Exhibit 1.1
7,000,000 Shares
H POWER CORP.
Common Stock
UNDERWRITING AGREEMENT
_____ __, 2000
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
DEUTSCHE BANK SECURITIES INC.
JOSEPHTHAL & CO. INC.
FIDELITY CAPITAL MARKETS,
a division of National Financial Services Corporation
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
H Power Corp., a Delaware corporation (the "Company"),
proposes to sell an aggregate of 7,000,000 shares (the "Firm Stock") of the
Company's common stock, $.001 par value (the "Common Stock"). In addition,
certain stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to grant to the Underwriters named in Schedule 1 hereto
(the "Underwriters") an option to purchase up to an additional 1,050,000 shares
of the Common Stock on the terms and for the purposes set forth in Section 2
(the "Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively referred to as the "Stock." This is to confirm the
agreement concerning the purchase of the Stock from the Company and the Selling
Stockholders by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 and all amendments
thereto, with respect to the Stock has (i) been prepared by the Company
in conformity with the requirements of the United States Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such registration
statement and all amendments thereto have been delivered by the Company
to you as the representatives (the "Representatives") of the
Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means each prospectus included in a registration statement,
and all amendments thereto, before such registration statement became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means the registration statement of the Company, as amended
at the Effective Time, including all information contained in the final
prospectus filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations in accordance with Section 5(a)
hereof and deemed to be a part of the registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations; and "Prospectus" means the final prospectus, as first
filed by the Company with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations. The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any supplement
thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; PROVIDED that no
representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary
to own or hold their respective properties and to conduct the
businesses in which they are engaged except where the failure to so
qualify would not in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole. The Company has no
subsidiaries other than H Power Enterprises of Canada, Inc. ("HPEC").
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(d) The Company has an authorized capitalization as described
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus; and except as described in the Prospectus,
all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, pledges, equities
or claims.
(e) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable and free and clear of all liens, encumbrances, pledges,
equities or claims, and good and valid title to such shares of Stock
will be passed to the Underwriters; and the Stock will conform to the
descriptions thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby, including the 5-for-1 split of each of the outstanding shares
of Common Stock, the conversion of all of the Company's outstanding
shares of preferred stock into shares of Common Stock, the issuance of
1,666,665 shares of Common Stock to outside investors upon conversion
of a certain 50% equity interest in HPEC and the amendments to the
Company's organizational instruments as described in the Prospectus
(such actions are hereinafter collectively called the
"Recapitalization"), will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the United
States Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and applicable state or foreign securities laws in connection
with the purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company
and
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the consummation of the transactions contemplated hereby and the
Recapitalization.
(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include any such securities with the Stock
registered pursuant to the Registration Statement or with any other
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(i) Except as described in the Prospectus and Item 15 of Part
II of the Registration Statement, the Company has not sold or issued
any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock during the
six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A or Regulations D or S under the Securities
Act, other than securities or shares issued pursuant to employee
benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(j) Except as described in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus (i)
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree;
and, (ii) there has not been any change in the capital stock or
long-term debt of the Company or its subsidiaries or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, condition
(financial or otherwise), prospects, results of operations, cash flows
and stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole ("Material Adverse Effect").
(k) The financial statements (including the related notes and
schedules thereto) filed as part of the Registration Statement or
included in the Prospectus present fairly the financial condition,
results of operations and cash flows of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have
been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis throughout the
periods involved ("GAAP"). The selected financial data set forth under
the caption "Selected Financial Data" in the Prospectus and the
Registration Statement fairly present, on the basis stated in the
Prospectus and the Registration Statement, the information included
therein.
The pro forma financial statements included in the Prospectus
and the Registration Statement include assumptions of the Company's
management
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that provide a reasonable basis for presenting the significant effects
directly attributable to the transactions and events described therein,
the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma adjustments reflect the proper
application of those adjustments to the historical financial statement
amounts in the pro forma financial statements included in the
Prospectus and the Registration Statement. The pro forma financial
statements included in the Prospectus and the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of Regulation S-X under the Securities Act and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements.
(l) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 7(h) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(m) The Company and its subsidiaries have good and marketable
title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and all real property and buildings held under lease by
the Company or its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries.
(n) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect, the Company is not
in default thereunder and the Company has fully paid all premiums
relating to such policies when due.
(o) The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trade and
service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the "Intellectual
Property") necessary for the conduct of the Company's business as now
conducted or as proposed in the Prospectus to be conducted. Except as
set forth in the Prospectus (i) there are no rights of third parties to
any such Intellectual Property, (ii) there is no material infringement
by third parties of any such Intellectual Property, (iii) there is no
pending or, to the Company's
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knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which could form a
reasonable basis for any such claim, (iv) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which could form a
reasonable basis for any such claim, (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which could form a
reasonable basis for any such claim, (vi) there is no U.S. patent or
published U.S. patent application which contains claims that dominate
or may dominate any Intellectual Property described in the Prospectus
as being owned by or licensed to the Company or that interferes with
the issued or pending claims of any such Intellectual Property, (vii)
to the Company's knowledge, there is no Intellectual Property that any
of the Company's competitors or other third parties have developed
which reasonably could be expected to supersede or make obsolete any
product or process of the Company, and (viii) there is no prior art of
which the Company is aware that may render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office.
(p) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, could have a Material Adverse Effect; and to the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(q) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been so described or filed or incorporated
therein by reference as permitted by the Rules and Regulations, and the
statements in the Prospectus under the headings "Risk Factors - Any
change in our relationship with ECO Fuel Cells, LLC would delay our
ability to generate revenues"; "Risk Factors - Government regulation
could impose burdensome requirements and restrictions that could impair
demand for our stationary fuel cell products"; "Risk Factors - We may
be unable to protect our intellectual property rights and we may be
liable for infringing the intellectual property rights of others";
"Risk Factors - We may become subject to risks inherent in
international operations including currency exchange rate fluctuations
and tariff regulations"; "Risk Factors - There may be an adverse effect
on the market price of our common stock as a result of a significant
number of shares being available for future sale by our existing
stockholders"; "Business - Intellectual Property"; "Business - Legal
Proceedings"; "Description of Capital
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Stock"; "Shares Eligible for Future Sale" and "United States Tax
Consequences to Non-U.S. Holders" insofar as such statements summarize
legal matters, agreements, documents, or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(r) No relationship, direct or indirect, exists between or
among the Company or its subsidiaries on the one hand, and the
directors, officers, stockholders, affiliates, associates, customers or
suppliers of the Company or its subsidiaries on the other hand, which
is required to be described in the Prospectus which is not so
described.
(s) No labor disturbance by the employees of the Company or
its subsidiaries exists or, to the knowledge of the Company, is
imminent which could have a Material Adverse Effect.
(t) The Company and each of its subsidiaries is in compliance
in all material respects with all presently applicable provisions of
the United States Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or its subsidiaries would have any liability; neither
the Company nor its subsidiaries has incurred or expects to incur
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the United States Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code").
(u) The Company and its subsidiaries have filed all federal,
state and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company have any knowledge of
any tax deficiency which, if determined adversely to the Company or any
of its subsidiaries, could have) a Material Adverse Effect.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as otherwise described
in the Prospectus, neither the Company nor its subsidiaries have (i)
issued or granted any securities, (ii) incurred any material liability
or obligation, direct or contingent, (iii) entered into any material
transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
(w) The Company and its subsidiaries (i) make and keep
accurate books and records and (ii) maintain internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit
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preparation of its financial statements and to maintain accountability
for their assets, (C) access to their assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for their assets is compared with existing assets at
reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event
has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties or
assets is subject, except for such defaults, which individually or in
the aggregate, do not and would not have a Material Adverse Effect or
(iii) is in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets is
subject.
(y) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(z) The Company and its subsidiaries (i) are in compliance
with all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986,
the Federal Water Pollution Control Act of 1972 (commonly known as the
Clean Water Act), the Clean Air Act, the Resource Conservation and
Recovery Act of 1976 (including the hazardous and Solid Waste
Amendments thereto), the Solid Waste Disposal Act; the Toxic Substances
Control Act, the Occupational Safety and Health Act of 1970, the New
Jersey Spill Compensation and Control Act, the New Jersey Solid Waste
Management Act, the New Jersey Air Pollution Control Act, the New
Jersey Water Pollution Control Act, and the New Jersey Industrial Site
Recovery Act ("ISRA"), each as amended and in effect from time to time
(collectively, "Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses, (iii) have not received notice of any actual or potential
liability for investigation, remediation, or damages related to the
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive or comply with required
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permits, licenses or other approvals, or liability could not,
individually or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus, and
(iv) are not presently subject to the requirements of the ISRA, nor
will they be subject to ISRA as a result of the transactions
contemplated herein. Except as described in the Prospectus, neither the
Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(aa) Neither the Company nor any subsidiary is, nor after
giving effect to the offering and sale of the Stock and the application
of the proceeds thereof as described in the Prospectus will be, an
"investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(bb) The Company and its subsidiaries are Year 2000 compliant.
(cc) Except as described in the Prospectus, there are no
transactions with any "affiliate" or "associate" (as such terms are
defined in Rule 405 promulgated under the Act) or any officer, director
or security holder of the Company (whether or not constituting such an
affiliate or associate) which are required by the Act and the
applicable rules and regulations thereunder to be disclosed in the
Registration Statement or the Prospectus.
(dd) To the Company's knowledge after reasonable inquiry and
except as described in the Prospectus under the heading "Management",
no officer, director, nominee for director or security holder of the
Company has any direct or indirect affiliation or association with any
member of the National Association of Securities Dealers, Inc. (the
"NASD").
(ee) The Amended and Restated Fuel Cell Product Operating
Agreement dated March 9, 2000, by and among ECO Fuel Cells, LLC, the
Company and HPEC, has been duly authorized, executed and delivered by
the Company and HPEC and constitutes a valid and binding obligation of
the Company and HPEC enforceable in accordance with its terms.
(ff) Those certain letter agreements executed in April 2000
constituting waivers of registration rights by each of Duquesne
Enterprises, Inc., Singapore Technologies Kinetics Ltd., Sofinov
Societe Financiere D'Innovation Inc., ECO Fuel Cells, LLC and
Hydro-Quebec CapiTech Inc. are duly authorized, executed and delivered
by the Company and, to the extent the Company is obligated thereunder,
constitute valid and binding obligations of the Company enforceable
against it in accordance with their terms.
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(gg) That certain Stockholders' and Voting Agreement dated as
of April 5, 2000, among the Company, Xxxxxx Brothers, Inc., Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Trustee for Jordan X.
Xxxxxxxxx 2000 Irrevocable Trust, Xxxxxx Xxxxxxxxx, as trustee for
Xxxxxx X. Xxxxxxxxx 2000 Irrevocable Trust, Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Trustee for Xxxxx
Xxxxxx, Dynamark Corp. and the other signatories thereto has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against it in
accordance with its terms.
(hh) 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 Stock.
(ii) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in the Prospectus.
(jj) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
for the ownership of property or assets or to conduct their respective
businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as
described in the Prospectus (exclusive of any supplement thereto); each
of the Company and its subsidiaries has operated and is operating its
business in compliance with and not in violation of any of its
obligations with respect to each such permit and no event has occurred
which allows, or after notice or lapse of time or both would allow,
revocation or termination of any such permit or result in any other
impairment of the rights of the Company or any of its subsidiaries
under any such permit, subject in each case to such qualification as
described in the Prospectus; and, except as described in the
Prospectus, such permits contain no restrictions that are burdensome to
the Company or any of its subsidiaries.
(kk) In the ordinary course of its business the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any
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capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated costs
and liabilities could not, singly or in the aggregate, have a Material
Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
Furthermore, the Company represents and warrants to Xxxxxx Brothers
Inc. that (i) the Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any further amendments or supplements thereto will
comply, with all applicable laws and regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program (as
hereinafter defined), and that (ii) no authorization, approval, consent,
license, order, registration or qualification of or with any government,
governmental instrumentality, authority or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.
The Company has not offered or caused the Underwriters to offer
Directed Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 7,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Selling Stockholders have granted to the Underwriters
an option to purchase up to 1,050,000 shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of Firm
Stock and is exercisable as provided in Section 4 hereof. Shares of Option Stock
shall be purchased severally for the account of the Underwriters in proportion
to the number of shares of Firm Stock set opposite the name of such Underwriters
in Schedule 1 hereto. The respective purchase obligations of each Underwriter
with respect to the Option Stock shall be adjusted by the Representatives so
that no Underwriter
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shall be obligated to purchase Option Stock other than in 100 share multiples.
The price of both the Firm Stock and any Option Stock shall be $_____ per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on the First Delivery Date or the
Second Delivery Date (as hereinafter defined), as the case may be, except upon
payment for all the Stock to be purchased on such Delivery Date as provided
herein.
3. OFFERING OF STOCK BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
It is understood that 700,000 shares of the Firm Stock (the "Directed
Shares") initially will be reserved by the several Underwriters for offer and
sale upon the terms and subject to the conditions described in the Prospectus
and in accordance with the rules and regulations of the NASD to employees and
persons having business relationships with the Company and its subsidiaries who
heretofore have delivered to the Representatives offers or indications of
interest to purchase shares of Firm Stock in form satisfactory to the
Representatives, and that any allocation of such Firm Stock among such persons
will be made in accordance with timely directions received by the
Representatives from the Company (the "Directed Share Program"); PROVIDED, that
under no circumstances will the Representatives or any Underwriter be liable to
the Company or to any such person for any action taken or omitted in good faith
in connection with such offering to employees and persons having business
relationships with the Company and its subsidiaries. It is further understood
that any shares of such Firm Stock which are not orally confirmed for purchase
by such persons by the beginning of the business day after this Agreement is
executed will be offered by the Underwriters to the public upon the terms and
subject to the conditions set forth in the Prospectus.
4. DELIVERY OF AND PAYMENT FOR THE STOCK. Delivery of and payment
for the Firm Stock shall be made at the offices of Xxxxxxxxx Traurig, LLP, The
Met Life Building, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New
York City time, on the fourth full business day next following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
hereinafter referred to as the "First Delivery Date." On the First Delivery
Date, the Company shall deliver or cause to be delivered certificates
representing the Firm Stock to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representatives
12
in New York, New York, not later than 2:00 p.m., New York City time, on the
business day next preceding the First Delivery Date.
At any time on or before the 30th day after the date of this Agreement
the option granted in Section 2 (which will expire 30 days after the date of
this Agreement) may be exercised in whole or in part from time to time by
written notice being given to the Selling Stockholders with a copy to the
Company by the Representatives. Such notice shall set forth the aggregate number
of shares of Option Stock as to which the option is being exercised, the names
in which the shares of Option Stock are to be registered, the denominations in
which the shares of Option Stock are to be issued and the date and time, as
determined by the Representatives, when the shares of Option Stock are to be
delivered; PROVIDED, HOWEVER, that such date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the shares of Option Stock are delivered are sometimes referred to as the
"Second Delivery Date" and the First Delivery Date and the Second Delivery Date
are sometimes each referred to as a "Delivery Date".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Selling Stockholders) at 10:00 a.m., New York City time, on the Second
Delivery Date. On the Second Delivery Date, the Selling Stockholders shall
deliver or cause to be delivered the certificates representing the Option Stock
to the Representatives for the account of each Underwriter against payment to or
upon the order of the Company of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Option Stock
shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Company shall make the certificates representing the Option Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 p.m., New York City time, on the business day prior to the Second
Delivery Date.
5. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day next following the execution and
delivery of this Agreement or, if applicable, such earlier time as may
be required by Rule 430A(a)(3) under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or to
the Prospectus except as expressly permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with true
and complete copies
13
thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, promptly to use its
best efforts to obtain the withdrawal thereof.
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives reasonably shall
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus;
and, if the delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the Stock and
if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an 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 when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus in order to comply with
the Securities Act or the Rules and Regulations, to notify the
Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that, in the judgment of the Company or the Representatives,
may be required by the Securities Act or requested by the Commission.
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing.
14
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder.
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; PROVIDED that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction.
(i) For a period of 180 days from the date of the Prospectus
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares
of Common Stock (other than the Stock and shares issued pursuant to
qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable or exercisable for shares of Common
Stock (other than the grant of options pursuant to option plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of shares of Common Stock or
other securities, in cash or otherwise, in each case without the prior
written consent of Xxxxxx Brothers Inc.; and to cause each officer,
director, 5% Stockholder, and each of the parties listed in Section
7(o) hereof to furnish to the Representatives, prior to the First
Delivery Date, a letter substantially in the form set forth in Exhibit
A attached hereto.
(j) Prior to the Effective Date, to apply for the quotation of
the Stock on the Nasdaq National Market and to use its best efforts to
complete that listing,
15
subject only to official notice of issuance and evidence of
satisfactory distribution, prior to the First Delivery Date.
(k) To apply the net proceeds from the sale of the Stock as
described in the Prospectus.
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(m) The Company will not directly or indirectly take any
action designed to or which has constituted or which might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Stock.
(n) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date
of the effectiveness of the Registration Statement. Xxxxxx Brothers
Inc. will notify the Company as to which participants in the Directed
Share Program will need to be so restricted. The Company will direct
the removal of such transfer restrictions upon the expiration of such
period of time.
(o) The Company will pay (i) all fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed
Share Program and (ii) stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program.
Furthermore, the Company covenants with Xxxxxx Brothers Inc. that the
Company will comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed Shares
are offered in connection with the Directed Share Program.
6. EXPENSES. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and all taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and all
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and all post-effective
amendments thereof (including, in each case, exhibits), each Preliminary
Prospectus, the Prospectus and each supplement to the Prospectus, all as
provided in this Agreement; (d) the costs of producing and distributing this
Agreement and all other related documents in connection with the offering,
purchase, sale and delivery of the Stock; (e) the filing fees incident to
securing any required review by the NASD of the terms of sale of the Stock; (f)
all applicable listing and
16
other fees; (g) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 5 (h) and of
preparing, printing and distributing a blue sky memorandum (including related
fees and expenses of counsel to the Underwriters); (h) all costs and expenses of
the Underwriters, including the fees and disbursements of counsel for the
Underwriters, incident to the offer and sale of shares of the Stock by the
Underwriters to employees and persons having business relationships with the
Company and its subsidiaries, as described in Section 3; and (i) all other costs
and expenses incident to the performance of the obligations of the Company and
the Selling Stockholders; PROVIDED that, except as provided in this Section 6
and in Section 11, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters.
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective\
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of
Xxxxxxxxx Traurig, LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreement and the Power of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company and the Selling Stockholders shall have
furnished to such counsel all documents and information that they
reasonably may request to enable them to pass upon such matters.
(d) Fulbright & Xxxxxxxx L.L.P. shall have furnished to the
Representatives its written opinion, as independent general counsel to
the
17
Company, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of Delaware, is duly qualified to transact business and
is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification,
except where the failure to so qualify would not have a
Material Adverse Effect, and the Company has all power and
authority necessary to own and lease, as applicable, its
properties and conduct the businesses in which it is engaged;
(ii) The Company has an authorized capitalization as
described in the Prospectus, and all of the issued and
outstanding shares of capital stock of the Company (including
the shares of Stock being delivered on such Delivery Date)
have been duly and validly authorized and issued, are fully
paid and non-assessable, and conform to the description
thereof contained in the Prospectus; all of the issued and
outstanding shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are
fully paid, and non assessable and are owned of record by the
Company and, to such counsel's knowledge, are owned
beneficially by the Company, free and clear of all liens,
encumbrances, equities, pledges or claims; based on that
certain letter dated July 6, 2000 from The Nasdaq Stock
Market, Inc., all shares of Common Stock (including the Stock)
have been approved for quotation on the Nasdaq National Market
under the symbol "HPOW," subject to official notice of
issuance and evidence of satisfactory distribution; the
certificates for the Stock are in valid and sufficient form;
and, except as described in the Prospectus, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert, exercise or
exchange any obligations into or for any securities or
ownership interests in the Company are outstanding;
(iii) Other than the transactions expressly
contemplated by this Agreement, there are no preemptive or
other rights to subscribe for or to purchase, nor is there any
restriction upon the voting or transfer of, any shares of the
Common Stock (including the Stock) pursuant to the Company's
(a) charter or by-laws or (b) any agreement or other
instrument known to such counsel;
(iv) All real property and buildings held under lease
by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions
which do not materially interfere with the use made and
proposed to be made of such property and buildings by the
Company and its subsidiaries;
18
(v) To such counsel's knowledge and other than as
described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or by which any property or
assets of the Company or any of its subsidiaries is bound or
subject which, if determined adversely to the Company or any
of its subsidiaries, could have a Material Adverse Effect,
and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by any governmental authorities or
threatened by others;
(vi) The Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such counsel's opinion, the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion
on the date specified therein and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge
of such counsel, no proceeding for that purpose is pending,
contemplated or threatened by the Commission;
(vii) The Registration Statement and the Prospectus
and all further amendments and supplements thereto made by the
Company prior to such Delivery Date (other than the financial
statements and related schedules, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations;
(viii) The statements contained in the Prospectus
under the headings "Risk Factors - Any adverse change in our
relationship with ECO Fuel Cells, LLC would delay our ability
to generate revenues"; "Risk Factors - There may be an adverse
effect on the market price of our common stock as a result of
a significant number of shares being available for future sale
by our existing stockholders"; "Business - Legal Proceedings";
"Description of Capital Stock"; "Shares Eligible for Future
Sale"; "United States Tax Consequences to Non-U.S. Holders,"
insofar as such statements refer to statements of law,
descriptions of statutes, licenses, rules or regulations, or
legal conclusions, are accurate and fair summaries of such
statements of law, descriptions of statutes, licenses, rules
or regulations, or legal conclusions;
(ix) To such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been so described or filed;
(x) This Agreement has been duly authorized, executed
and delivered by the Company;
19
(xi) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with the provisions of this
Agreement and the consummation by the Company of the
transactions contemplated hereby and by the Recapitalization,
do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default (or an event which with notice, lapse of time, or
both would constitute a default) under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party, by which the Company or any of
its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of
its subsidiaries presently in effect or of any statute, order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties
or assets; and, except for the registration of the offer and
sale of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and under applicable
state or foreign securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
by the Company of this Agreement or the consummation of the
transactions contemplated hereby and by the Recapitalization;
(xii) Except as described in the Prospectus, to such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person or entity
granting such person or entity the right to require the
Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to
be owned by such person or entity or to require the Company to
include such securities in the securities registered pursuant
to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed
by the Company under the Securities Act;
(xiii) That certain Amended and Restated Fuel Cell
Product Operating Agreement, dated March 9, 2000, by and among
ECO Fuel Cells, LLC, and the Company and HPEC has been duly
authorized, executed and delivered by the Company and HPEC and
constitutes a valid and binding obligation of each of the
Company and HPEC enforceable against the Company and HPEC in
accordance with its terms;
(xiv) The Stockholders' and Voting Agreement dated as
of April 5, 2000, among the Company, Xxxxxx Brothers Inc.,
Xxxxxx
20
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx,
Trustee for Jordan X. Xxxxxxxxx 2000 Irrevocable Trust, Xxxxxx
Xxxxxxxxx, as trustee for Xxxxxx X. Xxxxxxxxx 2000 Irrevocable
Trust, Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx Xxxxxx, Trustee for Xxxxx Xxxxxx, Dynamark
Corp. and the other signatories thereto has been duly
authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company
enforceable against it in accordance with its terms;
(xv) The Company is not and, after giving effect to
the offering and sale of the Stock and the application of the
net proceeds thereof as described in the Prospectus, will not
be, an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(xvi) Each Selling Stockholder has full right, power
and authority to enter into this Agreement and the Custodian
Agreement and Power of Attorney (as defined in Section 12
hereof); the execution, delivery and performance of this
Agreement and the Custodian Agreement and Power of Attorney by
each Selling Stockholder and the consummation by each Selling
Stockholder of the transactions contemplated hereby does not
and will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default
under, any statute or instrument known to such counsel to
which any Selling Stockholder is a party or by which any
Selling Stockholder is bound or to which any of the property
or assets of any Selling Stockholder is subject, nor will such
actions result in any violation of the provisions of the deed
of trust of any Selling Stockholder or any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over any
Selling Stockholder or the property or assets of any Selling
Stockholder; and, except for the registration of the Option
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Option Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement and the Custodian Agreement and Power of
Attorney by any Selling Stockholder and the consummation by
any Selling Stockholder of the transactions contemplated
hereby;
(xvii) This Agreement has been duly authorized,
executed and delivered by or on behalf of each Selling
Stockholder;
(xviii) The Custodian Agreement and Power of Attorney
has been duly authorized by those Selling Stockholders that
are entities, and
21
executed and delivered by each Selling Stockholder and
constitutes a valid and binding agreement of each Selling
Stockholder, enforceable in accordance with its terms;
(xix) Assuming that the Underwriters acquire their
interests in the Option Stock to be sold pursuant to this
Agreement by the Selling Stockholders in good faith and
without notice of any adverse claims (within the meaning of
Section 8-102 of the New York Uniform Commercial Code), upon
delivery to the Underwriters of such Option Stock registered
in their names, the Underwriters will acquire such Option
Stock free and clear of all liens, encumbrances, equities or
claims.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the federal laws of the United States of
America, the internal laws of the State of New York and the General
Corporation Law of the State of Delaware. In addition, such counsel
shall state that they have participated in meetings and conferences
with officers and other representatives of the Company, representatives
of the independent accountants of the Company, representatives of the
Underwriters and representatives of counsel for the Underwriters, at
which the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel need not pass
upon, and need not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except for those referred to
in the opinions in subsection (viii) above) and has made no independent
check or verification thereof, such counsel shall state that on the
basis of the foregoing, no facts have come to such counsel's attention
that has led them to believe that the Registration Statement, as of the
Effective Date and on the date of such counsel's opinion, contained or
contains an untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the
Prospectus, as of its date and on the date of such counsel's opinion
hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading, except that such counsel need express no
opinion or belief with respect to the financial statements and other
financial and statistical data included therein or excluded therefrom
or (except as referred to in the opinions in subsection (ix) above) the
exhibits to the Registration Statement.
(e) Xxxxxxxx Xxxxxxxxxx, shall have furnished to the
Representatives its written opinion as to certain matters of Canadian
law (including certain matters referred to in the opinions of Company
counsel set forth in Section 7(d)), addressed to the Underwriters and
dated such Delivery Date, as to such matters as shall be specified by
the Representatives.
22
(f) The Company additionally shall have requested and caused
Xxxxxxx & Levy, intellectual property counsel for the Company, to have
furnished to the Representatives their opinion, dated such Delivery
Date and addressed to the Underwriters, to the effect that:
(i) the Company and its subsidiaries own, possess,
license or have on reasonable terms other rights to use, and
title to and interest in, all Intellectual Property necessary
to the Company, its business as currently conducted or as
described in the Prospectus;
(ii) there is no pending, or, to the knowledge of
such counsel, threatened, action, suit or proceeding or claim
by others challenging the Company's rights in or to any such
Intellectual Property, and such counsel is unaware of any
facts which would form a reasonable basis for the assertion of
any such claim;
(iii) there is no pending, or, to the knowledge of
such counsel, threatened, action, suit, proceeding or claim by
others challenging the validity or scope of any such
Intellectual Property, and such counsel is unaware of any
facts which could form a reasonable basis for the assertion of
any such claim;
(iv) there is no pending, or, to the knowledge of
such counsel, threatened, action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other
proprietary rights of others, and such counsel is unaware of
any facts which would form a reasonable basis for the
assertion of any such claim;
(v) to the knowledge of such counsel, there is no
Intellectual Property that any competitors or other third
parties have developed which reasonably could be expected to
supersede or make obsolete any product or process of the
Company;
(vi) to the knowledge of such counsel, there is no
prior art that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company
unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office; and
(vii) The statements contained in the Prospectus,
under the headings "Risk Factors--We may be unable to protect
our intellectual property rights and we may be liable for
infringing the intellectual property rights of others" and
"Business--Intellectual Property" insofar as such statements
refer to the statements of law, descriptions of statutes,
licenses, agreements, rules or regulations or legal
conclusions are accurate and fair
23
summaries of such statements of law, descriptions of statutes,
licenses, agreements, rules or regulations or legal
conclusions.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction, to the extent
they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who
are satisfactory to counsel for the Underwriters and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the
Prospectus in this Section 7(f) include any supplements thereto at the
Delivery Date.
(g) The Representatives shall have received from Xxxxxxxxx
Traurig, LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel true and complete copies of such
documents and access to all Company records and management personnel as
they reasonably may request for the purpose of enabling them to pass
upon such matters.
(h) The Company shall have requested and caused
PricewaterhouseCoopers LLP to furnish to the Representatives, on the
date hereof and on each Delivery Date, letters dated, respectively, the
date hereof and each Delivery Date, in form and substance satisfactory
to the Representatives, confirming that they are independent
accountants within the meaning of the Securities Act and the applicable
Rules and Regulations, and stating in effect that:
(i) in their opinion the audited financial statements
included in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act and the related Rules and Regulations;
(ii) on the basis of carrying out certain specified
procedures (but not an examination in accordance with U.S.
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors, audit and
compensation committees of the Company and its subsidiaries;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to May 31, 2000, nothing came to their attention
which caused them to believe that:
(1) with respect to the period subsequent to
May 31, 2000 there were any changes, at a specified
date not more than five days prior to the date of the
letter in the long-term debt of the
24
Company and its subsidiaries, stockholders' equity of
the Company or in the working capital of the Company
and its subsidiaries as compared with the amounts
shown on the May 31, 2000 consolidated balance sheet
included in the Registration Statement and the
Prospectus, or for the period from June 1, 2000 to
such specified date there were any changes, as
compared with the corresponding period in the
preceding quarter, or any decrease in revenues or any
increase in the total or per share amount of net loss
of the Company, except in all instances for changes,
set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company
as to the significance thereof unless said
explanation is not deemed necessary by the
Representatives; and
(2) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data) is
not in conformity with the applicable disclosure
requirements of Regulation S-K;
and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including the information set
forth under the captions "Management's Discussion and Analysis
of Financial Condition and Results of Operations", "Selected
Financial Data, "Prospectus Summary --- Summary Financial
Data", "Capitalization", "Dilution", "Business" and "Risk
Factors" in the Prospectus, agrees with the accounting records
of the Company and its subsidiaries, excluding any questions
of legal interpretation.
(i) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the
Representatives a letter (the "bring-down letter") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and
25
findings of such firm with respect to the financial information and
other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial
letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board,
its President or a Vice President and its Chief Financial Officer
stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 7(a) through 7(p) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their judgment (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(k) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial condition, stockholders' equity cash flows,
prospects or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, Inc. or the
American Stock Exchange or in the over-the-counter market, or trading
in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
26
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of a
majority-in-interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner described in the Prospectus.
(m) Prior to the Closing Date, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
information, certificates and documents as the Representatives
reasonably may request.
(n) The Common Stock shall have been approved for quotation on
the Nasdaq National Market under the symbol "HPOW", subject to official
notice of issuance and evidence of satisfactory distribution.
(o) At the Effective Date, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer and director of the Company and each of Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Trustee for Jordan X.
Xxxxxxxxx 2000 Irrevocable Trust, Xxxxxx Xxxxxxxxx, as trustee for
Xxxxxx X. Xxxxxxxxx 2000 Irrevocable Trust, Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Trustee for Xxxxx
Xxxxxx, Dynamark Corp., Duquesne Enterprises, Singapore Technologies
Automotive Ltd., Sofinov Societe Financiere D'Innovation Inc., ECO Fuel
Cells, LLC and Hydro-Quebec CapiTech Inc.
(p) As described in the Prospectus, on or prior to the Closing
Date, all outstanding shares of the Company's Series A Convertible
Preferred Stock, $.001 par value, Series B Convertible Preferred Stock,
$.001 par value, and Series C Convertible Preferred Stock, $.001 par
value, shall have been duly and validly converted into the number of
shares of Common Stock described in the Prospectus and no such shares
of preferred stock shall remain issued or outstanding.
(q) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on each Delivery Date a certificate,
signed by, or on behalf of, the Selling Stockholder (or the Custodian
or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of the Selling Stockholder contained herein
are true and correct and that the Selling Stockholder has
27
complied with all agreements contained herein to be performed by the
Selling Stockholder at or prior to the such Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers, directors, affiliates, representatives,
employees and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act, from and against all losses, claims, damages and
liabilities joint or several ("Losses"), and all actions and
proceedings in respect thereof (including, but not limited to, Losses
relating to purchases and sales of Stock), to which that Underwriter,
officer, director, affiliate, representative, employee or controlling
person may become subject, under the Securities Act or otherwise,
insofar as any such Loss, action or proceeding arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, or (B) in any materials or information provided to
investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Stock ("Marketing Materials"),
including any roadshow or investor presentations made to investors by
the Company (whether in person or electronically),(ii) the omission or
alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Marketing Materials, any material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made), not misleading or (iii) any act or failure
to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or
referred to in any Loss, action or proceeding arising out of or based
upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that
it is determined in a final judgment by a court of competent
jurisdiction that such Loss, action or proceeding resulted directly
from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful
misconduct), and shall reimburse each Underwriter and each such
officer, employee, director, affiliate, representative or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, officer, director, affiliate,
representative, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
Loss, action or proceeding as such expenses are incurred; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the
extent that any such Loss, action or proceeding arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application, in reliance upon and in
conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein which information
consists solely of the information specified in Section 8(f).
28
The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any officer,
director, affiliate, representative employee or controlling person of
that Underwriter
(b) The Selling Stockholders, severally in proportion to the
number of shares of Option Stock to be sold by each of them hereunder,
shall indemnify and hold harmless each Underwriter, its officers,
directors, affiliates or representatives and employees, and each
person, if any, who controls any Underwriter within the meaning of the
Section 15 of Securities Act and Section 20 of the Exchange Act, from
and against Losses, and all actions and proceedings in respect thereof
(including, but not limited to, Losses relating to purchases and sales
of Option Stock), to which that Underwriter, officer, director,
affiliate, representative, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such Loss,
action or proceeding arises out of, or is based upon, (i) any breach of
any representation, warranty, covenant or agreement made by the Selling
Stockholders in this Agreement, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the information
furnished in writing by or on behalf of the Selling Stockholders
expressly for use in the Registration Statement and the Prospectus and
any further amendments or supplements thereto (including any
information relating to the Selling Stockholder, under the caption
"Principal and Selling Stockholders" contained in the Registration
Statement and Prospectus (or any amendment or supplement thereto)), or
(iii) the omission or alleged omission to state in any Preliminary
Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact, relating to the
Selling Stockholders, required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made) not misleading, and shall
reimburse each Underwriter, its officers and employees, directors,
affiliates, representatives and each such controlling person for any
legal or other expenses reasonably incurred by that Underwriter, its
officers, directors, affiliates, representatives and employees or
controlling persons in connection with investigating or defending or
preparing to defend against any such Loss, action or proceeding as such
expenses are incurred; PROVIDED, HOWEVER, that the Selling Stockholders
shall not be liable in any such case to the extent that any such Loss,
action or proceeding arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any such amendment or supplement in reliance upon and
in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein which information
consists solely of the information specified in Section 8(f). The
foregoing indemnity agreement is in addition to any liability which the
Selling Stockholders may otherwise have to any Underwriter or any
officer, director, affiliate, representative, employee or controlling
person of that Underwriter. Notwithstanding anything to the contrary
herein, in no event shall any Selling Stockholder's obligation under
this Section exceed the total net proceeds from the offering received
by such Selling Stockholder (computed without deduction for any taxes
on such amount.)
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers, affiliates,
representatives and employees, each of its directors (including any
person who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company), each person,
if any, who controls the Company within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act, and each of the
Selling Stockholders from and against any Loss, or any action or
proceeding in
29
respect thereof, to which the Company or any such director, officer,
affiliate, representative, employee, controlling person or Selling
Stockholder may become subject, under the Securities Act or otherwise,
insofar as such Loss, action or proceeding arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, or (B) in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment
thereof or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company and
any such director, officer, affiliate, representative, employee,
controlling person or Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or any such director,
officer, affiliate, representative, employee, controlling person or
Selling Stockholder in connection with investigating or defending or
preparing to defend against any such Loss, action or proceeding as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee, affiliate,
representative, controlling person or Selling Stockholder.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action or
proceeding, the indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the claim or the
commencement of that action or proceeding; PROVIDED, HOWEVER, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure. If any such claim,
action or proceeding shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim,
action or proceeding, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that the Representatives shall have the right to employ
counsel to represent jointly the Representatives and those other
Underwriters and their respective officers, employees, directors,
affiliates, representatives and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company under this Section 8
if, in the reasonable judgment of the Representatives, it is advisable
for the Representatives and those Underwriters, officers, employees,
directors, affiliates, representatives and controlling persons to be
jointly represented by separate counsel, and in that event the
reasonable fees and expenses of such separate counsel shall be paid by
the Company. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be
unreasonably
30
withheld), settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such
action or proceeding effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment of
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 8(a), 8(b), 8(c) or 8(g) in respect
of any Loss, action or proceeding in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such Loss, action or proceeding
in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company or Selling
Stockholders, on the one hand and the Underwriters on the other from
the offering of the Stock 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 or Selling
Stockholders, on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such Loss,
action or proceeding in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
or Selling Stockholders, on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company or Selling Stockholders, on the one hand, and the total
underwriting discounts and commissions received by the Underwriters
with respect to the shares of the Stock purchased under this Agreement,
on the other hand, bear to the total gross proceeds from the offering
of the shares of the Stock under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company,
the Selling Stockholders or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the Loss, action or proceeding in
respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action, proceeding or claim.
Notwithstanding the provisions of this Section 8(e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which
31
the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 8(e) are several in proportion
to their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of
the Stock by the Underwriters set forth on the cover page of, the
legend concerning over-allotments on the cover page of and the
concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
(g) The Company agrees to indemnify and hold harmless Xxxxxx
Brothers Inc., the directors, officers, employees, affiliates,
representative and agents of Xxxxxx Brothers Inc. and each person, who
controls Xxxxxx Brothers Inc. within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and
against any and all Losses, actions or proceedings in respect thereof,
to which they may become subject under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common
law or otherwise (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or
investigating any such action or claim), insofar as such Losses (or
actions or proceedings in respect thereof) (i) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus
or any Preliminary Prospectus or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statement therein, when considered in
conjunction with the Registration Statement, the Prospectus, any
Preliminary Prospectus or in any amendment thereof or supplement
thereto, not misleading; (ii) caused by the failure of any person
participating in the Directed Share Program to pay for and accept
delivery of the securities which immediately following the Effective
Date of the Registration Statement, were subject to a properly
confirmed agreement to purchase; or (iii) related to, arising out of,
or in connection with the Directed Share Program, provided that, the
Company will not be liable in any such case to the extent that any such
Loss arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information furnished
to the Company by or on behalf of Xxxxxx Brothers Inc. specifically for
inclusion therein, which information consists solely of the information
specified in Section 8(f), or is finally judicially determined by a
court of competent jurisdiction to have resulted directly from the bad
faith or gross negligence of Xxxxxx Brothers Inc.
32
9. DEFAULTING UNDERWRITERS. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Stock which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number
of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any
of the Stock on such Delivery Date if the total number of shares of the Stock
which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number
of shares of the Stock which it agreed to purchase on such Delivery Date
pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery
Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Selling Stockholders
to sell, the Option Stock) shall terminate without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Stockholders,
except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Stock which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document.
10. TERMINATION. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(k) or 7(l), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
11. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any
33
failure, refusal or inability on the part of the Company or such Selling
Stockholder to perform any agreement on its part to be performed, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by the Company or the Selling Stockholders is not fulfilled, the
Company and the Selling Stockholders will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company and the Selling Stockholders
shall pay the full amount thereof to the Representative(s). If this Agreement is
terminated pursuant to Section 9 by reason of the default of one or more
Underwriters, neither the Company nor any Selling Stockholder shall be obligated
to reimburse any defaulting Underwriter on account of those expenses.
12. Each Selling Stockholder severally and not jointly represents,
warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 4 hereof) the Selling
Stockholder will have, good and valid title to the shares of Option
Stock to be sold by the Selling Stockholder hereunder on such date,
free and clear of all liens, encumbrances, equities or claims; and upon
delivery of the Option Stock and payment therefor pursuant hereto, good
and valid title to such shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Stockholder has placed in custody and duly and
irrevocably executed and delivered a power of attorney under a
Custodian Agreement and Power of Attorney (the "Custody Agreement" and,
together with all other similar agreements executed by the other
Selling Stockholders, the "Custody Agreements") with
__________________________, as custodian (the "Custodian"), for
delivery under this Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company having an
office or correspondent in the United States or a member firm of the
New York or American Stock Exchanges) representing the shares of Stock
to be sold by the Selling Stockholder hereunder.
(c) Pursuant to the Custody Agreement, the Selling Stockholder
has duly and irrevocably executed and delivered a power of attorney
appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with full
authority (exercisable by any one or more of them) to execute and
deliver this Agreement and to take such other action as may be
necessary or desirable to carry out the provisions hereof on behalf of
the Selling Stockholder.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement and the Custody Agreement; the
execution, delivery and performance of this Agreement and the Custody
Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any
34
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Selling Stockholder is a party or by which
the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions
result in any violation of the deed of trust of the Selling Stockholder
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Option Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state or foreign securities laws in connection with the purchase and
distribution of the Option Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement and the Custody
Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby.
(e) The information furnished in writing by or on behalf of
the Selling Stockholder expressly for use in the Registration
Statement, the Preliminary Prospectus and the Prospectus and any
further amendments or supplements thereto and any information relating
to the Selling Stockholder, under the caption "Principal and Selling
Stockholders" contained in the Registration Statement, Preliminary
Prospectus and Prospectus, when they become effective or are filed with
the Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement,
Preliminary Prospectus and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(f) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1
hereof are not true and correct in all material respects.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the Stock.
13. Each Selling Stockholder agrees:
(a) That the Option Stock to be sold by the Selling
Stockholder hereunder which is represented by the certificates held in
custody for the Selling Stockholder is subject to the interest of the
Underwriters, that the arrangements
35
made by the Selling Stockholder for such custody are irrevocable, and
that the obligations of the Selling Stockholder hereunder shall not be
terminated by any act of the Selling Stockholder, by operation of law
by the death or incapacity of any individual Selling Stockholder or, in
the case of a trust, by the death or incapacity of any executor or
trustee or the termination of such trust, or the occurrence of any
other event.
(b) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-9.
14. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000; with a copy (which shall not constitute
effective notice pursuant to this Section 14) to Xxxxxxxxx Xxxxxxx,
LLP, The Met Life Building, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn:
Xxxxxxxx X. Xxxxxxx, Esq.;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxxxxx Xxxx (Fax:
000-000-0000); with a copy (which shall not constitute effective notice
pursuant to this Section 14) to Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxxxx Xxxxxxx, Esq.;
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth on Schedule 2 hereto;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc.
15. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and
36
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 8(c) of this Agreement shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement, any person controlling the
Company within the meaning of Section 15 of the Securities Act and the Selling
Stockholders. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
16. SURVIVAL. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
17. DEFINITION OF THE TERM "BUSINESS DAY". For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading each Monday, Tuesday, Wednesday, Thursday or Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
18. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
19. CONSENT TO JURISDICTION. Each party irrevocably agrees that
any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby may be instituted in the federal courts
of the United States of America located in the City of New York or the courts of
the State of New York in each case located in the Borough of Manhattan in the
City of New York (collectively, the "Specified Courts"), and irrevocably submits
to the exclusive jurisdiction (except for proceedings instituted in regard to
the enforcement of a judgment of any such court, as to which such jurisdiction
is non-exclusive) of such courts in any such suit, action or proceeding. The
parties further agree that service of any process, summons, notice or document
by mail to such party's address set forth above shall be effective service of
process for any lawsuit, action or other proceeding brought in any such court.
The parties hereby irrevocably and unconditionally waive any objection to the
laying of venue of any lawsuit, action or other proceeding in the Specified
Courts, and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such lawsuit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
37
21. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
38
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
H POWER CORP.
By:______________________________________
Name:
Title:
THE SELLING STOCKHOLDERS
named in Schedule 2 to this Agreement
By:______________________________________
Attorney-in-Fact
39
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
DEUTSCHE BANK SECURITIES INC.
JOSEPHTHAL & CO. INC.
FIDELITY CAPITAL MARKETS,
a division of National Financial Services Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By_____________________________
AUTHORIZED REPRESENTATIVE
40
SCHEDULE 1
Number of
Shares
----------
Underwriters
Xxxxxx Brothers Inc. ..........................................................
CIBC World Markets.............................................................
Deutsche Bank Securities Inc. .................................................
Josephthal & Co. Inc. .........................................................
Fidelity Capital Markets,
a division of National Financial
Services Corporation......................................................
----------
Total 7,000,000
==========
41
SCHEDULE 2
Name and Address of Number of Shares
Selling Stockholder of Option Stock
------------------- -----------------
Xxxxxxx Xxxxxxxxx................................... 525,000
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx, as Trustee for Xxxxx Xxxxxx.......... 225,000
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxx........................................ 150,000
000 Xxxxx Xxxxxx Xxxxxx Xxx 0
Xxxxx Xxxxxx XX 00000
Xxxxx Xxxxxx........................................ 150,000
-------
000 Xxxxxx Xxxx
Xxxxx Xxxxxx XX 00000
Total...................................... 1,050,000
=========
42
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS
DEUTSCHE BANK SECURITIES INC.
JOSEPHTHAL & CO. INC.
FIDELITY CAPITAL MARKETS
a division of National Financial
Services Corporation
As Representatives of the
several underwriters
c/x XXXXXX BROTHERS INC.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an underwriting agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.001 per share (the "Common Stock"), of H
Power Corp. (the "Company") and that the Underwriters propose to reoffer the
Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable or exercisable for Common Stock (other than the
Shares) owned by the undersigned on the date of execution of this Lock-Up Letter
Agreement or on the date of the completion of the Offering, or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, (any such transaction described in clause (1) or (2) above
hereafter referred to as a "Disposition") whether any Disposition is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 180 days after the date of the final Prospectus relating to the
Offering. Notwithstanding the foregoing, each person may transfer the Common
Stock (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound by the restrictions set forth herein or (ii) to any
trust for the direct or indirect benefit of each person or the immediate family,
provided that the trustee of the trust agrees to be bound by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a Disposition for value.
[TO BE INCLUDED IN THE LOCK-UP LETTER AGREEMENT TO BE EXECUTED BY
XXXXXXXXX XXXXXX
provided, however, that the provisions hereof shall not prohibit a
Disposition by Xxxxxxxxx Xxxxxx or his affiliates who are parties to the
Stockholders' and Voting Agreement, dated April 5, 2000, referred to in Section
1(gg) of the Underwriting Agreement and described in the Prospectus, of up to a
total of ______ shares of Common Stock owned beneficially by Xxxxxxxxx Xxxxxx
during the period commencing the 91st day following the date of the Underwriting
Agreement through and including the 180th day following the date of the
Underwriting Agreement, provided further, that such Disposition shall be subject
to the transfer restrictions set forth in the Stockholders' and Voting
Agreement.]
[TO BE INCLUDED IN THE LOCK-UP LETTER AGREEMENT TO BE EXECUTED BY XXXXXX
XXXXXXXXX
and provided, however, the provisions hereof shall not prohibit a
Disposition by Xxxxxx Xxxxxxxxx and his affiliates who are parties to the
Stockholder's and Voting Agreement, dated April 5, 2000, referred to in Section
1(gg) of the Underwriting Agreement and described in the Prospectus, of up to a
total of ________ shares of Common Stock owned beneficially by Xxxxxx Xxxxxxxxx
during the period commencing the 91st day following the date of the Underwriting
Agreement through and including the 180th day following the date of the
Underwriting Agreement, provided further, that such Disposition shall be subject
to the transfer restrictions set forth in the Stockholders' and Voting
Agreement.]
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
2
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:______________________________________
Name:
Title:
Dated: _______________
3
