Synagro Technologies, Inc. 17,129,710 Shares Common Stock UNDERWRITING AGREEMENT dated May 10, 2006 Banc of America Securities LLC
EXHIBIT 1.1
Synagro Technologies, Inc.
17,129,710 Shares
Common Stock
dated May 10, 0000
Xxxx xx Xxxxxxx Securities LLC
May 10, 0000
XXXX XX XXXXXXX SECURITIES LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Introductory. Synagro Technologies, Inc., a Delaware corporation (the
“Company”), proposes to issue and sell to Banc of America Securities LLC (the
“Underwriter”) an aggregate of 2,000,000 shares of its Common Stock, par value $0.002 per
share (the “Common Stock”); and the stockholders of the Company named in Schedule A
(collectively, the “Selling Stockholders”) severally propose to sell to the Underwriter an
aggregate of 15,129,710 shares of Common Stock. The 2,000,000 shares of Common Stock to be sold by
the Company and the 15,129,710 shares of Common Stock to be sold by the Selling Stockholders are
collectively called the “Firm Shares.” In addition, the Company has granted to the
Underwriter an option to purchase up to an additional 2,000,000 shares (the “Optional
Shares”) of Common Stock, as provided in Section 2. The Firm Shares and, if and to the extent
such option is exercised, the Optional Shares are collectively called the “Shares.”
The Company and each of the Selling Stockholders hereby confirm their respective agreements
with the Underwriter as follows:
Section 1. A. Representations and Warranties of the Company. The Company represents,
warrants and covenants to the Underwriter as follows:
(a) Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 (File No. 333-133617), which contains a base prospectus (the
“Base Prospectus”), to be used in connection with the public offering and sale of
the Shares. Such registration statement, as amended, including the financial statements,
exhibits and schedules thereto, at each time of effectiveness under the Securities Act of
1933 and the rules and regulations promulgated thereunder (collectively, the
“Securities Act”), including any required information deemed to be a part thereof
at the time of effectiveness pursuant to Rule 430B under the Securities Act or the
Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder
(collectively, the “Exchange Act”), is called the “Registration Statement.”
Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the “Rule 462(b) Registration Statement,” and from and
after the date and time of filing of the Rule 462(b) Registration Statement the term
“Registration Statement” shall include the Rule 462(b) Registration Statement. Any
preliminary prospectus supplement to the Base Prospectus that describes the Shares and the
offering thereof and is used prior to filing of the final prospectus is called, together
with the Base Prospectus, a “preliminary prospectus.” The term
“Prospectus” shall mean the final prospectus relating to the Shares that is first
filed pursuant to Rule 424(b) after the date and time that this Agreement is executed and
delivered by the parties hereto (the “Execution Time”). Any reference herein to
the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act; any reference to any amendment or supplement to any
preliminary prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such preliminary prospectus or Prospectus, as the case
may be, under the Exchange Act, and incorporated by reference in such preliminary
prospectus or Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Registration Statement that is incorporated by reference in the Registration
Statement.
(b) Compliance with Registration Requirements. The Registration Statement has
been declared effective by the Commission under the Securities Act. The Company has
complied to the Commission’s satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the effectiveness of the
Registration Statement is in effect, the Commission has not issued any order or notice
preventing or suspending the use of the Registration Statement, any preliminary prospectus
or the Prospectus and no proceedings for such purpose have been instituted or are pending
or, to the best knowledge of the Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied in all material
respects with the Securities Act and the rules thereunder. Each of the Registration
Statement and any post-effective amendment thereto, at each time of effectiveness and at
the date hereof, complied and will comply in all material respects with the Securities Act
and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements
therein not misleading. The Prospectus, as amended or supplemented, as of its date, at the
date hereof, at the time of any filing pursuant to Rule 424(b), at the Closing Date (as
defined herein) and at any Subsequent Closing Date (as defined herein), did not and will
not
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contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and warranties set forth in the
two immediately preceding sentences do not apply to statements in or omissions from the
Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein, it being understood and agreed that the only such information
furnished by the Underwriter consists of the information described as such in Section 8
hereof. There is no contract or other document required to be described in the Prospectus
or to be filed as exhibit to the Registration Statement that has not been described or
filed as required.
The documents incorporated by reference in the Prospectus, when they became effective
or were filed with the Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable. Any further
documents so filed and incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder.
(c) Disclosure Package. The term “Disclosure Package” shall mean
(i) the Base Prospectus, including any preliminary prospectus, (ii) the
issuer free writing prospectuses as defined in Rule 433 of the Securities Act (each, an
“Issuer Free Writing Prospectus”), if any, identified in Schedule B hereto,
(iii) any other free writing prospectus that the parties hereto shall hereafter
expressly agree in writing to treat as part of the Disclosure Package and (iv) a
schedule indicating the number of Shares being sold and the price at which the Shares will
be sold to the public. As of 7:00 p.m. (Eastern time) on the date of execution and
delivery of this Agreement (the “Applicable Time”), the Disclosure Package did not
contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from the Disclosure Package based upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use therein, it
being understood and agreed that the only such information furnished by the Underwriter
consists of the information described as such in Section 8 hereof.
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(d) Company Not Ineligible Issuer. (i) At the earliest time after the
filing of the Registration Statement relating to the Shares that the Company or another
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the
Securities Act and (ii) as of the date of the execution and delivery of this
Agreement (with such date being used as the determination date for purposes of this clause
(ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the
Securities Act), without taking account of any determination by the Commission pursuant to
Rule 405 of the Securities Act that it is not necessary that the Company be considered an
Ineligible Issuer.
(e) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as
of its issue date and at all subsequent times through the completion of the offering of
Shares under this Agreement or until any earlier date that the Company notified or notifies
the Underwriter as described in the next sentence, did not, does not and will not include
any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information contained
in the Registration Statement, the Company has promptly notified or will promptly notify
the Underwriter and has promptly amended or supplemented or will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict. The foregoing two sentences do not apply to statements in or omissions from
any Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein, it being
understood and agreed that the only such information furnished by the Underwriter consists
of the information described as such in Section 8 hereof.
(f) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the last Subsequent Closing Date
(as defined below) and the completion of the Underwriter’s distribution of the Shares, any
offering material in connection with the offering and sale of the Shares other than a
preliminary prospectus, the Prospectus, any Issuer Free Writing Prospectus reviewed and
consented to by the Underwriter or included in Schedule B hereto or the Registration
Statement.
(g) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(h) Authorization of the Shares. The Shares to be purchased by the
Underwriter from the Company have been duly authorized for issuance and sale pursuant to
this Agreement and, when issued and delivered by the Company
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pursuant to this Agreement against payment of the consideration set forth herein, will
be validly issued, fully paid and nonassessable.
(i) No Applicable Registration or Other Similar Rights. There are no persons
with registration or other similar rights to have any equity or debt securities registered
for sale under the Registration Statement or included in the offering contemplated by this
Agreement, other than the Selling Stockholders with respect to the Shares included in the
Registration Statement, except for such rights as have been duly waived.
(j) No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the preliminary prospectus: (i) there has been no
material adverse change, or any development that could reasonably be expected to result in
a material adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one entity (any such
change is called a “Material Adverse Change”); (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability or
obligation, indirect, direct or contingent, nor entered into any transaction or agreement
not in the ordinary course; and (iii) there has been no dividend or distribution of
any kind declared, paid or made by the Company or, except for dividends paid to the Company
or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase
or redemption by the Company or any of its subsidiaries of any class of capital stock.
(k) Independent Accountants. PricewaterhouseCoopers LLP, who have expressed
their opinion with respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) filed with the Commission and incorporated by
reference in the Registration Statement and included in the Disclosure Package and the
Prospectus, are independent public or certified public accountants as required by the
Securities Act and the Exchange Act.
(l) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of or incorporated by reference in the Registration Statement
and included or incorporated by reference in the Disclosure Package and the Prospectus
present fairly the consolidated financial position of the Company and its subsidiaries as
of and at the dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related notes thereto. No other
financial statements or supporting schedules are required to be included or
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incorporated by reference in the Registration Statement. The historical financial
data set forth or incorporated by reference in the preliminary prospectus, the Prospectus
and the Registration Statement fairly present the information set forth therein on a basis
consistent with that of the audited financial statements incorporated by reference in the
Registration Statement. The Company and its subsidiaries have no material contingent
obligations that are not disclosed in the Company’s financial statements in the
Registration Statement and the Prospectus.
The pro forma financial statements of the Company and its subsidiaries, if any, and
the related notes thereto and other pro forma financial data, if any, included or
incorporated by reference in the preliminary prospectus, the Prospectus and the
Registration Statement present fairly the information contained therein, have been prepared
in accordance with the Commission’s rules and guidelines with respect to pro forma
financial statements and have been properly presented on the basis described therein, and
the assumptions used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the circumstances referred to therein (in the
case of pro forma financial data).
(m) Incorporation and Good Standing of the Company and its Subsidiaries. Each
of the Company and its significant subsidiaries (as defined in Regulation S-X of the
Securities Act) has been duly incorporated and is validly existing as a corporation or
other legal entity in good standing under the laws of the jurisdiction of its incorporation
or organization and has power (corporate or otherwise) and authority to own, lease and
operate its properties and to conduct its business as described in the preliminary
prospectus and the Prospectus and, in the case of the Company, to enter into and perform
its obligations under this Agreement. Each of the Company and its significant subsidiaries
is duly qualified as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. Except as described in the preliminary
prospectus and the Prospectus with respect to the restrictions set forth in the Company’s
senior secured credit facility, all of the issued and outstanding capital stock of each of
the Company’s significant subsidiaries has been duly authorized and validly issued, is
fully paid and nonassessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. The
Company does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2005 (the “Annual Report”).
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(n) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth or incorporated by reference
in the Disclosure Package and the Prospectus (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Disclosure Package and the Prospectus
or upon exercise of outstanding options or warrants described in the Disclosure Package and
the Prospectus, as the case may be). The Common Stock (including the Shares) conforms in
all material respects to the description thereof contained in the Disclosure Package and
the Prospectus. All of the issued and outstanding shares of Common
Stock (including the shares of Common Stock owned by Selling Stockholders) have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with federal
and state securities laws. None of the outstanding shares of Common Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or other rights
to purchase, or equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries other than those
accurately described in the Disclosure Package and the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth or incorporated by reference in the
Disclosure Package and the Prospectus accurately and fairly presents, in all material
respects, the information required to be shown with respect to such plans, arrangements,
options and rights.
(o) Listing. The Shares have been approved for listing on the Nasdaq Stock
Market, Inc. and NYSE Arca, subject to official notice of issuance.
(p) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is in violation of
(i) its charter or by-laws or is in default (or, with the giving of notice or lapse
of time, would be in default) (“Default”) under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which the Company
or any of its subsidiaries is a party or by which it or any of them may be bound
(including, without limitation, the Company’s senior secured credit facility), or to which
any of the property or assets of the Company or any of its subsidiaries is subject (each,
an “Existing Instrument”), except for such Defaults with respect to Existing
Instruments as would not reasonably be expected to result in a Material Adverse Change or
(ii) any law, rule or regulation, or any order of any court or of any other
governmental agency or instrumentality having jurisdiction over the Company or any of its
subsidiaries or affiliates or any of its or their respective properties or assets. The
Company’s execution, delivery and performance of this Agreement
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and consummation of the transactions contemplated hereby and by the Disclosure Package
and by the Prospectus (i) have been duly authorized by all necessary corporate
action and will not result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary, (ii) will not conflict with or constitute a breach
of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, or require the consent of any other
party to, any Existing Instrument and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to the Company
or any subsidiary except with respect to clauses (ii) and (iii) as would not reasonably be
expected to result in a Material Adverse Change. No consent, approval, authorization or
other order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated hereby and
by the Disclosure Package and by the Prospectus, except such as have been obtained or made
by the Company and are in full force and effect under the Securities Act, applicable state
securities or blue sky laws and from the NASD, Inc. (the “NASD”). As used herein,
a “Debt Repayment Triggering Event” means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(q) No Material Actions or Proceedings. Except as otherwise disclosed or
incorporated by reference in the Disclosure Package and the Prospectus, there are no legal
or governmental actions, suits or proceedings pending or, to the best of the Company’s
knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which has as the subject thereof any officer or director of, or
property owned or leased by, the Company or any of its subsidiaries or (iii)
relating to environmental or discrimination matters, where in any such case (A)
there is a reasonable possibility that such action, suit or proceeding might be determined
adversely to the Company or such subsidiary and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to result in a
Material Adverse Change or adversely affect the consummation of the transactions
contemplated by this Agreement. No material labor dispute with the employees of the
Company or any of its subsidiaries or, to the knowledge of the Company, with the employees
of any principal supplier of the Company, exists or, to the best of the Company’s
knowledge, is threatened or imminent.
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(r) Intellectual Property Rights. The Company and its subsidiaries own or
have rights to use sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights (collectively,
“Intellectual Property Rights”) reasonably necessary to conduct the business of the
Company and its subsidiaries as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any notice of infringement or conflict
with asserted Intellectual Property Rights of others, which infringement or conflict, if
the subject of an unfavorable decision, would result in a Material Adverse Change. The
Company is not a party to or bound by any options, licenses or agreements with respect to
the Intellectual Property Rights of any other person or entity that are required to be set
forth in the Disclosure Package and the Prospectus and are not described in all material
respects. None of the technology employed by the Company has been obtained or is being used
by the Company in violation of any contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or employees or otherwise in violation
of the rights of any persons.
(s) All Necessary Permits, etc. The Company and each subsidiary possess such
valid and current certificates, authorizations or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, could result in a Material Adverse Change.
(t) Title to Properties. Except as otherwise disclosed in the preliminary
prospectus and the Prospectus, the Company and each of its subsidiaries has good and
marketable title to all the real property and good title to all other properties and assets
reflected as owned in the financial statements referred to in Section 1(A)(l) above (or
elsewhere in the Disclosure Package and the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property by the
Company or such subsidiary. The real property, improvements, equipment and personal
property held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
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(u) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have received
timely extensions thereof and have paid all taxes required to be paid by any of them and,
if due and payable, any related or similar assessment, fine or penalty levied against any
of them (except in the case where failure to file or pay would not reasonably be expected
to result in a Material Adverse Change). The Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in Section 1(A)(l) above in
respect of all federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has not been finally
determined.
(v) Additional Tax Law Requirements. There are no transfer taxes or other
similar fees or charges under federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance by the Company or sale by the Company of the Shares. There
are no tax audits or investigations pending, which if adversely determined would have
individually or in the aggregate a Material Adverse Change, nor are there any material
proposed additional tax assessments against the Company or any of its subsidiaries which
would have individually or in the aggregate a Material Adverse Change.
(w) Company Not an “Investment Company.” The Company has been advised of the
rules and requirements under the Investment Company Act of 1940, as amended (the
“Investment Company Act”). The Company is not, and after receipt of payment for
the 2,000,000 Shares issued by the Company and application of the proceeds as described in
the Prospectus under “Use of Proceeds” will not be, an “investment company” within the
meaning of the Investment Company Act and will conduct its business in a manner so that it
will not become subject to the Investment Company Act.
(x) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such amounts and
with such deductibles and covering such risks as are adequate and customary for their
businesses including, but not limited to, policies covering real and personal property
owned or leased by the Company and its subsidiaries against theft, damage, destruction,
acts of vandalism and earthquakes. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage as and
when such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse Change. Neither of the Company
nor any subsidiary has been denied any insurance coverage which it has sought or for which
it has
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applied, except for any denials that would not result in a Material Adverse Change.
(y) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares. The Company acknowledges that the
Underwriter may engage in passive market making transactions in the Common Stock on the
Nasdaq Stock Market, Inc. and NYSE Arca in accordance with Regulation M under the Exchange
Act.
(z) Related Party Transactions. No business or commercial relationship or
transaction, direct or indirect, exists between or among the Company or any of its
affiliates on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of its affiliates on the other hand which is required to be
described or incorporated by reference in the preliminary prospectus or the Prospectus,
which is not so described pursuant to Regulation S-K of the Commission.
(aa) Disclosure Controls. The Company and its subsidiaries maintain an
effective system of “disclosure controls and procedures” (as defined in Rule 13a-15 of the
Exchange Act) that is designed to ensure that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission’s rules and
forms, including controls and procedures designed to ensure that such information is
accumulated and communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure. The Company and its subsidiaries have carried out
evaluations of the effectiveness of their disclosure controls and procedures as required by
Rule 13a-15 of the Exchange Act.
(bb) No Material Weakness in Internal Controls. Except as disclosed or
incorporated by reference in the Disclosure Package and the Prospectus, since the end of
the Company’s most recent audited fiscal year, there has been (i) no material
weakness in the Company’s internal control over financial reporting (whether or not
remediated) and (ii) no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
(cc) No Unlawful Contributions or Other Payments. Neither the Company nor any
of its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of
the Company or any subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of any law or of
the character required to be
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disclosed or incorporated by reference in the Disclosure Package and the Prospectus.
(dd) No Conflict with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or,
to the best knowledge of the Company, threatened.
(ee) No Conflict with OFAC Laws. Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee
or affiliate of the Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds, to
any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered
by OFAC.
(ff) Compliance with Environmental Laws. Except as otherwise disclosed or
incorporated by reference in the preliminary prospectus and the Prospectus or as would not,
individually or in the aggregate, result in a Material Adverse Change (i) neither
the Company nor any of its subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including without limitation, laws and
regulations relating to the use and disposal of sewage sludge or biosolids, emissions,
discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous, dangerous, toxic, biohazardous or infectious substances,
materials, constituents or wastes or toxins, viruses, infectious disease agents, or
pathogens, petroleum and petroleum products and their breakdown constituents, or any other
substance exhibiting a hazardous waste characteristic including without limitation
corrosivity, ignitability, toxicity, or reactivity, whether solid, gaseous or liquid in
nature (collectively, “Materials of Environmental Concern”), or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environment Concern
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(collectively, “Environmental Laws”), which violation includes, but is not
limited to, noncompliance with any permits, licenses, registrations or other governmental
authorizations (collectively, “Environmental Permits”) required for the operation
of the business of the Company or its subsidiaries under applicable Environmental Laws, or
noncompliance with the terms and conditions thereof, nor has the Company or any of its
subsidiaries received any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Company or any of its
subsidiaries is in violation of any Environmental Law; (ii) there is no claim,
action or cause of action filed with a court or governmental authority, no investigation
with respect to which the Company has received written notice, and no written notice by any
person or entity alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages, personal
injuries, attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental Concern at any
location owned, leased or operated by the Company or any of its subsidiaries, now or in the
past (collectively, “Environmental Claims”), pending or, to the best of the
Company’s knowledge, threatened against the Company or any of its subsidiaries or any
person or entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has retained or assumed either contractually or by operation of law;
(iii) there are currently no, and are no foreseeable, material expenditures payable
by the Company or by any of its subsidiaries, in order to maintain any Environmental
Permit, comply with Environmental Laws or remediate, clean up, xxxxx or remove any Material
of Environmental Concern on any real property currently or formerly owned, operated or
leased by any of them; and (iv) to the best of the Company’s knowledge, there are
no past or present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or disposal of
any Material of Environmental Concern, that reasonably could result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against the Company
or any of its subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law.
(gg) ERISA Compliance. Except as would not reasonably be expected to result
in a Material Adverse Change, the Company and its subsidiaries and any “employee benefit
plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
“ERISA”)) established or maintained by the Company, its subsidiaries or, solely in
the case of an employee benefit plan subject to Title IV of ERISA, their “ERISA Affiliates”
(as defined below) are in compliance with ERISA. “ERISA Affiliate” means, with
respect to the Company
13
or a subsidiary, any member of any group of organizations described in Sections
414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the “Code”) of which
the Company or such subsidiary is a member. Except as would not reasonably be expected to
result in a Material Adverse Change, no “reportable event” (as defined under ERISA) has
occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates. Except as would not reasonably be expected to result in a Material Adverse
Change, neither the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any “employee benefit plan” or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Except as would not reasonably
be expected to result in a Material Adverse Change, each “employee benefit plan”
established or maintained by the Company or its subsidiaries that is intended to be
qualified under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service and, to the Company’s best knowledge, nothing has
occurred, whether by action or failure to act, which would reasonably be expected to cause
the loss of such qualification.
(hh) Brokers. There is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finder’s fee or other fee or commission as a
result of any transactions contemplated by this Agreement.
(ii) NASD. To the Company’s knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company’s officers, directors or
5% or greater security holders, except as set forth in the Registration Statement.
(jj) Industry Data. The market-related and customer-related data and
estimates and other industry-related data included or incorporated by reference in the
Disclosure Package and the Prospectus are based on or derived from sources which the
Company believes to be reliable and accurate.
(kk) No Termination of Contracts. Neither the Company nor any of its
subsidiaries has sent or received any notice indicating the termination of or intention to
terminate any of the contracts or agreements referred to, described or incorporated by
reference in the Registration Statement or the Prospectus, or filed as an exhibit to the
Registration Statement, and no such termination has been threatened by the Company, any
subsidiary or any other party to any such contract or agreement.
(ll) No Sale or Issuance of Common Stock. Except as described in the
preliminary prospectus and the Prospectus, the Company has not sold or issued
14
any shares of Common Stock during the six-month period preceding the date of the
Prospectus, including any sales pursuant to Regulation D or Regulation S of the Securities
Act.
(mm) Forward-Looking Information. The information contained in the Disclosure
Package and the Prospectus regarding the Company’s expectations, plans and intentions, and
any other information that constitutes “forward-looking” information within the meaning of
the Securities Act and the Exchange Act were made by the Company on a reasonable basis and
reflect the Company’s good faith belief and/or estimate of the matters described therein.
(nn) Dividend Policy and Restrictions. The statements (including the
assumptions described therein) included in the Annual Report under the caption “Market for
Registrant’s Common Equity and Related Stockholder Matters—Dividend Policy” (i) are
within the coverage of Rule 175(b) under the Securities Act to the extent such data
constitute forward-looking statements as defined in Rule 175(c), (ii) were made by
the Company with a reasonable basis and reflect the Company’s good faith estimate of the
matters described therein and (iii) are based upon the Company’s assessment and
analysis of all material factors it deems relevant and the application of assumptions which
it deems reasonable after due and proper consideration of relevant facts.
(oo) Backlog. The information contained under the caption “Business—Backlog”
in the Annual Report is true and correct.
(pp) No Insolvency. Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable value of the
assets of the Company and its subsidiaries taken as a whole will exceed its stated
liabilities (including contingent, subordinated, unmatured and unliquidated liabilities);
and the Company and its subsidiaries taken as a whole is not, nor will it be, after giving
effect to the execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, unable to pay its debts
(contingent or otherwise) as they mature, or otherwise insolvent.
(qq) Criminal or Bankruptcy Proceedings. To the knowledge of the Company,
after due inquiry, none of the directors or officers or shareholders of the Company listed
under “Selling Stockholders” in the Prospectus is or has ever been subject to prior
criminal or bankruptcy proceedings in the United States or elsewhere during the past five
years (excluding minor traffic violations and other similar minor offenses).
15
(rr) Xxxxxxxx-Xxxxx Act Compliance. There is and has been no failure on the
part of the Company and any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.
(ss) Description of Laws and Documents. The statements in the Annual Report
or preliminary prospectus, as the case may be, under the captions “Business—Federal, State
and Local Government Regulation,” “Business—Permitting Process,” “Business—Patents and
Proprietary Rights,” “Certain Relationships and Related Transactions,” “Description of
Capital Stock” and “Plan of Distribution,” insofar as they purport to describe the material
provisions of the laws and documents referred to therein, are accurate summaries in all
material respects.
(tt) Registration and Quotation of Common Stock. The Company has taken no
action designed to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or listing of the Common Stock on the Nasdaq Stock
Market, Inc. or NYSE Arca, nor has the Company received any notification that the
Commission, the Nasdaq Stock Market, Inc. or NYSE Arca is contemplating terminating such
registration or quotation.
Any certificate signed by an officer of the Company and delivered to the Underwriter or to
counsel for the Underwriter shall be deemed to be a representation and warranty by the Company to
the Underwriter as to the matters set forth therein.
The Company acknowledges that the Underwriter and, for purposes of the opinions to be
delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriter, will
rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to
such reliance.
B. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder represents, warrants and covenants to the Underwriter as follows:
(a) The Underwriting Agreement. This Agreement has been duly authorized (if
applicable), executed and delivered by or on behalf of such Selling Stockholder.
(b) The Custody Agreement and Power of Attorney. Each of the (i)
Custody Agreement signed by such Selling Stockholder and J. Xxxx Xxxxxxx and Xxxxx X.
Xxxxxx XX, as custodians (each, the “Custodian”), relating to the deposit of the
Shares to be sold by such Selling Stockholder (the “Custody
16
Agreement”) and (ii) Power of Attorney appointing J. Xxxx Xxxxxxx and
Xxxxx X. Xxxxxx XX as such Selling Stockholder’s attorneys-in-fact (each, an
“Attorney-in-Fact”) to the extent set forth therein relating to the transactions
contemplated hereby and by the Prospectus (the “Power of Attorney”), of such
Selling Stockholder has been duly authorized (if applicable), executed and delivered by
such Selling Stockholder.
(c) Title to Shares to be Sold; All Authorizations Obtained. Such Selling
Stockholder has, and on the Closing Date will have the legal right and power, and all
authorizations and approvals required by law and under other organizational documents to
enter into this Agreement and its Custody Agreement and Power of Attorney, to sell,
transfer and deliver all of the Shares which may be sold by such Selling Stockholder free
and clear of all security interests, adverse claims and liens pursuant to this Agreement
and to comply with its other obligations hereunder and thereunder. Upon payment for the
Shares to be sold by such Selling Stockholder pursuant to this Agreement, delivery of such
Shares, as directed by the Underwriter, to Cede & Co. (“Cede”) or such other
nominee as may be designated by The Depository Trust Company (“DTC”), registration
of such Shares in the name of Cede or such other nominee and the crediting of such Shares
on the books of DTC to securities accounts of the Underwriter (assuming that neither DTC
nor the Underwriter has notice of any adverse claim (within the meaning of Section 8-105 of
the New York Uniform Commercial Code (the “UCC”)) to such Shares), (A) DTC
shall be a “protected purchaser” of such Shares within the meaning of Section 8-303 of the
UCC, (B) under Section 8-501 of the UCC, the Underwriter will acquire a valid
security entitlement in respect of such Shares and (C) no action based on any
“adverse claim,” within the meaning of Section 8-102(a)(1) of the UCC, to such Shares may
be asserted against the Underwriter with respect to such Shares.
(d) Non-Contravention; No Further Authorizations or Approvals Required. The
execution and delivery by such Selling Stockholder of, and the performance by such Selling
Stockholder of its obligations under, this Agreement, the Custody Agreement and the Power
of Attorney will not contravene or conflict with, result in a breach of, or constitute a
Default under, or require the consent of any other party to, the charter or by-laws, or
other organizational documents of such Selling Stockholder (if applicable) or any other
agreement or instrument to which such Selling Stockholder is a party or by which it is
bound or under which it is entitled to any right or benefit, any provision of applicable
law or any judgment, order, decree or regulation applicable to such Selling Stockholder of
any court, regulatory body, administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental authority or
agency, is required for the consummation by
17
such Selling Stockholder of the transactions contemplated in this Agreement, except
such as have been obtained or made and are in full force and effect under the Securities
Act, applicable state securities or blue sky laws and from the NASD.
(e) No Registration or Other Similar Rights. Other than with respect to the
Shares sold by a Selling Stockholder, such Selling Stockholder does not have any
registration or other similar rights to have any equity or debt securities registered for
sale by the Company under the Registration Statement or included in the offering
contemplated by this Agreement, except for such rights as have been exercised or waived in
writing.
(f) No Further Consents, etc. Except for the (i) exercise by such
Selling Stockholder of certain registration rights described in the Prospectus (which
registration rights have been duly exercised pursuant thereto) and (ii) consent of
such Selling Stockholder to the respective number of Shares to be sold by all of the
Selling Stockholders pursuant to this Agreement, no consent, approval or waiver is required
under any instrument or agreement to which such Selling Stockholder is a party or by which
it is bound or under which it is entitled to any right or benefit, in connection with the
offering, sale or purchase by the Underwriter of any of the Shares which may be sold by
such Selling Stockholder under this Agreement or the consummation by such Selling
Stockholder of any of the other transactions contemplated hereby.
(g) Disclosure Made by Such Selling Stockholder in the Prospectus. All
information furnished by or on behalf of such Selling Stockholder in writing expressly for
use in the Registration Statement, the Prospectus or any free writing prospectus as defined
in Rule 405 of the Securities Act (“Free Writing Prospectus”) or any amendment or
supplement thereto used by the Company or the Underwriter, as the case may be, is, as of
the Applicable Time, and on the Closing Date will be, true, correct and complete
in all material respects, and as of the Applicable Time does not, and on the Closing Date
will not, contain any untrue statement of a material fact or omit to state any material
fact necessary to make such information not misleading. Such Selling Stockholder confirms
as accurate the number of shares of Common Stock set forth opposite such Selling
Stockholder’s name in the preliminary prospectus and the Prospectus under the caption
“Selling Stockholders” (both prior to and after giving effect to the sale of the Shares).
(h) No Price Stabilization or Manipulation. Such Selling Stockholder has not
taken and will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
18
(i) Confirmation of Completeness of Disclosure. Such Selling Stockholder is
not prompted to sell shares of Common Stock by any information concerning the Company which
is not set forth in the Disclosure Package and the Prospectus.
(j) Compliance with Registration Requirements. Such Selling Stockholder has
reviewed the Registration Statement, the preliminary prospectus and the Prospectus and
nothing has come to its attention which would lead it to believe that either the
Registration Statement or any amendments thereto, at the time the Registration Statement or
such amendments became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as amended or supplemented, as of
its date, at the date hereof, at the time of any filing pursuant to Rule 424(b) and at the
Closing Date (as defined herein), contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided, however,
that no representation is made as to any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus.
(k) No Free Writing Prospectuses. Such Selling Stockholder represents that,
unless it obtained the prior written consent of the Underwriter, it has not prepared or had
prepared on its behalf or used or referred to, any Free Writing Prospectus, and represents
that it has not distributed any written materials in connection with the offer or sale of
the Shares that could otherwise constitute a “free writing prospectus” (as defined in Rule
405 of the Securities Act) required to be filed with the Commission or retained under Rule
433 of the Securities Act.
Any certificate signed by or on behalf of any Selling Stockholder and delivered to the
Underwriter or to counsel for the Underwriter shall be deemed to be a representation and warranty
by such Selling Stockholder to the Underwriter as to the matters covered thereby.
Such Selling Stockholder acknowledges that the Underwriter and, for purposes of the opinion to
be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriter,
will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
19
Section 2. Purchase, Sale and Delivery of the Shares.
(a) The Firm Shares. Upon the terms herein set forth, (i) the Company agrees
to issue and sell to the Underwriter an aggregate of 2,000,000 Firm Shares and (ii) each of
the Selling Stockholders severally agrees to sell to the Underwriter an aggregate of 15,129,710
Firm Shares, each Selling Stockholder selling the number of Firm Shares set forth opposite such
Selling Stockholder’s name on Schedule A. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions herein set forth, the
Underwriter agrees to purchase from the Company and the Selling Stockholders the number of Firm
Shares set forth in the preceding sentence. The purchase price per Firm Share to be paid by the
Underwriter to the Company and the Selling Stockholders shall be $3.984 per share.
(b) The Closing Date. Delivery of certificates for the Firm Shares to be purchased by
the Underwriter and payment therefor shall be made at the offices of the Underwriter, 0 Xxxx
00xx Xxxxxx Xxx Xxxx, XX or Debevoise & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx Xxx Xxxx, XX (or
such other place as may be agreed to by the Company and the Underwriter) at 9:00 a.m. New York
time, on May 16, 2006 or such other time and date not later than 1:30 p.m. New York time, ten
business days following the original contemplated Closing Date as the Underwriter shall designate
by notice to the Company (the time and date of such closing are called the “Closing Date”).
(c) The Optional Shares; the Subsequent Closing Date. In addition, on the basis of
the representations, warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Company hereby grants an option to the Underwriter to purchase
up to an aggregate of 2,000,000 Optional Shares from the Company at the purchase price per share to
be paid by the Underwriter for the Firm Shares. The option granted hereunder may be exercised from
time to time upon notice by the Underwriter to the Company, which notice may be given at any time
within 30 days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Shares as to which the Underwriter is exercising the option,
(ii) the names and denominations in which the certificates for the Optional Shares are to
be registered and (iii) the time, date and place at which such certificates will be
delivered (which time and date may be simultaneous with, but not earlier than, the Closing Date;
and in such case the term “Closing Date” shall refer to the time and date of delivery of
certificates for the Firm Shares and the Optional Shares). Such time and date of delivery, if
subsequent to the Closing Date, is called a “Subsequent Closing Date” and shall be
determined by the Underwriter and shall not be earlier than three nor later than five full business
days after delivery of such notice of exercise. The Underwriter may cancel the option at any time
prior to its expiration by giving written notice of such cancellation to the Company.
(d) Public Offering of the Shares. The Underwriter hereby advises the Company and the
Selling Stockholders that the Underwriter intends to offer for sale to the public, as described in
the Prospectus, the Shares as soon after this Agreement has
20
been executed and the Registration Statement has been declared effective as the Underwriter,
in its sole judgment, has determined is advisable and practicable.
(e) Payment for the Shares. Payment for the Shares to be sold by the Company shall be
made at the Closing Date (and, if applicable, at any Subsequent Closing Date) by wire transfer of
immediately available funds to the order of the Company. Payment for the Shares to be sold by the
Selling Stockholders shall be made at the Closing Date by wire transfer of immediately available
funds to the order of the Custodian.
It is understood that the Underwriter has been authorized, for its own account, to accept
delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any
Optional Shares the Underwriter has agreed to purchase.
Each Selling Stockholder hereby agrees that (i) it will pay all stock transfer taxes,
stamp duties and other similar taxes, if any, payable upon the sale or delivery of the Shares to be
sold by such Selling Stockholder to the Underwriter, or otherwise in connection with the
performance of such Selling Stockholder’s obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such Selling
Stockholder hereunder and to hold such amounts for the account of such Selling Stockholder with the
Custodian under the Custody Agreement.
(f) Delivery of the Shares. Delivery of the Firm Shares and the Optional Shares shall
be made through the facilities of DTC unless the Underwriter shall otherwise instruct. Time shall
be of the essence, and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriter.
(g) Delivery of Prospectus to the Underwriter. Not later than 12:00 p.m. on the
second business day following the date the Shares are first released by the Underwriter for sale to
the public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such
quantities and at such places as the Underwriter shall request.
Section 3. Additional Covenants.
A. Covenants of the Company. The Company further covenants and agrees with the
Underwriter as follows:
(a) Underwriter’s Review of Proposed Amendments and Supplements. During the
period beginning on the Applicable Time and ending on the later of the Closing Date or such
date, as in the opinion of counsel for the Underwriter, the Prospectus is no longer
required by law to be delivered in connection with sales by the Underwriter or dealer,
including in circumstances where such requirement may be satisfied pursuant to Rule 172
under the Securities Act (the
21
“Prospectus Delivery Period”), prior to amending or supplementing the
Registration Statement, the Disclosure Package or the Prospectus (including any amendment
or supplement through incorporation by reference of any report filed under the Exchange
Act), the Company shall furnish to the Underwriter for review a copy of each such proposed
amendment or supplement, and the Company shall not file or use any such proposed amendment
or supplement to which the Underwriter reasonably objects.
(b) Securities Act Compliance. After the date of this Agreement, the Company
shall promptly advise the Underwriter in writing (i) when the Registration
Statement, if not effective at the Execution Time, shall have become effective,
(ii) of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (iii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or supplement to
any preliminary prospectus or the Prospectus, (iv) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and (v) of
the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order preventing
or suspending the use of the Registration Statement, any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation
the Common Stock from any securities exchange upon which it is listed for trading or
included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its reasonable best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that it shall
comply with the provisions of Rules 424(b) and 430B, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the Company
under such Rule 424(b) were received in a timely manner by the Commission.
(c) Amendments and Supplements to the Registration Statement, Disclosure Package
and Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery
Period, any event shall occur or condition exist as a result of which the Disclosure
Package or the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein in the light of the circumstances under which they were made or then
prevailing, as the case may be, not misleading, or if it shall be necessary to amend or
supplement the Disclosure Package or the Prospectus, or to file under the Exchange Act any
document incorporated by reference in the Disclosure Package or the Prospectus, in order to
make the statements therein, in the light of the circumstances under which they were made
or then prevailing, as the case may be, not misleading, or if
22
in the reasonable opinion of the Underwriter or counsel for the Underwriter it is
otherwise necessary to amend or supplement the Registration Statement, the Disclosure
Package or the Prospectus, or to file under the Exchange Act any document incorporated by
reference in the Disclosure Package or the Prospectus, or to file a new registration
statement containing the Prospectus, in order to comply with law, including in connection
with the delivery of the Prospectus, the Company agrees to (i) notify the
Underwriter of any such event or condition and (ii) promptly prepare (subject to
Section 3(A)(a) and Section 3(A)(d) hereof), file with the Commission (and use its best
efforts to have any amendment to the Registration Statement or any new registration
statement to be declared effective) and furnish at its own expense to the Underwriter and
to dealers, amendments or supplements to the Registration Statement, the Disclosure Package
or the Prospectus, or any new registration statement, necessary in order to make the
statements in the Disclosure Package or the Prospectus as so amended or supplemented, in
the light of the circumstances under which they were made or then prevailing, as the case
may be, not misleading or so that the Registration Statement, the Disclosure Package or the
Prospectus, as amended or supplemented, will comply with law.
(d) Permitted Free Writing Prospectuses. The Company represents that it has
not made, and agrees that, unless it obtains the prior written consent of the Underwriter,
it will not make, any offer relating to the Shares that constitutes or would constitute an
Issuer Free Writing Prospectus or that otherwise constitutes or would constitute a “free
writing prospectus” (as defined in Rule 405 of the Securities Act) or a portion thereof
required to be filed by the Company with the Commission or retained by the Company under
Rule 433 of the Securities Act; provided that the prior written consent of the Underwriter
hereto shall be deemed to have been given in respect of the Free Writing Prospectuses
included in Schedule B hereto and any electronic road show. Any such free writing
prospectus consented to by the Underwriter is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company agrees that (i) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, and (ii) has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Securities Act applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission, legending
and record keeping.
(e) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Underwriter, without charge, during the Prospectus Delivery Period,
as many copies of the Prospectus and any amendments and supplements thereto (including any
documents incorporated or deemed incorporated by reference therein) and the Disclosure
Package as the Underwriter may reasonably request.
23
(f) Blue Sky Compliance. The Company shall cooperate with the Underwriter and
counsel for the Underwriter to qualify or register the Shares for sale under (or obtain
exemptions from the application of) the state securities or blue sky laws or Canadian
provincial Securities laws or other foreign laws of those jurisdictions designated by the
Underwriter, shall comply with such laws and shall continue such qualifications,
registrations and exemptions in effect so long as required for the distribution of the
Shares. The Company shall not be required to qualify to do business as a foreign
corporation or to take any action that would subject it to general service of process in
any such jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Underwriter promptly of the
suspension of the qualification or registration of (or any such exemption relating to) the
Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use its best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(g) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Shares sold by it in the manner described under the caption “Use of Proceeds” in the
Disclosure Package and the Prospectus.
(h) Transfer Agent. The Company shall maintain, at its expense, a registrar
and transfer agent for the Common Stock.
(i) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Underwriter an earnings statement
(which need not be audited) covering the twelve-month period after the effective date of
the Registration Statement that satisfies the provisions of Section 11(a) of the Securities
Act.
(j) Periodic Reporting Obligations. During the Prospectus Delivery Period the
Company shall file, on a timely basis, with the Commission all reports and documents
required to be filed under the Exchange Act. Additionally, the Company shall report the
use of proceeds from the issuance of the Shares as may be required under Rule 463 under the
Securities Act.
(k) Company to Provide Interim Financial Statements. Prior to the Closing
Date, the Company will furnish the Underwriter, as soon as they have been prepared by or
are available to the Company, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
24
(l) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 90th day following the date of the
Prospectus, the Company will not, without the prior written consent of the Underwriter
(which consent may be withheld at the sole discretion of the Underwriter), directly or
indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or
establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares of Common Stock,
options or warrants to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as contemplated by
this Agreement with respect to the Shares); provided, however, that
the Company may issue shares of its Common Stock or options to purchase its Common Stock, or Common Stock upon
exercise of options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus. Notwithstanding the foregoing, if (x)
during the last 17 days of the 90-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs, or (y)
prior to the expiration of the 90-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the 90-day
period, the restrictions imposed in this clause shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event. The Company will provide the
Underwriter and each individual subject to the restricted period pursuant to the lockup
letters described in Section 5(l) with prior notice of any such announcement that gives
rise to an extension of the restricted period.
(m) Future Reports to the Underwriter. During the period of two years
hereafter the Company will furnish to the Underwriter at its address set forth in Section
12: (i) as soon as practicable after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the Company as of the close of
such fiscal year and statements of income, stockholders’ equity and cash flows for the year
then ended and the opinion thereon of the Company’s independent public or certified public
accountants; (ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
(n) Investment Limitation. The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in
25
such a manner as would require the Company or any of its subsidiaries to register as
an investment company under the Investment Company Act.
(o) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of the price of any
securities of the Company.
(p) Existing Lock-Up Agreement. The Company will use its reasonable best
efforts to enforce all agreements between the Company and any of its security holders that
prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company’s
securities in connection with the Company’s offering. In addition, the Company will direct
the transfer agent to place stop transfer restrictions upon any such securities of the
Company that are bound by such existing “lock-up” agreements for the duration of the
periods contemplated in such agreements.
(q) Press Release. Prior to the Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no press conference with
respect to the Company or any of its subsidiaries, the condition, financial or otherwise,
or the earnings, business affairs or business prospects of any of them, or the offering of
the Shares, without the prior written consent of the Underwriter, unless in the judgment of
the Company and its counsel, and after notification to the Underwriter, such press release
or communication is required by law.
(r) Company to Perform its Obligations. The Company will use its reasonable
best efforts to do and perform all things required to be done and performed by it under
this Agreement and any other related agreements prior to or after the Closing Date and the
Subsequent Closing Date, if any, and to satisfy all conditions precedent on its part to the
obligations of the Underwriter to purchase and accept delivery of the Shares.
(s) Listing. The Shares have been approved for listing on the Nasdaq Stock
Market, Inc. and NYSE Arca, subject to official notice of issuance.
(t) Compliance with Securities Law. The Company will comply with all
applicable securities and other laws, rules and regulations, including, without limitation,
the Xxxxxxxx-Xxxxx Act of 2002, and use its best efforts to cause the Company’s directors
and officers, in their capacities as such, to comply with such laws, rules and regulations,
including, without limitation, the provisions of the Xxxxxxxx-Xxxxx Act of 2002.
26
B. Covenants of the Selling Stockholders. Each Selling Stockholder further covenants
and agrees with the Underwriter:
(a) Agreement Not to Offer or Sell Additional Securities. Such Selling
Stockholder will not, without the prior written consent of the Underwriter (which consent
may be withheld at the sole discretion of the Underwriter), directly or indirectly, sell,
offer, contract or grant any option to sell (including without limitation any short sale),
pledge, transfer, 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,
options or warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or hereafter owned
either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by such
Selling Stockholder, or publicly announce such Selling Stockholder’s intention to do any of
the foregoing, for a period commencing on the date hereof and continuing through the close
of trading on the date 90 days after the date of the Prospectus. Notwithstanding the
foregoing, if (x) during the last 17 days of the 90-day restricted period the
Company issues an earnings release or material news or a material event relating to the
Company occurs, or (y) prior to the expiration of the 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period beginning
on the last day of the 90-day period, the restrictions imposed in this clause shall
continue to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event.
(b) Delivery of Form W-9. To deliver to the Underwriter prior to the Closing
Date a properly completed and executed United States Treasury Department Form W-9.
(c) Notification of Material Changes. During the Prospectus Delivery Period,
such Selling Stockholder will advise the Underwriter promptly, and if requested by the
Underwriter, will confirm such advice in writing, of (i) any change in information
in the Registration Statement, the Prospectus or any Free Writing Prospectus or any
amendment or supplement thereto relating to such Selling Stockholder or (ii) any
new material information relating to the Company or relating to any matter stated in the
Prospectus or any Free Writing Prospectus or any amendment or supplement thereto which
comes to the attention of such Selling Stockholder.
(d) No Free Writing Prospectuses. Such Selling Stockholder agrees that,
unless it obtained the prior written consent of the Underwriter, it will not prepare or
have prepared on its behalf or use or refer to, any Free Writing Prospectus, and agrees
that it will not distribute any written materials in connection with the offer or sale of
the Shares.
27
The Underwriter, may, in its sole discretion, waive in writing the performance by the Company
or any Selling Stockholder of any one or more of the foregoing covenants or extend the time for
their performance. Notwithstanding the foregoing, the Underwriter agrees not to consent to any
action proposed to be taken by the Company, any Selling Stockholder or any other holder of the
Company’s securities that would otherwise be prohibited by, or to waive compliance by the Company,
any Selling Stockholder or any such other security holder with the provisions of, Section 3(A)(l)
or 3(B)(a) above or any lock-up agreement delivered pursuant to Section 5(l) below without giving
the Underwriter at least 17 days prior notice (or such shorter notice as the Underwriter may deem
acceptable to permit compliance with applicable provisions of NASD Conduct Rule 2711(f) restricting
publication and distribution of research and public appearances by research analysts before and
after the expiration, waiver or termination of a lock-up agreement).
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Shares (including all printing and engraving costs),
(ii) all fees and expenses of the registrar and transfer agent of the Common Stock,
(iii) all necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Shares to the Underwriter, (iv) all fees and expenses of the Company’s and
Selling Stockholders’ counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each Free Writing Prospectus, each
preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and this
Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or
the Underwriter in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Shares for offer and sale under the state
securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the
Underwriter, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements thereto,
advising the Underwriter of such qualifications, registrations and exemptions, (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the Underwriter in
connection with, the NASD’s review and approval of the Underwriter’s participation in the offering
and distribution of the Shares, (viii) the fees and expenses associated with including the
portion of the Shares issued by the Company on the Nasdaq Stock Market, Inc. and NYSE Arca,
(ix) the transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of the securities and
(x) all other fees, costs and expenses referred to in Item 14 of Part II of the
Registration Statement. Except as provided in this Section 4, Section 6, Section 8 and Section 9
hereof, the Underwriter shall pay its own
28
expenses, including the fees and disbursements of its counsel and its share of road show
expenses.
The Selling Stockholders further agree with the Underwriter to pay (directly or by
reimbursement) all fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including but not limited to
expenses and taxes incident to the sale and delivery of the Shares to be sold by such Selling
Stockholders to the Underwriter hereunder (which taxes, if any, may be deducted by the Custodian
under the provisions of Section 2 of this Agreement).
This Section 4 shall not affect or modify any separate, valid agreement relating to the
allocation of payment of expenses between the Company, on the one hand, and the Selling
Stockholders, on the other hand.
Section 5. Conditions of the Obligations of the Underwriter. The obligations of the
Underwriter to purchase and pay for the Shares as provided herein on the Closing Date and, with
respect to the Optional Shares, any Subsequent Closing Date, shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling Stockholders set
forth in Sections 1(A) and 1(B) hereof as of the date hereof and as of the Closing Date as though
then made and, with respect to the Optional Shares, as of the Subsequent Closing Date as though
then made, to the timely performance by the Company and the Selling Stockholders of their
respective covenants and other obligations hereunder, and to each of the following additional
conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Underwriter shall
have received from PricewaterhouseCoopers LLP, independent public or certified public
accountants for the Company, a letter dated the date hereof addressed to the Underwriter,
in form and substance satisfactory to the Underwriter, containing statements and
information of the type ordinarily included in accountant’s “comfort letters” to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or any
successor bulletin), with respect to the audited and unaudited financial statements and
certain financial information contained or incorporated by reference in the Registration
Statement and the Prospectus.
(b) Compliance with Registration Requirements; No Stop Order; No Objection from
NASD. For the period from and after effectiveness of this Agreement and prior to the
Closing Date and, with respect to the Optional Shares, the Subsequent Closing Date:
(i) the Company shall have filed the Prospectus with the Commission (including
the information required by Rule 430B under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities Act; or the
Company shall have filed a
29
post-effective amendment to the Registration Statement containing the
information required by such Rule 430B, and such post-effective amendment shall
have become effective;
(ii) all materials required to be filed by the Company pursuant to Rule 433(d)
under the Securities Act shall have been filed with the Commission within the
applicable time periods prescribed for such filings under such Rule 433;
(iii) no stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment to the Registration Statement, shall be in effect
and no proceedings for such purpose shall have been instituted or, to the Company’s
knowledge, threatened by the Commission; and
(iv) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period from
and after the date of this Agreement and prior to the Closing Date and, with respect to the
Optional Shares, the Subsequent Closing Date:
(i) in the judgment of the Underwriter there shall not have occurred any
Material Adverse Change;
(ii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the rating
accorded any securities of the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(iii) there shall not have been any change or decrease specified in the letter
or letters referred to in paragraph (a) of this Section 5 which is, in the
sole judgment of the Underwriter, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or delivery of the Shares as
contemplated by the Registration Statement and the Prospectus.
(d) Opinion of Counsel for the Company. On each of the Closing Date and any
Subsequent Closing Date the Underwriter shall have received the favorable opinion of Xxxxx
Xxxxxxx & Xxxx LLP, counsel for the Company, dated as of such Closing Date, the form of
which is attached as Exhibit A.
30
(e) Opinion of Counsel for the Underwriter. On each of the Closing Date and
any Subsequent Closing Date the Underwriter shall have received the favorable opinion of
Debevoise & Xxxxxxxx LLP, counsel for the Underwriter, dated as of such Closing Date, with
respect to the validity of the Shares and other related matters as the Underwriter
reasonably may request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(f) Officers’ Certificate. On each of the Closing Date and any Subsequent
Closing Date the Underwriter shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the Company and the Chief
Financial Officer or Chief Accounting Officer of the Company, dated as of such Closing
Date, to the effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus and any amendment or supplement thereto, any Issuer
Free Writing Prospectus and any amendment or supplement thereto and this Agreement, to the
effect set forth in subsections (b)(iii) and (c)(ii) of this Section 5, and further to the
effect that:
(i) for the period from and after the date of this Agreement and prior to such
Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in
Section 1(A) of this Agreement are true and correct with the same force and effect
as though expressly made on and as of such Closing Date;
(iii) the Company has complied with all the agreements hereunder and satisfied
all the conditions on its part to be performed or satisfied hereunder at or prior
to such Closing Date;
(iv) all filings required to have been made pursuant to Rule 424 or 430B under
the Securities Act have been made; and
(v) they have carefully examined the Registration Statement, the Prospectus
and any Free Writing Prospectus and, in their opinion, as of the effective date of
the Registration Statement and as of the date of such certificate, the statements
contained in the Registration Statement were true and correct, and such
Registration Statement and Prospectus and any Free Writing Prospectus did not omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been set forth in a
supplement to or
31
an amendment of the Prospectus which has not been so set forth in such
supplement or amendment.
(g) Bring-down Comfort Letter. On each of the Closing Date and any Subsequent
Closing Date the Underwriter shall have received from PricewaterhouseCoopers LLP,
independent public or certified public accountants for the Company, a letter dated such
date, in form and substance satisfactory to the Underwriter, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant to subsection (a) of
this Section 5, except that the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the Closing Date or any
Subsequent Closing Date, as the case may be.
(h) Opinion of Counsel for the Selling Stockholders. On each of the Closing
Date and any Subsequent Closing Date the Underwriter shall have received the favorable
opinion of Xxxxxxxx & Xxxxx LLP, counsel for the Selling Stockholders, dated as of such
Closing Date, the form of which is attached as Exhibit B.
(i) Opinion of General Counsel of the Company. On each of the Closing Date
and any Subsequent Closing Date the Underwriter shall have received the favorable opinion
of the General Counsel of the Company, dated as of such Closing Date, the form of which is
attached as Exhibit C.
(j) Selling Stockholders’ Certificate. On the Closing Date the Underwriter
shall receive a written certificate executed by the Attorney-in-Fact of each Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the signer of such certificate has carefully examined the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus and any amendment or
supplement thereto and this Agreement, and that the representations, warranties and
covenants of such Selling Stockholder set forth in Section 1(B) and Section 3(B) of
this Agreement are true and correct with the same force and effect as though
expressly made by such Selling Stockholder on and as of such Closing Date; and
(ii) such Selling Stockholder 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.
(k) Selling Stockholders’ Documents. On the date hereof, the Company and the
Selling Stockholders shall have furnished for review by the Underwriter copies of the
Powers of Attorney and Custody Agreements executed
32
by each of the Selling Stockholders and such further information, certificates and
documents as the Underwriter may reasonably request.
(l) Lock-Up Agreements. On or prior to the date hereof, the Company shall
have furnished to the Underwriter an agreement in the form of Exhibit D hereto from each
director, officer and each other beneficial owner of Common Stock listed on Schedule C
hereto, and such agreement shall be in full force and effect on each of the Closing Date
and any Subsequent Closing Date.
(m) Listing. The Shares have been approved for listing on the Nasdaq Stock
Market, Inc. and NYSE Arca, subject to official notice of issuance.
(n) Additional Documents. On or before each of the Closing Date and any
Subsequent Closing Date, the Underwriter and counsel for the Underwriter shall have
received such information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as contemplated
herein, or in order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Underwriter by notice to the Company and the
Selling Stockholders at any time on or prior to the Closing Date and, with respect to the Optional
Shares, at any time prior to the Subsequent Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4, Section 6, Section 8
and Section 9 shall at all times be effective and shall survive such termination.
Section 6. Reimbursement of Underwriter’s Expenses. If this Agreement is terminated
by the Underwriter pursuant to Section 5, Section 7, Section 10 or Section 16, or if the sale to
the Underwriter of the Shares on the Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company or the Selling Stockholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to reimburse the
Underwriter, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by
the Underwriter in connection with the proposed purchase and the offering and sale of the Shares,
including but not limited to fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges.
Section 7. Effectiveness of this Agreement. This Agreement shall not become effective
until the later of (i) the execution of this Agreement by the parties hereto and
(ii) notification by the Commission to the Company of the effectiveness of the Registration
Statement under the Securities Act.
33
Prior to such effectiveness, this Agreement, to the extent it has been executed by the parties
hereto, may be terminated by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the Selling
Stockholders to the Underwriter, except that the Company and the Selling Stockholders shall be
obligated to reimburse the expenses of the Underwriter pursuant to Sections 4 and 6 hereof,
(b) of the Underwriter to the Company or the Selling Stockholders, or (c) of any
party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
Section 8. Indemnification.
(a) Indemnification of the Underwriter. The Company agrees to indemnify and hold
harmless the Underwriter, its officers and employees, and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which the Underwriter or such controlling person may
become subject, under the Securities Act, the Exchange Act or other federal or state statutory law
or regulation, or 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 loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including any information deemed
to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Package, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto)
or any marketing materials and anything used on the road show, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and to reimburse the Underwriter and each
such controlling person for any and all expenses (including the fees and disbursements of counsel
chosen by the Underwriter) as such expenses are reasonably incurred by the Underwriter or such
controlling person in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however, that the indemnity
agreement set forth in this paragraph shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon and in conformity
with written information furnished to the Company by the Underwriter expressly for use in the
Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The indemnity agreement set forth in this
paragraph shall be in addition to any liabilities that the Company may otherwise have.
34
Each of the Selling Stockholders, severally and not jointly, agrees to indemnify and hold
harmless the Underwriter, its officers and employees, and each person, if any, who controls the
Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which the Underwriter or such controlling person may
become subject, under the Securities Act, the Exchange Act or other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Selling Stockholders), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises
out of or is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430B under the Securities Act, or the omission or
alleged omission therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in the Disclosure Package, any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
and to reimburse the Underwriter and each such controlling person for any and all expenses
(including the fees and disbursements of counsel chosen by the Underwriter) as such expenses are
reasonably incurred by the Underwriter or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the indemnity agreement set forth in this paragraph shall apply
only with reference to information furnished in writing by or on behalf of such Selling Stockholder
expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any
preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The indemnity
agreement set forth in this paragraph shall be in addition to any liabilities that the Selling
Stockholders may otherwise have. The liability of each Selling Stockholder under the indemnity
agreement set forth in this paragraph shall be limited to the total net proceeds from the offering
of the Shares pursuant to this Agreement received by such Selling Stockholder.
(b) Indemnification of the Company, its Directors and Officers and the Selling
Stockholders. The Underwriter agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement, the Selling Stockholders and
each person, if any, who controls the Company or any Selling Stockholder within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Securities Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Underwriter), insofar as
such loss, claim,
35
damage, liability or expense (or actions in respect thereof as contemplated below) arises out
of or is based upon any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or arises out of or is 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, the Disclosure Package, any Issuer Free Writing Prospectus, any
preliminary prospectus, the Prospectus (or any amendment or supplement thereto), in reliance upon
and in conformity with written information furnished to the Company and the Selling Stockholders by
the Underwriter expressly for use therein; and to reimburse the Company, or any such director,
officer, Selling Stockholder or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, Selling Stockholder or controlling person
in connection with investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. Each of the Company and the Selling Stockholders hereby
acknowledges that the only information that the Underwriter has furnished to the Company expressly
for use in the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus,
any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in the preliminary prospectus in the last sentence of the second to last
paragraph of the cover page regarding delivery of the Shares to the public and, under the heading
“Underwriting,” (i) the sentences in the third paragraph related to the offering price of the
Shares to the public and concessions, (ii) the first four paragraphs under “—Stabilization” and
(iii) the first five sentences of the paragraph under “—Passive Market Making”; and the Underwriter
confirms that such statements are correct. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that the Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 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 8, notify the indemnifying party in writing of the commencement thereof, but the
failure so to notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any liability which it
may have for contribution or any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case any such action is
brought against any indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the
36
extent that it shall elect, jointly with all other indemnifying parties similarly notified, by
written notice delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, 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 that a conflict may arise between the positions of the indemnifying party and the
indemnified party in conducting the defense of any such action or 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, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise 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 such indemnifying party’s 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 8 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 separate counsel 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 (together with local
counsel), approved by the indemnifying party (the Underwriter in the case of Section 8(b) and
Section 9), representing the indemnified parties who are parties to such action) or (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, in each of which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not be liable for
any settlement of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party, unless
37
such settlement, compromise or consent includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action, suit or proceeding.
Section 9. Contribution. If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders, on the one hand, and the Underwriter, on the other
hand, from the offering of the Shares pursuant to this Agreement 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 Selling Stockholders, on the one hand, and the
Underwriter, on the other hand, in connection with the statements or omissions or inaccuracies in
the representations and warranties herein which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders, on the one hand, and the
Underwriter, on the other hand, in connection with the offering of the Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Shares pursuant to this Agreement (before deducting expenses) received by the
Company and the Selling Stockholders, and the total underwriting discount received by the
Underwriter, in each case as set forth on the front cover page of the Prospectus bear to the
aggregate offering price of the Shares as set forth on such cover. The relative fault of the
Company and the Selling Stockholders, on the one hand, and the Underwriter, on the other hand,
shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact or any such
inaccurate or alleged inaccurate representation or warranty relates to information supplied by the
Company or the Selling Stockholders, on the one hand, or the Underwriter, on the other hand, 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, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be
made under this Section 9; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 8(c) for purposes of
indemnification.
38
The Company, the Selling Stockholders and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 this Section 9.
Notwithstanding the provisions of this Section 9, the Underwriter shall not be required to
contribute any amount in excess of the underwriting commissions received by the Underwriter in
connection with the Shares underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 9, each officer and employee of the Underwriter and each person, if
any, who controls the Underwriter within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and each person, if any, who
controls the Company with the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as the Company. In no event shall the liability of a Selling
Stockholder under this Section 9 exceed the amount that such Selling Stockholder would have been
required to pay under Section 8(a) had such indemnification been available thereunder.
Section 10. Termination of this Agreement. Prior to the Closing Date this Agreement
may be terminated by the Underwriter by notice given to the Company and the Selling Stockholders if
at any time (i) trading or quotation in any of the Company’s securities shall have been
suspended or limited by the Commission, by the Nasdaq Stock Market or by the NYSE Arca, or trading
in securities generally on either the Nasdaq Stock Market, NYSE Arca or the New York Stock Exchange
shall have been suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal or New York authorities;
(iii) there shall have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a prospective substantial
change in United States’ or international political, financial or economic conditions, as in the
judgment of the Underwriter is material and adverse and makes it impracticable to market the Shares
in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of
securities; or (iv) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of the Underwriter may
interfere materially with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured. Any termination pursuant to this Section 10
shall be without liability on the part of (a) the Company or the Selling Stockholders to
the Underwriter, except that the Company and the Selling Stockholders shall be obligated to
reimburse the
39
expenses of the Underwriter pursuant to Sections 4 and 6 hereof, or (b) the
Underwriter to the Company or the Selling Stockholders.
Section 11. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the Company, of its
officers, of the Selling Stockholders and of the Underwriter 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 the Underwriter or the Company or any of its or their partners, officers or directors or
any controlling person, or the Selling Stockholders, as the case may be, and will survive delivery
of and payment for the Shares sold hereunder and any termination of this Agreement.
Section 12. Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Underwriter:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to each of:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xx, Esq.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xx, Esq.
and
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
40
If to the Company:
Synagro Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, XX, Esq.
0000 Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, XX, Esq.
with a copy to:
Xxxxx Liddell & Xxxx LLP
0000 XXXxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
0000 XXXxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Selling Stockholders:
Synagro Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, XX, Esq.
0000 Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, XX, Esq.
with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
Xxxxxx X. Xxxxx, Esq.
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
Xxxxxx X. Xxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The term “successors”
shall not include any purchaser of the Shares as such from any of the Underwriter merely by reason
of such purchase.
41
Section 14. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
Section 15. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SUCH STATE.
Section 16. Failure of One or More of the Selling Stockholders to Sell and Deliver
Shares. If one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriter the Shares to be sold and delivered by such Selling Stockholders at the Closing Date
pursuant to this Agreement, then the Underwriter may at its option, by written notice from the
Underwriter to the Company and the Selling Stockholders, either (i) terminate this
Agreement without any liability on the part of the Underwriter or, except as provided in Sections
4, 6, 8 and 9 hereof, the Company or the Selling Stockholders, or (ii) purchase the shares
which the Company and other Selling Stockholders have agreed to sell and deliver in accordance with
the terms hereof. If one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriter the Shares to be sold and delivered by such Selling Stockholders pursuant to this
Agreement at the Closing Date, then the Underwriter shall have the right, by written notice from
the Underwriter to the Company and the Selling Stockholders, to postpone the Closing Date, as the
case may be, but in no event for longer than seven days in order that the required changes, if any,
to the Registration Statement and the Prospectus or any other documents or arrangements may be
effected.
Section 17. General Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions.
42
Each of the parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
Section 18. No Advisory or Fiduciary Responsibility. Each of the Company and the
Selling Stockholders acknowledges and agrees that: (i) the purchase and sale of the Shares
pursuant to this Agreement, including the determination of the offering price of the Shares and any
related discounts and commissions, is an arm’s-length commercial transaction between the Company
and the Selling Stockholders, on the one hand, and the Underwriter, on the other hand, and the
Company and the Selling Stockholders are capable of evaluating and understanding and understand and
accept the terms, risks and conditions of the transactions contemplated by this Agreement;
(ii) in connection with each transaction contemplated hereby and the process leading to
such transaction the Underwriter is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company, the Selling Stockholders or their respective
affiliates, stockholders, creditors or employees or any other party; (iii) the Underwriter
has not assumed or will not assume an advisory, agency or fiduciary responsibility in favor of the
Company or the Selling Stockholders with respect to any of the transactions contemplated hereby or
the process leading thereto (irrespective of whether the Underwriter has advised or is currently
advising the Company or the Selling Stockholders on other matters) and the Underwriter does not
have any obligation to the Company or the Selling Stockholders with respect to the offering
contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the
Underwriter and its respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Company and the Selling Stockholders and that the
Underwriter does not have any obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) the Underwriter has not provided any
legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and
the Company and the Selling Stockholders have consulted their own legal, accounting, regulatory and
tax advisors to the extent they deemed appropriate.
The Company and the Selling Stockholders hereby waive and release, to the fullest extent
permitted by law, any claims that the Company and the Selling Stockholders may have against the
Underwriter with respect to any breach or alleged breach of agency or fiduciary duty.
43
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company and the Custodian the enclosed copies hereof, whereupon this instrument,
along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
Very truly yours, | ||||||
SYNAGRO TECHNOLOGIES, INC. | ||||||
By: | /s/ J. Xxxx Xxxxxxx | |||||
Title: Senior Executive Vice
President and Chief Financial Officer |
||||||
GTCR FUND VII, L.P. | ||||||
GTCR CAPITAL PARTNERS, L.P. | ||||||
GTCR CO-INVEST, L.P. | ||||||
TCW/CRESCENT MEZZANINE PARTNERS II, L.P. | ||||||
TCW/CRESCENT MEZZANINE TRUST II | ||||||
TCW LEVERAGED INCOME TRUST, L.P. | ||||||
TCW LEVERAGED INCOME TRUST II, L.P. | ||||||
TCW LEVERAGED INCOME TRUST IV, L.P. | ||||||
By: | /s/ Xxxxx X. Xxxxxx XX | |||||
44
The foregoing Underwriting Agreement is hereby confirmed and accepted by the Underwriter as of
the date first above written.
BANC OF AMERICA SECURITIES LLC | ||||||
By: | /s/ Xxxxx Xxxxxxxx | |||||
45
SCHEDULE A
Number of Firm | ||||
Shares to be | ||||
Selling Stockholder | Sold | |||
GTCR FUND VII, L.P. |
12,570,122 | |||
GTCR CAPITAL PARTNERS, L.P. |
899,984 | |||
GTCR CO-INVEST, L.P. |
115,081 | |||
TCW/CRESCENT MEZZANINE PARTNERS II, L.P. |
994,542 | |||
TCW/CRESCENT MEZZANINE TRUST II |
241,077 | |||
TCW LEVERAGED INCOME TRUST, L.P. |
102,968 | |||
TCW LEVERAGED INCOME TRUST II, L.P. |
102,968 | |||
TCW LEVERAGED INCOME TRUST IV, L.P. |
102,968 | |||
Total |
15,129,710 |
Schedule A-1
SCHEDULE B
Schedule of Free Writing Prospectuses included in the Disclosure Package
None
Schedule B-1
SCHEDULE C
Lock-Up Signatories
1. | Xxxxxx X. Xxxxxxx | |
2. | Xxxx X. Xxxxxx | |
3. | Xxxxx X. Xxxxxx | |
4. | Xxxxxxx Xxxx Xxxxxxx | |
5. | Xxxxxxx Xxxx | |
6. | Xxxx Xxxxxxxx | |
7. | Xxxxxx Xxxxx, 2nd | |
8. | Xxxxx X. Xxxxxx |
Schedule C-1