DYNAMIC MATERIALS CORPORATION
5,153,897 Shares of Common Stock
Underwriting Agreement
----------------------
May 10, 2006
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
As Representative of the several
Underwriters listed in Schedule I
hereto
Ladies and Gentlemen:
SNPE, Inc. (the "Selling Stockholder"), the majority stockholder of Dynamic
Materials Corporation, a Delaware corporation (the "Company"), proposes to sell
to the several Underwriters listed in Schedule I hereto (the "Underwriters"),
for whom you are acting as representative (the "Representative"), an aggregate
of 5,153,897 shares (the "Underwritten Shares") and, at the option of the
Underwriters, up to an additional 773,085 shares (the "Option Shares"), of
common stock, par value $0.05 per share (the "Stock"), of the Company. The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares."
The Company and the Selling Stockholder hereby confirm their agreement with
the several Underwriters concerning the purchase and sale of the Shares, as
follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement on Form S-3 (File
No.: 333-132748) including a prospectus (the "Basic Prospectus"), relating to
the Shares. The Company has also filed, or proposes to file, with the Commission
pursuant to Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Shares (the "Prospectus Supplement"). The
registration statement, as amended at the time it became effective, including
the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time of its
effectiveness ("Rule 430 Information"), is referred to herein as the
"Registration Statement"; and as used herein, the term "Prospectus" means the
Basic Prospectus as supplemented by the Prospectus Supplement in the form first
used (or made available upon request of purchasers pursuant to Rule 173 under
the Securities Act) in connection with confirmation of sales of the Shares and
the term "Preliminary Prospectus" means each preliminary Prospectus Supplement
specifically relating to the Shares that omits Rule 430 Information included in
the Registration Statement together with the Basic Prospectus. If the Company
has filed an abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall
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be deemed to include such Rule 462 Registration Statement. Any reference in this
Agreement to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any reference
to "amend," "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") that are deemed to be incorporated
by reference therein. Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Registration Statement and the
Prospectus.
At or prior to 7:00 A.M. (New York City time) on May 10, 2006 (the "Time of
Sale"), the Company had prepared the following information (collectively with
the pricing information set out on Schedule II, the "Time of Sale Information"):
a Preliminary Prospectus dated April 27, 2006, and each "free-writing
prospectus" (as defined pursuant to Rule 405 under the Securities Act) listed on
Schedule II hereto.
2. Purchase of the Shares by the Underwriters. (a) The Selling
Stockholder agrees to sell the Shares to the several Underwriters as provided in
this Agreement, and each Underwriter, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Selling
Stockholder at a purchase price per share of $33.3375 (the "Purchase Price") the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule I hereto.
In addition, the Selling Stockholder agrees to sell the Option Shares to
the several Underwriters and the Underwriters shall have the option to purchase
at their election up to 773,085 Option Shares at the Purchase Price. Each
Underwriter, on the basis of the representations and warranties and agreements
herein contained and subject to the conditions set forth herein, shall have the
option to purchase, severally and not jointly, from the Selling Stockholder at
the Purchase Price that portion of the number of Option Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Option Shares by a
fraction, the numerator of which is the number of Underwritten Shares as set
forth opposite such Underwriter's name on Schedule I, and the denominator of
which is the total number of Underwritten Shares set forth on Schedule I.
The Underwriters may exercise the option to purchase the Option Shares at
any time, in whole or in part (but one time only), on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representative to the Attorneys-in-Fact (as hereinafter defined). Such notice
shall set forth the aggregate number of Option Shares as to which the option is
being exercised and the date and time when the Option Shares are to be delivered
and paid for which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full business day after the date of such notice (unless such time
and date are postponed in accordance with the provisions of
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Section 12 hereof). Any such notice shall be given at least two business days
prior to the date and time of delivery specified therein.
(b) The Company and the Selling Stockholder understand that the
Underwriters intend to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Representative is
advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Company and the Selling Stockholder acknowledge and agree that
the Underwriters may offer and sell Shares to or through any affiliate of an
Underwriter and that any such affiliate may offer and sell Shares purchased by
it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the U.S. bank account maintained by the Selling Stockholder
specified by the Attorneys-in-Fact to the Representative, in the case of the
Underwritten Shares, at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00 A.M. New York City time on May 15, 2006, or
at such other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representative and the Attorneys-in-Fact
may agree upon in writing or, in the case of each purchase of the Option Shares,
on the date and at the time and place specified by the Representative in the
written notice of the Underwriters' election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares is referred to herein
as the "Closing Date" and the time and date for each such payment for the Option
Shares, if other than the Closing Date, is herein referred to as an "Additional
Closing Date."
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representative for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representative shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Selling Stockholder. The
certificates for the Shares will be made available for inspection and packaging
by the Representative at the office of ▇.▇. ▇▇▇▇▇▇ Securities Inc. set forth
above not later than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may be.
(d) Each of the Company and the Selling Stockholder acknowledges and
agrees that the Underwriters are acting solely in the capacity of an arm's
length contractual counterparty to the Selling Stockholder with respect to the
offering of Shares contemplated hereby (including in connection with determining
the terms of the offering) and not as a financial advisor or a fiduciary to, or
an agent of, the Company, the Selling Stockholder or any other person.
Additionally, neither the Representative nor any other Underwriter is advising
the Company, the Selling Stockholder or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Company
and the Selling Stockholder shall consult with their own advisors concerning
such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall
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have no responsibility or liability to the Company or the Selling Stockholder
with respect thereto. Any review by the Underwriters of the Company or the
Selling Stockholder, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company or the Selling
Stockholder.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter and the Selling Stockholder that:
(a) Preliminary Prospectus. No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representative expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, as of the Time
of Sale, did not, and as of the Closing Date and as of the Additional Closing
Date, as the case may be, will not, contain any 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 that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representative expressly for use in such Time of
Sale Information. No statement of material fact included in the Prospectus has
been omitted from the Time of Sale Information and no statement of material fact
included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.
(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus
and the Prospectus, the Company (including its agents and representatives, other
than the Underwriters in their capacity as such) has not made, used, prepared,
authorized, approved or referred to and will not prepare, make, use, authorize,
approve or refer to any "written communication" (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or solicitation of an
offer to buy the Shares (each such communication by the Company or its agents
and representatives (other than a communication referred to in clause (i) below)
an "Issuer Free Writing Prospectus") other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act
or Rule 134 under the Securities Act or (ii) the documents listed on Schedule II
hereto and other written communications approved in writing in advance by the
Representative. Each such Issuer Free Writing Prospectus complied in all
material respects with the Securities Act, has been filed in accordance with the
Securities Act (to the extent required thereby) and, when taken together with
the Preliminary Prospectus filed prior to the first use of
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such Issuer Free Writing Prospectus, did not, and at the Closing Date and at the
Additional Closing Date, as the case may be will not, contain any 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 that the Company makes no
representation and warranty with respect to any statements or omissions made in
each such Issuer Free Writing Prospectus in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use in any Issuer Free
Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement has
been declared effective by the Commission. No order suspending the effectiveness
of the Registration Statement has been issued by the Commission and no
proceeding for that purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering has been initiated or threatened
by the Commission; as of the applicable effective date of the Registration
Statement and any amendment thereto, the Registration Statement complied and
will comply in all material respects with the Securities Act, and did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representative expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in the
Registration Statement, the Prospectus or the Time of Sale Information, when
they became effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, when read together with the Time of Sale
Information, and none of such documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, when read together with the Time of
Sale Information; and any further documents so filed and incorporated by
reference in the Registration Statement, the Prospectus or the Time of Sale
Information, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
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(f) Financial Statements. The financial statements and the related notes
thereto of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and present
fairly the financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods covered
thereby, and the supporting schedules included or incorporated by reference in
the Registration Statement present fairly the information required to be stated
therein; and the other financial information relating to the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus has been
prepared on a basis consistent with that of the financial statements included or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus and the books and records of the respective
entities presented therein.
(g) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus, (i)
there has not been any material change in the capital stock or long-term debt of
the Company or any of its subsidiaries, or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company on any class
of capital stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, properties,
management, financial position, stockholders' equity, results of operations,
cash flows or prospects of the Company and its subsidiaries taken as a whole;
(ii) neither the Company nor any of its subsidiaries has entered into any
transaction or agreement that is material to the Company and its subsidiaries
taken as a whole or incurred any liability or obligation, direct or contingent,
that is material to the Company and its subsidiaries taken as a whole; and (iii)
neither the Company nor any of its subsidiaries has sustained any material loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus.
(h) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, stockholders' equity, results of operations,
cash flows or prospects of the Company and its subsidiaries taken as a whole or
on the transactions contemplated hereby (a "Material Adverse Effect"). The
Company does not own or control, directly or indirectly, any
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corporation, association or other entity other than the subsidiaries listed in
Exhibit 21.1 to the Company's Annual Report on Form 10-K for the year ended
December 31, 2005 (the "2005 Form 10-K").
(i) Capitalization. The Company has an authorized capitalization as set
forth in the Registration Statement, the Time of Sale Information and the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company (including the Shares to be sold by the Selling
Stockholder) have been duly and validly authorized and issued and are fully paid
and non-assessable and are not subject to any preemptive or similar rights;
except as described in the Time of Sale Information and the Prospectus, there
are no outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company or any
of its subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options, except for options to purchase Stock
pursuant to existing employee stock option plans filed as an exhibit to or
incorporated by reference into the 2005 Form 10-K (the "Existing Plans"); the
capital stock of the Company conforms in all material respects to the
description thereof included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party.
(j) Due Authorization. The Company has corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by the Company.
(k) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default under any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority
having jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except, in the case of clauses (ii) and (iii) above, for
any such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
(l) No Conflicts. The execution, delivery and performance by the Company
of this Agreement, the sale of shares by the Selling Stockholder and the
consummation by the Company of the transactions contemplated hereby will not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or
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any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the Company or any of
its subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority having jurisdiction over the Company, except, in the
case of clauses (i) and (iii) above, for such conflicts, breaches, violations or
defaults as would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect and which would not give rise to any liability
for any Underwriter or purchaser of Shares in the offering contemplated hereby.
(m) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of this Agreement, and the consummation by the Company of the
transactions contemplated hereby, except for (i) the registration of the Shares
under the Securities Act, (ii) such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and distribution of the Shares
by the Underwriters and (iii) such consents, approvals or authorizations
required by the Nasdaq National Market in connection with the listing of the
Stock, which consents, approvals and authorizations have been obtained.
(n) Legal Proceedings. Except as described in the Registration Statement,
the Time of Sale Information and the Prospectus, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is the subject that,
individually or in the aggregate, if determined adversely to the Company or any
of its subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and no such investigations, actions, suits or proceedings, to the best
knowledge of the Company, are threatened or contemplated by any governmental or
regulatory authority, or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement
that are not so described in the Registration Statement, the Time of Sale
Information and the Prospectus and (ii) there are no statutes, regulations or
contracts or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement or described in the Registration
Statement or the Prospectus that are not so filed as exhibits to the
Registration Statement or described in the Registration Statement, the Time of
Sale Information and the Prospectus.
(o) Independent Accountants. Ernst & Young LLP, who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus, are an independent registered public accounting
firm with respect to the Company and its subsidiaries within the applicable
rules and regulations adopted by the Commission and the Public Accounting
Oversight Board (United States) and as required by the Securities Act.
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(p) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) are disclosed in the Registration Statement, the
Time of Sale Information and the Prospectus, (ii) do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries or (iii) could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
(q) Title to Intellectual Property. The Company and its subsidiaries own
or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) (collectively, "Intellectual Property") necessary for the
conduct of their respective businesses; and the Company and its subsidiaries
have not received any notice and are not otherwise aware of any infringement of
or conflict with asserted rights of others with respect to any Intellectual
Property, which infringement or conflict (if the subject of any unfavorable
decision, ruling or filing) or invalidity or inadequacy, individually or in the
aggregate, would result in a Material Adverse Effect.
(r) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus and that is not
so described in such documents and in the Time of Sale Information.
(s) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares as described in the Registration Statement,
the Time of Sale Information and the Prospectus, will not be, required to
register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(t) Taxes. The Company and its subsidiaries have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof, other than any of those being contested in good faith
and for which adequate reserves have been provided; and except as otherwise
disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus or as would not, individually or in the aggregate, have a Material
Adverse Effect, there is no tax deficiency that has been, or could reasonably be
expected to be, asserted against the Company or any of its subsidiaries or any
of their respective properties or assets.
(u) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are
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necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Registration
Statement, the Time of Sale Information, and the Prospectus, except where the
failure to possess or make the same would not, individually or in the aggregate,
have a Material Adverse Effect; and except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, neither the Company
nor any of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, except as would not
have a Material Adverse Effect.
(v) No Labor Disputes. No labor disturbance by or dispute with employees
of the Company or any of its subsidiaries exists or, to the best knowledge of
the Company, is contemplated or threatened, except as would not have a Material
Adverse Effect.
(w) Compliance With Environmental Laws. (i) The Company and its
subsidiaries (x) are in compliance with any and all applicable federal, state,
local and foreign laws (including common law), rules, regulations, requirements,
decisions and orders relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, "Environmental Laws"); (y) have received and are in
compliance with all permits, licenses, certificates or other authorizations or
approvals required of them under applicable Environmental Laws (collectively,
"Environmental Permits") to conduct their respective businesses; and (z) have
not received notice of any actual or potential liability for the investigation
or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, and (ii) there are no costs or liabilities
(whether accrued, contingent, absolute, determined, determinable or otherwise)
associated with Environmental Laws or Environmental Permits of or relating to
the Company or its subsidiaries, except in the case of each of (w)(i)(x) and
(w)(i)(y) above, for any such failure to comply, or failure to receive required
permits, licenses or approvals, or cost or liability as would not, individually
or in the aggregate, have a Material Adverse Effect.
(x) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance in all material
respects with its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "Code"); no "prohibited transaction," as
defined in Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant to a statutory
or administrative exemption; and for each such plan that is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA, no
"accumulated funding deficiency" as defined in Section 302 of ERISA has been
incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan determined
using reasonable actuarial assumptions. As used in this paragraph, the term
"affiliate" shall have the meaning ascribed thereto in Sections 414(b), (c), (m)
or (o) of the Code.
11
(y) Disclosure Controls. The Company and its subsidiaries maintain an
effective system of "disclosure controls and procedures" (as defined in Rule
13a-15(e) of the Exchange Act) that is designed to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission's rules and forms, including
controls and procedures designed to ensure that such information is accumulated
and communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure. The Company and its subsidiaries have
carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.
(z) Accounting Controls. The Company and its subsidiaries maintain systems
of "internal control over financial reporting" (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including,
but not limited to internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (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 the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there
are no material weaknesses in the Company's internal controls.
(aa) Insurance. The Company and its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and insures
against such losses and risks as are adequate to protect the Company and its
subsidiaries and their respective businesses; and neither the Company nor any of
its subsidiaries has (i) received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(bb) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the
12
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(cc) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in 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 involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(dd) Compliance with OFAC. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury; provided that this representation shall not apply
with respect to any such U.S. sanctions that would not, individually or in the
aggregate, have a Material Adverse Effect, as long as such U.S. sanctions apply
only to the ultimate parent company of the Selling Stockholder or any subsidiary
of such ultimate parent company other than the Company or any subsidiary of the
Company.
(ee) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, 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 properties or
assets to the Company or any other subsidiary of the Company.
(ff) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the offering and sale of the Shares.
(gg) No Registration Rights. No person has the right to require the Company
or any of its subsidiaries to register any securities for sale under the
Securities Act by reason of the filing of the Registration Statement with the
Commission or, to the best knowledge of the Company, the sale of the Shares to
be sold by the Selling Stockholder hereunder.
(hh) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
13
(ii) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act
contained in the Registration Statement, the Time of Sale Information and the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(jj) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement, the Time of Sale
Information and the Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(kk) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply in all material respects with any provision of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in
connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402 related
to loans and Sections 302 and 906 related to certifications.
(ll) Status under the Securities Act. (i) At the time of filing the
Registration Statement, (ii) at the time of the most recent amendment thereto
for the purposes of complying with Section 10(a)(3) of the Securities Act
(whether such amendment was by post-effective amendment, incorporated report
filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus)
and (iii) at the date hereof, the Company is not an ineligible issuer as defined
in Rule 405 of the Securities Act.
(mm) Nasdaq Listing. The Shares were heretofore listed and quoted as Nasdaq
Capital Market securities by The Nasdaq Stock Market, Inc. and have been
approved by The Nasdaq Stock Market, Inc. for listing and quotation as Nasdaq
National Market ("Nasdaq National Market") securities, effective on the date
hereof.
(nn) Significant Subsidiary. Nobelclad Europe S.A. is the only significant
subsidiary of the Company.
4. Representations and Warranties of the Selling Stockholder. The Selling
Stockholder represents and warrants to each Underwriter and the Company that:
(a) Required Consents; Authority. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Selling Stockholder of this Agreement, and the consummation
by the Selling Stockholder of the transactions contemplated hereby, the Power of
Attorney hereinafter referred to and the Custody Agreement hereinafter referred
to, except for (i) such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state and
foreign securities and Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and (ii) the prior declaration to
the French government, which has been made, in connection with the privatization
of the Company under French law; and the Selling Stockholder has the corporate
power and authority to enter into this Agreement, the Power of Attorney and the
Custody
14
Agreement and to sell, assign, transfer and deliver the Shares to be sold by the
Selling Stockholder hereunder; this Agreement, the Power of Attorney and the
Custody Agreement have each been duly authorized, executed and delivered by the
Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by the Selling
Stockholder of this Agreement, the Power of Attorney and the Custody Agreement,
the sale of the Shares to be sold by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions herein and therein
contemplated will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Selling Stockholder pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which
any of the property or assets of the Selling Stockholder is subject, (ii) result
in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Selling Stockholder or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory agency having jurisdiction
over such Selling Stockholder (excluding, for purposes of this representation,
the antifraud provisions of the Securities Act and the Exchange Act, which
matters are covered in Section 4(e)), except, in the case of clause (i) and
(iii) for such conflicts, breaches or violations which could not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect
and which would not give rise to any liability for any Underwriter or purchaser
of Shares in the offering contemplated hereby.
(c) Title to Shares. The Selling Stockholder has good and valid title, and
will, immediately prior to the consummation of the transactions contemplated
hereunder on the Closing Date and the Additional Closing Date, as the case may
be, have good and valid title to the Shares to be sold on the Closing Date or
the Additional Closing Date, as the case may be, in each case free and clear of
all liens, encumbrances, equities or adverse claims (other than such as are
imposed by the Custody Agreement); and, upon delivery of such Shares through
book-entry transfer (any Shares so delivered, "DTC Securities") or by delivery
of certificates representing such Shares (any Shares so delivered, "Certificated
Securities") and payment therefor pursuant hereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or adverse claims,
will pass to the several Underwriters on the Closing Date or the Additional
Closing Date, as the case may be.
(d) No Stabilization. The Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Shares.
(e) Time of Sale Information. The Time of Sale Information, at the Time of
Sale did not, and at the Closing Date and as of the Additional Closing Date, as
the case may be, will not, contain any 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 that the Selling Stockholder only makes such representation and
warranty to the extent such statements or omissions were made or omitted in
reliance upon and in
15
conformity with information relating to such Selling Stockholder furnished by
the Selling Stockholder to the Company in writing for use in the Time of Sale
Information; and provided further, that such information consists only of (i)
the first three paragraphs and the seventh paragraph in the section of the
Prospectus entitled "Related party transactions," (ii) the ownership information
for the Selling Stockholder in the section of the Prospectus entitled "Principal
and selling stockholders, " (iii) the information in the section of the
Prospectus entitled "Selling stockholder," excluding the third and fourth
paragraphs under the subheading "Transactions with the selling stockholder and
its affiliates," and (iv) the corresponding information in the Time of Sale
Information (collectively, the "Selling Stockholder Information").
(f) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus
and the Prospectus, the Selling Stockholder (including its agents and
representatives, other than the Underwriters in their capacity as such) has not
made, used, prepared, authorized, approved or referred to and will not prepare,
make, use, authorize, approve or refer to any Issuer Free Writing Prospectus,
other than (i) any document not constituting a prospectus pursuant to Section
2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii)
the documents listed on Schedule II hereto and other written communications
approved in writing in advance by the Company and the Representative.
(g) Registration Statement and Prospectus. As of the applicable effective
date of the Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with the Securities
Act, and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the Closing Date
and as of the Additional Closing Date, as the case may be, the Prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Selling Stockholder only makes such representation
and warranty to the extent such statements or omissions were made or omitted in
reliance upon and in conformity with the Selling Stockholder Information.
(h) Material Information. As of the date hereof, as of the Closing Date
and as of the Additional Closing Date, as the case may be, that the sale of the
Shares by the Selling Stockholder is not and will not be prompted by any
material information concerning the Company which is not set forth in the
Registration Statement, the Time of Sale Information or the Prospectus.
(i) Deposit of Shares. The Selling Stockholder represents and warrants
that all of the Shares to be sold by the Selling Stockholder hereunder
(including any Option Shares) have been placed in custody, either through
book-entry transfer or through the deposit of certificates in negotiable form,
under a custody agreement (the "Custody Agreement") relating to such Shares
between the Selling Stockholder and Computershare Trust Company, Inc., as
custodian (the "Custodian"), in the form heretofore furnished to you, which
Custody Agreement has been duly executed and delivered by the Selling
Stockholder, and that the Selling Stockholder has duly
16
executed and delivered a power of attorney (the "Power of Attorney"), in the
form heretofore furnished to you, appointing the person or persons identified in
Schedule III hereto, and each of them, as the Selling Stockholder's
Attorneys-in-fact (the "Attorneys-in-Fact" or any one of them the "Attorney-in
Fact") with authority to execute and deliver this Agreement on behalf of the
Selling Stockholder, to determine the purchase price to be paid by the
Underwriters to the Selling Stockholder as provided herein, to authorize the
delivery of the Shares to be sold by the Selling Stockholder hereunder and
otherwise to act on behalf of the Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement. The
Selling Stockholder specifically agrees that the Shares are subject the Custody
Agreement and are subject to the interests of the Underwriters hereunder, and
that the arrangements made by the Selling Stockholder for such custody and the
appointment by the Selling Stockholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable. The Selling Stockholder specifically
agrees that the obligations of the Selling Stockholder hereunder shall not be
terminated by operation of law, whether by its dissolution, bankruptcy or
insolvency or by the occurrence of any other event. If the Selling Stockholder
should be dissolved, or should be or become bankrupt or insolvent, or if any
other such event should occur, before the delivery of the Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of the
Selling Stockholder in accordance with the terms and conditions of this
Agreement and the Custody Agreement, and actions taken by the Attorneys-in-Fact
pursuant to the Powers of Attorney shall be as valid as if such dissolution,
bankruptcy, insolvency or other event had not occurred, regardless of whether or
not the Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such dissolution, bankruptcy, insolvency or other event.
(j) No Immunity. The Selling Stockholder does not have immunity (whether
on the basis of sovereignty or otherwise) from jurisdiction, service of process,
attachment (whether before or after judgment) or execution with respect to any
legal proceedings arising out of the transactions contemplated hereby.
5. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter and the Selling Stockholder that:
(a) Required Filings. The Company will file the final Prospectus with the
Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B
or 430C under the Securities Act, as applicable, and will file any Issuer Free
Writing Prospectus to the extent required by Rule 433 under the Securities Act;
and will file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; and the Company will furnish
copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent
not previously delivered) to the Underwriters in New York City prior to 10:00
A.M., New York City time, on the business day following the date of this
Agreement in such quantities as the Representative may reasonably request.
17
(b) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representative, two signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith and documents incorporated by reference therein;
and (ii) to each Underwriter (A) a conformed copy of the Registration Statement
as originally filed and each amendment thereto (without exhibits) and (B) during
the Prospectus Delivery Period (as defined below), as many copies of the
Prospectus (including all amendments and supplements thereto and documents
incorporated by reference therein ) and each Issuer Free Writing Prospectus as
the Representative may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered (or
required to be delivered but for Rule 172 under the Securities Act) in
connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before
preparing, using, authorizing, approving, referring to or filing any Issuer Free
Writing Prospectus, and before filing any amendment or supplement to the
Registration Statement or the Prospectus, whether before or after the time that
the Registration Statement became effective, the Company will furnish to the
Representative and counsel for the Underwriters and to the Selling Stockholder
and counsel for the Selling Stockholder a copy of the proposed Issuer Free
Writing Prospectus, amendment or supplement for review and will not prepare,
use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the
Representative or the Selling Stockholder reasonably objects.
(d) Notice to the Representative and the Selling Stockholder. The Company
will advise the Representative and the Selling Stockholder promptly, and confirm
such advice in writing, (i) when the Registration Statement became effective;
(ii) when any amendment to the Registration Statement has been filed or becomes
effective; (iii) when any supplement to the Prospectus or any Issuer Free
Writing Prospectus or any amendment to the Prospectus has been filed; (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or the receipt of any comments
from the Commission relating to the Registration Statement or any other request
by the Commission for any additional information; (v) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or the initiation or threatening of any proceeding for that
purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence
of any event within the Prospectus Delivery Period as a result of which the
Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus
as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
existing when the Prospectus, the Time of Sale Information or any Issuer Free
Writing Prospectus is delivered to a purchaser, not misleading; and (vii) of the
receipt by the Company of any notice with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company
will use its best efforts to prevent the issuance of any such order suspending
18
the effectiveness of the Registration Statement, preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Shares and, if any such order is issued, will obtain as
soon as possible the withdrawal thereof.
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i)
any event shall occur or condition shall exist as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will immediately notify the Underwriters and the
Selling Stockholder thereof and forthwith prepare and, subject to subsection (c)
above, file with the Commission and furnish to the Underwriters and the Selling
Stockholder and to such dealers as the Representative may designate, such
amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law and (2)
if at any time prior to the Closing Date or the Additional Closing Date as the
case may be (i) any event shall occur or condition shall exist as a result of
which the Time of Sale Information as then amended or supplemented would include
any 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, not misleading or (ii) it is necessary to amend or supplement the
Time of Sale Information to comply with law, the Company will immediately notify
the Underwriters and the Selling Stockholder thereof and forthwith prepare and,
subject to subsection (c) above, file with the Commission (to the extent
required) and furnish to the Underwriters and to such dealers as the
Representative may designate, such amendments or supplements to the Time of Sale
Information as may be necessary so that the statements in the Time of Sale
Information as so amended or supplemented will not, in the light of the
circumstances, be misleading or so that the Time of Sale Information will comply
with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualifications in
effect so long as required for distribution of the Shares; provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representative as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
19
(h) Clear Market. For a period of 90 days after the date hereof, the
Company will not (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Stock or any
securities convertible into or exercisable or exchangeable for Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise, without the prior
written consent of the Representative, other than the grant of stock options
under Existing Plans or the issuance of shares of Stock issued upon the exercise
of options granted under Existing Plans; nor will the Company file any
registration statement under the Securities Act relating to any Stock.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of
the 90-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
90-day period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(i) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(j) Nasdaq Listing. The Company will use its best efforts to maintain the
listing and quotation of the Shares by The Nasdaq Stock Market, Inc. as Nasdaq
National Market securities.
(k) Reports. During the period of three years from the effective date of
the Registration Statement, the Company will furnish to the Representative, as
soon as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange or automatic quotation system (except in each
case to the extent available through the Commission's ▇▇▇▇▇ System or otherwise
on the Company's website).
(k) Record Retention. The Company will, pursuant to reasonable procedures
developed in good faith, retain copies of each Issuer Free Writing Prospectus
that is not filed with the Commission in accordance with Rule 433 under the
Securities Act.
6. Further Agreements of the Selling Stockholder. The Selling Stockholder
covenants and agrees with each Underwriter that:
(a) Clear Market. For a period of 90 days after the date hereof, the
Selling Stockholder will not (i) offer, pledge, announce the intention to sell,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares of Stock
20
or any securities convertible into or exercisable or exchangeable for Stock, in
each case other than the sale of the Shares to the Underwriters hereunder; or
(ii) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise; or (iii) make any
demand for or exercise any right with respect to the registration of any shares
of Stock or any security convertible into or exercisable or exchangeable for
Stock, without the prior written consent of the Representative; provided that
after the expiration of the Underwriters' option with respect to the Option
Shares set forth in Section 2(a) above, in the event that the Underwriters shall
not have exercised such option in full, the Selling Stockholder may transfer any
such Option Shares as to which such option shall not have been exercised to any
affiliate of the Selling Stockholder, so long as each such transferee provides a
written undertaking to the Representative on behalf of the Underwriters agreeing
to be bound by the restrictions set forth in this subsection (a) as and to the
same extent as the Selling Stockholder, and so long as any filing with the
Commission in connection therewith or relating thereto made by or on behalf of
the Selling Stockholder, such transferee or any affiliate of either of them
specifically describes such restrictions; and provided further that nothing in
this paragraph shall preclude the Selling Stockholder from making any required
filing on Schedule 13D with respect to the transactions contemplated hereby.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of
the 90-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
90-day period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(b) Tax Form. It will deliver to the Representative prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated.
7. Certain Agreements of the Underwriters. Each Underwriter hereby
represents and agrees that:
(a) It has not and will not use, authorize use of, refer to, or
participate in the planning for use of, any "free writing prospectus," as
defined in Rule 405 under the Securities Act (which term includes use of any
written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release
issued by the Company) other than (i) a free writing prospectus that contains no
"issuer information" (as defined in Rule 433(h)(2) under the Securities Act)
that was not included (including through incorporation by reference) in the
Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Schedule II or prepared
pursuant to Section 3(c) or Section 4(f) above, or (iii) any free writing
prospectus prepared by
21
such Underwriter and approved by the Company in advance in writing (each such
free writing prospectus referred to in clauses (i) or (iii), an "Underwriter
Free Writing Prospectus").
(b) It has not and will not distribute any Underwriter Free Writing
Prospectus referred to in clause (a)(i) in a manner reasonably designed to lead
to its broad unrestricted dissemination.
(c) It will, pursuant to reasonable procedures developed in good faith,
retain copies of each free writing prospectus used or referred to by it, in
accordance with Rule 433 under the Securities Act.
(d) It is not subject to any pending proceeding under Section 8A of the
Securities Act with respect to the offering (and will promptly notify the
Company if any such proceeding against it is initiated during the Prospectus
Delivery Period).
8. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company and the Selling Stockholder
of their respective covenants and other obligations hereunder and to the
following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose pursuant to Section 8A under the Securities Act
shall be pending before or threatened by the Commission; the Prospectus and each
Issuer Free Writing Prospectus shall have been timely filed with the Commission
under the Securities Act (in the case of an Issuer Free Writing Prospectus, to
the extent required by Rule 433 under the Securities Act) and in accordance with
Section 5(a) hereof; and all requests by the Commission for additional
information shall have been complied with to the reasonable satisfaction of the
Representative.
(b) Representations and Warranties. The respective representations and
warranties of the Company and the Selling Stockholder contained herein shall be
true and correct on the date hereof and on and as of the Closing Date or the
Additional Closing Date, as the case may be; and the statements of the Company
and its officers and of the Selling Stockholder made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the
Closing Date or the Additional Closing Date, as the case may be.
(c) No Material Adverse Change. No event or condition of a type described
in Section 3(g) hereof shall have occurred or shall exist, which event or
condition is not described in the Time of Sale Information (excluding any
amendment or supplement thereto) and the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Prospectus.
22
(d) Officer's Certificate. The Representative shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, (A) a
certificate of the chief executive officer and chief financial officer of the
Company (i) confirming that such officers have carefully reviewed the
Registration Statement, the Time of Sale Information and the Prospectus and, to
the best knowledge of such officers, the representations of the Company set
forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming
that the other representations and warranties of the Company in this Agreement
are true and correct and that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at
or prior to such Closing Date and (iii) to the effect set forth in subsections
(a) and (c) above; and (B) a certificate of the chief executive officer of the
Selling Stockholder, in form and substance reasonably satisfactory to the
Representative, (i) confirming that the representations of the Selling
Stockholder set forth in Sections 4(e), 4(f), 4(g) and 4(h) hereof is true and
correct and (ii) confirming that the other representations and warranties of the
Selling Stockholder in this agreement are true and correct and that the Selling
Stockholder has complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to such Closing
Date.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have
furnished to the Representative, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Underwriters, in
form and substance reasonably satisfactory to the Representative, containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus;
provided, that the letter delivered on the Closing Date or the Additional
Closing Date, as the case may be, shall use a "cut-off" date no more than three
business days prior to such Closing Date or such Additional Closing Date, as the
case may be.
(f) Opinion of Counsel for the Company. LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
counsel for the Company, shall have furnished to the Representative, at the
request of the Company, their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
in the form set forth in Annex A hereto.
(g) Opinion of Counsel for the Selling Stockholder. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ LLP, counsel for the Selling Stockholder, shall have furnished to the
Representative, at the request of the Selling Stockholder, their written
opinion, dated the Closing Date or the Additional Closing Date, as the case may
be, and addressed to the Underwriters, in the form set forth in Annex B hereto.
(h) Opinion of Counsel for the Underwriters. The Representative shall have
received on and as of the Closing Date or the Additional Closing Date, as the
case may be, an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
with respect to such matters as the Representative may reasonably request, and
such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
23
(i) No Legal Impediment to Sale. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or the Additional Closing Date, as the case may be,
prevent the sale of the Shares; and no injunction or order of any federal, state
or foreign court shall have been issued that would, as of the Closing Date or
the Additional Closing Date, as the case may be, prevent the sale of the Shares.
(j) Good Standing. The Representative shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, satisfactory
evidence of the good standing of the Company, Nobelclad Europe S.A. and the
Selling Stockholder in their respective jurisdictions of organization and in
such other jurisdictions as the Representative may reasonably request, in each
case in writing or any standard form of telecommunication from the appropriate
governmental authorities of such jurisdictions.
(k) Nasdaq Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing and quotation by The Nasdaq Stock Market, Inc. as Nasdaq National Market
securities.
(l) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Annex C hereto (except that any such agreement signed by an
affiliate of the Selling Stockholder may contain a proviso substantially to the
same effect as that contained in Section 6(a) hereof), between you and certain
shareholders, officers and directors of the Company relating to sales and
certain other dispositions of shares of Stock or certain other securities,
delivered to you on or before the date hereof, shall be full force and effect on
the Closing Date or the Additional Closing Date, as the case may be.
(m) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company and the Selling
Stockholder shall have furnished to the Representative such further certificates
and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
9. Indemnification and Contribution.
(a) Indemnification of the Underwriters by the Company and the Selling
Stockholder. The Company and the Selling Stockholder, jointly and severally,
agree to indemnify and hold harmless each Underwriter, its affiliates, directors
and officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with
any suit, action or proceeding or any claim asserted, as such fees and expenses
are incurred),
24
joint or several, that arise out of, or are based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, not misleading, (ii) or any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time
of Sale Information (including any Time of Sale Information that has
subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (d)
below; provided that (A) the aggregate liability of the Selling Stockholder
pursuant to this subsection (a) shall not exceed the product of (x) the number
of Shares sold hereunder by the Selling Stockholder (including any Option
Shares) times (y) the Purchase Price per Share; and (B) the Selling Stockholder
shall only be liable under this subsection (a) in the event that (i) the Company
is bankrupt or insolvent and/or (ii) an Indemnified Person (as defined below)
shall have requested indemnity from the Company pursuant to this subsection (a)
and the Company shall not have satisfied such request within 30 days after such
request was made. The obligation of the Selling Stockholder under this
subsection (a) is in addition to its obligation under subsection (c).
(b) Indemnification of the Selling Stockholder by the Company. The Company
agrees to indemnify and hold harmless the Selling Stockholder, its officers and
directors and each person who controls the Selling Stockholder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(including, without limitation, SNPE, the ultimate parent company of the Selling
Stockholder) to the same extent as the indemnity set forth in subsection (a)
above (without giving effect to the proviso thereto), in each case except
insofar as such losses, claims, damages or liabilities that arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to the Selling Stockholder, furnished to the Company in writing by the Selling
Stockholder expressly for use in the Registration Statement, the Prospectus (or
any amendment or supplement thereto), any Issuer Free Writing Prospectus or any
Time of Sale Information, it being understood that for purposes of this
subsection (b) only, the only such information furnished by the Selling
Stockholder to the Company in writing consists of (i) the first three paragraphs
and the seventh paragraph in the Prospectus under the caption "Related party
transactions" and (ii) the ownership information for the Selling Stockholder in
the Prospectus under the caption "Principal and selling stockholders."
(c) Indemnification of the Underwriters by the Selling Stockholder. In
addition to its obligation under subsection (a) above, the Selling Stockholder
agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
25
of the Exchange Act to the same extent as the indemnity set forth in subsection
(a) above (without giving effect to the proviso thereto), in each case except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Representative expressly for use in the Registration Statement, the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing
Prospectus or any Time of Sale Information, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in subsection (d) below; provided that the
obligation of the Selling Stockholder pursuant to this subsection (c) shall
arise only to the extent that such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission concerning or relating to the Selling Stockholder in the
Registration Statement, the Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus or any Time of Sale Information.
(d) Indemnification of the Company and the Selling Stockholder by each
Underwriter. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Selling Stockholder, its officers and directors and each person who
controls the Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (including, without limitation,
SNPE, the ultimate parent company of the Selling Stockholder) to the same extent
as the indemnity set forth in subsection (a) above (without giving effect to the
proviso thereto), but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Underwriter furnished to the
Company in writing by such Underwriter through the Representative expressly for
use in the Registration Statement, the Prospectus (or any amendment or
supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale
Information, it being understood and agreed upon that the only such information
furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the concession and
reallowance figures appearing in the third paragraph of text under the caption
"Underwriting," and the information contained in the four paragraphs of text
under the caption "Underwriting" beginning with "In connection with this
offering, the underwriters may engage in stabilizing transactions . . ."; "The
underwriters have advised us that, pursuant to Regulation M under the Securities
Exchange Act of 1934, as amended . . ."; "In addition, in connection with this
offering certain of the underwriters (and selling group members) may engage in
passive market making transactions . . ."; and "These activities may have the
effect of raising or maintaining the market price . . .".
(e) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to the preceding subsections of this Section 9, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in
26
writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under this Section 9 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 9. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified
Person in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred. Any
such separate firm for any Underwriter, its affiliates, directors and officers
and any control persons of such Underwriter shall be designated in writing by
▇.▇. ▇▇▇▇▇▇ Securities Inc., any such separate firm for the Company, its
directors, its officers who signed the Registration Statement and any control
persons of the Company shall be designated in writing by the Company and any
such separate firm for the Selling Stockholder or its directors, officers or any
control persons shall be designated in writing by the Selling Stockholder. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this subsection, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such
27
proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(f) Contribution. If the indemnification provided for in subsections (a),
(b), (c) and (d) above is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such subsection, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder, on the one hand,
and the Underwriters, on the other, from the offering of the Shares or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Selling Stockholder, on the one hand, and the Underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Stockholder, on the one hand, and the Underwriters, on the other, shall be
deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Selling Stockholder from the sale of the
Shares and the total underwriting discounts and commissions received by the
Underwriters in connection therewith, in each case as set forth in the table on
the cover of the Prospectus, bear to the aggregate offering price of the Shares.
The relative fault of the Company and the Selling Stockholder, on the one hand,
and the Underwriters, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Stockholder or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(g) Limitation on Liability. The Company, the Selling Stockholder and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in subsection (f) above. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in subsection (f) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim. Notwithstanding
the provisions of this Section 9, in no event shall an Underwriter be required
to contribute any amount in excess of the amount by which the total underwriting
discounts and commissions received by such Underwriter with respect to the
offering of the Shares exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
purchase obligations hereunder and not joint.
28
(h) Non-Exclusive Remedies. The remedies provided for in this Section 9
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity.
(i) Further Limitation on Liability of the Selling Stockholder.
Notwithstanding anything to the contrary in this Section 9, the Selling
Stockholder shall have no obligation to pay any amount to the Underwriters under
this Section 9 until there shall have been a final court decision to the effect
that (x) the Registration Statement contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading or (y) the
Prospectus (or any amendment or supplement thereto), any Issuer Free Writing
Prospectus or any Time of Sale Information (including any Time of Sale
Information that has subsequently been amended) contained any untrue statement
of a material fact or omitted to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (excluding, in each case (x) and (y), any such
untrue statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use therein).
10. Effectiveness of Agreement. This Agreement shall become effective upon
the execution and delivery hereof by the parties.
11. Termination. This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company and the Selling
Stockholder, if after the execution and delivery of this Agreement and prior to
the Closing Date or, in the case of the Option Shares, prior to the Additional
Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., The Nasdaq Stock
Market, Inc., or The NASDAQ Stock Market LLC; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on any exchange or
in any over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis, either within or outside
the United States, that, in the judgment of the Representative, is material and
adverse and makes it impracticable or inadvisable to proceed with the offering,
sale or delivery of the Shares on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this
Agreement, the Time of Sale Information and the Prospectus; provided that the
Representative shall not deliver such a notice pursuant to clause (i), (ii) or
(iv) based solely upon a suspension or limitation of trading prior to May 14,
2006 at the New York Stock Exchange, the American Stock Exchange, The Nasdaq
Stock Market, Inc., or The NASDAQ Stock Market LLC, that lasts no longer than
one hour and interferes with no more than a single day of trading, and that is
no longer in effect and does not interfere with the regularly scheduled opening
of trading on the New York Stock Exchange, the American Stock Exchange, The
Nasdaq Stock Market, Inc., or The NASDAQ Stock Market LLC on the next trading
day.
29
12. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company and the Selling
Stockholder on the terms contained in this Agreement. If, within 36 hours after
any such default by any Underwriter, the non-defaulting Underwriters do not
arrange for the purchase of such Shares, then the Company and the Selling
Stockholder shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or agree
to purchase the Shares of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company and the Selling Stockholder may postpone the Closing
Date or the Additional Closing Date, as the case may be, for up to five full
business days in order to effect any changes that in the opinion of counsel for
the Company, counsel for the Selling Stockholder or counsel for the Underwriters
may be necessary in the Registration Statement and the Prospectus or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Registration Statement and the Prospectus that
effects any such changes. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context otherwise
requires, any person not listed in Schedule I hereto that, pursuant to this
Section 12, purchases Shares that a defaulting Underwriter agreed but failed to
purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholder as provided in subsection
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date,
then the Company and the Selling Stockholder shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter's
pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholder as provided in subsection
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of
the aggregate amount of Shares to be purchased on such date, or if the Company
and the Selling Stockholder shall not exercise the right described in subsection
(b) above, then this Agreement or, with respect to any Additional Closing Date,
the obligation of the Underwriters to purchase Shares on the Additional Closing
Date, as the case may be, shall terminate without liability on the part of the
non-defaulting Underwriters. Any termination of this Agreement pursuant to this
Section 12 shall be without liability on the part of the Company and the Selling
Stockholder, except that the Company and the Selling Stockholder, as applicable,
will continue to be liable for the payment of expenses as set forth in Section
13 hereof and except that the provisions of Section 9 hereof shall not terminate
and shall remain in effect.
30
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company, the Selling Stockholder or any
non-defaulting Underwriter for damages caused by its default.
13. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, (A) except as
set forth in clause (B) of this subsection (a), the Selling Stockholder will pay
or cause to be paid all costs and expenses incident to the performance of its
and the Company's obligations hereunder, including without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Shares and any taxes payable in that connection; (ii) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Preliminary Prospectus, any Issuer Free Writing
Prospectus, any Time of Sale Information and the Prospectus (including all
exhibits, amendments and supplements thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing this Agreement; (iv) the fees
and expenses of the Company's counsel and independent accountants; (v) the fees
and expenses incurred in connection with the registration or qualification and
determination of eligibility for investment of the Shares under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related, reasonable
fees and expenses of counsel for the Underwriters); (vi) the cost of preparing
stock certificates; (vii) the costs and charges of any transfer agent, any
registrar and any Custodian; (viii) all expenses and application fees incurred
in connection with any filing with, and clearance of the offering by, the
National Association of Securities Dealers, Inc.; and (ix) all expenses incurred
by the Company in connection with any "road show" presentation to potential
investors; and (B) the Company shall pay or cause to be paid all costs and
expenses (including counsel fees) incident to the transfer of the listing of the
Stock from the Nasdaq Capital Market to the Nasdaq National Market.
(b) If (i) this Agreement is terminated pursuant to Section 11, (ii) the
Selling Stockholder for any reason fails to tender the Shares for delivery to
the Underwriters or (iii) the Underwriters decline to purchase the Shares for
any reason permitted under this Agreement, the Selling Stockholder agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriters
in connection with this Agreement and the offering contemplated hereby, up to a
maximum of $300,000.00.
14. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to in Section 9 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
31
15. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Selling
Stockholder, and the Underwriters contained in this Agreement or made by or on
behalf of the Company, the Selling Stockholder, or the Underwriters pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company, the Selling Stockholder, or the
Underwriters.
16. Certain Defined Terms. For purposes of this Agreement, (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; (c) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act; and (d) the term "significant subsidiary" has the
meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
17. Miscellaneous. (a) Authority of the Representative. Any action by the
Underwriters hereunder may be taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. on behalf of
the Underwriters, and any such action taken by ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall
be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representative ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: Equity
Syndicate Desk. Notices to the Company shall be given to it at Dynamic Materials
Corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Fax: (303) ▇▇▇- ▇▇▇▇);
Attention: ▇▇▇▇▇▇▇ ▇. Santa, Chief Financial Officer. Notices to the Selling
Stockholder shall be given to it in care of SNPE, ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇
cedex ▇▇, ▇▇▇▇▇▇ (Fax: ▇▇.▇.▇▇.▇▇.▇▇.▇▇); Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior
Vice President.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Submission to Jurisdiction. Each of the Company and the Selling
Stockholder irrevocably agrees that any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby
("Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City of New York or the courts of the State of
New York in each case located in the Borough of Manhattan in the City of New
York (collectively, the "Specified Courts"), and irrevocably submits to the
non-exclusive jurisdiction of such courts in any such suit, action or
proceeding. Each of the Company and the Selling Stockholder further agrees that
service of any process, summons, notice or document by mail to its address set
forth above shall be effective service of process for any lawsuit, action or
other proceeding brought in any such court. The Company has appointed CT
Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇ ▇▇▇▇▇▇
and the Selling Stockholder has appointed ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
32
(each an "Authorized Agent") as its authorized agent in the Borough of Manhattan
in The City of New York upon which process may be served in any such suit,
action or proceeding relating to this Agreement, and agrees that service of
process upon such agent, and written notice of said service by the person
serving the same to the address provided in subsection (b) above, shall be
deemed in every respect effective service of process in any such suit, action or
proceeding. Each of the Company and the Selling Stockholder further agrees that,
in the event that its Authorized Agent shall at any time cease to be such duly
appointed and authorized agent for service of process, it shall take any and all
action as may be necessary to ensure that there shall be a duly appointed and
authorized agent for service of process in the Borough of Manhattan, The City of
New York. Each of the Company and the Selling Stockholder hereby irrevocably and
unconditionally waives any objection to the laying of venue of any lawsuit,
action or other proceeding in the Specified Courts, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such lawsuit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
With respect to any Related Proceedings, each of the Company and the
Selling Stockholder irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or otherwise)
from jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the Specified
Courts, and with respect to any judgment by Specified Court ("Related
Judgment"), each of the Company and the Selling Stockholder waives any such
immunity in the Specified Courts or any other court of competent jurisdiction,
and will not raise or claim or cause to be pleaded any such immunity at or in
respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign
Immunities Act of 1976, as amended.
Nothing herein shall be construed to prevent or impair the right of any
Underwriter to serve process in any other manner permitted by law or to bring
any suit, action or proceeding in any other jurisdiction.
(e) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(f) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(g) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
33
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
DYNAMIC MATERIALS CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name:▇▇▇▇ ▇▇▇▇▇▇
Title: President and CEO
SNPE, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer and
Attorney-in-Fact under the
Power of Attorney
Accepted: May 10, 2006
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
For itself and on behalf of the
several Underwriters listed
in Schedule I hereto.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Authorized Signatory
34
Schedule I
Underwriter Number of Shares
----------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. 3,571,651
Lazard Capital Markets LLC 1,020,471
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. 255,118
▇▇▇▇▇▇▇▇▇ & Company, Inc. 255,118
Emerging Growth Equities, Ltd. 51,539
---------
Total 5,153,897
35
Schedule II
Time of Sale Information
------------------------
1. Preliminary Prospectus dated April 27, 2006.
2. The price to public of the Shares is $35 per Share.
36
Schedule III
Attorney-in-Fact
----------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
37
Annex A
Form of Opinion of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
-----------------------------------------------------
(1) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion; each of the Preliminary
Prospectus and the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) under the Securities Act specified in such opinion
on the date specified therein; and no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereof or the use of
the Prospectus, the Time of Sale Information or any "issuer free writing
prospectus" (as defined in Rule 433 under the Securities Act) relating to the
Shares has been issued and no proceeding for that purpose or pursuant to Section
8A of the Securities Act against the Company or in connection with the offering
is pending or, to the knowledge of such counsel, threatened by the Commission.
All filings required by Rule 424(b) under the Securities Act with respect to the
Registration Statement have been made.
(2) The Registration Statement, the Preliminary Prospectus, each Issuer
Free Writing Prospectus included in the Time of Sale Information and the
Prospectus and any amendments thereof or supplements thereto (other than the
financial statements and related schedules and other financial or accounting
data included or incorporated by reference therein, as to which no opinion need
be expressed) appeared on their face to comply as to form in all material
respects with the requirements of the Securities Act and the rules and
regulations of the Commission thereunder. To the knowledge of such counsel, all
documents required by the rules and regulations of the Commission to be filed in
connection with, incorporated by reference, or described in the Registration
Statement have been so filed, incorporated by reference or described. The
documents filed under the Exchange Act and incorporated by reference in the
Registration Statement, the Time of Sale Information, the Prospectus or any
amendment thereof or supplement thereto made by the Company prior to the Closing
Date or the Additional Closing Date, as the case may be (other than the
financial statements and related schedules and other financial or accounting
data included or incorporated by reference therein, as to which no opinion need
be expressed), when they were filed with the Commission (or at the time they
were amended, if applicable) appeared on their face to comply as to form in all
material respects with the Exchange Act and the rules and regulations of the
Commission thereunder.
(3) The Company has been duly organized and is validly existing and in
good standing under the laws of its jurisdiction of organization, with all
requisite corporate power to own or hold its properties and to conduct its
business as described in the Registration Statement and the Time of Sale
Information.
(4) The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the Prospectus under
the heading "Capitalization"; and the capital stock of the Company conforms in
all material respects to the description thereof contained in the Registration
Statement, the Time of Sale Information and the Prospectus.
(5) The Company has the corporate power to enter into and perform its
obligations under this Agreement.
38
(6) This Agreement and the transactions contemplated hereby have been duly
authorized, and this Agreement has been duly executed and delivered by the
Company.
(7) Neither the execution, delivery or performance of this Agreement by
the Company, nor compliance by the Company with the provisions thereof, nor the
consummation by the Company of the transactions contemplated therein, (A)
violates (i) any provision of any New York State law, any U.S. federal law or
the General Corporation Law of the State of Delaware the violation of which
would be material to the Company and its subsidiaries taken as a whole or (ii)
the Certificate of Incorporation or Bylaws of the Company or (B) breaches, or
would result in a default under, any agreement filed with the Commission as an
exhibit to the Registration Statement or a document which is incorporated by
reference into the Time of Sale Information or the Prospectus.
(8) No consent, approval, authorization, order, registration, filing,
qualification, license or permit pursuant to U.S. federal law, New York law or
the General Corporation Law of the State of Delaware or with any U.S. federal or
New York court or any U.S. federal or New York public, governmental or
regulatory agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets is required for the
execution, delivery and performance of the Underwriting Agreement or the
consummation of the transactions contemplated thereby, except for (1) such as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion), (2) such as have been made or obtained under
the Securities Act, and (3) such as are required by the National Association of
Securities Dealers, Inc. (as to which such counsel need express no opinion),
except for such requirements associated with the listing of the Stock on the
Nasdaq National Market.
(9) The statements in the Preliminary Prospectus, the Time of Sale
Information and the Prospectus under the headings "Underwriting," and "Tax
considerations for non-U.S. holders," and the description of capital stock,
included or incorporated by reference in the Preliminary Prospectus, the Time of
Sale Information and the Prospectus from Item 3 of Part I of the Company's
Annual Report on Form 10-K for the year ended December 31, 2005 and in the
Registration Statement in Item 15, to the extent that they constitute summaries
of the terms of stock, matters of law or regulation or legal conclusions, fairly
summarize the matters described therein in all material respects; and, to the
knowledge of such counsel, there are no statutes, regulations or contracts and
other documents that are required under the Securities Act to be filed as
exhibits to the Registration Statement or described in the Registration
Statement and that have not been so filed as exhibits to the Registration
Statement or described in the Registration Statement, the Preliminary
Prospectus, the Time of Sale Information and the Prospectus.
(10) The Company is not required to register as an "investment company" as
such term is defined in the Investment Company Act.
(11) Section 17(d) of this Agreement constitutes a valid and irrevocable
submission on the part of the Company to the personal jurisdiction of any New
York state court or United States
39
federal court sitting in the Borough of Manhattan, The City of New York, and any
appellate court thereof, with respect to any suit, action or proceeding against
it brought by any Underwriter or by any person who controls any of the
Underwriters within the meaning of either Section 15 of the Act or Section 20 of
the Exchange Act, arising out of or based upon this Agreement, constitutes a
valid waiver of any objection to the venue of a proceeding in any such court and
a valid waiver of any immunity that the Company may have from jurisdiction,
service of process, attachment and execution; and validly appoints the
Authorized Agent named therein for the purposes described therein. Service of
process effected in the manner set forth in Section 17(d) of this Agreement will
be effective to confer personal jurisdiction over the Company. Such counsel need
not express any opinion as to the subject matter jurisdiction of any U.S.
District Court over any such suit, action or proceeding. Such counsel may
acknowledge that courts retain discretion to change the venue of any proceeding,
even if a party has waived any objection to such venue.
Such counsel shall also state that they have participated in conferences
with officers and representatives of the Company, representatives of the
independent public accountants for the Company and the Underwriters at which the
contents of the Registration Statement, the Time of Sale Information and the
Prospectus and any amendment and supplement thereto and related matters were
discussed and, no facts have come to such counsel's attention that have caused
such counsel to believe that (i) the Registration Statement, at the time the
Registration Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) the Time of
Sale Information, at the Time of Sale (which such counsel may assume to be the
date of the Underwriting Agreement) contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (iii) the Prospectus or any amendment or supplement thereto, as
of its date, contained, or as of the Closing Date contains, an untrue statement
of a material fact or omitted, as of its date, or as of the Closing Date omits,
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading (it being
understood that with respect to each of the foregoing, such counsel need not
express any comment with respect to the financial statements and notes thereto
or the related statements, supporting schedules and other financial and
accounting information included, incorporated by reference or referred to
therein or omitted therefrom).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
40
Annex B
Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
-----------------------------------------------------
(1) The execution and delivery of the Power of Attorney, the Underwriting
Agreement and the Custody Agreement and the sale and delivery of the Shares by
the Selling Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated in the Underwriting Agreement and performance by the
Selling Stockholder of its obligations under the Underwriting Agreement have
been duly authorized by all necessary action on the part of the Selling
Stockholder. The Power of Attorney, the Underwriting Agreement and the Custody
Agreement have been duly executed and delivered by or on behalf of the Selling
Stockholder. The Power of Attorney and the Custody Agreement are valid and
binding on the Selling Stockholder in accordance with their respective terms.
(2) If an Underwriter simultaneously (A) acquires possession in the State
of New York of the security certificates representing the applicable
Certificated Securities, indorsed to such Underwriter or in blank by an
effective indorsement, (B) gives value, and (C) does not have notice of any
adverse claim to any such Certificated Security, then such Underwriter will
acquire its interest in such Certificated Securities free of any adverse claim.
(3) If the Depository Trust Company ("DTC") on the Closing Date or the
Additional Closing Date, as applicable (A) was a clearing corporation, (B)
acquired possession in the State of New York of the security certificates
representing the DTC Securities, indorsed to DTC or in blank by an effective
indorsement, or registered in the name of DTC, upon original issue or
registration of transfer by the Company, (C) established a security entitlement
to the DTC Securities in favor of an entitlement holder, and (D) did not have
notice of any adverse claim to any DTC Security, then on the Closing Date or the
Additional Closing Date, as applicable, DTC acquired its interest in the DTC
Securities free of any adverse claim.
(4) If DTC is a clearing corporation and indicates by book entry that the
applicable DTC Securities have been credited to an Underwriter's securities
account, then such Underwriter will acquire a security entitlement with respect
to such DTC Securities. If such Underwriter acquires such security entitlement
for value and without notice of any adverse claim, then an action based on an
adverse claim to such DTC Securities, whether framed in conversion, replevin,
constructive trust, equitable lien, or other theory, may not be asserted against
such Underwriter.
(5) Upon the execution and delivery of the Underwriting Agreement, Section
17(d) of the Underwriting Agreement shall be valid, binding and enforceable
against the Selling Stockholder in accordance with terms set forth therein.
(6) No consent, approval, authorization or order of, nor any filing with,
any court or governmental agency or body is required for the consummation by the
Selling Stockholder of the transactions contemplated in the Underwriting
Agreement and the Custody Agreement, except such as may have been obtained or
made under the Securities Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and distribution of
41
the Shares by the Underwriters (as to which counsel need not express any
opinion). Counsel need not express any opinion as to matters of French law.
(7) Neither the sale of the Shares by the Selling Stockholder pursuant to
the Underwriting Agreement, nor the performance by the Selling Stockholder of
the obligations set forth in the Underwriting Agreement have resulted and will
not, as of the date hereof, result in (i) any violation of, conflict with or
default under (A) the Certificate or the Bylaws of the Selling Stockholder, (B)
any judgment, decree or order applicable to the Selling Stockholder and known to
such counsel or (C) to counsel's knowledge, any statute, rule or governmental
regulation applicable to the Selling Stockholder or (ii) any material violation
of, material conflict with or material default under any agreement or instrument
to which the Selling Stockholder is a party or by which it is bound known to
such counsel.
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Selling Stockholder and public
officials that are furnished to the Underwriters.
The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Selling Stockholder and shall so state
therein.
42
Annex C
Form of Lock-Up Agreement
-------------------------
May 10, 2006
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Dynamic Materials Corporation - Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Dynamic Materials Corporation, a Delaware corporation (the
"Company") and the Selling Stockholder named therein, providing for the public
offering (the "Public Offering") by the several Underwriters named in Schedule I
thereto (the "Underwriters"), of common stock, par value $0.05 per share (the
"Common Stock") of the Company. Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Common Stock, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on
behalf of the Underwriters, the undersigned will not, during the period ending
90 days after the date of the final prospectus relating to the Public Offering
(the "Prospectus"), (1) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (including without limitation, Common Stock which may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant) or (2) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇
Securities Inc. on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90 day
restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of
43
the 90 day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
90-day period, the restrictions imposed by this Letter Agreement shall continue
to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By: _______________________
Name:
Title:
44