Heritage-Crystal Clean, Inc. 1,740,000 Shares of Common Stock1 Underwriting Agreement
Exhibit 1.1
1,740,000 Shares of Common Stock1
Underwriting Agreement
March ___, 2008
Xxxxxxx Xxxxx & Company, L.L.C.
As Representative of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
As Representative of the Several
Underwriters Named in Schedule A
c/o Xxxxxxx Xxxxx & Company, L.L.C.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory. Heritage-Crystal Clean, Inc. (the “Company”), a Delaware
corporation, has an authorized capital stock consisting of 500,000 shares, $0.01 par value, of
preferred stock (“Preferred Stock”), of which no shares will be outstanding as of the First Closing
Date hereinafter defined, and 15,000,000 shares, $0.01 par value, of common stock (“Common Stock”),
of which 10,269,290 shares will be outstanding as of the First Closing Date hereinafter defined.
The Company proposes to issue and sell 1,740,000 shares of its authorized but unissued Common Stock
(“Firm Shares”) to the several underwriters named in Schedule A as it may be amended by the Pricing
Agreement hereinafter defined (“Underwriters”), who are acting severally and not jointly. In
addition, the Company proposes to grant to the Underwriters an option to purchase up to 261,000
additional shares of Common Stock (“Option Shares”) as provided in Section 4 hereof. The Firm
Shares and, to the extent such option is exercised, the Option Shares, are hereinafter collectively
referred to as the “Public Offering Shares.”
You have advised the Company that the Underwriters propose to make a public offering (the
“Public Offering”) of their respective portions of the Public Offering Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes effective, if it has not
yet become effective, and the Pricing Agreement hereinafter defined has been executed and
delivered.
Concurrently with the Public Offering hereinafter defined, the Company proposes to issue and
sell to certain of its existing stockholders and related persons (the “Direct Placement
Purchasers”) 1,200,000 shares of its authorized but unissued Common Stock (the “Direct Placement
Shares” and, together with the Public Offering Shares, the “Shares”) at the initial public offering
price set forth in the Pricing Agreement hereinafter defined (the “Direct Placement” and, together
with the Public Offering, the “Offerings”), the closing of which will occur simultaneously with the
completion of the Public Offering.
Except for the filing of the Certificate of Merger with respect to the merger of BRS-HCC
Investment Co., Inc. with and into the Company with the Secretary of State of the State of Delaware
(an
| 1 | Plus an option to acquire up to 261,000 additional shares to cover overallotments. |
executed copy of which is currently being held in escrow by the Company and has been
pre-cleared by the Secretary of State of the State of Delaware), the release of loan documents
required under Section 4.02 of the Company’s Credit Facility with its lender that have been
delivered to the lender to be held in escrow and the funding of available amounts thereunder to pay
a portion of the proceeds to the holders of preferred units of Heritage-Crystal Clean LLC as
described in the Prospectuses, the Company has obtained all consents, approvals and documentation
required from third parties required to validly exchange the outstanding membership interests of
Heritage-Crystal Clean, LLC, a Delaware limited liability company (“HCC LLC”), for cash and shares
of Common Stock, including the financing required therefor, in a reorganization (the
“Reorganization”) described under the heading “Reorganization” in the Statutory Prospectus (as
defined below), and the Company’s ability to consummate the Reorganization and such financing is
subject only to the execution of this Agreement.
The Company and the Underwriters agree that up to 87,000 of the Shares to be purchased by the
Underwriters (the “Reserved Shares”) shall be reserved for sale by the Underwriters to certain
eligible employees of the Company (the “Invitees”), as part of the distribution of the Public
Offering Shares by the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the Financial Industry Regulation Authority (“FINRA”) and all
other applicable laws, rules and regulations. To the extent that any such Reserved Shares are not
orally confirmed for purchase by Invitees by the end of the first business day after the date of
this Agreement, such Reserved Shares may be offered to the public by the Underwriters as part of
the Public Offering contemplated hereby.
Prior to the purchase and Public Offering of the Public Offering Shares by the several
Underwriters, the Company and Xxxxxxx Xxxxx & Company, L.L.C. (the “Representative”), acting on
behalf of the several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the “Pricing Agreement”). The Pricing Agreement may take the form of an exchange
of any standard form of written telecommunication between the Company and the Representative and
shall specify such applicable information as is indicated in Exhibit A hereto. The Public Offering
will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the
date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Company and HCC LLC hereby confirm their agreement with the Underwriters as follows:
Section 2. Representations and Warranties of the Company. The Company and HCC LLC
jointly and severally represent and warrant to the several Underwriters that (unless context
requires otherwise, references in the representations and warranties set forth below to the Company
or the Company and its subsidiaries shall be deemed to include HCC LLC):
(a) A registration statement on Form S-1 (File No. 333-143864), a related preliminary
prospectus relating to the Public Offering Shares and a related preliminary prospectus
relating to the Direct Placement Shares have been prepared and filed with the Securities and
Exchange Commission (“Commission”) by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “1933 Act;” unless otherwise indicated, all references herein
to specific rules are rules promulgated under the 0000 Xxx); and the Company has so prepared
and has filed such amendments thereto, if any, and such amended preliminary prospectuses as
may have been required to the date hereof and will file such additional amendments thereto
and such amended prospectuses as may hereafter be required. The Company will, with respect
to each preliminary prospectus, prepare and file a prospectus pursuant to Rule 424(b) that
discloses the information previously omitted from such preliminary prospectus in reliance
upon Rule 430A.
To the extent requested by the Representative, there have been or will promptly be
delivered to you one signed copy of such registration statement and amendments, one copy of
each exhibit filed therewith, and conformed copies of such registration statement and
amendments (but without exhibits) and of the related preliminary prospectuses and final
forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time it becomes
effective, the prospectus relating to the Public Offering Shares and the prospectus relating
to the Direct Placement Shares (in each case, including the information, if any, deemed to
be part thereof pursuant to Rule 430A(b)), as from time to time amended or supplemented, are
hereinafter referred to as the “Registration Statement,” the “Public Offering Prospectus”
and the “Direct Placement Prospectus,” respectively, except that if the Company provides any
revised prospectus to the Underwriters for use in connection with the Public Offering or to
the Direct Placement Purchasers in connection with the Direct Placement, which revised
prospectus differs from the Public Offering Prospectus or the Direct Placement Prospectus,
as applicable, on file at the Commission at the time the Registration Statement became or
becomes effective (whether or not such revised prospectus is required to be filed by the
Company pursuant to Rule 424(b)), the terms Public Offering Prospectus and Direct Placement
Prospectus, as applicable, shall refer to such revised prospectus from and after the time it
was provided to the Underwriters for such use or to the Direct Placement Purchasers. Any
registration statement (including any amendment or supplement thereto or information which
is deemed part thereof) filed by the Company under Rule 462(b) (“Rule 462(b) Registration
Statement”) shall be deemed to be part of the “Registration Statement” as defined herein,
and any prospectus (including any amendment or supplement thereto or information which is
deemed part thereof) included in such registration statement shall be deemed to be part of
the “Public Offering Prospectus” and the “Direct Placement Prospectus” as defined herein, as
appropriate. The Public Offering Prospectus and the Direct Placement Prospectus are
hereinafter collectively referred to as the “Prospectuses.” The Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder are hereinafter
collectively referred to as the “Exchange Act.”
(b) The Commission has not issued any order preventing or suspending the use of any
preliminary prospectus, and each preliminary prospectus has conformed in all material
respects with the requirements of the 1933 Act and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were made, not
misleading; and when the Registration Statement became or becomes effective, and at all
times subsequent thereto, up to the First Closing Date or the Second Closing Date
hereinafter defined, as the case may be, the Registration Statement, including the
information deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A(b), if applicable, the Public Offering Prospectus and the Direct
Placement Prospectus, and any amendments or supplements thereto, in all material respects
conformed or will in all material respects conform to the requirements of the 1933 Act, and
none of the Registration Statement, the Public Offering Prospectus, the Direct Placement
Prospectus and any amendment or supplement thereto, included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact, in the case
of the Registration Statement or any amendment or supplement thereto, required to be stated
therein or necessary to make the statements therein not misleading and, in the case of the
Public Offering Prospectus, the Direct Placement Prospectus or any amendment or supplement
thereto, necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading.
As of the Applicable Time hereinafter defined, neither (x) the Issuer General Use Free
Writing Prospectus(es) hereinafter defined issued at or prior to the Applicable Time and the
Statutory Prospectuses hereinafter defined as of the Applicable Time nor (y) any individual
Issuer Limited Use Free Writing Prospectus hereinafter defined, all being considered
together (collectively, the “Disclosure Package”), included any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.
As used in this Section 2(b) and elsewhere in this Agreement:
“Applicable Time” means ___:00 _.M., Chicago Time, on March ___, 2008 or such other time
as agreed by the Company and the Representative.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433, relating to the Shares that (i) is required to be filed with the Commission by
the Company, (ii) is a “road show for an offering 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 Shares or of the Offerings that does not reflect the final terms, in each case in the
form filed or required to be filed with the Commission or, if not required to be filed, in
the form required to be 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 hereinafter defined), as evidenced by its being specified in Schedule C
hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectuses” as of any time means the Public Offering Prospectus and the
Direct Placement Prospectus that are included in the Registration Statement immediately
prior to that time.
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 Shares.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the Offerings or until any earlier date that the Company notified
or notifies the Representative as described in Section 5(d), did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, the Prospectuses, or any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
Notwithstanding the foregoing, the representations and warranties of the Company and
HCC LLC set forth in this Section 2(b) shall not apply to information contained in or
omitted from any preliminary prospectus, the Registration Statement, the Prospectuses, any
Issuer Free Writing Prospectus or any amendment or supplement thereto in reliance upon and
in conformity
with written information furnished to the Company by or on behalf of any Underwriter
through the Representative specifically for use in the preparation thereof.
At the time of filing the Registration Statement, any 462(b) Registration Statement and
any post-effective amendments thereto and at the date of this Agreement, the Company was not
and is not an “ineligible issuer” as defined in Rule 405.
(c) The Company and its subsidiaries have been duly incorporated or formed and are
validly existing as corporations or limited liability companies in good standing under the
laws of their respective places of incorporation or formation, as the case may be, with
requisite power and authority to own their properties and conduct their business as
described in the Prospectuses; the Company and each of its subsidiaries are duly qualified
to do business as foreign corporations or limited liability companies under the laws of, and
are in good standing as such in, each jurisdiction in which they own or lease substantial
properties, have an office, or in which substantial business is conducted and such
qualification is required except in any such case where the failure to so qualify or be in
good standing would not, individually or in the aggregate, have a material adverse effect
upon the Company and its subsidiaries taken as a whole (“Material Adverse Effect”); and no
proceeding of which the Company has knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.
The making and performance of the agreements executed in connection with the
Reorganization were duly authorized by all necessary corporate and limited liability company
action and, after giving effect to all consents or waivers obtained in a timely manner, did
not violate any provision of HCC LLC’s certificate of formation or amended operating
agreement, did not result in the breach, or was not in contravention, of any provision of
any agreement set forth or required to be set forth as an exhibit to the Registration
Statement or any order, rule or regulation applicable to HCC LLC of any court or regulatory
body, administrative agency or other governmental body having jurisdiction over HCC LLC or
any of its properties, or any order of any court or governmental agency or authority entered
in any proceeding to which HCC LLC was or is a party or by which it was or is bound. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body was required for the execution and delivery
of such agreements or the consummation of the transactions contemplated therein, other than
consents, approvals or authorizations obtained prior to the consummation thereof. The
Company and HCC LLC have obtained a valid and binding commitment from HCC LLC’s lender
sufficient, or otherwise has sufficient available borrowing capacity, to finance the payment
of cash in the Reorganization as provided herein and has obtained valid and binding
elections from each of the holders of ownership interests in HCC LLC and the Company to
complete the Reorganization, subject in each case only to the condition of the execution of
this Agreement. Other than the execution of this Agreement, there are no other approvals
required for, or conditions to, the completion of the Reorganization or the financing
related thereto, and the Company’s ability to consummate the Reorganization is subject only
to the execution of this Agreement, the release of loan documents required under Section
4.02 of the Company’s Credit Facility with its lender that have been delivered to the lender
to be held in escrow, and the funding of available amounts thereunder to pay a portion of
the proceeds to the holders of preferred units of Heritage-Crystal Clean LLC as described in
the Prospectuses.
(d) Following the Reorganization, the Company will own directly 100 percent of the
issued and outstanding membership units of HCC LLC, free and clear of any claims, liens,
encumbrances or security interests other than those disclosed in the Registration Statement
and all of such membership units have been duly authorized and validly issued and are fully
paid and
nonassessable. Other than HCC LLC, the Company shall have no direct or indirect
subsidiaries following the Reorganization.
(e) The issued and outstanding shares of capital stock of the Company as set forth in
the Prospectuses have been duly authorized and validly issued, are fully paid and
nonassessable, and conform in all material respects to the description thereof contained in
the Prospectuses.
(f) The Shares have been duly authorized and when issued, delivered and paid for
pursuant to this Agreement or the Direct Placement, as applicable, will be validly issued,
fully paid and nonassessable, and will conform to the description thereof contained in the
Prospectuses.
(g) The making and performance by the Company of this Agreement, including the
completion of the Reorganization as contemplated hereby, and the Pricing Agreement have been
duly authorized by all necessary corporate action and will not (i) violate any provision of
the Company’s charter or bylaws or (ii) result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed of trust, or other
instrument to which the Company or any subsidiary is a party or by which the Company, any
subsidiary or the property of any of them may be bound or affected, or any order, rule or
regulation applicable to the Company or any subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction over the Company or any
subsidiary or any of their respective properties, or any order of any court or governmental
agency or authority entered in any proceeding to which the Company or any subsidiary was or
is now a party or by which it is bound, except in the case of clause (ii) to the extent such
breach or contravention would not have a Material Adverse Effect. No consent, approval,
authorization or other order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this Agreement, including
the Reorganization, or the Pricing Agreement or the consummation of the transactions
contemplated herein or therein, except for compliance with the 1933 Act and blue sky laws
applicable to the Offerings and clearance of the Public Offering with FINRA. This Agreement
has been duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to certain of the
financial statements and schedules included in the Registration Statement are an independent
registered public accounting firm as required by the 1933 Act and such accountants are not
in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”).
(i) The consolidated financial statements of HCC LLC included in the Registration
Statement, the Disclosure Package and the Prospectuses present fairly in all material
respects the consolidated financial position of the Company as of the respective dates of
such financial statements, and the consolidated statements of operations and cash flows of
the Company for the respective periods covered thereby, all in conformity with generally
accepted accounting principles consistently applied throughout the periods involved, except
as disclosed therein.
The financial information set forth in the Prospectuses under “Selected Financial Data”
presents fairly in all material respects on the basis stated in the Prospectuses, the
information set forth therein.
The pro forma financial statements and other pro forma information included in the
Registration Statement, the Disclosure Package and the Prospectuses present fairly in all
material respects the information shown therein, have been prepared in accordance with
generally accepted accounting principles and the Commission’s rules and guidelines with
respect to pro
forma financial statements and other pro forma information, have been properly compiled
on the pro forma basis described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the adjustments used therein
are appropriate under the circumstances.
All disclosures contained in the Registration Statement and the Prospectuses regarding
“non-GAAP financial measures” (as such term is defined by the Commission’s rules and
regulations) comply in all material respects with Regulation G of the Exchange Act and Item
10 of Regulation S-K under the 1933 Act, to the extent applicable.
(j) Neither the Company nor any subsidiary is in violation of its organizational
documents or in default under any consent decree, or in default with respect to any
provision of any lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party except for defaults that would not have a Material Adverse
Effect; and, to the Company’s knowledge, there does not exist any state of facts which
constitutes an event of default as defined in such documents or which, with notice or lapse
of time or both, would constitute such an event of default, in each case, except for
defaults which neither singly nor in the aggregate would have a Material Adverse Effect.
(k) There are no material legal or governmental proceedings pending, or to the
Company’s knowledge, threatened to which the Company or any subsidiary is or may be a party
or of which material property owned or leased by the Company or any subsidiary is or may be
the subject, or related to environmental or discrimination matters which are not disclosed
in the Prospectuses, or which question the validity of this Agreement or the Pricing
Agreement or any action taken or to be taken pursuant hereto or thereto or pursuant to the
Direct Placement.
(l) There are no holders of securities of the Company having rights to registration
thereof or preemptive rights to purchase Common Stock except as disclosed in the
Prospectuses. All holders of registration rights have waived such rights with respect to
the Offerings.
(m) The Company and each of its subsidiaries have good and marketable title to all the
properties and assets reflected as owned in the financial statements hereinabove described
(or elsewhere in the Prospectuses), except as disposed of in the ordinary course of
business, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
those, if any, reflected in such financial statements (or elsewhere in the Prospectuses) or
which are not material to the Company and its subsidiaries taken as a whole. The Company
and each of its subsidiaries hold their respective leased properties which are material to
the Company and its subsidiaries taken as a whole under valid and binding leases.
(n) The Company has not taken and will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares.
(o) Subsequent to the respective dates as of which information is given in the
Registration Statement, the Disclosure Package and the Prospectuses, and except as
contemplated by the Prospectuses, the Company and its subsidiaries, taken as a whole, have
not incurred any material liabilities or obligations, direct or contingent, nor entered into
any material transactions not in the ordinary course of business and there has not been any
material adverse change in their condition (financial or otherwise) or results of operations
nor any material change in their capital stock, membership units, short-term debt or
long-term debt.
(p) There is no material document of a character required to be described in the
Registration Statement, the Disclosure Package or the Prospectuses, or to be filed as an
exhibit to the Registration Statement which is not described or filed as required.
(q) Except as described in the Prospectuses, the Company together with its subsidiaries
owns and possesses all right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how, trademarks, trade
names, copyrights, service marks and other proprietary rights (“Trade Rights”) material to
the business of the Company and each of its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries has received any notice of infringement,
misappropriation or conflict from any third party as to such material Trade Rights which has
not been resolved or disposed of and neither the Company nor any of its subsidiaries has
infringed, misappropriated or otherwise conflicted with material Trade Rights of any third
parties, which infringement, misappropriation or conflict would have a Material Adverse
Effect.
(r) The conduct of the business of the Company and each of its subsidiaries is in
compliance in all respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a Material Adverse
Effect.
(s) All offers and sales of the Company’s and its subsidiaries’ capital stock or
membership units, as applicable, prior to the date hereof were at all relevant times exempt
from the registration requirements of the 1933 Act and were duly registered with or the
subject of an available exemption from the registration requirements of the applicable
federal, state and local securities or blue sky laws.
(t) The Company has filed or has a valid extension for filing all necessary federal,
state and local income and franchise tax returns that were required to be filed prior to the
date hereof and has paid all taxes shown as due thereon except where the failure to file
would not have a Material Adverse Effect, and there is no tax deficiency that has been, or
to the knowledge of the Company might be, asserted against the Company or any of its
properties or assets that would or could be expected to have a Material Adverse Effect.
(u) The Company has filed a registration statement pursuant to Section 12(b) of the
Exchange Act to register the Common Stock thereunder, has filed an application to list the
Shares on the Nasdaq Global Market, and has received notification that the listing has been
approved, subject to notice of issuance or sale of the Shares, as the case may be.
(v) The Company (including HCC LLC prior to the Reorganization) has established and
maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under
the Exchange Act) and such controls and procedures are effective in ensuring that material
information relating to the Company, including HCC LLC, is made known to the principal
executive officer and the principal financial officer. The Company has utilized such
controls and procedures to the extent applicable in preparing and evaluating the disclosures
relating to the Company included in the Registration Statement, the Disclosure Package and
the Prospectuses.
(w) The Company (including HCC LLC prior to the Reorganization) maintains a system of
internal accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in accordance
with management’s general or specific
authorization; and (iv) amounts reflected on the Company’s consolidated balance sheet
for assets are compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(x) The Company is not, and does not intend to conduct its business in a manner in
which it would become, an “investment company” as defined in Section 3(a) of the Investment
Company Act of 1940, as amended (“Investment Company Act”).
(y) No transaction has occurred between or among the Company or HCC LLC and any of
their respective officers or directors, stockholders or any affiliate or affiliates of any
such officer or director or stockholder that is required to be described in and is not
described in the Registration Statement and the Prospectuses.
(z) The Company’s board of directors has validly appointed an audit committee whose
composition, subject to applicable phase-in periods, satisfies the requirements of Rule
4350(d)(2) of the Marketplace Rules of the Nasdaq Stock Market (the “NASD Rules”), and the
board of directors or the audit committee has adopted a charter that satisfies the
requirements of Rule 4350(d)(1) of the NASD Rules.
(aa) The Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are customary in the
businesses in which they are engaged or propose to engage after giving effect to the
transactions described in the Prospectuses. All policies of insurance and fidelity or
surety bonds insuring the Company, its subsidiaries and their respective businesses, assets,
employees, officers and directors are in full force and effect in all material respects; the
Company and its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and, except as disclosed in the Registration
Statement, the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a cost that is not
materially greater than the current cost.
(bb) The Company has taken all necessary actions to ensure that, upon the effectiveness
of the Registration Statement, it will be in compliance in all material respects with all
provisions of the Xxxxxxxx-Xxxxx Act and all rules and regulations promulgated thereunder or
implementing the provisions thereof that are then in effect and which the Company is
required to comply with as of the effectiveness of the Registration Statement, and is taking
steps to ensure that it will be in compliance in all material respects with other provisions
of the Xxxxxxxx-Xxxxx Act not currently in effect, upon the effectiveness of such
provisions, or which will become applicable to the Company at all times after the
effectiveness of the Registration Statement.
(cc) The Company has not offered, or caused the Underwriters to offer, any Reserved
Shares with the specific intent to unlawfully influence (i) a customer or supplier of the
Company or any of its subsidiaries to alter the customer’s or supplier’s level or type of
business with the Company or any of its subsidiaries or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its products.
(dd) None of the Company and its subsidiaries is involved in any labor dispute that
would have a Material Adverse Effect nor, to the knowledge of the Company, is any such
dispute threatened. The Company is not aware of any threatened or pending litigation
between the Company and any of its executive officers and has not received notice from any
of its executive officers that such officer does not intend to remain in the employment of
the Company.
Section 3. Representations and Warranties of the Underwriters. The Representative,
on behalf of the several Underwriters, represents and warrants to the Company that the information
set forth (a) on the cover page of the Public Offering Prospectus with respect to price,
underwriting discount, direct placement fee and terms of the Public Offering and (b) in paragraphs
3, 11 and 12 under “Underwriting” in the Public Offering Prospectus was furnished to the Company by
and on behalf of the Underwriters for use in connection with the preparation of the Registration
Statement and is correct and complete in all material respects.
Section 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters named in Schedule A
hereto, and the Underwriters agree, severally and not jointly, to purchase the Firm Shares from the
Company at the price per share set forth in the Pricing Agreement. The obligation of each
Underwriter to the Company shall be to purchase from the Company that number of Firm Shares set
forth opposite the name of such Underwriter in Schedule A hereto. The initial public offering
price and the purchase price shall be set forth in the Pricing Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under Rule 15c6-1 under
the Exchange Act, (or the third business day if required under Rule 15c6-1 under the Exchange Act
or unless postponed in accordance with the provisions of Section 12) following the date the
Registration Statement becomes effective (or, if the Company has elected to rely upon Rule 430A,
the fourth business day, if permitted under Rule 15c6-1 under the Exchange Act, (or the third
business day if required under Rule 15c6-1 under the Exchange Act) after execution of the Pricing
Agreement), or such other time not later than ten business days after such date as shall be agreed
upon by the Representative and the Company, the Company will deliver to you at the offices of
counsel for the Underwriters or through the facilities of The Depository Trust Company for the
accounts of the several Underwriters, certificates representing the Firm Shares to be sold by it,
against payment of the purchase price therefor by delivery of federal or other immediately
available funds, by wire transfer or otherwise, to the Company. Such time of delivery and payment
is herein referred to as the “First Closing Date.” The certificates for the Firm Shares so to be
delivered will be in such denominations and registered in such names as you request by notice to
the Company prior to 10:00 A.M., Chicago Time, on the second business day preceding the First
Closing Date, and will be made available at the Company’s expense for checking and packaging by the
Representative at 10:00 A.M., Chicago Time, on the business day preceding the First Closing Date.
Payment for the Firm Shares so to be delivered shall be made at the time and in the manner
described above at the offices of counsel for the Underwriters.
In addition, on the basis of the representations, warranties and agreements herein contained,
but subject to the terms and conditions herein set forth, the Company hereby grants an option to
the several Underwriters to purchase, severally and not jointly, up to an aggregate of 210,000
Option Shares, at the same purchase price per share to be paid for the Firm Shares, for use solely
in covering any overallotments made by the Underwriters in the sale and distribution of the Firm
Shares. The option granted hereunder may be exercised at any time (but not more than once) within
30 days after the date of the initial public offering of the Public Offering Shares upon notice by
you to the Company setting forth the aggregate number of Option Shares as to which the Underwriters
are exercising the option, the names and denominations in which the certificates for such shares
are to be registered and the time and place at which such certificates will be delivered. Such
time of delivery (which may not be earlier than the First Closing Date), being herein referred to
as the “Second Closing Date,” shall be determined by you, but if at any time other than the First
Closing Date, shall not be earlier than three nor later than 10 full business days after delivery
of such notice of exercise. The number of Option Shares to be purchased by each Underwriter shall
be determined by multiplying the number of Option Shares to be sold by a fraction, the numerator of
which is the number of Firm Shares to be purchased by such Underwriter as set forth
opposite its name in Schedule A and the denominator of which is the total number of Firm
Shares (subject to such adjustments to eliminate any fractional share purchases as you in your
absolute discretion may make). Certificates for the Option Shares will be made available at the
Company’s expense for checking and packaging at 10:00 A.M., Chicago Time, on the first full
business day preceding the Second Closing Date. The manner of payment for and delivery of the
Option Shares shall be the same as for the Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to accept delivery of
its Public Offering Shares, to make payment and to receipt therefor. You, individually and not as
the Representative of the Underwriters, may make payment for any Public Offering Shares to be
purchased by any Underwriter whose funds shall not have been received by you by the First Closing
Date or the Second Closing Date, as the case may be, for the account of such Underwriter, but any
such payment shall not relieve such Underwriter from any obligation hereunder.
Section 5. Covenants of the Company and HCC LLC. The Company and HCC LLC jointly and
severally covenant and agree that:
(a) The Company will advise you promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the institution of
any proceedings for that purpose, or of any notification of the suspension of qualification
of the Shares for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and if the Company becomes the subject of a proceeding
under Section 8A of the 1933 Act in connection with the offering of the Shares, and will
also advise you promptly of any request of the Commission for amendment or supplement of the
Registration Statement, of any preliminary prospectus or of the Prospectuses, or for
additional information.
(b) The Company will give you notice of its intention to file or prepare any amendment
to the Registration Statement (including any post-effective amendment) or any Rule 462(b)
Registration Statement or any amendment or supplement to the Public Offering Prospectus or
the Direct Placement Prospectus (including any revised prospectus which the Company proposes
for use by the Underwriters in connection with the Public Offering or by the Company
connection with the Direct Placement which differs from the applicable prospectus on file at
the Commission at the time the Registration Statement became or becomes effective, whether
or not such revised prospectus is required to be filed pursuant to Rule 424(b)) and will
furnish you with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which you or counsel for the
Underwriters shall reasonably object.
(c) If at any time when a prospectus relating to the Shares is required to be delivered
under the 1933 Act any event occurs as a result of which either the Public Offering
Prospectus or the Direct Placement Prospectus, including any amendments or supplements,
would include an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is necessary at any time
to amend either the Public Offering Prospectus or the Direct Placement Prospectus, including
any amendments or supplements thereto and including any revised prospectus which the Company
proposes for use by the Underwriters in connection with the Public Offering or the Direct
Placement that differs from the applicable prospectus on file with the Commission at the
time of effectiveness of the Registration Statement, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) to comply with the 1933 Act, the Company
promptly will advise you thereof and will promptly prepare and
file with the Commission an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance; and, in case any Underwriter
is required to deliver a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of such Underwriter,
will prepare promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the 1933 Act.
(d) If at any time following the 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 or included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary to make the statements therein, in light of
the circumstances, prevailing at that subsequent time, not misleading, the Company will
promptly notify the Representative and will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(e) Neither the Company nor any of its subsidiaries will acquire any capital stock of
the Company prior to the earlier of the Second Closing Date or termination or expiration of
the related option nor will the Company declare or pay any dividend or make any other
distribution upon the Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the related option,
except in either case as contemplated by the Prospectuses.
(f) The Company will make generally available to its security holders an earnings
statement (which need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement which will satisfy the provisions of
the last paragraph of Section 11(a) of the 1933 Act no later than the date on which the
Company would be required to file its reports under the Exchange Act containing such
information.
(g) During such period as a prospectus is required by law to be delivered in connection
with offers and sales of the Public Offering Shares by an Underwriter or dealer, the Company
will furnish to you at its expense, subject to the provisions of subsection (d) hereof,
copies of the Registration Statement, the Public Offering Prospectus, any Permitted Free
Writing Prospectus hereinafter defined, each preliminary prospectus and all amendments and
supplements to any such documents in each case as soon as available and in such quantities
as you may reasonably request, for the purposes contemplated by the 1933 Act.
(h) The Company will cooperate with the Underwriters in qualifying or registering the
Shares for sale under the blue sky laws of such jurisdictions as you designate, and will
continue such qualifications in effect so long as reasonably required for the distribution
of the Shares. The Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such jurisdiction where it is not
currently qualified or where it would be subject to taxation as a foreign corporation.
(i) During the period of two years hereafter, the Company will furnish you and each of
the other Underwriters with a copy or otherwise have electronically available on its website
(i) as soon as practicable after the filing thereof, of each report filed by the Company
with the Commission, any securities exchange or FINRA; (ii) as soon as practicable after the
release thereof, of each material press release in respect of the Company; and (iii) as soon
as available, of each report of the Company mailed to stockholders.
(j) The Company will use the net proceeds received by it from the sale of the Shares
being sold by it in the manner specified in the Prospectuses.
(k) If, at the time of effectiveness of the Registration Statement, any information
shall have been omitted therefrom in reliance upon Rule 430A, then immediately following the
execution of the Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A and Rule 424(b), copies of an
amended Public Offering Prospectus and an amended Direct Placement Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Public Offering Prospectus and an amended Direct Placement
Prospectus), containing all information so omitted. If required, the Company will prepare
and file, or transmit for filing, a Rule 462(b) Registration Statement not later than the
date of the execution of the Pricing Agreement. If a Rule 462(b) Registration Statement is
filed, the Company shall make payment of, or arrange for payment of, the additional
registration fee owing to the Commission required by Rule 111.
(l) The Company will comply with all registration, filing and reporting requirements of
the Exchange Act and the Nasdaq Global Market.
(m) For so long as the Company is subject to the Exchange Act, as required under the
Exchange Act, the Company and its subsidiaries will maintain such controls and other
procedures, including without limitation those required by the Xxxxxxxx-Xxxxx Act and the
applicable regulations thereunder, that are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, including without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and its principal financial officer,
or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure, to ensure that material information relating to Company, including its
subsidiaries, is made known to them by others within those entities.
(n) For so long as the Company is subject to the Exchange Act, as required under the
Exchange Act, the Company and its subsidiaries will maintain a system of internal accounting
controls designed to provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) amounts reflected on the Company’s consolidated balance sheet for
assets is compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(o) Except for the Direct Placement and in connection with the Reorganization, the
Company agrees not to, directly or indirectly, (i) offer, sell (including “short” selling),
assign, transfer, encumber, pledge, contract to sell, grant an option to purchase, establish
an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange
Act, or otherwise dispose of any shares of Common Stock or securities convertible or
exchangeable into, or exercisable for, Common Stock held of record or beneficially owned
(within the meaning of Rule 13d-3 under the Exchange Act); or (ii) enter into any swap or
other arrangement that transfers all or a portion of the economic consequences associated
with the ownership of any Common Stock
(except, in each case, Common Stock sold pursuant to this Agreement or issued pursuant
to currently outstanding options, warrants or convertible securities and except for options
or stock awards described in the Prospectuses to be granted or awarded on the date hereof or
in the future under stock option plans described in the Prospectuses) without the prior
written consent of the Representative for a period of 180 days after this Agreement becomes
effective; provided, however, that if (1) during the last 17 days of the initial Lock-Up
Period, the Company releases earnings results or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the initial Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period beginning
on the last day of the initial Lock-Up Period, then in either case the Lock-Up Period will
be extended until the expiration of the 18-day period beginning on the date of release of
the earnings results or the occurrence of the material news or material event, as
applicable, unless the Representative waives, in writing, such extension.
(p) The Company and HCC LLC shall use their respective best efforts to consummate the
Reorganization as promptly as practicable following the execution of this Agreement, but in
no event later than the business day immediately preceding the contemplated First Closing
Date.
Section 6. Covenants of the Company and the Underwriters. The Company represents and
agrees that, unless it obtains the prior consent of the Representative, and each Underwriter,
severally and not jointly, 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 Shares
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. Any such free writing prospectus consented to by the Representative or by the
Company and the Representative, as the case may be, is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated and 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.
Section 7. Payment of Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement becomes effective as to all of its provisions or is
terminated, the Company agrees to pay (i) all costs, fees and expenses (other than legal fees and
disbursements of counsel for the Underwriters and the expenses incurred by the Underwriters)
incurred in connection with the performance of the Company’s obligations hereunder, including
without limiting the generality of the foregoing, all fees and expenses of legal counsel for the
Company and of the Company’s independent accountants, all costs and expenses incurred in connection
with the preparation, printing, filing and distribution (including reasonable electronic delivery)
of the Registration Statement, each preliminary prospectus, any Permitted Free Writing Prospectus
and the Public Offering Prospectus (including all exhibits and financial statements), and all
amendments and supplements provided for herein, this Agreement, the Pricing Agreement and a blue
sky memorandum, (ii) all costs, fees and expenses (including legal fees and disbursements of
counsel for the Underwriters) incurred by the Underwriters in connection with qualifying or
registering all or any part of the Public Offering Shares for offer and sale under blue sky laws,
including the preparation of a blue sky memorandum relating to the Public Offering Shares and
clearance of such offering with FINRA; (iii) all fees and expenses of the Company’s transfer agent,
printing of the certificates for the Public Offering Shares and all transfer taxes, if any, with
respect to the sale and delivery of the Public Offering Shares to the several Underwriters; (iv)
all costs, fees and expenses (including legal fees of counsel for the Underwriters) incurred by the
Underwriters in connection with matters related to the Reserved Shares which are designated by the
Company for sale to Invitees; and (v) all costs, fees and expenses (including without limitation
any
damages or other amounts payable in connection with legal or contractual liability) associated
with the reforming of any contracts for sale of the Public Offering Shares made by the Underwriters
caused by a breach of the representation contained in the second paragraph of Section 2(b).
Section 8. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Firm Shares on the First Closing Date and the
Option Shares on the Second Closing Date shall be subject to the accuracy of the representations
and warranties on the part of the Company herein set forth as of the date hereof and as of the
First Closing Date or the Second Closing Date, as the case may be, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective either prior to the
execution of this Agreement or not later than 1:00 P.M., Chicago Time, on the first full
business day after the date of this Agreement, or such later time as shall have been
consented to by you but in no event later than 1:00 P.M., Chicago Time, on the third full
business day following the date hereof; and prior to the First Closing Date or the Second
Closing Date, as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that purpose shall have
been instituted or shall be pending or, to the knowledge of the Company or you, shall be
contemplated by the Commission. If the Company has elected to rely upon Rule 430A, the
information concerning the initial public offering price of the Public Offering Shares, the
offering price of the Direct Placement Shares and price-related information shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) in the manner and within
the prescribed time period (without reliance on Rule 424(b)(8)) and the Company will provide
evidence satisfactory to the Representative of such timely filing (or a post-effective
amendment providing such information shall have been filed and declared effective in
accordance with the requirements of Rules 430A and 424(b)). If a Rule 462(b) Registration
Statement is required, such Registration Statement shall have been transmitted to the
Commission for filing and become effective within the prescribed time period and, prior to
the First Closing Date, the Company shall have provided evidence of such filing and
effectiveness in accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky laws of such
states as shall have been specified by the Representative.
(c) The legality and sufficiency of the authorization, issuance and sale or transfer
and sale of the Public Offering Shares hereunder and the Direct Placement Shares pursuant to
the Direct Placement, the validity and form of the certificates representing the Shares, the
execution and delivery of this Agreement and the Pricing Agreement, and all corporate
proceedings and other legal matters incident thereto, and the form of the Registration
Statement, the Disclosure Package, the Public Offering Prospectus and the Direct Placement
Prospectus (except financial statements) shall have been approved by counsel for the
Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration Statement, the
Disclosure Package, the Public Offering Prospectus or the Direct Placement Prospectus, or
any amendment or supplement thereto, contains an untrue statement of fact, which, in the
opinion of counsel for the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein or necessary to
make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there shall not have
occurred any material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or properties of the Company or
its subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which, in the judgment of the Representative, makes it impractical or inadvisable
to proceed with the Public Offering, Direct Placement or purchase of the Public Offering
Shares as contemplated hereby or the Direct Placement Shares as contemplated by the Direct
Placement.
(f) There shall have been furnished to you, as Representative of the Underwriters, on
the First Closing Date or the Second Closing Date, as the case may be, except as otherwise
expressly provided below:
(i) An opinion of XxXxxxxxx Will & Xxxxx LLP, counsel for the Company,
addressed to the Underwriters and dated the First Closing Date or the Second Closing
Date, as the case may be, substantially in the form set forth on Exhibit B hereto.
(ii) An opinion of Ice Xxxxxx LLP, Indiana counsel for the Company, addressed
to the Underwriters and dated the First Closing Date or the Second Closing Date, as
the case may be, substantially in the form set forth on Exhibit C hereto.
(iii) Such opinion or opinions of Sidley Austin LLP, counsel for the
Underwriters, dated the First Closing Date or the Second Closing Date, as the case
may be, with respect to the incorporation of the Company, the validity of the Public
Offering Shares, the Registration Statement, the Disclosure Package, the Public
Offering Prospectus and the Direct Placement Prospectus, and other related matters
as you may reasonably require, and the Company shall have furnished to such counsel
such documents and shall have exhibited to them such papers and records as they
reasonably request for the purpose of enabling them to pass upon such matters.
(iv) A certificate of the chief executive officer and the principal financial
officer of the Company, dated the First Closing Date or the Second Closing Date, as
the case may be, to the effect that:
(1) the representations and warranties of the Company set forth in
Section 2 of this Agreement are true and correct as of the date of this
Agreement and as of the First Closing Date or the Second Closing Date, as
the case may be, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(2) the Commission has not issued an order preventing or suspending the
use of the Public Offering Prospectus, the Direct Placement Prospectus or
any preliminary prospectus filed as a part of the Registration Statement, or
any amendment thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and to the best knowledge of the
respective signers, no proceedings for that purpose have been instituted or
are pending or contemplated under the 1933 Act; and
(3) subsequent to the date of the most recent financial statements
included in the Registration Statement and Prospectuses, and except as set
forth or contemplated in the Prospectuses, (A) none of the Company and its
consolidated subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
not in the ordinary course of business, and (B) there has not been any
change that has had or would have a material adverse effect upon the Company
and its subsidiaries taken as a whole or any material change in their
short-term debt or long-term debt taken as a whole.
The delivery of the certificate provided for in this subparagraph shall be and
constitute a representation and warranty of the Company and not of its officers
personally as to the facts required in the immediately foregoing clauses to be set
forth in said certificate.
(v) At the time the Pricing Agreement is executed and also on the First Closing
Date or the Second Closing Date, as the case may be, there shall be delivered to you
a letter addressed to you, as Representative of the Underwriters, from KPMG LLP, an
independent registered public accounting firm, the first one to be dated the date of
the Pricing Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a second closing) to be dated the Second Closing Date, to
the effect set forth in Schedule B. There shall not have been any change or
decrease specified in the letters referred to in this subparagraph which makes it
impractical or inadvisable in the judgment of the Representative to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(vi) A certificate of the chief executive officer and the principal financial
officer of the Company, dated the First Closing Date or the Second Closing Date, as
the case may be, regarding certain statistical or financial figures included in the
Prospectuses which you may reasonably request and which have not been otherwise
verified by the letters referred to in clause (v) above.
(vii) Such further certificates and documents as you may reasonably request.
All such opinions, certificates, letters and documents shall be in compliance with the
provisions hereof only if they are approved by you and Sidley Austin LLP, counsel for the
Underwriters, which approval shall not be unreasonably withheld. The Company shall furnish you
with such manually signed or conformed copies of such opinions, certificates, letters and documents
as you request.
(g) The Company and HCC LLC shall have consummated the Reorganization as provided
herein and described in the Disclosure Package.
(h) The Company shall have consummated the Direct Placement as described in the
Disclosure Package.
If any condition to the Underwriters’ obligations hereunder to be satisfied prior to or at the
First Closing Date is not so satisfied, this Agreement at your election will terminate upon
notification to the Company without liability on the part of any Underwriter or the Company, except
for the expenses to be paid or reimbursed by the Company pursuant to Sections 7 and 9 hereof and
except to the extent provided in Section 11 hereof.
Section 9. Reimbursement of Underwriters’ Expenses. If the sale to the Underwriters
of the Firm Shares on the First Closing Date is not consummated because any condition of the
Underwriters’ obligations hereunder is not satisfied or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply with any provision
hereof, unless
such failure to satisfy such condition or to comply with any provision hereof is due to the
default or omission of any Underwriter, the Company agrees to reimburse you and the other
Underwriters upon demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by you and them in connection
with the proposed purchase and the sale of the Public Offering Shares. Any such termination shall
be without liability of any party to any other party except that the provisions of this Section 9,
Section 7 and Section 11 shall at all times be effective and shall apply.
Section 10. Effectiveness of Registration Statement. You and the Company will use
your and its best efforts to cause the Registration Statement to become effective, if it has not
yet become effective, and to prevent the issuance of any stop order suspending the effectiveness of
the Registration Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
Section 11. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within the meaning of the
1933 Act or the Exchange Act against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or such controlling person may become subject under the 1933 Act, the
Exchange Act or other federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation if such settlement is effected with the written consent
of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information deemed to be part
of the Registration Statement at the time of effectiveness pursuant to Rule 430A, any preliminary
prospectus, any Issuer Free Writing Prospectus, the Public Offering Prospectus or the Direct
Placement Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact , in the case of the Registration
Statement or any amendment or supplement thereto, required to be stated therein or necessary to
make the statements therein not misleading and, in the case of any preliminary prospectus, any
Issuer Free Writing Prospectus, the Public Offering Prospectus or the Direct Placement Prospectus,
or any amendment or supplement thereto, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any preliminary prospectus, any Issuer Free Writing Prospectus, the Public
Offering Prospectus, the Direct Placement Prospectus, or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of any Underwriter through the Representative, specifically for use therein. In addition to its
other obligations under this Section 11(a), the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission, described in this
Section 11(a), upon receipt of notices setting forth in reasonable detail the matter for which
indemnification is sought, it will reimburse the Underwriters on a monthly basis for all reasonable
legal and other expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the Company’s obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. This indemnity agreement will be in addition
to any liability which the Company may otherwise have, it being understood that, notwithstanding
anything to the contrary contained herein, neither the Underwriters nor any controlling person
shall be entitled to duplicate indemnification hereunder to the extent the Underwriters or such
controlling person has actually
received indemnification payments pursuant to the engagement letter governing the Direct
Placement or otherwise.
(b) Each Underwriter will severally indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the 1933 Act or the Exchange Act, against any losses,
claims, damages or liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained in the Registration Statement,
any preliminary prospectus, any Issuer Free Writing Prospectus, the Public Offering Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, any Issuer Free Writing Prospectus, the Public
Offering Prospectus, or any amendment or supplement thereto in reliance upon and in conformity with
Section 3 of this Agreement or any other written information furnished to the Company by such
Underwriter through the Representative specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or any such director,
officer or controlling person in connection with investigating or defending any such loss, claim,
damage, liability or action. In addition to their other obligations under this Section 11(b), the
Underwriters agree that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any statement or omission,
or any alleged statement or omission, described in this Section 11(b), they will reimburse the
Company on a monthly basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and enforceability of
the Underwriters’ obligation to reimburse the Company for such expenses and the possibility that
such payments might later be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 11 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 11, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party except to the extent that the indemnifying
party was prejudiced by such failure to notify. In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such
action include both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded, based on advice of outside counsel, that there may be legal
defenses available to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to represent both of
them, the indemnified party or parties shall have the right to select separate counsel to assume
such legal defense and otherwise to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 11 for any legal or
other expenses subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the expenses of more than
one separate counsel, approved by the Representative in the case of paragraph (a) representing all
indemnified parties not having different or additional defenses or potential conflicting interest
among themselves who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of the indemnifying
party. No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such indemnified
party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 11 is unavailable to an indemnified
party under paragraphs (a) or (b) hereof in respect of any losses, claims, damages or liabilities
referred to therein, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from the Public Offering
or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion, in the case of the
Company, as the total price paid to the Company for the Public Offering Shares by the Underwriters
(net of underwriting discount but before deducting expenses) bears to, and in the case of the
Underwriters, as the underwriting discount received by them bears to, the total of such amounts
paid to the Company for the Public Offering Shares and received by the Underwriters as underwriting
discount, in each case as contemplated by the Public Offering Prospectus. The relative fault of
the Company and the Underwriters shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending any action or
claim.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11(d) were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section 11(d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Public Offering Shares 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 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. The Underwriters’ obligations
to contribute pursuant to this Section 11(d) are several in proportion to their respective
underwriting commitments and not joint.
(e) In connection with the offer and sale of the Reserved Shares, the Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling person may become
subject under the 1933 Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company) (i) 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 Shares or arising out of or based upon 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; or (ii) arising out of or based upon the failure of any Invitee to pay for
and accept delivery of Reserved Shares which have been orally confirmed for purchase by any Invitee
by the end of the first business day after the date of this Agreement, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally judicially determined to
have resulted from the bad faith, wilful misconduct or gross negligence of any such Underwriter.
(f) The provisions of this Section 11 shall survive any termination of this Agreement.
Section 12. Default of Underwriters. It shall be a condition to the agreement and obligation
of the Company to sell and deliver the Public Offering Shares hereunder, and of each Underwriter to
purchase the Public Offering Shares hereunder, that, except as hereinafter in this paragraph
provided, each of the Underwriters shall purchase and pay for all Public Offering Shares agreed to
be purchased by such Underwriter hereunder upon tender to the Representative of all such Public
Offering Shares in accordance with the terms hereof. If any Underwriter or Underwriters default in
their obligations to purchase Public Offering Shares hereunder on the First Closing Date and the
aggregate number of Public Offering Shares which such defaulting Underwriter or Underwriters agreed
but failed to purchase does not exceed 10 percent of the total number of Public Offering Shares
which the Underwriters are obligated to purchase on the First Closing Date, the Representative may
make arrangements satisfactory to the Company for the purchase of such Public Offering Shares by
other persons, including any of the Underwriters, but if no such arrangements are made by such date
the nondefaulting Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Public Offering Shares which such defaulting Underwriters
agreed but failed to purchase on such date. If any Underwriter or Underwriters so default and the
aggregate number of Public Offering Shares with respect to which such default or defaults occur is
more than the above percentage and arrangements satisfactory to the Representative and the Company
for the purchase of such Public Offering Shares by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any nondefaulting
Underwriter or the Company, except for the expenses to be paid by the Company pursuant to Section 7
hereof and except to the extent provided in Section 11 hereof.
In the event that Public Offering Shares to which a default relates are to be purchased by the
nondefaulting Underwriters or by another party or parties, the Representative or the Company shall
have the right to postpone the First Closing Date for not more than seven business days in order
that the necessary changes in the Registration Statement, the Public Offering Prospectus and any
other documents, as well as any other arrangements, may be effected. As used in this Agreement,
the term
“Underwriter” includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
Section 13. Effective Date. This Agreement shall become effective immediately as to
Sections 7, 9, 11 and 14 and as to all other provisions at 10:00 A.M., Chicago Time, on the day
following the date upon which the Pricing Agreement is executed and delivered, unless such a day is
a Saturday, Sunday or holiday (and in that event this Agreement shall become effective at such hour
on the business day next succeeding such Saturday, Sunday or holiday); but this Agreement shall
nevertheless become effective at such earlier time after the Pricing Agreement is executed and
delivered as you may determine on and by notice to the Company or by release of any Public Offering
Shares for sale to the public. For the purposes of this Section, the Public Offering Shares shall
be deemed to have been so released upon the release for publication of any newspaper advertisement
relating to the Public Offering Shares or upon the release by you of written communications (i)
advising Underwriters that the Public Offering Shares are released for public offering, or (ii)
offering the Public Offering Shares for sale to securities dealers, whichever may occur first.
Section 14. Termination. Without limiting the right to terminate this Agreement
pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to you or by you by
notice to the Company at any time prior to the time this Agreement shall become effective as
to all its provisions, and any such termination shall be without liability on the part of
the Company to any Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or of any
Underwriter to the Company.
(b) This Agreement may also be terminated by you prior to the First Closing Date, and
the option referred to in Section 4, if exercised, may be cancelled at any time prior to the
Second Closing Date, if (i) trading in securities on the New York Stock Exchange or the
Nasdaq Stock Market shall have been suspended or minimum prices shall have been established
on such exchange or market, or (ii) a banking moratorium shall have been declared by
Illinois, New York, or United States authorities, or (iii) there shall have been any
material adverse change in financial markets or in political, economic or financial
conditions which, in the opinion of the Representative, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the terms set forth in
the Public Offering Prospectus or materially and adversely affects the market for the
Shares, or (iv) there shall have been an outbreak of major armed hostilities between the
United States and any foreign power or terrorist organization which in the opinion of the
Representative makes it impractical or inadvisable to offer or sell the Shares. Any
termination pursuant to this paragraph (b) shall be without liability on the part of any
Underwriter to the Company or on the part of the Company to any Underwriter (except for
expenses to be paid or reimbursed pursuant to Section 7 hereof and except to the extent
provided in Section 11 hereof).
Section 15. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the Company, of its
officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, principals, members, officers or
directors or any controlling person, and will survive delivery of and payment for the Shares sold
hereunder.
Section 16. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters will be mailed, delivered or telegraphed and confirmed to you c/o Xxxxxxx Xxxxx &
Company, L.L.C., 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, with copies to Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxxx, c/o Xxxxxx Xxxxxx LLP, Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; if
sent to the Company will be mailed, delivered or telegraphed and confirmed to the Company at its
corporate headquarters with a copy to Xxxx X. Xxxxxx and Xxxxx X. Xxxxxx, c/x XxXxxxxxx Will &
Xxxxx LLP, 000 X. Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000.
Section 17. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Public Offering Shares pursuant to this Agreement,
including the determination of the initial public offering price of the Public Offering Shares, and
any related discounts and commissions, is an arm’s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with
the Public Offering 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 its 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 with respect to the Public Offering or the
process leading thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company on other matters) and no Underwriter has any obligation to the Company with
respect to the Public Offering 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 the Company and (e) the Underwriters have not
provided any legal, accounting, regulatory or tax advice with respect to the Public Offering and
the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
Section 18. Successors. This Agreement and the Pricing Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors and controlling
persons referred to in Section 11, and no other person will have any right or obligation hereunder.
The term “successors” shall not include any purchaser of the Public Offering Shares as such from
any of the Underwriters merely by reason of such purchase.
Section 19. Representation of Underwriters. You will act as Representative for the
several Underwriters in connection with this financing, and any action under or in respect of this
Agreement taken by you will be binding upon all the Underwriters.
Section 20. Partial Unenforceability. If any section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, such determination shall not
affect the validity or enforceability of any other section, paragraph or provision hereof.
Section 21. Applicable Law. This Agreement and the Pricing Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois.
Section 22. Guarantee. HCC LLC hereby guarantees to the Underwriters the performance
by the Company of all covenants, agreements, terms, conditions, undertakings, indemnities and other
obligations to be performed and observed by the Company under this Agreement.
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters including you, all in accordance with its terms.
| Very truly yours, Heritage-Crystal Clean, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Heritage-Crystal Clean, LLC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
confirmed and accepted as of
the date first above written.
Xxxxxxx Xxxxx & Company, L.L.C.
Acting as Representative of the
several Underwriters named in
Schedule A.
several Underwriters named in
Schedule A.
By: Xxxxxxx Xxxxx & Company, L.L.C.
By:
Principal
Principal
