Exhibit 1.1
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ALTRA HOLDINGS, INC.
(a Delaware corporation)
10,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: [ , 2006]
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ALTRA HOLDINGS, INC.
(a Delaware corporation)
10,000,000 Shares of Common Stock
Par Value $0.001 Per Share
PURCHASE AGREEMENT
[ , 2006]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxxxx & Company
Wachovia Securities
Xxxxxx X. Xxxxx & Co.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") 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 Xxxxxxx Xxxxx 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
[1,500,000] additional shares of Common Stock to cover overallotments, if any.
The aforesaid [10,000,000] shares of Common Stock (the "Initial Securities") to
be purchased by the Underwriters and all or any part of the [1,500,000] 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 deems advisable after this Agreement has been executed and
delivered.
The Company, the Selling Shareholders and the Underwriters agree that
up to 5% of the Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for
sale by the Underwriters to certain eligible employees and persons having
business relationships with the Company (the "Invitees"), as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. ("NASD") and all other applicable laws,
rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by Invitees by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-137660), 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 ("XXXXX").
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
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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 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, and the Prospectus,
any preliminary prospectus and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance and at
the Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
and such preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Securities.
Neither the Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), 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 [ ] or such other time as
agreed by the Company and Xxxxxxx Xxxxx.
"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
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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.
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
Xxxxxxx Xxxxx 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 Xxxxxxx
Xxxxx 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
XXXXX, 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
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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
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 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
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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.
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,
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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 (i) filing with the
Secretary of State of Delaware an Amended and 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 and (iii) such as
have been obtained under the laws and regulations of
jurisdictions outside the United States in which the Reserved
Securities are offered.
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,
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"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 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
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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.
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
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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 Xxxxxxxx-Xxxxx Act. Since the initial
filing date of the Registration Statement, there has been no
failure on the part of the Company or its directors or
officers, in their capacities as such, to comply in all
material respects with any applicable provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Xxxxxxxx-Xxxxx
Act"). 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
Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx 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 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
11
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 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
12
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.
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.
13
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")[
(unless delivery of such Securities is unnecessary because
such Securities are already in possession of Cede or such
nominee)], registration of such Securities in the name of Cede
or such other nominee[ (unless registration of such Securities
is unnecessary because such Securities are already registered
in the name of Cede or such 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[ (if necessary)] 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
14
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, (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 and (iii) such as have been obtained under the
laws and regulations of jurisdictions outside the United
States in which the Reserved Securities are offered.
9. No Association with 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 person associated with
(within the meaning of Article I (dd) of the By-laws of the
NASD), any member firm of the 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.
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 the price per share set forth in Schedule C, 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 [1,500,000] 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
15
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, Xxxxxxx and Xxxxxxxx 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").
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. Xxxxxxx Xxxxx, 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.
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
16
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.
E. Appointment of Qualified Independent Underwriter. The Company and
the Selling Shareholders hereby confirm their engagement of Xxxxxx X. Xxxxx &
Co. Incorporated ("Xxxxxx X. Xxxxx") as, and Xxxxxx X. Xxxxx hereby confirms its
agreement with the Company and the Selling Shareholders to render services as, a
"qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc. with
respect to the offering and sale of the Securities. Xxxxxx X. Xxxxx, solely in
its capacity as qualified independent underwriter and not otherwise, is referred
to herein as the "Independent Underwriter."
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
17
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).
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 XXXXX, 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 XXXXX, 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 Xxxxxxx
Xxxxx and will promptly amend or supplement, at its own expense, such
18
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
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 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Xxxxxxx Xxxxx, (1) 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 (2) 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 (1) or
(2) 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 (i) during the last 17 days of the
180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs or (ii) prior to the
expiration of the 180-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 180-day
restricted period, the restrictions imposed in this
19
paragraph 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.
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. Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The Underwriters
will notify the Company as to which persons will need to be so restricted. At
the request of the Underwriters, the Company will direct the transfer agent to
place a stop transfer restriction upon such Reserved Securities for such period
of time. Should the Company release, or seek to release, from such restrictions
any of the Reserved Securities, the Company agrees to reimburse the Underwriters
for any reasonable expenses (including, without limitation, legal expenses) they
incur in connection with such release.
M. 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 1934 Act Regulations.
IV. Payment of Expenses.
A. Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of their obligations under this Agreement, including
(1) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (2) 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, (3) 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, (4) the fees
and disbursements of the Company's counsel, accountants and other advisors, (5)
the qualification of
20
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, (6) 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, (7) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (8) the fees and
expenses of any transfer agent or registrar for the Securities, (9) 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), (10) 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 (11) 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 (1) any stamp duties,
capital duties and stock transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters and (2) 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 & Xxxxxx
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)(1)
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.
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:
21
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 &
Xxxxxx 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 & Xxxxxx 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.
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, Xxxxxxx & Xxxxxxxx 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
22
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
(1) there has been no such material adverse change, (2) 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, (3) 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 (4) 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
(1) 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 (2) 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 Xxxx Xxxxxxx 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.
H. Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from each of Ernst & Young LLP and BDO Xxxx Xxxxxxx 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.
23
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:
1. 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.
2. 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.
3. Opinion of Counsel for Company. The opinion of Weil, Gotshal &
Xxxxxx 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.
4. Opinion of Counsel for the Selling Shareholders. The opinion
of Weil, Gotshal & Xxxxxx 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.
5. Opinion of Counsel for Underwriters. The favorable opinion of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx 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.
6. Bring-down Comfort Letter. A letter from Ernst & Young LLP and
from BDO Xxxx Xxxxxxx 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.
24
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 reasonably 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. (1) 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:
1. 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;
2. 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.
3. against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel
chosen by Xxxxxxx Xxxxx), reasonably
25
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 (1) or
(2) 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 Xxxxxxx Xxxxx 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).
(2) In addition to and without limitation of the Company's obligation
to indemnify Xxxxxx X. Xxxxx as an Underwriter, the Company agrees to indemnify
and hold harmless the Independent Underwriter, its Affiliates and Selling Agents
and each person, if any, who controls the Independent Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and
against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, incurred as a result of the Independent Underwriter's participation as
a "qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the NASD in connection with the offering of the Securities.
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
26
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (A) (1) 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 Xxxxxxx Xxxxx 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) (1)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
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.
Any such separate counsel for the Independent Underwriter and such control
persons of the Independent Underwriter shall be designated in writing by the
Independent Underwriter. 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) (1) or settlement of any claim in connection with any violation
referred to in Section VI(F) effected without its written consent if (1) such
settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (2) 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 (3) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of such
settlement.
27
F. Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees to indemnify and
hold harmless the Underwriters, their Affiliates and selling agents and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all loss, liability, claim, damage and expense (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending, investigating or settling any such action or claim), as incurred, (1)
arising out of the violation of any applicable laws or regulations of foreign
jurisdictions where Reserved Securities have been offered; (2) arising out of
any untrue statement or alleged untrue statement of a material fact contained in
any prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Invitees in connection with the offering of the
Reserved Securities or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (3) caused by the failure of any Invitee to
pay for and accept delivery of Reserved Securities which have been orally
confirmed for purchase by any Invitee by the end of the first business day after
the date of the Agreement; or (4) related to, or arising out of or in connection
with, the offering of the Reserved Securities.
G. 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.
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, or in connection with any
violation of the nature referred to in Section VI (F) hereof, 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
28
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 or in connection with any violation of the nature
referred to in Section VI (F) hereof.
The Company, the Selling Shareholders and the Underwriters agree that
Xxxxxx X. Xxxxx will not receive any additional benefits hereunder for serving
as the Independent Underwriter in connection with the offering and sale of the
Securities.
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 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 0000 Xxx) 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.
29
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
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 written notice to the Company and the Selling Shareholders, at any
time at or prior to Closing Time (1) 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 (2) 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 (3) 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 (4) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(5) 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
30
forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
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
Shareholder 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
31
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.
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.
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 Xxxxx Xxxx with a copy to Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx LLP at Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of
Xxxxxx Xxxxxxx; notices to the Company shall be directed to it at 00 Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, attention of Xxxxxxx X. Xxxx, with a copy
to Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxxxxx 00000, attention of Xxxxx X. Xxxx; and notices to the Selling
Shareholders shall be directed to Genstar Capital, Xxxx Xxxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, attention of Xxxx-Xxxxxx Xxxxx,
with a copy to Weil, Gotshal & Xxxxxx LLP, 000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000, attention of Xxxxx X. Xxxx.
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
32
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.
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 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.
33
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
------------------------------------------
Name:
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:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXXXX & COMPANY
WACHOVIA SECURITIES
XXXXXX X. XXXXX & CO.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
-------------------------------------------------------
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
34
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.....................................................
Xxxxxxxxx & Company.............................................................
Wachovia Securities ...............................................
Xxxxxx X. Xxxxx & Co.
Total..................................................................
=================
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- -------------------------
ALTRA HOLDINGS, INC....................... 3,333,334 0
Genstar Capital Partners III, L.P......... 4,824,121 903,247
Stargen III, L.P.......................... 173,877 32,556
Caisse de depot et placement du Quebec.... 1,346,391 252,093
Xxxxx Xxxxxxxxx MKC Worldwide............. 37,500 56,250
Xxxxx Xxxxxxxxx........................... 3,413 5,119
Xxxxx XxXxxxxxx........................... 15,913 23,869
Xxx Xxxx.................................. 2,500 1,250
Xxxxxx Xxxx............................... 2,500 1,250
Xxxxxxx X. Xxxx........................... 94,140 141,210
Xxxx Xxxxxxxxxxx.......................... 63,136 31,568
Xxxxx Xxxx................................ 24,500 12,250
Xxxxxxx X. Xxxx........................... 15,300 7,650
Xxxxxx X. Xxxxxxx......................... 14,000 7,000
Xxxxxx Xxxxxx............................. 12,250 6,125
Xxxxx Xxxxxxx............................. 12,250 6,125
Xxxxxx X. Xxxxxxxxxx...................... 6,650 3,325
Xxxxxx Xxxxxxxxxx......................... 5,000 2,500
Xxxx Xxxxxx............................... 4,650 2,325
Xxxxx Xxxxxxx............................. 3,900 1,950
Xxxxx X. Xxxxxx........................... 0 0
Xxxxxxx XxXxxxx........................... 3,425 1,713
Xxxxxxxx Xxxxxxxxxxx...................... 1,250 625
Total..................................... 10,000,000 1,500,000
SCHEDULE C
ALTRA HOLDINGS, INC.
[ ] Shares of Common Stock
(Par Value $0.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section II, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $ [ ] per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
overallotment option described in Section II(B) shall be reduced by 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.
[SCHEDULE D]
Genstar Capital Partners III, X.X.
Xxxxxx de depot et placement du Quebec
Stargen III, L.P.
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
Xxx Xxxx
Xxxxxx Xxxx
Xxxxxxxx Xxxxxxxxxxx
Xxxxxxx X. Xxxx
Xxxx Xxxxxxxxxxx
Xxxxx Xxxx
Xxxxxx X. Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx XxXxxxx
Xxxx-Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Gold
Xxxxx Xxxxxxxxx
Xxxxx XxXxxxxxx
Xxxxx Xxxxxxxxx, MKC Worldwide
[SCHEDULE E]
[SPECIFY EACH ISSUER GENERAL USE FREE WRITING PROSPECTUS]
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION V(B)
December __, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representative of the several Underwriters
Xxxxxxxxx & Company
Wachovia Securities
Xxxxxx X. Xxxxx & Co.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to Altra Holdings, Inc. (the "Company") in
connection with the preparation, authorization, execution and delivery of, and
the consummation of the transactions contemplated by, the Purchase Agreement
dated as of December __, 2006 (the "Agreement") by and among the Company, the
persons and entities listed in Schedule B thereto (the "Selling Stockholders"),
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and each
of the other underwriters named in Schedule A thereto (collectively, the
"Underwriters"), in connection with (i) the sale by the Company and the Selling
Stockholders, 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 thereto and (ii) the grant by the Selling
Stockholders to the Underwriters, acting severally and not jointly, of the
option described therein to purchase all or any part of 1,500,000 additional
shares of Common Stock to cover overallotments, if any (collectively, the
"Offering"). This opinion is being rendered to you pursuant to Section V.B. of
the Agreement. Capitalized terms defined in the Agreement and used (but not
otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Agreement, the Registration Statement on
Form S-1 (file No. 333-137660) filed on September 29, 2006, as amended (the
"Registration Statement"), the prospectus dated December __, 2006 (the
"Prospectus") and such corporate, partnership, and limited liability company
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of
the Company, and have made such inquiries of such officers and representatives,
as we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us
A-1
December __, 2006
Page 2
as originals, the conformity to original documents of all documents submitted to
us as certified, conformed or photostatic copies and the authenticity of the
originals of such latter documents. As to all questions of fact material to
these opinions that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the
Company and upon the representations and warranties of the Company contained in
the Agreement. As used herein, "to our knowledge" and "of which we are aware"
mean the conscious awareness of facts or other information by any lawyer in our
firm actively involved in the transactions contemplated by the Agreement, after
consultation with such other lawyers in our firm, as each such actively involved
lawyer has deemed appropriate.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:
1. The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as described in the Prospectus. The Company is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction identified in Schedule A hereto.
2. As of the date of this opinion and prior to the consummation of the
Offering and transactions contemplated by the Agreement (i) the authorized
capital stock of the Company will consist of 50,000,000 shares of common stock,
par value $0.001 per share, and 40,000,000 shares of preferred stock, par value
$0.001 per share and (ii) there were ________ shares of common stock and
_________ shares of preferred stock, issued and outstanding. All of such
outstanding shares are duly authorized, validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and have not been issued in violation of any preemptive rights pursuant to law
or in the Company's Amended and Restated Certificate of Incorporation.
3. The shares of Common Stock to be issued pursuant to the Agreement have
been duly authorized and, when issued as contemplated by the Agreement, will be
validly issued, fully paid and nonassessable and free of preemptive rights
pursuant to law or in the Company's Amended and Restated Certificate of
Incorporation.
4. All of the outstanding shares of capital stock, limited liability
interests or partnership interests of Altra Industrial Motion, Inc. and its
subsidiaries organized or incorporated under the laws of the State of Delaware
and listed on Schedule B (the "Delaware Subsidiaries") are owned of record by
the Company, directly or through its subsidiaries. To our knowledge and except
as otherwise described in the Registration Statement, such shares or interests
are also owned beneficially by the Company and are free and clear of all adverse
claims, limitations on voting rights, options and other encumbrances and are
duly authorized, validly issued, fully paid and nonassessable, and
A-2
December __, 2006
Page 3
have not been issued in violation of any preemptive rights pursuant to law or
the applicable organizational documents.
5. Each Delaware Subsidiary is a corporation, partnership or limited
liability company validly existing and in good standing under the laws of the
State of Delaware, and has all requisite corporate, partnership, or limited
liability company power and authority to own, lease and operate its properties
and to carry on its business as described in the Prospectus. Each Delaware
Subsidiary is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction identified in Schedule A hereto.
6. The Company has all requisite corporate power and authority to execute
and deliver the Agreement and to perform its obligations thereunder. The
execution, delivery and performance of the Agreement by the Company have been
duly authorized by all necessary corporate action on the part of the Company.
The Agreement has been duly and validly executed and delivered by the Company.
7. The execution and delivery by the Company of the Agreement and the
performance by the Company of its obligations thereunder will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Amended and Restated Certificate of Incorporation or by-laws
of the Company, (ii) any of the terms, conditions or provisions of any document,
agreement or other instrument listed on Schedule C hereto, (iii) Delaware, New
York or federal law or regulation (other than federal and state securities or
blue sky laws, as to which we express no opinion in this paragraph), or (iv) any
judgment, writ, injunction, decree, order or ruling of any court or governmental
authority binding on the Company of which we are aware.
8. No consent, approval, waiver, license or authorization or other action
by or filing with any Delaware corporate, New York corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company of the Agreement, the consummation by the Company of the
transactions contemplated thereby or the performance by the Company of its
obligations thereunder, except for (i) the filing of the Company's Amended and
Restated Certificate of Incorporation, (ii) filings required under federal and
state securities or blue sky laws, as to which we express no opinion in this
paragraph, and (iii) those already obtained.
9. The Registration Statement and the Prospectus (except for the financial
statements and related notes thereto, the financial statement schedules and the
other financial, statistical and accounting data included in the Registration
Statement or the Prospectus, as to which we express no opinion,) comply as to
form in all material respects with the requirements of the 1933 Act and the 1933
Regulations.
A-3
December __, 2006
Page 4
10. The Registration Statement has become effective under the 1933 Act,
and we are not aware of any stop order suspending the effectiveness of the
Registration Statement. To our knowledge, no proceedings therefor have been
initiated or overtly threatened by the Commission and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under the 1933 Act
has been made in the manner and within the time period required by such Rule.
11. The statements (A) in the Prospectus under the captions "Description
of Capital Stock," "Material U.S. Tax Considerations for Non-US Holders of
Common Stock" and "Description of Indebtedness" and (B) in the Registration
Statement in response to the requirements of Item 14 of Form S-1, in each case
insofar as such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein in all material respects.
12. Except as disclosed in the Prospectus, to our knowledge, there are no
legal or governmental proceedings pending or overtly threatened to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed or incorporated
by reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.
13. Except as disclosed in the Prospectus, to our knowledge, there is no
litigation, proceeding or governmental investigation pending or overtly
threatened against the Company or any of its subsidiaries or properties that
relates to any of the transactions contemplated by the Agreement.
14. The Company is not, and, after giving effect to the issuance of the
Securities in accordance with the terms of the Agreement and the application of
the proceeds therefrom as described in the Prospectus and the consummation of
the other transactions contemplated by the Prospectus, will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
The opinions expressed herein are limited to the laws of the State of New
York, the corporate, partnership and limited liability company laws of the State
of Delaware and the federal laws of the United States, and we express no opinion
as to the effect on the matters covered by this letter of the laws of any other
jurisdiction.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Those opinions may not be
used or
A-4
December __, 2006
Page 5
relied upon by any other person, nor may this letter or any copies hereof be
furnished to a third party, filed with a governmental agency, quoted, cited or
otherwise referred to without our prior written consent.
Very truly yours
A-5
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION V(C)
December __, 2006
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representative of the several Underwriters
Xxxxxxxxx & Company
Wachovia Securities
Xxxxxx X. Xxxxx & Co.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to the persons and entities listed on Schedule A
hereto (each, a "Selling Stockholder" and collectively, the "Selling
Stockholders") in connection with the preparation, authorization, execution and
delivery of, and the consummation of the transactions contemplated by, the
Purchase Agreement dated as December __, 2006 (the "Agreement") by and among
Altra Holdings, Inc. (the "Company"), Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and each of the other underwriters named in
Schedule A thereto (collectively, the "Underwriters"), Caisse de depot et
placement du Quebec ("CDPQ") and the Selling Stockholders in connection with (i)
the sale by the Company, CDPQ and the Selling Stockholders, 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
thereto and (ii) the grant by CDPQ and the Selling Stockholders to the
Underwriters, acting severally and not jointly, of the option described therein
to purchase all or any part of 1,500,000 additional shares of Common Stock to
cover overallotments, if any (collectively, the "Offering"). This opinion is
being rendered to you pursuant to Section V.C. of the Agreement. Capitalized
terms defined in the Agreement and used (but not otherwise defined) herein are
used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Agreement, the Power of Attorney (the
"Power of Attorney"), the Registration Statement on Form S-1 (file No.
333-137660) filed on September 29, 2006, as amended (the "Registration
Statement"), the prospectus dated December __, 2006 (the "Prospectus") and such
corporate, partnership, and limited liability company records, agreements,
documents and other instruments, and such certificates or comparable documents
of public officials and of officers and representatives of the Selling
Stockholders, and have made such inquiries of such officers
B-1
December ,2006
Page 2
and representatives, as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Selling Stockholders and upon the representations and
warranties of the Company contained in the Agreement. As used herein, "to our
knowledge" and "of which we are aware" mean the conscious awareness of facts or
other information by any lawyer in our firm actively involved in the
transactions contemplated by the Agreement, after consultation with such other
lawyers in our firm in our possession, as each such actively involved lawyer has
deemed appropriate.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:
1. No consent, approval, waiver, license or authorization or other action
by or filing with any federal governmental authority is required in connection
with the performance by each of the Selling Stockholders of their obligations
under the Agreement, except for (i) filings required under federal and state
securities or blue sky laws, as to which we express no opinion in this
paragraph, and (ii) those already obtained.
2. The execution, delivery and performance of the Agreement and Power of
Attorney by each Selling Stockholder have been duly authorized by all necessary
corporate or partnership action, as applicable, on the part of the Selling
Stockholder. Each Power of Attorney has been duly and validly executed and
delivered by the respective Selling Stockholder named therein and constitutes
the legal, valid and binding obligation of each Selling Stockholder.
3. The Agreement has been duly executed and delivered by or on behalf of
each Selling Stockholder.
4. The execution and delivery by each Selling Stockholder of the Agreement
and the Power of Attorney and the performance by each Selling Stockholder of its
obligations thereunder will not conflict with, constitute a default under or
violate (i) any of the terms, conditions or provisions of the limited
partnership agreement, Certificate of Incorporation or by-laws of each Selling
Stockholder, if applicable, (ii) any of the terms, conditions or provisions of
any document, agreement or other instrument listed on Schedule B hereto, (iii)
Delaware corporate or federal law or regulation (other than federal and state
securities or blue sky laws, as to which we express no opinion in
B-2
December ,2006
Page 3
this paragraph), or (iv) any judgment, writ, injunction, decree, order or ruling
of any court or governmental authority binding on the Selling Stockholder of
which we are aware.
5. Each of the Selling Stockholders is the owner of record of the Common
Stock listed next to such Selling Stockholder's name on Schedule B of the
Agreement. To our knowledge and except as otherwise described in the
Registration Statement, such shares are also beneficially owned by such Selling
Stockholder and are free and clear of all adverse claims, limitations on voting
rights, options and other encumbrances.
6. Assuming that the Underwriters acquire the Common Stock being sold to
it by the Selling Stockholders pursuant to the Agreement without notice of an
adverse claim thereto, upon (a) the delivery to the Underwriters of the
certificates representing such Common Stock accompanied by an effective
indoresement in blank by the Selling Stockholders, (b) the payment therefor in
accordance with the terms of the Agreement and (c) the acquisition by the
Underwriters of control of such Common Stock, the Underwriters will be protected
purchasers and will acquire such Common Stock free of any adverse claim. For
purposes of this Paragraph 6, the terms "delivery", "control", "adverse claim",
"notice of an adverse claim" and "protected purchaser" have the respective
meanings ascribed thereto in Sections 8-301, 8-106, 8-102(a)(1), 8-105 and
8-303(a) of the Uniform Commercial Code in effect in the State of New York (the
"UCC").
The opinions expressed herein are limited to the laws of the State of New
York, the corporate, partnership and limited liability company laws of the State
of Delaware and the federal laws of the United States, and we express no opinion
as to the effect on the matters covered by this letter of the laws of any other
jurisdiction.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
hereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent.
Very truly yours,
B-3
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION V(K)]
Exhibit C
[ , 2006]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
XXXXXXXXX & COMPANY
WACHOVIA SECURITIES
XXXXXX X. XXXXX & CO.
as Representative of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Altra Holdings, Inc.
Dear Sirs:
The undersigned, a stockholder, officer, director and/or employee of
Altra Holdings, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Xxxxxxxxx & Company, Wachovia Securities and Xxxxxx X. Xxxxx
& Co., propose to enter into a Purchase Agreement (the "Purchase Agreement")
with the Company and the Selling Shareholders providing for the public offering
of shares (the "Public Offering") of the Company's common stock, par value
$0.001 per share (the "Common Stock"). In recognition of the benefit that such
an offering will confer upon the undersigned as a stockholder, officer, director
and/or employee of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with each underwriter to be named in the Purchase Agreement that, during
a period of 180 days from the date of the Purchase Agreement, the undersigned
will not, without the prior written consent of Xxxxxxx Xxxxx, directly or
indirectly, (i) 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 for the sale of, or otherwise dispose of or transfer any shares
of the Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing (collectively, the "Lock-Up Securities") 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
Lock-Up Securities, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or
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otherwise; provided, however, that the foregoing restrictions will not apply to
transfers of the Lock-Up Securities (A) as a bona fide gift, provided that each
donee thereof agrees to be bound in writing by the restrictions set forth
herein, (B) to any trust or other entity formed for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust or authorized representative of such other entity,
as applicable, agrees to be bound in writing by the restrictions set forth
herein, or (C) to any of its members, partners, shareholders or the equivalent
thereof, and such transferee may transfer Lock-Up Securities to any other
members, partners, or shareholders or the equivalent thereof; provided, however,
that (x) in any such case, it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving and
holding such Lock-Up Securities subject to the provisions of this lock-up
agreement and there shall be no further transfer of such Lock-Up Securities
except in accordance with this Agreement, and (y) no such transfer shall be
effected on the New York Stock Exchange, NASDAQ Global Market, the
over-the-counter market or any other system providing share price quotations.
Notwithstanding the foregoing, the undersigned may sell shares of
Common Stock purchased by the undersigned on the open market following the
Public Offering if and only if (i) such sales are not required to be reported in
any public report or filing with the Securities Exchange Commission, or
otherwise and (ii) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such sales.
Notwithstanding the foregoing, if:
(1) during the last 17 days of the 180-day lock-up 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 180-day lock-up 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 180-day lock-up period;
the restrictions imposed by this lock-up agreement shall continue to apply until
the expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless Xxxxxxx Xxxxx waives, in writing, such extension.
The undersigned hereby acknowledges and agrees that written
notice of any extension of the 180-day lock-up period pursuant to the previous
paragraph will be delivered by Xxxxxxx Xxxxx to the Company (in accordance with
Section XII of the Purchase Agreement) and that any such notice properly
delivered will be deemed to have been given to, and received by, the
undersigned. The undersigned further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this
lock-up agreement during the period from the date of this lock-up agreement to
and including the 34th day following the expiration of the initial 180-day
lock-up period, it will give notice thereof to the Company and will not
consummate such transaction or take any such action unless it has received
written confirmation from the Company that the 180-day lock-up period (as may
have been extended pursuant to the previous paragraph) has expired.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.
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The obligation of the undersigned shall terminate if the Public
Offering shall not have been effected on or before February 15, 2007.
Very truly yours,
Signature:
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Print Name:
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