstances,
activities, practices, actions, omissions or plans that could reasonably be expected to give
rise to any material costs or liabilities to the Company or any Subsidiary under, or to
interfere with or prevent compliance by the Company or any Subsidiary with, Environmental
Laws; except as would not, individually or in the aggregate, have a Material Adverse Effect,
and except as otherwise disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of the Subsidiaries (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any pending or, to the
Company’s knowledge, threatened action, suit or proceeding, (iv) is bound by any judgment,
decree or order or (v) has entered into any agreement, in each case relating to any alleged
violation of any Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below) (as used herein,
“Environmental Law” means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to health, safety or the
protection, cleanup or restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of Hazardous Materials, and
“Hazardous Materials” means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is regulated by or may give rise
to liability under any Environmental Law);




(bb) in the ordinary course of their business, the Company and each of the Subsidiaries
conduct periodic reviews of the effect of the Environmental Laws on their respective
businesses, operations and properties, in the course of which they identify and evaluate
associated costs and liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with the
Environmental Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties);




(cc) all tax returns required to be filed by the Company or any of the Subsidiaries
have been timely filed (or have duly requested extension of), and all taxes and other
assessments of a similar nature (whether imposed directly or through withholding) including
any interest, additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been timely paid, other than those being contested in good faith and for
which adequate reserves have been provided; all material tax liabilities have been
adequately provided for in the financial statements of the Company, and the Company does not
know of any actual or proposed additional material tax assessments;




(dd) the Company and each of the Subsidiaries maintain insurance covering their
respective properties, operations, personnel and businesses as the Company reasonably deems
adequate; all such insurance is fully in force on the date hereof and will be fully in force
at the Time of Purchase and at the Additional Time of Purchase, as the case may be; neither
the Company nor any Subsidiary has reason to believe that it will not be able to renew any
such insurance as and when such insurance expires;




(ee) neither the Company nor any Subsidiary has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or agreements
referred to or described in the Prospectus or any Permitted Free Writing Prospectus, or
referred to or described in, or filed as an exhibit to, the Registration Statement or any
Incorporated Document, and no such termination or non-renewal has been threatened by the
Company or any Subsidiary or, to the Company’s knowledge, any other party to any such
contract or agreement, except for such terminations or non-renewals which would not,
individually or in the aggregate, have a Material Adverse Effect;




(ff) the Company and each of the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any
differences;




(gg) the Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; to the Company’s
knowledge, the Company’s independent auditors and the Audit Committee of the Board of
Directors of the Company have been advised of: (i) all significant deficiencies, if any, in
the design or operation of internal controls which could adversely affect the Company’s
ability to record, process, summarize and report financial data; and (ii) all fraud, if any,
whether or not material, that involves management or other employees who have a role in the
Company’s internal controls; all material weaknesses, if any, in internal controls have been
identified to the Company’s independent auditors; since the date of the most recent
evaluation of such disclosure controls and procedures and internal controls, there have been
no significant changes in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses; the principal executive officers (or their
equivalents) and principal financial officers (or their equivalents) of the Company have
made all certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and any related rules and regulations promulgated by the Commission, and the
statements contained in each such certification are complete and correct in all material
respects; the Company, the Subsidiaries and the Company’s directors and officers are each in
compliance in all material respects with all applicable effective provisions of the
Sarbanes-Oxley Act and the rules and regulations of the Commission and the NYSE Amex
promulgated thereunder related to the Sarbanes-Oxley Act;




(hh) each “forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the Registration
Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, has been made
or reaffirmed with a reasonable basis and in good faith;




(ii) all statistical or market-related data included or incorporated by reference in
the Registration Statement, the Prospectus and the Permitted Free Writing Prospectuses, if
any, are based on or derived from sources that the Company reasonably believes to be
reliable and accurate, and the Company has obtained the written consent to the use of such
data from such sources to the extent required;




(jj) neither the Company nor any of the Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of the
Subsidiaries is aware of or has taken any action, directly or indirectly, that would result
in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder by the Company or any Subsidiary; and the Company, the
Subsidiaries and, to the knowledge of the Company, its affiliates have instituted and
maintain policies and procedures reasonably designed to ensure continued compliance
therewith;




(kk) the operations of the Company and the Subsidiaries are and have been conducted at
all times in material compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”); and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any
arbitrator or non-governmental authority involving the Company or any of the Subsidiaries
with respect to the Money Laundering Laws is pending or, to the Company’s knowledge,
threatened;




(ll) neither the Company nor any of the Subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of the
Subsidiaries is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company
will not directly or indirectly use the proceeds of the offering of the Shares contemplated
hereby, or lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other person or entity for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC;




(mm) no Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such Subsidiary’s capital
stock, from repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the Company or
any other Subsidiary of the Company, except as described in the Registration Statement
(excluding the exhibits thereto) and the Prospectus;




(nn) the Common Stock is registered pursuant to Section 12(g) of the Exchange Act and
is listed on the NYSE Amex, and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the Exchange Act
or delisting the Common Stock from the NYSE Amex, nor has the Company received any
notification that the Commission or the NYSE Amex is contemplating terminating such
registration or listing;




(oo) except pursuant to this Agreement, neither the Company nor any of the Subsidiaries
has incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby;




(pp) neither the Company nor any of the Subsidiaries nor any of their respective
directors, officers or, to the knowledge of the Company, any of their affiliates or
controlling persons has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of
the Shares;




(qq) the minute books of the Company and any of its Subsidiaries, representing all
existing records of all meetings and actions of the board of directors (including, Audit,
Compensation and Nominating Committees) and stockholders of the Company and any of its
Subsidiaries (collectively, the “Corporate Records”) through the date of the latest
meeting and action have been made available to the Underwriter and counsel for the
Underwriter. All such Corporate Records are complete and accurately reflect, in all
material respects, all transactions referred to in such Corporate Records. There are no
material transactions, agreements or other actions that have been consummated by the Company
or any of the Subsidiaries that are not properly approved and/or recorded in the Corporate
Records of the Company and the Subsidiaries;




(rr) 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 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;




(ss) as of the date of this Agreement there were, and as of the Time of Purchase and
the Additional Time of Purchase, as the case may be, there will be, no securities of or
guaranteed by the Company or any Subsidiary of the Company that are rated by a “nationally
recognized statistical rating organization,” as that term is defined in Rule 436(g)(2)
promulgated under the Act; and




(tt) to the Company’s knowledge, there are no affiliations or associations between
(i) any member of FINRA and (ii) the Company or any of the Company’s officers, directors or
5% or greater security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately preceding
the date the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement (excluding the exhibits thereto) and the Prospectus.



In addition, any certificate signed by any officer of the Company or any of the Subsidiaries
and delivered to the Underwriter or counsel for the Underwriter in connection with the offering of
the Shares shall be deemed to be a representation and warranty by the Company, as to matters
covered thereby, to the Underwriter.



4. Certain Covenants of the Company. The Company hereby agrees:




(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such
states or other jurisdictions as the Underwriter may designate and to maintain such
qualifications in effect so long as the Underwriter may request for the distribution of the
Shares; provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation in any such jurisdiction, (ii) consent to the service of
process under the laws of any such jurisdiction (except service of process with respect to
the offering and sale of the Shares) or (iii) subject itself to taxation in such
jurisdiction; and to promptly advise the Underwriter of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares for offer or
sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose;




(b) to make available to the Underwriter in New York City, as soon as practicable after
this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriter, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements thereto after the
Effective Time) as the Underwriter may reasonably request for the purposes contemplated by
the Act; in case the Underwriter is required to deliver (whether physically or through
compliance with Rule 172 under the Act or any similar rule), in connection with the sale of
the Shares, a prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act, or after the time a post-effective amendment to the Registration Statement is required
pursuant to Item 512(a) of Regulation S-K under the Act, the Company will prepare, at its
expense, promptly upon request such amendment or amendments to the Registration Statement
and the Prospectus as may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act or Item 512(a) of Regulation S-K under the Act, as the case may be;




(c) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement to be filed with
the Commission and become effective before the Shares may be sold, the Company will use its
best efforts to cause such post-effective amendment to be filed and become effective; and
the Company will advise the Underwriter promptly and, if requested by the Underwriter, will
confirm such advice in writing, (i) when such post-effective amendment has become effective,
and (ii) if Rule 430A under the Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner in accordance with such Rules);




(d) if, at any time during the period when a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares, the Registration Statement shall cease
to comply with the requirements of the Act with respect to eligibility for the use of the
form on which the Registration Statement was filed with the Commission or the Company shall
have received, from the Commission, a notice, pursuant to Rule 401(g)(2), of objection to
the use of the form on which the Registration Statement was filed with the Commission, to
(i) promptly notify the Underwriter, (ii) promptly file with the Commission a new
registration statement under the Act, relating to the Shares, or a post-effective amendment
to the Registration Statement, which new registration statement or post-effective amendment
shall comply with the requirements of the Act and shall be in a form satisfactory to the
Underwriter, (iii) use its best efforts to cause such new registration statement or
post-effective amendment to become effective under the Act as soon as practicable,
(iv) promptly notify the Underwriter of such effectiveness and (v) take all other action
reasonably necessary or appropriate to permit the public offering and sale of the Shares to
continue as contemplated in the Prospectus; all references herein to the Registration
Statement shall be deemed to include each such new registration statement or post-effective
amendment, if any;




(e) if the third anniversary of the initial effective date of the Registration
Statement (within the meaning of Rule 415(a)(5) under the Act) shall occur at any time
during the period when a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, to file with the Commission, prior to such third
anniversary, a new registration statement under the Act relating to the Shares, which new
registration statement shall comply with the requirements of the Act (including, without
limitation, Rule 415(a)(6) under the Act) and shall be in a form satisfactory to the
Underwriter; the Company shall use its best efforts to cause such new registration statement
to become effective under the Act as soon as practicable, but in any event within 180 days
after such third anniversary and promptly notify the Underwriter of such effectiveness; the
Company shall take all other action necessary or appropriate to permit the public offering
and sale of the Shares to continue as contemplated in the Prospectus; all references herein
to the Registration Statement shall be deemed to include each such new registration
statement, if any;




(f) to advise the Underwriter promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration Statement, the
Prospectus or any Permitted Free Writing Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the entry of a stop
order, suspending the effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the Registration Statement, to use
its reasonable best efforts to obtain the lifting or removal of such order as soon as
possible; to advise the Underwriter promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus, and to provide the Underwriter and Underwriter’s
counsel copies of any such documents for review and comment a reasonable amount of time
prior to any proposed filing and to file no such amendment or supplement to which the
Underwriter shall object in writing;




(g) subject to Section 4(f) hereof, to file promptly all reports and documents
and any preliminary or definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act for so long as a
prospectus is required by the Act to be delivered (whether physically or through compliance
with Rule 172 under the Act or any similar rule) in connection with any sale of Shares; and
to provide the Underwriter, for the Underwriter’s review and comment, with a copy of such
reports and statements and other documents to be filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of time prior to
any proposed filing, and to file no such report, statement or document to which the
Underwriter shall have objected in writing; and to promptly notify the Underwriter of such
filing;




(h) to advise the Underwriter promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares, which event could require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and to advise the
Underwriter promptly if, during such period, it shall become necessary to amend or
supplement the Prospectus to cause the Prospectus to comply with the requirements of the
Act, and, in each case, during such time, subject to Section 4(f) hereof, to prepare
and furnish, at the Company’s expense, to the Underwriter promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such change or to effect
such compliance;




(i) to make generally available to its security holders, and to deliver to the
Underwriter to the extent not available on the Commission’s EDGAR system, an earnings
statement of the Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is reasonably practicable
after the termination of such twelve-month period but in any case not later than November
10, 2010;




(j) to furnish to the Underwriter two copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including all exhibits
thereto and documents incorporated by reference therein);




(k) to furnish to the Underwriter as early as practicable prior to the Time of
Purchase, but not later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly consolidated financial statements, if any, of the Company and
the Subsidiaries which have been read by the Company’s independent registered public
accountants, as stated in their letter to be furnished pursuant to Sections 5(c) and
(d) hereof;




(l) to apply the net proceeds from the sale of the Shares in the manner set forth under
the caption “Use of Proceeds” in the Prospectus Supplement;




(m) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Basic Prospectus, the Prospectus Supplement,
the Prospectus, each Permitted Free Writing Prospectus and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the Underwriter and to
dealers (including costs of mailing and shipment), (ii) the registration, issue, sale and
delivery of the Shares including any stock or transfer taxes and stamp or similar duties
payable upon the sale, issuance or delivery of the Shares to the Underwriter, (iii) the
preparation of this Agreement, any agreement among underwriters, any dealer agreements, any
powers of attorney and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the Underwriter and
(except closing documents) to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state or foreign laws (including the
legal fees and filing fees and other disbursements of counsel for the Underwriter) and the
printing and furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriter and to dealers, (v) any listing of the Shares on any securities exchange or
qualification of the Shares for listing on the NYSE Amex, (vi) any filing for review of the
public offering of the Shares by FINRA, including the legal fees and filing fees and other
disbursements of counsel to the Underwriter relating to FINRA matters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the costs and
expenses of the Company relating to presentations or meetings undertaken in connection with
the marketing of the offering and sale of the Shares to prospective investors and the
Underwriter’s sales forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel, lodging and other expenses incurred by
the officers of the Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, (ix) the fees and other disbursements of counsel to the
Underwriter and (x) the performance of the Company’s other obligations hereunder;
provided, however, that in no event shall the Company be obligated to
reimburse the Underwriter pursuant to this Agreement in an amount in excess of $150,000 in
the aggregate;




(n) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under the
Act) and with Rule 433(g) under the Act;




(o) beginning on the date hereof and ending on, and including, the date that is 90 days
after the date of the Prospectus Supplement (the “Lock-Up Period”), without the
prior written consent of the Underwriter, not to (i) issue, sell, offer to sell, contract or
agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, with respect to, any Common Stock, or any other securities of the Company that
are substantially similar to Common Stock, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing,
(ii) file or cause to become effective a registration statement under the Act relating to
the offer and sale of any Common Stock, or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing, (iii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock, or any other securities of the
Company that are substantially similar to Common Stock, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the
foregoing, whether any such transaction is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise or (iv) publicly announce an intention to effect any
transaction specified in clause (i), (ii) or (iii), except, in each case, for (A) the
registration of the offer and sale of the Shares as contemplated by this Agreement, (B) the
filing of amendments to any of the Company’s resale registration statements in effect as of
the date hereof, (C) issuances of Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock upon the exercise of options or
warrants or conversion or exchanges of convertible notes disclosed as outstanding in the
Registration Statement (excluding the exhibits thereto) and the Prospectus, and (D) the
issuance of employee stock options not exercisable (other than pursuant to provisions for
automatic acceleration of exercisability in connection with a change in control of the
Company) during the Lock-Up Period pursuant to stock option plans described in the
Registration Statement (excluding the exhibits thereto) and the Prospectus;
provided, however, that if (a) during the period that begins on the date
that is fifteen (15) calendar days plus three (3) business days before the last day of the
Lock-Up Period and ends on the last day of the Lock-Up Period, the Company issues an
earnings release or material news or a material event relating to the Company occurs; or (b)
prior to the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the sixteen (16) day period beginning on the last day of the Lock-Up
Period, then the restrictions imposed by this Section 4(o) shall continue to apply
until the expiration of the date that is fifteen (15) calendar days plus three (3) business
days after the date on which the issuance of the earnings release or the material news or
material event occurs; provided, further, that the immediately preceding
proviso shall not apply if (i) the safe harbor provided by Rule 139 under the Act is
available in the manner contemplated by Rule 2711(f)(4) of FINRA and (ii) within the 3
business days preceding the 15th calendar day before the last day of the Lock-Up
Period, the Company delivers (in accordance with Section 8) to the Underwriter a
certificate, signed by the Chief Financial Officer or Chief Executive Officer of the
Company, certifying on behalf of the Company that the Company’s shares of Common Stock are
“actively traded securities,” within the meaning of Rule 2711(f)(4) of FINRA;




(p) prior to the Time of Purchase and the Additional Time of Purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company or any Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of the Company or any
Subsidiary, or the offering of the Shares, without the Underwriter’s prior consent, such
consent not to be unreasonably withheld, delayed or conditioned;




(q) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Act), or use any “prospectus” (within the meaning of the Act) in connection with the offer
or sale of the Shares, in each case other than the Prospectus;




(r) not to, and to cause the Subsidiaries not to, take, directly or indirectly, any
action designed, or which will constitute, or has constituted, or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;




(s) to use its best efforts to cause the Shares to be listed on the NYSE Amex and to
maintain the listing of the Common Stock for listing on the NYSE Amex through the Time of
Purchase and the Additional Time of Purchase;




(t) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock; and




(u) that, without the prior consent of the Underwriter, it has not made and will not
make any offer relating to the Shares that would constitute a “free writing prospectus” (as
defined in Rule 405 under the Act); the Company has complied and will comply with the
requirements of Rule 433 under the Act applicable to any Permitted Free Writing Prospectus,
including timely filing with the Commission or retention where required and legending; and
the Company agrees that if at any time following issuance of any Permitted Free Writing
Prospectus any event occurred or occurs as a result of which such Permitted Free Writing
Prospectus would conflict with the information in the Registration Statement, the Disclosure
Package or the Prospectus or would include 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 under which they are made, not misleading, the Company will give prompt
notice thereof to the Underwriter and, if requested by the Underwriter, will prepare and
furnish without charge to the Underwriter a Permitted Free Writing Prospectus or other
document which will correct such conflict, statement or omission.



5. Conditions of the Underwriter’s Obligations. The obligations of the Underwriter
hereunder are subject to the accuracy in all material respects of the representations and
warranties (except for those representations and warranties which are qualified by materiality, in
which case such representations and warrants shall be accurate in all respects) on the part of the
Company on the date hereof, at the Time of Purchase and at the Additional Time of Purchase, as the
case may be, the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:




(a) The Company shall furnish to the Underwriter at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, an opinion of Lowenstein Sandler P.C.,
counsel for the Company, addressed to the Underwriter, and dated the Time of Purchase and
the Additional Time of Purchase, as the case may be, in form and substance reasonably
satisfactory to the Underwriter, as to the matters set forth in Exhibit B hereto.




(b) The Company shall furnish to the Underwriter at the Time of Purchase and at the
Additional Time of Purchase, as the case may be, an opinion of Arnold S. Graber, Executive
Vice President and General Counsel of the Company, addressed to the Underwriter, and dated
the Time of Purchase and the Additional Time of Purchase, as the case may be, in form and
substance reasonably satisfactory to the Underwriter, as to the matters set forth in
Exhibit C hereto.




(c) The Underwriter shall have received from McGladrey & Pullen LLP letters dated,
respectively, the date of the Prospectus Supplement, the Time of Purchase and the Additional
Time of Purchase, as the case may be, and addressed to the Underwriter in customary forms
reasonably satisfactory to the Underwriter, which letters shall cover, without limitation,
the various financial disclosures contained in the Registration Statement, the Prospectus
and the Permitted Free Writing Prospectuses, if any.




(d) The Underwriter shall have received from J.H. Cohn LLP letters dated, respectively,
the date of the Prospectus Supplement, the Time of Purchase and the Additional Time of
Purchase, as the case may be, and addressed to the Underwriter in customary forms reasonably
satisfactory to the Underwriter, which letters shall cover, without limitation, the various
financial disclosures contained in the Registration Statement, the Prospectus and the
Permitted Free Writing Prospectuses, if any.




(e) The Underwriter shall have received at the Time of Purchase and at the Additional
Time of Purchase, as the case may be, a favorable opinion of Goodwin Procter LLP, counsel
for the Underwriter, dated the Time of Purchase and the Additional Time of Purchase, as the
case may be, in form and substance reasonably satisfactory to the Underwriter.




(f) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Underwriter shall have objected in writing.




(g) The Prospectus Supplement shall have been filed with the Commission pursuant to
Rule 424(b) under the Act at or before 5:30 P.M., New York time, on the second full business
day after the date of this Agreement (or such earlier time as may be required under the
Act).




(h) Prior to and at the Time of Purchase and at the Additional Time of Purchase, as the
case may be, (i) no stop order with respect to the effectiveness of the Registration
Statement shall have been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading; (iii) neither
the Prospectus nor amendment or supplement thereto shall include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not misleading;
(iv) no Disclosure Package, and no amendment or supplement thereto, shall include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they are made, not
misleading; and (v) none of the Permitted Free Writing Prospectuses, if any, shall include
an untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they are made,
not misleading.




(i) The Company will, at the Time of Purchase and at the Additional Time of Purchase,
as the case may be, deliver to the Underwriter a certificate of its Chief Executive Officer
and its Chief Financial Officer, dated the Time of Purchase and the Additional Time of
Purchase, as the case may be, in the form attached as Exhibit D hereto.




(j) The Company will, at the Time of Purchase and at the Additional Time of Purchase,
as the case may be, deliver to the Underwriter a certificate of its Secretary, dated the
Time of Purchase and the Additional Time of Purchase, as the case may be, in the form
attached as Exhibit E hereto.




(k) The Underwriter shall have received each of the signed Lock-Up Agreements referred
to in Section 3(t) hereof, and each such Lock-Up Agreement shall be in full force
and effect at the Time of Purchase and at the Additional Time of Purchase, as the case may
be.




(l) The Company shall have furnished to the Underwriter such other documents and
certificates as to the accuracy and completeness of any statement in the Registration
Statement, the Prospectus or any Permitted Free Writing Prospectus as of the Time of
Purchase and the Additional Time of Purchase, as the case may be, as the Underwriter may
reasonably request.




(m) The Shares shall have been approved for listing on the NYSE Amex, subject only to
notice of issuance at or prior to the Time of Purchase.




(n) FINRA shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.



6. Effective Date of Agreement; Termination.




(a) This Agreement shall become effective when the parties hereto have executed and
delivered this Agreement.




(b) The obligations of the Underwriter hereunder shall be subject to termination in the
absolute discretion of the Underwriter, if (1) since the time of execution of this Agreement
or the earlier respective dates as of which information is given in the Registration
Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has
been any change or any development involving a prospective change in the business,
properties, management, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole, the effect of which change or development is, in the sole
judgment of the Underwriter, so material and adverse as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the Shares on the terms
and in the manner contemplated in the Registration Statement, the Prospectus and the
Permitted Free Writing Prospectuses, if any, or (2) since the time of execution of this
Agreement, there shall have occurred: (A) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the NASDAQ Global Market or the NYSE
Amex; (B) a suspension or material limitation in trading in the Company’s securities on the
NYSE Amex; (C) a general moratorium on commercial banking activities declared by either
federal or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (D) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a declaration
by the United States of a national emergency or war; or (E) any other calamity or crisis or
any change in financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (D) or (E), in the sole judgment of the
Underwriter, makes it impractical or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the Registration
Statement, the Prospectus and the Permitted Free Writing Prospectuses, if any.




(c) If the Underwriter elects to terminate this Agreement as provided in this
Section 6, the Company shall be notified promptly in writing.




(d) If the sale to the Underwriter of the Shares, as contemplated by this Agreement, is
not carried out by the Underwriter for any reason permitted under this Agreement, or if such
sale is not carried out because the Company shall be unable to comply with any of the terms
of this Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 4(m) and 7 hereof), and
the Underwriter shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 7 hereof).



7. Indemnity and Contribution.




(a) The Company agrees to indemnify, defend and hold harmless the Underwriter, its
partners, directors and officers, any person who controls the Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or severally, such
Underwriter or any such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with information
concerning such Underwriter furnished in writing by such Underwriter to the Company
expressly for use in (it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in Section
7(g)), the Registration Statement or arises out of or is based upon any omission or
alleged omission to state a material fact in the Registration Statement in connection with
such information, which material fact was not contained in such information and which
material fact was required to be stated in such Registration Statement or was necessary to
make such information not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact included in any Prospectus (the term Prospectus for the purpose
of this Section 7 being deemed to include any Basic Prospectus, the Prospectus
Supplement, the Prospectus and any amendments or supplements to the foregoing), in any
Permitted Free Writing Prospectus, in any “issuer information” (as defined in Rule 433 under
the Act) of the Company or in any Prospectus together with any combination of one or more of
the Permitted Free Writing Prospectuses, if any, or arises out of or is based upon any
omission or alleged omission 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, except, with respect to such Prospectus or Permitted Free Writing Prospectus,
insofar as any such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in, and in
conformity with information concerning such Underwriter furnished in writing by such
Underwriter to the Company expressly for use in (it being understood and agreed that the
only such information furnished by the Underwriter consists of the information described as
such in Section 7(g)), such Prospectus or Permitted Free Writing Prospectus or
arises out of or is based upon any omission or alleged omission to state a material fact in
such Prospectus or Permitted Free Writing Prospectus in connection with such information,
which material fact was not contained in such information and which material fact was
necessary in order to make the statements in such information, in the light of the
circumstances under which they were made, not misleading.




(b) The Underwriter agrees to indemnify, defend and hold harmless the Company, its
directors and officers, and any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the successors and assigns of
all of the foregoing persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact contained in, and in
conformity with information concerning such Underwriter furnished in writing by such
Underwriter to the Company expressly for use in (it being understood and agreed that the
only such information furnished by the Underwriter consists of the information described as
such in Section 7(g)), the Registration Statement (or in the Registration Statement
as amended by any post-effective amendment thereof by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact in such Registration
Statement in connection with such information, which material fact was not contained in such
information and which material fact was required to be stated in such Registration Statement
or was necessary to make such information not misleading or (ii) any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with information
concerning such Underwriter furnished in writing by such Underwriter to the Company
expressly for use in (it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in Section
7(g)), a Prospectus or a Permitted Free Writing Prospectus, or arises out of or is based
upon any omission or alleged omission to state a material fact in such Prospectus or
Permitted Free Writing Prospectus in connection with such information, which material fact
was not contained in such information and which material fact was necessary in order to make
the statements in such information, in the light of the circumstances under which they were
made, not misleading.




(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company or the Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection (a) or (b), respectively, of this Section 7, such indemnified
party shall promptly notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so notify such
indemnifying party shall not relieve such indemnifying party from any liability which such
indemnifying party may have to any indemnified party or otherwise. The indemnified party or
parties shall have the right to employ its or their own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of such indemnified party or
parties unless the employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such Proceeding or the indemnifying
party shall not have, within a reasonable period of time in light of the circumstances,
employed counsel to defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which are different
from, additional to or in conflict with those available to such indemnifying party (in which
case such indemnifying party shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such indemnifying party and paid as incurred (it being
understood, however, that such indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). The indemnifying party shall not be liable for any
settlement of any Proceeding effected without its written consent, such consent not to be
unreasonably withheld, but, if settled with its written consent, such indemnifying party
agrees to indemnify and hold harmless the indemnified party or parties from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if
at any time an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second sentence of
this Section 7(c), then the indemnifying party agrees that it shall be liable for
any settlement of any Proceeding effected without its written consent if (i) such settlement
is entered into more than 60 business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30 days’ prior
notice of its intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened
Proceeding 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
includes an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission of fault or
culpability or a failure to act by or on behalf of such indemnified party.




(d) If the indemnification provided for in this Section 7 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 7 or insufficient to
hold an indemnified party harmless in respect of any losses, damages, expenses, liabilities
or claims referred to therein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriter on the other
hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriter on the other shall be deemed to
be in the same respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received by the
Company, and the total underwriting discounts and commissions received by the Underwriter,
bear to the aggregate public offering price of the Shares. The relative fault of the
Company on the one hand and of the Underwriter on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by the Company
or by the Underwriter (it being understood and agreed that the only such information
supplied by the Underwriter consists of the information described as such in Section
7(g)) and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by a party as
a result of the losses, damages, expenses, liabilities and claims referred to in this
Section 7(d) shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.




(e) The Company and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable considerations
referred to in subsection (d) above. Notwithstanding the provisions of this Section
7, the Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.




(f) The indemnity and contribution agreements contained in this Section 7 and
the covenants, warranties and representations of the Company contained in this Agreement
shall remain in full force and effect regardless of any investigation made by or on behalf
of the Underwriter, its partners, directors or officers or any person (including each
partner, director or officer of such person) who controls the Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The Company and
the Underwriter agree promptly to notify each other of the commencement of any Proceeding
against it and, in the case of the Company, against any of the Company’s officers or
directors in connection with the issuance and sale of the Shares, or in connection with the
Registration Statement, any Basic Prospectus, the Prospectus or any Permitted Free Writing
Prospectus.




(g) The Underwriter confirms and the Company acknowledges that the statements with
respect to the public offering of the Shares by the Underwriter set forth under the caption
“Underwriting—Price Stabilization and Short Positions” in the Prospectus constitute the only
information concerning the Underwriter and furnished in writing or otherwise supplied by
such Underwriter to the Company expressly for use in the Registration Statement, the
Prospectus or such Permitted Free Writing Prospectus.



8. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriter, shall be
sufficient in all respects if delivered or sent to Canaccord Adams Inc., 99 High Street,
12th Floor, Boston, MA 02210, Attention: Syndicate Department (fax no.: 617-788-1553),
with a copy (for informational purposes only) to Goodwin Procter LLP, Exchange Place, 53 State
Street, Boston, MA 02109, Attention: Jocelyn M. Arel, Esq. (fax no.: 617-523-1231); and if to the
Company, shall be sufficient in all respects if delivered or sent to Metalico, Inc., 186 North
Avenue East, Cranford, NJ 07016, Attention: General Counsel (fax no.: 908-497-1097), with a copy
(for informational purposes only) to Lowenstein Sandler P.C., 65 Livingston Avenue, Roseland, NJ
07068, Attention: Steven M. Skolnick, Esq. (fax no.: 973-597-2477).



9. Governing Law; Construction. This Agreement and any claim, counterclaim or dispute
of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.



10. Submission to Jurisdiction. No Claim may be commenced, prosecuted or continued in
any court other than the courts of the State of New York located in the City and County of New York
or in the United States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company consents to the
jurisdiction of such courts and personal service with respect thereto. The Company hereby consents
to personal jurisdiction, service and venue in any court in which any Claim arising out of or in
any way relating to this Agreement is brought by any third party against the Underwriter or any
indemnified party. The Underwriter and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its shareholders and affiliates) waives all right to trial by jury in
any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Agreement.



11. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriter and the Company and to the extent provided in Section 7
hereof the controlling persons, partners, directors and officers referred to in such Section
7, and their respective successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation (including a purchaser,
as such purchaser, from the Underwriter) shall acquire or have any right under or by virtue of this
Agreement.



12. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriter
is acting solely as underwriter in connection with the purchase and sale of the Company’s
securities. The Company further acknowledges that the Underwriter is acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Underwriter act or be responsible as a fiduciary to
the Company, its management, shareholders or creditors or any other person in connection with any
activity that the Underwriter may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriter hereby
expressly disclaims any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and
the Company hereby confirms its understanding and agreement to that effect. The Company and the
Underwriter agree that they are each responsible for making their own independent judgments with
respect to any such transactions and that any opinions or views expressed by the Underwriter to the
Company regarding such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Underwriter with respect to any
breach or alleged breach of any fiduciary or similar duty to the Company in connection with the
transactions contemplated by this Agreement or any matters leading up to such transactions.



13. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.



14. Successors and Assigns. This Agreement shall be binding upon the Underwriter and
the Company and their successors and assigns and any successor or assign of any substantial portion
of the Company’s and any of the Underwriter’s respective businesses and/or assets.



If the foregoing correctly sets forth the understanding among the Company and the
Underwriter, please so indicate in the space provided below for that purpose, whereupon this
Agreement and the Underwriter’s acceptance shall constitute a binding agreement among the Company
and the Underwriter.




Very truly yours,




Metalico, Inc.




By:

Name:

Title:




1



Accepted and agreed to as of the


date first above written



Canaccord Adams Inc.




	 	 	By:






Name:


Title:




2