Exhibit 1.1
ALTRA HOLDINGS, INC.
(a Delaware corporation)
[__________] Shares of Common Stock
PURCHASE AGREEMENT
Dated: June [__], 2007
ALTRA HOLDINGS, INC.
(a Delaware corporation)
[__________] Shares of Common Stock
(Par Value $0.001 Per Share)
PURCHASE AGREEMENT
June [__], 2007
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇ & Company
Wachovia Securities
KeyBanc Capital Markets
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Altra Holdings, Inc., a Delaware corporation (the "Company"), and the
persons listed in Schedule B hereto (the "Selling Shareholders"), confirm their
respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section X
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such capacity,
the "Representative"), with respect to (i) the sale by the Company and the
Selling Shareholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $0.001 per share, of the Company ("Common
Stock") set forth in Schedules A and B hereto and (ii) the grant by the Selling
Shareholders to the Underwriters, acting severally and not jointly, of the
option described in Section II(B) hereof to purchase all or any part of
[__________] additional shares of Common Stock to cover overallotments, if any.
The aforesaid [__________] shares of Common Stock (the "Initial Securities") to
be purchased by the Underwriters and all or any part of the [__________] shares
of Common Stock subject to the option described in Section II(B) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities."
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representative deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-[__________]),
including the related preliminary prospectus or prospectuses, covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. The information included in such
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information." Each prospectus used before such registration
statement became effective, and any prospectus that omitted the Rule 430A
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the amendments thereto, the exhibits and
any schedules thereto, at the time it became effective, and including the Rule
430A Information, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
I. Representations and Warranties.
A. Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the
Applicable Time referred to in Section I(A)(1) hereof, as of the
Closing Time referred to in Section II(C) hereof, and as of each Date
of Delivery (if any) referred to in Section II(B) hereof, and agrees
with each Underwriter, as follows:
1. Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto has become effective
under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement, any Rule 462(b) Registration
Statement or any post-effective amendment thereto has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company,
are threatened by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and
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supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither the Prospectus nor any
amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will 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.
As of the Applicable Time (as defined below), neither (x) the Issuer
General Use Free Writing Prospectuses (as defined below) issued at or prior
to the Applicable Time and the Statutory Prospectus (as defined below) as
of the Applicable Time and the information included on Schedule C hereto,
all considered together (collectively, the "General Disclosure Package"),
nor (y) any individual Issuer Limited Use Free Writing Prospectus, when
considered together with the General Disclosure Package, included any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means [__________] (Eastern time) on June [__], 2007
or such other time as agreed by the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Statutory Prospectus" as of any time means the prospectus relating to
the Securities that is included in the Registration Statement immediately
prior to the Applicable Time.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule
433"), relating to the Securities that (i) is required to be filed with the
Commission by the Company, (ii) is a "road show that is a written
communication" within the meaning of Rule 433(d)(8)(i) whether or not
required to be filed with the Commission or (iii) is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, in
each case in the form filed or required to be filed with the Commission or,
if not required to be filed, in the form retained in the Company's records
pursuant to Rule 433(g).
"Issuer General Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is intended for general distribution to prospective
investors (other than a Bona Fide Electronic Road Show (as defined below)),
as evidenced by its being specified in Schedule E hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
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The Company has made available a "bona fide electronic road show," as
defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the "Bona Fide
Electronic Road Show") such that no filing of any "road show" (as defined
in Rule 433(h)) is required in connection with the offering of the
Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Securities or until any earlier date that the issuer notified or notifies
▇▇▇▇▇▇▇ ▇▇▇▇▇ as described in the next sentence, did not, does not and will
not include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement or the
Prospectus, and any preliminary or other prospectus deemed to be a part
thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus made in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use therein.
Each preliminary prospectus (including the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto) complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
At the time of filing the Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto, at the
earliest time thereafter that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933
Act Regulations) of the Securities and at the date hereof, the Company was
not and is not an "ineligible issuer," as defined in Rule 405 of the 1933
Act Regulations.
2. Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
3. Financial Statements. The consolidated financial statements
included in the Registration Statement, the General Disclosure
Package and the Prospectus, together with the related schedules
and notes, present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified, in each case on the basis
stated in the Registration Statement; said consolidated financial
statements have been prepared in conformity with generally
accepted
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accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved, except as disclosed therein. The
supporting schedules, if any, present fairly in accordance with
GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in
the Prospectus present fairly in all material respects the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included
in the Registration Statement. The pro forma financial statements
and the related notes thereto included in the Registration
Statement, the General Disclosure Package and the Prospectus,
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and
have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. All
disclosures contained in the Registration Statement, the General
Disclosure Package or the Prospectus regarding "non-GAAP
financial measures" (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
1934 Act and Item 10 of Regulation S-K of the 1933 Act, to the
extent applicable.
4. No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration
Statement, the General Disclosure Package or the Prospectus,
except as otherwise stated therein, (i) there has been no
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, (a
"Material Adverse Effect"), (ii) there have been no transactions
entered into by the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as
one enterprise, and (iii) except as described in the Prospectus,
there has been no dividend or distribution of any kind declared,
paid or made by the Company or the Selling Shareholders on any
class of its capital stock.
5. Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
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6. Good Standing of Subsidiaries. Each material "subsidiary" of the
Company (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing
as a corporation, limited liability company or limited
partnership in good standing under the laws of the jurisdiction
of its organization, has the power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation, limited liability company or limited partnership to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock, limited liability company
interests or limited partnership interests of each such
Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock, limited liability company
interests or limited partnership interests of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder, member or partner of such Subsidiary. The only
subsidiaries of the Company are the subsidiaries listed on
Exhibit 21 to the Registration Statement.
7. Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding capital stock,
including the Securities to be purchased by the Underwriters from
the Selling Shareholders, have been duly authorized and validly
issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the Securities to
be purchased by the Underwriters from the Selling Shareholders,
was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
8. Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
9. Authorization and Description of Securities. The Securities to be
purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration
set forth herein, will be validly issued and fully paid and
non-assessable; the Common Stock
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conforms to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities
will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
10. Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws,
limited liability company agreement, partnership agreement or
other organizational documents, or in default in the performance
or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for
such defaults that would not result in a Material Adverse Effect;
and the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and in
the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use
of Proceeds") and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches, defaults or
Repayment Events or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws
limited liability company agreement, partnership agreement or
other organizational documents of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
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11. Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its or any subsidiary's principal suppliers, manufacturers,
customers or contractors, which, with respect to any such dispute
or disturbance, would result in a Material Adverse Effect.
12. Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or would reasonably be likely to result in a Material
Adverse Effect, or which would reasonably be likely to materially
and adversely affect the material properties or assets thereof or
the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations
hereunder.
13. Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been
so described and filed as required.
14. Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or
any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
15. Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority
or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement,
except filing with the Secretary of State of Delaware an Amended
and
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Restated Certificate of Incorporation, which will be made on or
prior to the Applicable Time, (ii) such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
16. Absence of Manipulation. Neither the Company nor any affiliate of
the Company has taken, nor will the Company or any affiliate
take, directly or indirectly, any action which is designed to or
which has constituted or which would be expected to cause or
result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
17. Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business
now operated by them, except where the failure so to possess
would not, singly or in the aggregate, result in a Material
Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, result in a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, result in a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
18. Title to Property. The Company and its subsidiaries have good and
marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances
of any kind except such as (i) are described in the Prospectus or
(ii) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in
full force and effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or such
subsidiary to
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the continued possession of the leased or subleased premises
under any such lease or sublease.
19. Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment
company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
20. Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (i) neither the Company nor
any of its subsidiaries is in violation of any applicable
federal, state, local or foreign statute, law, rule, regulation,
ordinance, code or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release into the environment
or threatened release into the environment of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products or
asbestos-containing materials (collectively, "Hazardous
Materials") or to the environmental aspects of the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (ii) the Company and its subsidiaries have
all permits, authorizations and approvals required for their
respective operations under any applicable Environmental Laws and
are each in compliance with their requirements, (iii) there are
no pending or to the knowledge of the Company threatened
administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or
violation or proceedings or, to the knowledge of the Company, any
investigation relating to any Environmental Law against the
Company or any of its subsidiaries and (iv) to the knowledge of
the Company there are no known events or circumstances existing
as of the date hereof that would reasonably be expected to form
the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or
agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental
Laws.
21. Registration Rights. (i) There are no persons with registration
rights or other similar rights to have any securities registered
pursuant to the Registration Statement other than rights which
have been waived and (ii) there are no persons with registration
rights or other similar rights to have any securities registered
by the Company under the 1933 Act other than as described in the
Prospectus.
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22. Accounting Controls and Disclosure Controls. The Company and each
of its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general
or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets;
(C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as described in the
Prospectus, since the end of the Company's most recent audited
fiscal year, there has been (1) no material weakness in the
Company's internal control over financial reporting (whether or
not remediated) and (2) no change in the Company's internal
control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Company's internal
control over financial reporting.
The Company and its consolidated subsidiaries employ disclosure
controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the
reports that it files or submits under the 1934 Act is recorded,
processed, summarized and reported, within the time periods
specified in the Commission's rules and forms, and is accumulated
and communicated to the Company's management, including its
principal executive officer or officers and principal financial
officer or officers, as appropriate, to allow timely decisions
regarding disclosure
23. Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 Section 302 and 906 related to
certifications. The Company has taken all necessary actions to
ensure that, upon the effectiveness of the Registration
Statement, it will be in compliance with the provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that are then in effect and which the Company
is required to comply with as of the effectiveness of the
Registration Statement, and is actively taking steps to ensure
that they will be in compliance with other provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect, upon the
effectiveness of such provisions, or will become applicable to
the Company at all times after the effectiveness of the
Registration Statement.
24. Payment of Taxes. Except to the extent the failure or inadequacy
would not result in a Material Adverse Effect, (i) all United
States federal income tax returns of the Company and its
subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due
and payable, have been paid, except assessments against
11
which appeals have been or will be promptly taken and as to which
adequate reserves have been provided; (ii) the Company and its
subsidiaries have filed all other tax returns that are required
to have been filed by them pursuant to applicable foreign, state,
local or other law, and has paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Company and
its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have
been provided; and (iii) the charges, accruals and reserves on
the books of the Company in respect of any income and corporation
tax liability for any years not finally determined are adequate
to meet any assessments or re-assessments for additional income
tax for any years not finally determined.
25. Insurance. The Company and its subsidiaries carry or are entitled
to the benefits of insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as is
generally maintained by companies engaged in the same or similar
business of the same or similar size and/or otherwise similarly
situated, and all such insurance is in full force and effect. The
Company has no reason to believe that it or any subsidiary will
not be able (i) to renew existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would
not result in a Material Adverse Effect.
26. Statistical and Market-Related Data. Any statistical and
market-related data included in the Registration Statement and
the Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate, and the Company has
obtained the consent to the use of such data from sources
requiring consent.
27. Foreign Corrupt Practices Act. Neither the Company nor, to the
knowledge of the Company, any director, officer, agent, employee,
affiliate or other person acting on behalf of the Company or any
of its subsidiaries is aware of or has taken any action, directly
or indirectly, that would result in a violation by such persons
of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder (the "FCPA"), including, without
limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give,
or authorization of the giving of anything of value to any
"foreign official" (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the
Company and, to the knowledge of the Company, its affiliates have
conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures
12
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
28. Money Laundering Laws. The operations of the Company 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 in
which the Company and its subsidiaries do business, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by
any governmental agency within such jurisdictions (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 with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened.
29. OFAC. Neither the Company nor, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or person
acting on behalf of the Company is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
30. Stock Option Awards. The Company has no outstanding stock option
awards.
31. Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the
Representative or to counsel for the Underwriters shall be deemed
a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
B. Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally and not jointly represents and warrants
to each Underwriter as of the date hereof, as of the Closing Time,
and, if the Selling Shareholder is selling Option Securities on a Date
of Delivery, as of each such Date of Delivery, and agrees with each
Underwriter, as follows:
1. Accurate Disclosure. Such Selling Shareholder is not prompted to
sell the Securities to be sold by such Selling Shareholder
hereunder by any information concerning the Company or any
subsidiary of the Company which is not set forth in the General
Disclosure Package or the Prospectus; provided, however, that
this representation and warranty is only being given by those
Selling Shareholders who are officers of the Company.
13
2. Authorization of this Agreement. This Agreement has been duly
authorized, executed and delivered by or on behalf of such
Selling Shareholder.
3. Authorization of Power of Attorney. The Power of Attorney in the
form heretofore furnished to the Representative (the "Power of
Attorney"), has been duly authorized, executed and delivered by
such Selling Shareholder and is the valid and binding agreement
of such Selling Shareholder.
4. Noncontravention. The execution and delivery of this Agreement
and the Power of Attorney and the sale and delivery of the
Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and
compliance by such Selling Shareholder with its obligations
hereunder do not and will not, whether with or without the giving
of notice or passage of time or both, (i) conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance
upon the Securities to be sold by such Selling Shareholder or any
property or assets of such Selling Shareholder pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or instrument
to which such Selling Shareholder is a party or by which such
Selling Shareholder may be bound, or to which any of the property
or assets of such Selling Shareholder is subject, or (ii) result
in any violation of (a) the provisions of the charter or by-laws
or other organizational instrument of such Selling Shareholder,
if applicable, or (b) any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of its
properties; except in the case of clause (i) or clause (ii)(b),
for such conflicts, breaches, violations or defaults as would not
reasonably be expected to impair in any material respect the
consummation of such Selling Shareholder's obligations hereunder
and thereunder.
5. Valid Title. Such Selling Shareholder has, and at the Closing
Time will have, valid title to the Securities to be sold by such
Selling Shareholder free and clear of all security interests,
claims, liens, equities or other encumbrances and the legal right
and power, and all authorization and approval required by law, to
enter into this Agreement and the Power of Attorney and to sell,
transfer and deliver the Securities to be sold by such Selling
Shareholder or a valid security entitlement in respect of such
Securities.
6. Delivery of Securities. Upon payment of the purchase price for
the Securities to be sold by such Selling Shareholder pursuant to
this Agreement, delivery of such Securities, as directed by the
Underwriters, to Cede & Co. ("Cede") or such other nominee as may
be designated by The Depository Trust Company ("DTC"),
registration of such Securities in the
14
name of Cede or such other nominee, and the crediting of such
Securities on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter
has notice of any "adverse claim," within the meaning of Section
8-105 of the New York Uniform Commercial Code (the "UCC"), to
such Securities), (A) DTC shall be a "protected purchaser,"
within the meaning of Section 8-303 of the UCC, of such
Securities and will acquire its interest in the Securities
(including, without limitation, all rights that such Selling
Shareholder had or has the power to transfer in such Securities)
free and clear of any adverse claim within the meaning of Section
8-102 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect
of such Securities and (C) no action (whether framed in
conversion, replevin, constructive trust, equitable lien, or
other theory) based on any "adverse claim," within the meaning of
Section 8-102 of the UCC, to such Securities may be asserted
against the Underwriters with respect to such security
entitlement; for purposes of this representation, such Selling
Shareholder may assume that when such payment, delivery and
crediting occur, (x) such Securities will have been registered in
the name of Cede or another nominee designated by DTC, in each
case on the Company's share registry in accordance with its
certificate of incorporation, bylaws and applicable law, (y) DTC
will be registered as a "clearing corporation," within the
meaning of Section 8-102 of the UCC, and (z) appropriate entries
to the accounts of the several Underwriters on the records of DTC
will have been made pursuant to the UCC.
7. Absence of Manipulation. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is
designed to or which has constituted or would be reasonably
expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale
or resale of the Securities.
8. Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the performance
by each Selling Shareholder of its obligations hereunder or in
the Power of Attorney, or in connection with the sale and
delivery of the Securities by the Selling Shareholders hereunder
or the consummation of the transactions contemplated by this
Agreement, except (i) such as may not reasonably be expected to
impair in any material respect the consummation of the Selling
Shareholders' obligations hereunder, and (ii) such as may have
previously been made or obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
9. No Association with the NASD. Neither such Selling Shareholder
nor any of its affiliates directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under
common control with, or is a
15
person associated with (within the meaning of Article I (dd) of
the By-laws of the NASD), any member firm of the National
Association of Securities Dealers, Inc. ("NASD").
10. Officer's Certificates. Any certificate signed by or on behalf of
the Selling Shareholders as such and delivered to the
Representative or to counsel for the Underwriters pursuant to the
terms of this Agreement shall be deemed a representation and
warranty by such Selling Shareholder to the Underwriters as to
the matters covered thereby.
16
II. Sale and Delivery to Underwriters; Closing.
A. Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agree to sell
to each Underwriter, severally and not jointly, and each Underwriter, severally
and not jointly, agrees to purchase from the Company and each Selling
Shareholder, at [__________] per share, that proportion of the number of Initial
Securities set forth in Schedule B opposite the name of the Company or such
Selling Shareholder, as the case may be, which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section X hereof, bears to
the total number of Initial Securities, subject, in each case, to such
adjustments among the Underwriters as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional securities.
B. Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholders hereby grant an option to the Underwriters,
severally and not jointly, to purchase up to an additional [__________] shares
of Common Stock, as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable on
the Option Securities. The option hereby granted will expire 30 days after the
date hereof and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representative to the Selling Shareholders setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by the
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representative in
its discretion shall make to eliminate any sales or purchases of fractional
shares.
C. Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial Securities shall be made at the offices of Fried, Frank,
Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP in the City of New York, or at such other place
as shall be agreed upon by the Representative and the Company and the Selling
Shareholders, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern Time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section X),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative and the Company and the Selling Shareholders
(such time and date of payment and delivery being herein called "Closing Time").
17
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company and the Selling Shareholders, on each Date of Delivery as
specified in the notice from the Representative to the Company and the Selling
Shareholders.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to a bank account designated by the
Company and the Custodian pursuant to each Selling Shareholder's Power of
Attorney, as the case may be, against delivery to the Representative for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually
and not as representative of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
18
D. Denominations; Registration. Certificates for the Initial Securities and
the Option Securities, if any, shall be in such denominations and registered in
such names as the Representative may request in writing at least two full
business days before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
III. Covenants of the Company and the Selling Shareholders. The Company
covenants with each Underwriter as follows:
A. Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section III(B), will comply with the requirements of Rule
430A, and will notify the Representative immediately, (1) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (2) of the receipt of any comments from the Commission, (3) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (4) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any examination
pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement
and (5) if the Company becomes the subject of a proceeding under Section 8A of
the 1933 Act in connection with the offering of the Securities. The Company will
effect the filings required under Rule 424(b), in the manner and within the time
period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will
take such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof as soon as practicable.
B. Filing of Amendments and Exchange Act Documents. The Company will give
the Representative notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus, and
will furnish the Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representative or counsel
for the Underwriters reasonably shall object (other than a document which the
Company believes it is required by law to file). The Company will give the
Representative notice of its intention to make any such filing pursuant to the
1934 Act or the 1934 Act Regulations from the Applicable Time to the Closing
Time and will furnish the Representative with copies of any such documents a
reasonable amount of time prior to such proposed filing, as the case may be, and
will not file or use any such document to which the Representative or counsel
for the Underwriters shall reasonably object (other than a document which the
Company believes it is required to file by law).
19
C. Delivery of Registration Statements. The Company has furnished or will
deliver upon request to the Representative and counsel for the Underwriters,
without charge, conformed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith) and
copies of all signed consents and certificates of experts. The copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
D. Delivery of Prospectuses. The Company has delivered to each Underwriter,
without charge, as many copies of each preliminary prospectus as such
Underwriter reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto furnished to
the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
E. Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section III(B), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would
conflict with the information contained in the Registration Statement relating
to the Securities or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances, prevailing at
that subsequent time, not misleading, the Company will promptly notify ▇▇▇▇▇▇▇
▇▇▇▇▇ and will promptly amend or supplement, at its own expense, such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission.
20
F. Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other domestic
jurisdictions as the Representative may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent or otherwise subject itself to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject.
G. Rule 158. The Company will timely file such reports pursuant to the
Securities Exchange Act of 1934 (the "1934 Act") as are necessary in order to
make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
H. Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."
I. Listing. The Company will use its commercially reasonable efforts to
effect and maintain the quotation of the Securities on the Nasdaq Global Market.
J. Restriction on Sale of Securities. During a period of 90 days from the
date of the Prospectus, the Company will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly, offer, pledge, 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 any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof (including any preferred stock) and
referred to in the Prospectus, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existing employee benefit plans of
the Company referred to in the Prospectus or (D) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend reinvestment
plan. 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 or becomes aware that material news or a material event
will occur during the 16-day period beginning on the last day of the 90-day
restricted period, the restrictions imposed in this paragraph (J) 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.
21
K. Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder.
L. Issuer Free Writing Prospectuses. Each of the Company and each Selling
Shareholder represents and agrees that, unless it obtains the prior consent of
the Representative, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representative, it has not made
and will not make any offer relating to the Securities that would constitute an
"issuer free writing prospectus," as defined in Rule 433, or that would
otherwise constitute a "free writing prospectus," as defined in Rule 405,
required to be filed with the Commission or, in the case of each Selling
Shareholder, whether or not required to be filed with the Commission. Any such
free writing prospectus consented to by the Company and the Representative is
hereinafter referred to as a "Permitted Free Writing Prospectus." Each of the
Company and each Selling Shareholder represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an "issuer free
writing prospectus," as defined in Rule 433, and has complied and will comply
with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely filing with the Commission where required,
legending and record keeping. For the purposes of clarity, nothing in this
Section III(M) shall restrict the Company from making any filings required under
the 1934 Act or the 1934 Act Regulations.
IV. Payment of Expenses.
22
A. Expenses. The Company will pay or cause to be paid all expenses incident
to the performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section III(F) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus and of the
Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Underwriters to
investors, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides
and graphics prepared by third party vendors, fees and expenses of any
consultants engaged in connection with the road show presentations, and travel
and lodging expenses of the representatives and officers of the Company and any
such consultants (but the cost of aircraft and other transportation chartered in
connection with the road show shall be paid for by both the Underwriters and the
Company in equal parts), (x) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Underwriters in connection with, the
review by the NASD of the terms of the sale of the Securities (provided that
such reimbursable legal fees shall not exceed $20,000) and (xi) the fees and
expenses incurred in connection with the listing of the Securities on the Nasdaq
Global Market.
B. Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly and severally, will pay all expenses incident to the
performance of their respective obligations under, and the consummation of the
transactions contemplated by this Agreement, including (i) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and (ii) the fees and disbursements of their
respective counsel and other advisors. [It being understood, however, that the
Company should bear, and the Selling Shareholders shall not be required to pay
or to reimburse the Company for, the fees and expenses of Weil, Gotshal & ▇▇▇▇▇▇
LLP in connection with the transactions contemplated by this Agreement or the
cost of any other matters not directly relating to the sale and purchase of the
Securities by the Selling Shareholders pursuant to this Agreement.]
C. Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section V, Section IX(a)(i)
or Section XI hereof, the Company shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
23
D. Allocation of Expenses. The provisions of this Section shall not affect
any agreement that the Company and the Selling Shareholders may make for the
sharing of such costs and expenses.
V. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company and the Selling Shareholders contained in
Section I hereof or in certificates of any officer of the Company or any
subsidiary of the Company or on behalf of any Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
A. Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in the
manner and within the time frame required by Rule 424(b) without reliance on
Rule 424(b)(8) or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A.
B. Opinion of Counsel for Company. At Closing Time, the Representative
shall have received the opinion, dated as of Closing Time, of Weil, Gotshal &
▇▇▇▇▇▇ LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New York and the
federal law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representative. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
C. Opinion of Counsel for the Selling Shareholders. At Closing Time, the
Representative shall have received the opinion, dated as of Closing Time, of
Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the Selling Shareholders, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit B hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the law
of the State of New York and the federal law of the United States and the
General Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
24
D. Opinion of Counsel for Underwriters. At Closing Time, the Representative
shall have received the favorable opinion, dated as of Closing Time, of Fried,
Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters with respect to the matters set forth in clauses (i), (ii), (v),
(vi) (solely as to preemptive or other similar rights arising by operation of
law or under the charter or by-laws of the Company), (viii) through (x),
inclusive, (xi), (xiii) (solely as to the information in the Prospectus under
"Description of Capital Stock--Common Stock") and the penultimate paragraph of
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the State of
New York and the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to the
Representative. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
E. Officers' Certificate. At Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the Prospectus or the General Disclosure Package, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, and the Representative shall have received a certificate of the
President or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section I(A) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to their
knowledge, threatened by the Commission.
F. Certificate of Selling Shareholders. At Closing Time, the Representative
shall have received a certificate of an Attorney-in-Fact on behalf of each
Selling Shareholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of each Selling Shareholder contained in Section
I(B) hereof are true and correct in all respects with the same force and effect
as though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied in all material respects with all agreements and all
conditions on its part to be performed under this Agreement at or prior to
Closing Time.
G. Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from each of Ernst & Young LLP
and BDO ▇▇▇▇ ▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance
reasonably satisfactory to the Representative, together with signed or
reproduced copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
25
H. Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from each of Ernst & Young LLP and BDO ▇▇▇▇ ▇▇▇▇▇▇▇ LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (G) of this Section, except that
the specified date referred to shall be a date not more than three business days
prior to Closing Time.
I. Approval of Listing. At Closing Time, the Securities shall have been
approved for listing on the Nasdaq Global Market, subject only to official
notice of issuance.
J. No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
K. Lock-up Agreements. At the date of this Agreement, the Representative
shall have received an agreement substantially in the form of Exhibit C hereto
signed by the persons listed on Schedule D hereto.
L. Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section II(B) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Shareholders contained herein and the statements
in any certificates furnished by the Company, any subsidiary of the Company and
the Selling Shareholders hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Representative shall have
received:
(i) Officers' Certificate. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section V(E) hereof
remains true and correct as of such Date of Delivery.
(ii) Certificate of Selling Shareholders. A certificate, dated such
Date of Delivery, of an Attorney-in-Fact on behalf of each Selling
Shareholder confirming that the certificate delivered at Closing Time
pursuant to Section V(F) remains true and correct as of such Date of
Delivery.
(iii) Opinion of Counsel for Company. The opinion of Weil, Gotshal &
▇▇▇▇▇▇ LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section V(B) hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The opinion of
Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the Selling Shareholders, in form
and substance satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion required by
Section V(C) hereof.
26
(v) Opinion of Counsel for Underwriters. The favorable opinion of
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section V(D) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young LLP and
from BDO ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, in form and substance satisfactory to the
Representative and dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to the Representative pursuant
to Section V(G) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than five
days prior to such Date of Delivery.
M. Additional Documents. At Closing Time and at each Date of Delivery
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained.
N. Termination of Agreement. If any condition specified in this Section,
other than clause (L)(5), shall not have been fulfilled when and as required to
be fulfilled, this Agreement, or, in the case of any condition to the purchase
of Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by written notice to the
Company and the Selling Shareholders at any time at or prior to Closing Time or
such Date of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section IV and
except that Sections I, VI, VII and VIII shall survive any such termination and
remain in full force and effect.
VI. Indemnification.
A. Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus, any Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
27
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
VI(E) below) any such settlement is effected with the written consent of
the Company.
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto).
B. Indemnification by Selling Shareholder. Each Selling Shareholder,
severally and not jointly, agrees to indemnify and hold harmless each
Underwriter, its Affiliates and selling agents and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(A)(1), (2) and (3) above in connection with the offering of the Securities by
the Selling Shareholder; provided, however, that the aggregate indemnification
liability of each Selling Shareholder shall not exceed the net proceeds received
by such person from the sale of the Securities sold by such person in the public
offering pursuant to this Agreement; and provided, further that each Selling
Shareholder shall be liable only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, any preliminary prospectus, the Prospectus or such
amendment or supplement in reliance upon and in conformity with information
furnished by such Selling Shareholder expressly for use in such document, it
being understood and agreed that the only such information furnished by the
Selling Shareholders consists of the names and addresses of the Selling
Shareholders.
C. Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder and each person, if any, who controls any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection
28
(A) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use therein.
D. Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section VI(A) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section VI(C) above, counsel to the
indemnified parties shall be selected by the Company and the Selling
Shareholders. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section VI or Section VII hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
E. Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section VI(A) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
F. Other Agreements with Respect to Indemnification. The provisions of this
Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
29
VII. Contribution. If the indemnification provided for in Section VI hereof is
for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by
the Company and the Selling Shareholders on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant
to this Agreement 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) above but
also the relative fault of the Company and the Selling Shareholders on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions, which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholders and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus bear to the aggregate initial public offering price of the Securities
as set forth on the cover of the Prospectus.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Shareholders, it being understood and
agreed that the only such information supplied by the Selling Shareholders
consists of the names and addresses of the Selling Shareholders, or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section VII
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 which does not
take account of the equitable considerations referred to above in this Section
VII. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section VII shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of
30
any damages which such Underwriter has otherwise been required to pay by reason
of any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section VII, no Selling Shareholder
shall be required to contribute any amount in excess of the net proceeds
received by such Selling Shareholder from the sale of the Securities in the
public offering exceeds the amount of any damages which such Selling Shareholder
has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section VII, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling Shareholder,
as the case may be. The Underwriters' respective obligations to contribute
pursuant to this Section VII are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
31
VIII. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or
in certificates of officers of the Company or any of its subsidiaries or
the Selling Shareholders submitted pursuant hereto, shall remain operative
and in full force and effect regardless of (i) any investigation made by or
on behalf of any Underwriter or its Affiliates or selling agents, any
person controlling any Underwriter, its officers or directors, any person
controlling the Company or any person controlling any Selling Shareholder
and (ii) delivery of and payment for the Securities.
IX. Termination of Agreement.
A. Termination; General. The Representative may terminate this Agreement,
by notice to the Company and the Selling Shareholders, at any time at or prior
to Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus or General Disclosure Package, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the Nasdaq Global Market,
or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq Global Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(iv) a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (v) if a banking
moratorium has been declared by either Federal, Delaware or New York
authorities.
B. Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections I, V,
VI and VIII shall survive such termination and remain in full force and effect.
X. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representative shall have the
right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as
may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such
24-hour period, then:
32
1. if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters,
or
2. if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Underwriters to purchase and
of the Company to sell the Option Securities to be purchased and
sold on such Date of Delivery shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section X shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company or any Selling Shareholder to sell the
relevant Option Securities, as the case may be, either the (i) Representative or
(ii) the Company and any Selling Shareholder shall have the right to postpone
the Closing Time or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section X.
XI. Default by one or more of the Selling Shareholders or the Company.
A. If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth on Schedule B hereto,
then the Underwriters may, at option of the Representative, by notice from the
Representative to the Company and the non-defaulting Selling Shareholders,
either (i) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections I, IV, VI, VII and
VIII shall remain in full force and effect or (ii) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder. No action taken pursuant to this Section XI shall relieve any Selling
Shareholder so defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to in this
Section XI, each of the Representative and the Company shall have the right to
postpone Closing Time or Date of Delivery for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
33
B. If the Company shall fail at Closing Time or at the Date of Delivery to
sell the number of Securities that it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any nondefaulting
party; provided, however, that the provisions of Sections I, IV, VI, VII and
VIII shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
34
XII. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Company relating to such tax treatment and tax structure.
For purposes of the foregoing, the term "tax treatment" is the purported or
claimed federal income tax treatment of the transactions contemplated
hereby, and the term "tax structure" includes any fact that may be relevant
to understanding the purported or claimed federal income tax treatment of
the transactions contemplated hereby.
XIII. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at 4 World Financial
Center, New York, New York 10080, attention of ▇▇▇▇▇ ▇▇▇▇ with a copy to
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; notices to the Company
shall be directed to it at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, with a copy to Weil, Gotshal & ▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇ ▇. ▇▇▇▇; and notices to the Selling Shareholders shall be directed to
Genstar Capital, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to Weil,
Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇.
XIV. No Advisory or Fiduciary Relationship. Each of the Company and each Selling
Shareholder acknowledges and agrees that (a) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
public offering price of the Securities and any related discounts and
commissions, is an arm's-length commercial transaction between the Company
and the Selling Shareholder, on the one hand, and the several Underwriters,
on the other hand, (b) in connection with the offering contemplated hereby
and the process leading to such transaction each Underwriter is and has
been acting solely as a principal and is not the agent or fiduciary of the
Company or any Selling Shareholder, or its respective stockholders,
creditors, employees or any other party, (c) no Underwriter has assumed or
will assume an advisory or fiduciary responsibility in favor of the Company
or any Selling Shareholder with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company or any Selling Shareholder
on other matters) and no Underwriter has any obligation to the Company or
any Selling Shareholder with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (d) the
Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of each
of the Company and each Selling Shareholder, and (e) the Underwriters have
not provided any legal, accounting, regulatory or tax advice with respect
to the offering contemplated hereby and the Company and each of the Selling
Shareholders has consulted its own respective legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.
35
XV. Parties. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Company and the Selling Shareholders and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation,
other than the Underwriters, the Company and the Selling Shareholders and
their respective successors and the controlling persons and officers and
directors referred to in Sections VI and VII and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole
and exclusive benefit of the Underwriters, the Company and the Selling
Shareholders and their respective successors, and said controlling persons
and officers and directors and their heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
XVI. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
XVII. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE
SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
XVIII. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
XIX. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
36
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company, the Attorney-in-Fact for the Selling
Shareholders and Caisse de depot et placement du Quebec a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Company and the Selling Shareholders in
accordance with its terms.
Very truly yours,
ALTRA HOLDINGS, INC.
By
-------------------------------------
Title:
---------------------------------
CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By
-------------------------------------
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule B hereto, other than Caisse
de depot et placement du Quebec
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇▇▇ & COMPANY
WACHOVIA SECURITIES
KEYBANC CAPITAL MARKETS
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By
----------------------------------
Authorized Signatory
For themselves and as Representative of the other Underwriters named in
Schedule A hereto
37