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Exhibit 1.1
2,000,000 SHARES
COMMON STOCK
($.001 PAR VALUE)
UNDERWRITING AGREEMENT
_________________, 1996
X.X. XXXXXXX & SONS, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
As Representative of the Several Underwriters
c/o X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
The undersigned, Sun Hydraulics Incorporated, a Delaware corporation
(the "Company"), Sun Hydraulics Corporation, a Florida corporation ("SHC") and
Sun Hydraulik Holdings Limited, a private limited company organized under the
Laws of England and Wales ("SHHL")(the Company, SHC and SHHL are sometimes
referred to collectively as the "Company Parties") hereby address you as the
representatives (the "Representatives") of each of the persons, firms and
corporations listed on Schedule I hereto (collectively, the "Underwriters") and
hereby confirm their agreement with the several Underwriters as follows:
1. DESCRIPTION OF SHARES. The Company proposes to issue and sell
to the Underwriters 2,000,000 shares of its Common Stock, par value $.001 per
share (the "Firm Shares"). Solely for the purpose of covering over-allotments
in the sale of the Firm Shares, the Company further proposes to grant to the
Underwriters the right to purchase up to an additional amount of shares equal
to 15% of the Firm Shares (the "Option Shares"), as provided in Section 3 of
this Agreement. The Firm Shares and the Option Shares are herein sometimes
referred to as the "Shares" and are more fully described in the Prospectus
hereinafter defined.
2. PURCHASE, SALE AND DELIVERY OF FIRM SHARES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each such Underwriter agrees, severally and not jointly, (a)
to purchase from the Company, at a purchase price of $_____ per share, the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) to purchase from the Company any additional number of
Option Shares which such Underwriter may become obligated to purchase pursuant
to Section 3 hereof.
The Company will deliver definitive certificates for the Firm Shares
at the office of X.X. Xxxxxxx & Sons, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
("Xxxxxxx' Office"), or such other place as you and the Company may mutually
agree upon, for the accounts of the Underwriters
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against payment to the Company of the purchase price fo the Firm Shares sold by
it to the several Underwriters by wire transfer or certified or bank cashiers'
check in clearing house funds payable to the order of the Company, and
delivered to Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, or at such
other place as may be agreed upon between you and the Company (the "Place of
Closing"), at 10:00 a.m., St. Louis time, on the third full business day
following the date of this Agreement, or at such other time and date thereafter
as you and the Company may agree, such time and date of payment and delivery
being herein called the "Closing Date."
The certificates for the Firm Shares so to be delivered will be made
available to you for inspection at Xxxxxxx' Office (or such other place as you
and the Company may mutually agree upon) at least one full business day prior
to the Closing Date and will be in such names and denominations as you may
request at least two full business days prior to the Closing Date.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose checks
shall not have been received prior to the Closing Date for Shares to be
purchased by such Underwriter. Any such payment by an Underwriter shall not
relieve the other Underwriters of any of their obligations hereunder.
It is understood that the Underwriters propose to offer the Shares to
the public upon the terms and conditions set forth in the Registration
Statement (as hereinafter defined).
3. PURCHASE, SALE AND DELIVERY OF THE OPTION SHARES. The Company
hereby grants an option to the Underwriters to purchase from it up to 300,000
Option Shares on the same terms and conditions as the Firm Shares; provided,
however, that such option may be exercised only for the purpose of covering any
over-allotments which may be made by them in the sale of the Firm Shares. No
Option Shares shall be sold or delivered unless the Firm Shares previously have
been, or simultaneously are, sold and delivered.
The option is exercisable on behalf of the several Underwriters by
you, as Representatives, at any time, and from time to time, before the
expiration of 30 days from the date of this Agreement, for the purchase of all
or part of the Option Shares covered thereby, by notice given by you to the
Company in the manner provided in Section 12 hereof, setting forth the number
of Option Shares as to which the Underwriters are exercising the option, and
the date of delivery of said Option Shares, which date shall not be more than
five business days after such notice unless otherwise agreed to by the parties.
You may terminate the option at any time, as to any unexercised portion
thereof, by giving written notice to the Company to such effect.
You, as Representatives, shall make such allocation of the Option
Shares among the Underwriters as may be required to eliminate purchases of
fractional Shares.
Delivery of the Option Shares with respect to which the options shall
have been exercised shall be made to or upon your order at Xxxxxxx' Office (or
at such other place as you and the Company may mutually agree upon), against
payment by you of the per share purchase price to the Company by wire transfer
or certified or bank cashier's check or checks, payable in clearing house
funds. Such payment and delivery shall be made at 10:00 a.m., St. Louis time,
on the date designated in the notice given by you as above provided for, unless
some other date and time are
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agreed upon, which date and time of payment and delivery are called the "Option
Closing Date." The certificates for the Option Shares so to be delivered will
be made available to you for inspection at Xxxxxxx' Office at least one full
business day prior to the Option Closing Date and will be in such names and
denominations as you may request at least two full business days prior to the
Option Closing Date. On the Option Closing Date, the Company shall provide the
Underwriters such representations, warranties, opinions and covenants with
respect to the Option Shares as are required to be delivered on the Closing
Date with respect to the Firm Shares.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY, SHC
AND SHHL.
(a) The Company, SHC and SHHL represent and warrant to and agree
with each Underwriter that:
(i) A registration statement (Registration No. 333-14183)
on Form S-1 with respect to the Shares, including a preliminary
prospectus, and such amendments to such registration statement as may
have been required to the date of this Agreement, has been carefully
prepared by the Company pursuant to and in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"),
and the Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder and
has been filed with the Commission under the Act. Copies of such
registration statement, including any amendments thereto, each related
preliminary prospectus (meeting the requirements of Rule 430 or 430A
of the Rules and Regulations) contained therein, the exhibits,
financial statements and schedules have heretofore been delivered by
the Company to you. If such registration statement has not become
effective under the Act, a further amendment to such registration
statement, including a form of final prospectus, necessary to permit
such registration statement to become effective will be filed promptly
by the Company with the Commission. If such registration statement
has become effective under the Act, a final prospectus containing
information permitted to be omitted at the time of effectiveness by
Rule 430A of the Rules and Regulations will be filed promptly by the
Company with the Commission in accordance with Rule 424(b) of the
Rules and Regulations. The term "Registration Statement" as used
herein means the registration statement as amended at the time it
becomes or became effective under the Act (the "Effective Date"),
including financial statements and all exhibits and, if applicable,
the information deemed to be included by Rule 430A of the Rules and
Regulations. The term "Prospectus" as used herein means (i) the
prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, (ii) if no such filing is required,
the form of final prospectus included in the Registration Statement at
the Effective Date or (iii) if a Term Sheet or Abbreviated Term Sheet
(as such terms are defined in Rule 434(b) and 434(c), respectively, of
the Rules and Regulations) is filed with the Commission pursuant to
Rule 424(b)(7) of the Rules and Regulations, the Term Sheet or
Abbreviated Term Sheet and the last Preliminary Prospectus filed with
the Commission prior to the time the Registration Statement became
effective, taken together. The term "Preliminary Prospectus" as used
herein shall mean a preliminary prospectus as contemplated by Rule
430 or 430A of the Rules and Regulations included at any time in the
Registration Statement.
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(ii) The Commission has not issued, and is not to the
knowledge of the Company threatening to issue, an order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus nor
instituted proceedings for that purpose. Each Preliminary Prospectus
at its date of issue, the Registration Statement and the Prospectus
and any amendments or supplements thereto contains or will contain, as
the case may be, all statements which are required to be stated
therein by, and in all material respects conform or will conform, as
the case may be, to the requirements of, the Act and the Rules and
Regulations. Neither the Registration Statement nor any amendment
thereto, as of the applicable effective date, and neither the
Prospectus nor any supplement thereto contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company Parties make no representation or warranty
as to information contained in or omitted from the Registration
Statement or the Prospectus, or any such amendment or supplement, in
reliance upon, and in conformity with, written information furnished
to the Company by or on behalf of the Underwriters specifically for
use in the preparation thereof.
(iii) The filing of the Registration Statement and the
execution and delivery of this Agreement have been duly authorized by
the Board of Directors of each of the Company Parties; this Agreement
constitutes a valid and legally binding obligation of each of the
Company Parties enforceable in accordance with its terms (except to
the extent the enforceability of the indemnification and contribution
provisions of Section 7 hereof may be limited by public policy
considerations as expressed in the Act as construed by courts of
competent jurisdiction; the issue and sale of the Shares by the
Company and the performance of this Agreement and the consummation of
the transactions herein contemplated by the Company Parties will not
result in a violation of the certificate of incorporation or bylaws of
any of the Company Parties or result in a breach or violation of any
of the terms and provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of any of the Company
Parties or their subsidiaries under, any statute, or under any
indenture, mortgage, deed of trust, note, loan agreement, sale and
leaseback arrangement or other agreement or instrument to which any of
the Company Parties or any of their subsidiaries is a party or by
which they are bound or to which any of the properties or assets of
any of the Company Parties or their subsidiaries is subject, or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over any of the Company Parties or their
subsidiaries or their properties, except to such extent as does not
materially adversely affect the business of the Company Parties and
their subsidiaries taken as a whole; no consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the consummation
of the transactions herein contemplated, except such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the Act or Rules and Regulations or any state
securities laws.
(iv) Except as described in the Prospectus, none of the
Company Parties have sustained since the date of the latest audited
financial statements included in the
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Prospectus 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. Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company, SHC and SHHL
taken as a whole have not incurred any material liabilities or
material obligations, direct or contingent, other than in the ordinary
course of business, or entered into any material transactions not in
the ordinary course of business, and there has not been any material
change in the capital stock or long-term debt of the Company, SHC and
SHHL taken as a whole or any material adverse change in the condition
(financial or other), net worth, business, affairs, management,
prospects or results of operations of the Company and its subsidiaries
taken as a whole. The Company, SHC and SHHL have filed all necessary
federal, state and foreign income and franchise tax returns and paid
all taxes shown as due thereon; all tax liabilities are adequately
provided for on the books of the Company, SHC and SHHL except to such
extent as would not materially adversely affect the business of the
Company, SHC and SHHL taken as a whole; the Company, SHC and SHHL have
made all necessary payroll tax payments and are current and up-to-date
as of the date of this Agreement; and the Company, SHC and SHHL have
no knowledge of any tax proceeding or action pending or threatened
against the Company or its subsidiaries which might materially
adversely affect their business or property.
(v) Except described in the Prospectus, there is not now
pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company, SHC
or SHHL is a party before or by any court or public, regulatory or
governmental agency or body which might be expected to result
(individually or in the aggregate) in any material adverse change in
the condition (financial or other), business or prospects of the
Company, SHC and SHHL taken as a whole, or might be expected to
materially and adversely affect (individually or in the aggregate) the
properties or assets thereof; and there are no contracts or documents
of the Company, SHC or SHHL which would be required to be filed as
exhibits to the Registration Statement by the Act or by the Rules and
Regulations which have not been filed as exhibits to the Registration
Statement.
(vi) The Company has duly and validly authorized capital
stock as described in the Prospectus; all outstanding shares of Common
Stock of the Company and the Shares conform, or when issued will
conform, to the description thereof in the Registration Statement and
the Prospectus and have been, or, when issued and paid for will be,
duly authorized, validly issued, fully paid and nonassessable; and the
issuance of the Shares to be purchased from the Company hereunder is
not subject to any preemptive or similar rights. All offers and sales
of the securities of the Company Parties during the past three years
were at all relevant times duly registered or exempt from the
registration requirements of the Act and were duly registered or the
subject of an exemption from the registration requirements of
applicable state securities or Blue Sky laws. Except as set
forth in the Prospectus, the Company Parties do not have outstanding,
and at the Closing Date, will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts, or
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commitments to issue or sell any shares of Common Stock or any such
warrants, convertible securities or obligations. 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 Act with respect to any securities of
the Company owned or to be owned by such person 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 Act.
(vii) At the Closing Date, the only active subsidiaries (as
defined in the Rules and Regulations) of the Company will be as
provided in Exhibit 21 of the Registration Statement. The Company has
been and its subsidiaries at the Closing Date will have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the states or other jurisdictions in which they are
incorporated, with full power and authority (corporate and other) to
own, lease and operate their properties and conduct their businesses
as described in the Registration Statement; the Company is and its
subsidiaries at the Closing Date will be duly qualified to do business
as foreign corporations in good standing in each state or other
jurisdiction in which their ownership or leasing of property or
conduct of business legally requires such qualification, except where
the failure to be so qualified would not have a material adverse
effect on the ability of the Company and its subsidiaries to conduct
its or their business as described in the Registration Statement; at
the Closing Date the outstanding shares of capital stock of the
Company's subsidiaries will have been duly authorized and validly
issued, are fully paid and nonassessable and will be owned (100% as to
SHC and at least 90% as to SHHL) by the Company free and clear of any
mortgage, pledge, lien, encumbrance, charge or adverse claim and will
not be the subject of any agreement or understanding with any person;
and at the Closing Date no options, warrants or other rights to
purchase, agreement or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership
interests in the subsidiaries will be outstanding.
(viii) Price Waterhouse LLP, the accounting firm which has
certified the financial statements filed with the Commission as a part
of the Registration Statement, is an independent public accounting
firm within the meaning of the Act and the Rules and Regulations.
(ix) The combined financial statements and schedules of
the Company, including the notes thereto, filed with and as a part of
the Registration Statement, are accurate in all material respects and
present fairly the combined financial position of the companies
reflected therein as of the respective dates thereof and the results
of operations and statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed in the Prospectus. The
financial and statistical data included in the Registration Statement
and Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements in the Registration Statement and Prospectus.
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(x) None of the Company Parties is nor at the Closing
Date will be in default with respect to any contract or agreement to
which it is a party; provided that this representation shall not apply
to defaults which in the aggregate are not materially adverse to the
condition, financial or other, or the business or prospects of the
Company Parties taken as a whole.
(xi) None of the Company Parties is nor at the Closing
Date will be in violation of any other laws, ordinances or
governmental rules or regulations to which it is subject, and neither
the Company, SHC or SHHL has failed to obtain any other license,
permit, franchise, easement, consent, or other governmental
authorization necessary to the ownership, leasing and operation of its
properties or to the conduct of its business, which violation or
failure would materially adversely affect the business, operations,
affairs, properties, prospects, profits or condition (financial or
other) of the Company, SHC and SHHL taken as a whole. None of the
Company, SHC or SHHL has, at any time during the past five years, (A)
made any unlawful contributions to any candidate for any political
office, or failed fully to disclose any contribution in violation of
law, or (B) made any payment to any state, federal or foreign
government official, or other person charged with similar public or
quasi-public duty (other than payment required or permitted by
applicable law).
(xii) Except as described in the Prospectus, the Company,
SHC and SHHL own or possess, or can acquire on reasonable terms,
adequate patents, patent licenses, trademarks, service marks and trade
names necessary to conduct the business now operated by them, and none
of the Company, SHC or SHHL has received any notice of infringement of
or conflict with asserted rights of others with respect to any
patents, patent licenses, trademarks, service marks or trade names
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the conduct of the business, operations, financial condition or income
of the Company, SHC and SHHL taken as a whole.
(xiii) The Company, SHC and SHHL have good and marketable
title to all property owned by them, free and clear of all liens,
encumbrances, restrictions and defects except such as are described in
the Registration Statement or do not interfere with the use made and
proposed to be made of such property; and any property held under
lease or sublease by the Company, SHC or SHHL is held under valid,
subsisting and enforceable leases or subleases with such exceptions as
are not material and do not interfere with the use made and proposed
to be made of such property by the Company, SHC and SHHL, and none of
the Company, SHC or SHHL has any notice or knowledge of any material
claim of any sort which has been, or may be, asserted by anyone
adverse to the Company's, SHC's or SHHL's rights as lessee or
sublessee under any lease or sublease described above, or affecting or
questioning the Company's, SHC's or SHHL's rights to the continued
possession of the leased or subleased premises under any such lease or
sublease in conflict with the terms thereof.
(xiv) Except as described in the Prospectus, there is no
factual basis for any action, suit or other proceeding involving the
Company, SHC or SHHL or any of their
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material assets for any failure of the Company, SHC or SHHL, or any
predecessor thereof, to comply with any requirements of federal, state
or local regulation relating to air, water, solid waste management,
hazardous or toxic substances, or the protection of health or the
environment. Except as described in the Prospectus, none of the
property owned or leased by the Company, SHC or SHHL is, to the best
knowledge of the Company, contaminated with any waste or hazardous
substances, and none of the Company, SHC or SHHL may be deemed an
"owner or operator" of a "facility" or "vessel" which owns, possesses,
transports, generates or disposes of a "hazardous substance" as those
terms are defined in Section 9601 of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section
9601 et seq.
(xv) No labor disturbance exists with the employees of the
Company, SHC or SHHL or is imminent which would have a material
adverse effect on the Company, SHC and SHHL taken as a whole.
(xvi) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of the Company's Common Stock, and the Company is not aware of
any such action taken or to be taken by affiliates of the Company.
(xvii) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(xviii) The Company's system of internal accounting controls
taken as a whole is sufficient to meet the broad objectives of
internal accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company's financial statements;
and, except as disclosed in the Prospectus, neither the Company nor
any employee or agent of the Company has made any payment of funds of
the Company or received or retained any funds in violation of any law,
rule or regulation, the receipt or payment of which could have a
material adverse effect on the Company.
(xix) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required. All such contracts to
which the Company, SHC or SHHL is a party have been duly authorized,
executed and delivered by the Company, SHC or SHHL, constitute valid
and binding agreements of the Company, SHC or SHHL and are enforceable
against the Company, SHC or SHHL in accordance with the terms thereof.
(xx) No statement, representation, warranty or covenant
made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to you was or will
be, when made, inaccurate, untrue or incorrect in any material
respect.
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(xxi) No holder of securities of the Company, SHC or SHHL
has rights to the registration of any securities of the Company
because of the filing of the Registration Statement.
(xxii) Other than as contemplated by this Agreement, there
is no broker, finder or other party that is entitled to receive from
the Company, SHC or SHHL any brokerage or finder's fee or other fee or
commission as a result of any of the transactions contemplated by this
Agreement.
(b) Any certificate signed by any officer of the Company, SHC or
SHHL and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty to each Underwriter as to the matters covered
thereby.
5. ADDITIONAL COVENANTS. The Company covenants and agrees with
the several Underwriters that:
(a) If the Registration Statement is not effective under the Act,
the Company will use its best efforts to cause the Registration Statement to
become effective as promptly as possible, and it will notify you, promptly
after it shall receive notice thereof, of the time when the Registration
Statement has become effective. The Company (i) will prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations, if
required, a Prospectus containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations or otherwise or a Term Sheet or Abbreviated Term Sheet,
as applicable; (ii) will not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Underwriters shall not previously
have been advised and furnished with a copy or to which the Underwriters shall
have reasonably objected in writing or which is not in compliance with the
Rules and Regulations; and (iii) will promptly notify you after it shall have
received notice thereof of the time when any amendment to the Registration
Statement becomes effective or when any supplement to the Prospectus has been
filed.
(b) The Company will advise the Underwriters promptly, after it
shall receive notice or obtain knowledge thereof, of any request of the
Commission for amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution or threatening of
any proceedings for that purpose, and the Company will use its best efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if
issued.
(c) The Company will cooperate with the Underwriters and their
counsel in endeavoring to qualify the Shares for sale under the securities laws
of such jurisdictions as they may have designated and will make such
applications, file such documents, and furnish such information as may be
necessary for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any
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jurisdiction where it is not now so qualified or required to file such a
consent or to subject itself to taxation as doing business in any jurisdiction
where it is not now so taxed. The Company will, from time to time, file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Underwriters may
reasonably request.
(d) The Company will deliver to, or upon the order of, the
Underwriters, without charge from time to time, as many copies of any
Preliminary Prospectus as they may reasonably request. The Company will
deliver to, or upon the order of, the Underwriters without charge as many
copies of the Prospectus, as it thereafter may be amended or supplemented, as
they may from time to time reasonably request; provided, however, that the
expense of the preparation and delivery of any Prospectus required for use
after the expiration of the time period required by law for delivery by an
Underwriter or dealer shall be borne by the Underwriters required to deliver
such Prospectus. The Company consents to the use of such Prospectus by the
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for such other purposes
and for such period of time thereafter as the Prospectus is required by law to
be delivered in connection with the offering or sale of the Shares. The
Company will deliver to the Underwriters at or before the Closing Date two
signed copies of the Registration Statement and all amendments thereto
including all exhibits filed therewith, and will deliver to the Underwriters
such number of copies of the Registration Statement, without exhibits, and of
all amendments thereto, as they may reasonably request.
(e) If, during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer, any event shall occur as a result
of which, in the judgment of the Company or in your judgment or in the opinion
of counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and file
with the Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with law;
provided, however, that the expense of the preparation and delivery of any
Prospectus required for use after the expiration of the time period required by
law for delivery by an Underwriter or dealer, as well as the expense of the
preparation and filing of an amendment to the Registration Statement relating
to such Prospectus, shall be borne by the Underwriters required to deliver such
Prospectus.
(f) The Company will make generally available to its stockholders
and will file as an exhibit in a report pursuant to the Securities and Exchange
Act of 1934, as amended (the "1934 Act"), as soon as it is practicable to do
so, but in any event not later than 90 days after the end of the period covered
thereby, an earnings statement in reasonable detail, covering a period of at
least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise the Underwriters in writing when such statement has been so made
available.
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(g) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives at their principal executive offices a
reasonable number of copies of annual reports, quarterly reports, current
reports and copies of all other documents, reports and information furnished by
the Company to its stockholders or filed with any securities exchange pursuant
to the requirements of such exchange or with the Commission pursuant to the Act
or the 1934 Act. The Company will deliver to the Representatives similar
reports with respect to any significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements. Any report, document or other information required to be
furnished under this paragraph (g) shall be furnished as soon as practicable
after such report, document or information becomes available.
(h) The Company will apply the proceeds from the sale of the
Shares as set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the requirements of
Item 504 of Regulation S-K.
(i) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission in connection
with the registration of the Shares under the Act.
(j) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will furnish to you, as soon as they have been
prepared, copies of any unaudited interim consolidated financial statements of
the Company and its subsidiaries for any periods subsequent to the periods
covered by the financial statements appearing in the Registration Statement and
the Prospectus.
(k) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Company will not issue any press releases or other
communications directly or indirectly and will hold no press conferences with
respect to the Company or any of its subsidiaries, the financial condition,
results of operations, business, properties, assets or liabilities of the
Company or any of its subsidiaries, or the offering of the Shares, without your
prior written consent.
(l) The Company will use its best efforts to obtain approval for,
and maintain the quotation of the Shares on, the National Association of
Securities Dealers, Inc. Automated Quotation/National Market System (the
"Nasdaq/NMS").
(m) Except pursuant to this Agreement or with the prior written
consent of X.X. Xxxxxxx & Sons, Inc., the Company will not, and the Company has
provided agreements executed by each of the Company's officers and directors
and each record or beneficial owner of more than five percent (5%) of the
shares of Company's Common Stock providing that none of them will, for a period
of 180 days from the Effective Date, directly or indirectly, make, agree to or
cause any offer, sale (including short sale but excluding any sale of shares to
any employee of the Company pursuant to the exercise of options under the
Company's 1996 Stock Option Plan), loan, pledge or other disposition of, or
grant any options (other than options under the Company's 1996 Stock Option
Plan) or other rights with respect to, or otherwise reduce any risk of
ownership, directly or indirectly, of any shares of Common Stock or other
capital stock of the Company, or any securities that are convertible into or
exchangeable or exercisable for shares of
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Common Stock or other capital stock of the Company, or derivatives thereof, or
request the registration of any of the foregoing.
(n) The Company and its subsidiaries will maintain and keep
accurate books and records reflecting their assets and maintain internal
accounting controls which provide reasonable assurance that (1) transactions
are executed in accordance with management's authorization, (2) transactions
are recorded as necessary to permit the preparation of the Company's
consolidated financial statements and to maintain accountability for the assets
of the Company and its subsidiaries, (3) access to the assets of the Company
and its subsidiaries is permitted only in accordance with management's
authorization, and (4) the recorded accounts of the assets of the Company and
its subsidiaries are compared with existing assets at reasonable intervals.
(o) If at any time during the 25 day period after the Registration
Statement is declared effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your opinion, the
market price for the Shares has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase and pay for the Shares, as provided
herein, shall be subject to the accuracy in all material respects, as of the
date hereof and as of the Closing Date (and, if applicable, the Option Closing
Date), of the representations and warranties of the Company contained herein,
to the performance in all material respects by the Company of its covenants and
obligations hereunder, and to the following additional conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules
and Regulations shall have been made. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time,
shall have been issued and no proceeding for that purpose shall have been
initiated or, to the knowledge of the Company or any Underwriter, threatened or
contemplated by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) No Underwriter shall have disclosed in writing to the Company
on or prior to the Closing Date (and, if applicable, the Option Closing Date),
that the Registration Statement or Prospectus or any amendment or supplement
thereto contains an untrue statement of fact which, in the opinion of counsel
to 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, in light of the circumstances under
which they were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing
Date), you shall have received the opinion of counsel for the Company,
addressed to you and dated the Closing Date (and, if applicable, the Option
Closing Date), to the effect that:
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(i) The Company and its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of the states or other jurisdictions in which they are
incorporated, with full power and authority (corporate and other) to
own, lease and operate their properties and conduct their business as
described in the Registration Statement; the Company and its
subsidiaries are duly qualified to do business as foreign corporations
in good standing in each state or other jurisdiction in which their
ownership or leasing of property or conduct of business legally
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the ability of
the Company and its subsidiaries to conduct its or their business as
described in the Registration Statement; and the outstanding shares of
capital stock of the Company's subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and, to the
knowledge of such counsel, are owned by the Company free and clear of
any mortgage, pledge, lien, encumbrance, charge or adverse claim and
are not the subject of any agreement or understanding with any person;
to the knowledge of such counsel, no options, warrants or other rights
to purchase, agreement or other obligations to issue or other rights
to convert any obligations into shares of capital stock or ownership
interests in the subsidiaries are outstanding.
(ii) The Company has duly and validly authorized capital
stock as set forth under the heading "Capitalization" in the
Prospectus; all outstanding shares of Common Stock of the Company and
the Shares conform to the description thereof in the Prospectus under
the heading "Description of Capital Stock", and the outstanding shares
of Common Stock have been duly authorized and are validly issued,
fully paid and non-assessable; the Shares to be sold by the Company
have been duly authorized and, when delivered and paid for in
accordance with this Agreement, will be validly issued, fully paid and
non-assessable, and the stockholders of the Company have no preemptive
rights with respect to the Shares. To the knowledge of such counsel,
all offers and sales of the Company's securities during the past three
years were at all relevant times duly registered or exempt from the
registration requirements of the Act and were duly registered or the
subject of an exemption from the registration requirements of
applicable state securities or Blue Sky laws.
(iii) Such counsel has been advised by the staff of the
Commission that the Registration Statement has become effective under
the Act and, to the knowledge of such counsel after due inquiry, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act.
(iv) The Registration Statement and the Prospectus, and
each amendment or supplement thereto, as of their respective effective
or issue date, comply as to form and appear on their face to be
appropriately responsive in all material respects to the requirements
of the Act and the applicable rules and regulations (except that such
counsel need express no opinion as to the financial statements or
other financial data).
(v) The descriptions in the Registration Statement and
Prospectus of contracts and other documents filed as exhibits to the
Registration Statement are accurate in all
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material respects; to the knowledge of such counsel, all other
material agreements between the Company and third parties expressly
referenced in the Prospectus are legal, valid and binding obligations
of the Company.
(vi) To the knowledge of such counsel, no authorization,
approval, consent, order, registration or qualification of or with of
any court or governmental body, authority or agency is required with
respect to the Company in connection with the transactions
contemplated by this Agreement, except such as may be required under
the Act or the Rules and Regulations or as may be required by the NASD
or under state securities laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(vii) The filing of the Registration Statement has been
duly authorized by the Board of Directors of the Company. The
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a violation of the Company's
certificate of incorporation or bylaws or, to the knowledge of such
counsel, result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company and its subsidiaries under, any
statute, or under any indenture, mortgage, deed of trust, note, loan
agreement, sale and leaseback arrangement, or any other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which they are bound or to which any of
the properties or assets of the Company or its subsidiaries are
subject, or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or its subsidiaries or their properties, except, in the case
of any such violation, breach, default, creation or imposition, to
such extent as does not materially adversely affect the business of
the Company and its subsidiaries taken as a whole.
(viii) To the knowledge of such counsel,(A) there are no
material (individually, or in the aggregate) legal, governmental or
regulatory proceedings pending or threatened to which the Company or
any subsidiary is a party or of which the business or properties of
the Company or any subsidiary is the subject which are not disclosed
in the Registration Statement and Prospectus; (B) there are no
contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement which are not described or filed as
required; and (C) there are no statutes or regulations required to be
described in th Registration Statement or Prospectus which are not
described as required.
(ix) To the knowledge of such counsel, the Company and
each of its subsidiaries hold all licenses, certificates, permits and
approvals from all state, federal and other regulatory authorities,
and have satisfied in all material respects the requirements imposed
by regulatory bodies, administrative agencies or other governmental
bodies, agencies or officials, that are required for the Company and
its subsidiaries lawfully to own, lease and operate its properties and
conduct its business as described in the Prospectus, and, to the
knowledge of such counsel, each of the Company and its subsidiaries is
conducting its business in compliance in all material respects with
all of
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the laws, rules and regulations of each jurisdiction in which
it conducts its business.
(x) The statements made in the Registration Statement
under the captions "Dividend Policy", "Capitalization", and
"Description of Capital Stock", to the extent that they constitute
summaries of documents referred to therein or matters of law or legal
conclusions, have been reviewed by such counsel and are accurate
summaries and fairly present the information disclosed therein.
(xi) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(xii) There are no contracts, agreements or understandings
known to such counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person 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
Act.
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
obligation of the Company enforceable in accordance with its terms,
except (A) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws now
or hereafter in effect relating to creditors' rights or debtors'
obligations generally; (B) that the remedies of specific performance
and injunctive and other forms of relief are subject to general
equitable principles, whether enforcement is sought at law or in
equity, and that such enforcement may be subject to the discretion of
the court before which any proceedings therefor may be brought; and
(C) as rights to indemnity and contribution may be limited by state or
Federal laws relating to securities or the policies underlying such
laws.
Such counsel shall confirm that in the course of its duties in
connection with the preparation of the Registration Statement and Prospectus,
nothing came to such counsel's attention that would lead them to believe that
either the Registration Statement or Prospectus or any amendment or supplement
thereto (other than the financial statements or other financial data as to
which such counsel need express no opinion) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering the foregoing opinion, such counsel may rely, provided
that the opinion shall state that you and they are entitled to so rely, as to
all matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company and various public officials.
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(d) You shall have received on the Closing Date (and, if
applicable, the Option Closing Date), from Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx,
L.L.P., counsel to the Underwriters, such opinion or opinions, dated the
Closing Date (and, if applicable, the Option Closing Date) with respect to the
incorporation of the Company, the validity of the Shares, the Registration
Statement, the Prospectus and other related matters as you may reasonably
require; the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass on such
matters.
(e) You shall have received at or prior to the Closing Date from
Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P., a memorandum or memoranda, in form
and substance satisfactory to you, with respect to the qualification for
offering and sale by the Underwriters of the Shares under state securities or
Blue Sky laws of such jurisdictions as the Underwriters may have designated to
the Company.
(f) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing
Date), you shall have received from Price Waterhouse LLP, a letter or letters,
dated the date of this Agreement and the Closing Date (and, if applicable, the
Option Closing Date), respectively, in form and substance satisfactory to you,
confirming that they are independent public accountants with respect to the
Company within the meaning of the Act and the published Rules and Regulations,
and the answer to Item 509 of Regulation S-K set forth in the Registration
Statement is correct insofar as it relates to them, and stating to the effect
set forth in Schedule II hereto.
(g) Except as contemplated in the Prospectus, (i) none of the
Company Parties nor any of their 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; and (ii) subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, none of the Company Parties nor any of their subsidiaries
shall have incurred any liability or obligation, direct or contingent, or
entered into transactions, and there shall not have been any change in the
capital stock or long-term debt of any of the Company Parties and their
subsidiaries or any change in the condition (financial or other), net worth,
business, affairs, management, prospects or results of operations of any of the
Company Parties or their subsidiaries, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material or adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered on such Closing Date (and, if
applicable, the Option Closing Date) on the terms and in the manner
contemplated in the Prospectus.
(h) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or the establishing on such
exchanges by the Commission or by such exchanges of minimum or maximum prices
which are in force and effect on the date hereof; (ii) a general moratorium on
commercial banking activities declared by either federal or state authorities;
(iii) the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if the
effect of any such event specified in this
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clause (iii) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares in the manner
contemplated in the Prospectus; (iv) any calamity or crisis, change in
national, international or world affairs, act of God, change in the
international or domestic markets, or change in the existing financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in this clause (iv) makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Shares in the manner contemplated in the Prospectus; or (v) the enactment,
publication, decree, or other promulgation of any federal or state statute,
regulation, rule, or order of any court or other governmental authority, or the
taking of any action by any federal, state or local government or agency in
respect of fiscal or monetary affairs, if the effect of any such event
specified in this clause (v) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
in the manner contemplated in the Prospectus.
(i) You shall have received certificates, dated the Closing Date
(and, if applicable, the Option Closing Date) and signed by the President and
the Chief Financial Officer of the Company stating that (i) they have carefully
examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue
dates, contained, and the Prospectus as amended or supplemented at such Closing
Date, contains any untrue statement of a material fact, or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and, that (ii) all representations and warranties made herein
by the Company are true and correct in all material respects at such Closing
Date, with the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed by the Company on or prior to such Closing
Date have been duly performed in all material respects.
(j) The Company shall not have failed, refused, or been unable, at
or prior to the Closing Date (and, if applicable, the Option Closing Date) to
have performed in all material respects any agreement on its part to be
performed or any of the conditions herein contained and required to be
performed or satisfied by it at or prior to such Closing Date.
(k) The Company shall have furnished to you at the Closing Date
(and, if applicable, the Option Closing Date) such other certificates as you
may have reasonably requested as to the accuracy, on and as of such Closing
Date, of the representations and warranties of the Company herein and as to the
performance by the Company of its obligations hereunder.
(l) The Shares shall have been approved for trading upon official
notice of issuance on the Nasdaq/NMS.
(m) The agreements mentioned in Section 5(m) shall be in full
force and effect.
(n) The Reorganization shall have been consummated.
All such opinions, certificates, letters and documents will be in
compliance with the
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provisions hereof only if they are reasonably satisfactory to you and to Xxxxxx
Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., counsel for the several Underwriters. The
Company will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company.
7. INDEMNIFICATION. (a) The Company will indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter or such controlling person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any blue sky
application or other document executed by the Company or based on any
information furnished in writing by the Company, filed in any jurisdiction in
order to qualify any or all of the Shares under the securities laws thereof
("Blue Sky Application"), or arise out of or are based upon the omission or
alleged omission therein of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, or such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by you or by any Underwriter through you, specifically for use in the
preparation thereof; and provided, further, that if any Preliminary Prospectus
or the Prospectus contained any alleged untrue statement or allegedly omitted
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading and such statement or omission shall
have been corrected in a revised Preliminary Prospectus or in the Prospectus or
in an amended or supplemented Prospectus, the Company shall not be liable to
any Underwriter or controlling person under this subsection (a) with respect to
such alleged untrue statement or alleged omission to the extent that any such
loss, claim, damage or liability of such Underwriter or controlling person
results from the fact that such Underwriter sold Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, such revised Preliminary Prospectus or Prospectus or amended or
supplemented Prospectus. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or controlling
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person may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, any amendment or supplement thereto, or any Blue Sky Application or
arise out of or are based upon the omission or the alleged omission therein of
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, such Preliminary Prospectus or the
Prospectus, such amendment or supplement, or any Blue Sky Application in
reliance upon and in conformity with written information furnished to the
Company by any such Underwriter specifically for use in the preparation
thereof; and will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action. The Company acknowledges that the statements set forth under the
heading "Underwriting" in any Preliminary Prospectus and the Prospectus
constitute the only information relating to the Underwriters furnished in
writing to the Company by the Underwriters expressly for inclusion in the
Registration Statement, any Preliminary Prospectus or the Prospectus.
(c) Any person (as defined in the Act) which proposes to assert
the right to be indemnified under this Section 7 shall, within ten days after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim is to be made against an indemnifying
party under this Section 7, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served, but the omission so to notify such indemnifying party of any such
action, suit or proceeding shall not relieve such indemnifying party from any
liability which it may have to any indemnified party otherwise than under this
Section 7. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party, similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its own counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party at the expense of the indemnifying party has
been authorized by the indemnifying party, (ii) the indemnified party shall
have been advised by such counsel in a written opinion that there may be a
conflict of interest between the indemnifying party and the indemnified party
in the conduct of the defense, or certain aspects of the defense, of such
action (in which case the indemnifying party shall not have the right to direct
the defense of such action with respect to those matters or aspects of the
defense on which a conflict exists or may exist on behalf of the indemnified
party) or (iii) the indemnifying party shall not in fact have employed counsel
to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne by the indemnifying party. An
indemnifying party shall not be liable for any
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settlement of any action or claim effected without its consent. Each
indemnified party, as a condition of such indemnity, shall cooperate in good
faith with the indemnifying party in the defense of any such action or claim.
(d) If the indemnification provided for in this Section 7 is for
any reason, other than pursuant to the terms thereof, judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction
and the expiration of time to appeal or the denial of the last right to appeal)
to be unavailable to an indemnified party under subsections (a), (b) or (c)
above in respect of any losses, claims, damages or liabilities (or actions 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 losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault, as
applicable, of the Company and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as other relevant
equitable considerations. The relative benefits received by, as applicable,
the Company and the Underwriters shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, 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, among other things, whether the untrue statement of
a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company contained in
Sections 7 and 11 herein or in certificates delivered pursuant hereto, and the
agreements of the Underwriters contained in Section 7 hereof, shall remain
operative and in full force and effect regardless of any termination
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or cancellation of this Agreement or any investigation made by or on behalf of
any Underwriter, the Company or other indemnified party and shall survive
delivery of the Shares to the Underwriters hereunder.
9. SUBSTITUTION OF UNDERWRITERS. (a) If any Underwriter shall
default in its obligation to purchase the Shares which it has agreed to
purchase hereunder, you may in your discretion arrange for you or another party
or other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not
arrange for the purchase of such Shares, then the Company shall be entitled to
a further period of thirty-six hours within which to procure another party or
parties reasonably satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Shares, or the
Company notifies you that it has so arranged for the purchase of such Shares,
you or the Company shall have the right to postpone the Closing Date for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or
in any other documents or arrangements, and the Company agrees to file promptly
any amendments to the Registration Statement or the Prospectus which in your
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any persons substituted under this Section 9 with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company as provided in subsection (a) above, the aggregate number of Shares
which remains unpurchased does not exceed one tenth of the total Shares to be
sold on the Closing Date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the Shares which such Underwriter agreed
to purchase hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters made by you or the
Company as provided in subsection (a) above, the number of Shares which remains
unpurchased exceeds one tenth of the total Shares to be sold on the Closing
Date, or if the Company shall not exercise the right described in subsection
(b) above to require the non-defaulting Underwriters to purchase Shares of the
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company except for the expenses to be borne by the Company and the
Underwriters as provided in Section 11 hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall
become effective at 1:00 p.m., St. Louis time, on the first business day
following the effective date of the Registration
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Statement, or at such earlier time after the effective date of the Registration
Statement as you in your discretion shall first release the Shares for offering
to the public; provided, however, that the provisions of Section 7 and 11 shall
at all times be effective. For the purposes of this Section 10(a), the Shares
shall be deemed to have been released to the public upon release by you of the
publication of a newspaper advertisement relating to the Shares or upon release
of telegrams, facsimile transmissions or letters offering the Shares for sale
to securities dealers, whichever shall first occur.
(b) In the event that the Company refuses or fails to perform
hereunder, this Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 10(a) by notice to the Company;
provided, however, that the provisions of this Section 10 and of Section 7 and
Section 11 hereof shall at all times be effective. In the event of any
termination of this Agreement pursuant to Section 9 or this Section 10(b)
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Section 7 or Section 11 hereof.
(c) This Agreement may be terminated by you at any time at or
prior to the Closing Date by notice to the Company if any condition specified
in Section 6 hereof shall not have been satisfied on or prior to the Closing
Date. Any such termination shall be without liability of any party to any
other party except as provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the
Company as to any obligation of the Underwriters to purchase the Option Shares,
if any condition specified in Section 6 hereof shall not have been satisfied at
or prior to the Option Closing Date or as provided in Section 9 of this
Agreement.
If you terminate this Agreement as provided in Sections 10(b), 10(c)
or 10(d), you shall notify the Company by telephone or telegram, confirmed by
letter.
11. COSTS AND EXPENSES. The Company Parties will bear and pay the
costs and expenses incident to the registration of the Shares and public
offering thereof, including, without limitation, (a) the fees and expenses of
the Company's accountants and the feesand expenses of counsel for the Company,
(b) the preparation, printing, filing, delivery and shipping of the
Registration Statement, each Preliminary Prospectus, the Prospectus and any
amendments or supplements thereto (except as otherwise expressly provided in
Section 5(d) or (e) hereof) and the printing, delivery and shipping of this
Agreement, the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaires and Powers of Attorney and Blue Sky Memoranda, (c)
the furnishing of copies of such documents (except as otherwise expressly
provided in Section 5(d) or (e) hereof) to the Underwriters, (d) the
registration or qualification of the Shares for offering and sale under the
securities laws of the various states, including the reasonable fees and
disbursements of Underwriters' counsel relating to such registration or
qualification, (e) the fees payable to the NASD and the Commission in
connection with their review of the proposed offering of the Shares, (f) all
printing and engraving costs related to preparation of the certificates for the
Shares, including transfer agent and registrar fees, (g) all initial transfer
taxes, if any, (h) all fees and expenses relating to the authorization of the
Shares for trading on Nasdaq/NMS, (i) all travel expenses, including air fare
and accommodation expenses, of representatives of the Company in connection
with the offering of the Shares and
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(j) all of the other costs and expenses incident to the performance by the
Company of the registration and offering of the Shares; provided, however, that
the Underwriters will bear and pay the fees and expenses of the Underwriters'
counsel (other than fees and disbursements relating to the registration or
qualification of the Shares for offering and sale under the securities laws of
the various states and clearance with the NASD), the Underwriters'
out-of-pocket expenses, and any advertising costs and expenses incurred by the
Underwriters incident to the public offering of the Shares.
If this Agreement is terminated by you in accordance with the
provisions of Section 10(b) or 10(c), the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel to the Underwriters.
12. NOTICES. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o X.X. Xxxxxxx & Sons, Inc. at Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000, Attention: Syndicate, facsimile number (314)
289-7387, or if sent to any of the Company Parties shall be mailed, delivered,
sent by facsimile transmission, or telegraphed and confirmed to the Company at
0000 Xxxx Xxxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000, facsimile number (941)
355-4497. Notice to any Underwriter pursuant to Section 7 shall be mailed,
delivered, sent by facsimile transmission, or telegraphed and confirmed to such
Underwriter's address as it appears in the Underwriters' Questionnaire
furnished in connection with the offering of the Shares or as otherwise
furnished to the Company.
13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and each of the Company Parties and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, corporation or
other entity, other than the parties hereto and their respective successors and
assigns and the officers, directors and other persons referred to in Section 7,
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective successors and assigns and
said officers, directors and other persons, and for the benefit of no other
person, corporation or other entity. No purchaser of any of the Shares from
any Underwriter shall be construed a successor or assign by reason merely of
such purchase.
In all dealings with the Company Parties under this Agreement you
shall act on behalf of each of the several Underwriters. The Company Parties
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of the Underwriters, made or given by you on behalf of the
Underwriters, as if the same shall have been made or given in writing by the
Underwriters.
14. COUNTERPARTS. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
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15. PRONOUNS. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
16. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri.
If the foregoing is in accordance with your understanding, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between the Company Parties and the
Underwriters.
SUN HYDRAULICS INCORPORATED
By:
---------------------------------
Title:
---------------------------------
SUN HYDRAULICS CORPORATION
By:
---------------------------------
Title:
---------------------------------
SUN HYDRAULIK HOLDINGS LIMITED
By:
---------------------------------
Title:
---------------------------------
Accepted in St. Louis,
Missouri as of the date
first above written, on
behalf of ourselves and each
of the several Underwriters
named in Schedule I hereto.
X.X. XXXXXXX & SONS, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
By: X.X. Xxxxxxx & Sons, Inc.
By:
---------------------------------
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Title:
---------------------------------
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SCHEDULE I
Number
Name of Shares
---- ---------
X.X. Xxxxxxx & Sons, Inc. __________
Xxxxxx X. Xxxxx & Co. Incorporated __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
____________________________ __________
Total __________
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SCHEDULE II
Pursuant to Section 6(f) of the Underwriting Agreement, Price
Waterhouse LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of the Act
and the applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the applicable Rules and Regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of the
unaudited consolidated interim financial statements, selected financial data,
pro forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Representatives of the
Underwriters (the "Representatives").
(iii) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, performing the procedures specified by the AICPA for a
review of interim financial information as discussed in SAS No. 71, Interim
Financial Information, on the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the Company
and its subsidiaries since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) any material modifications should be made to
the unaudited statements of consolidated income, statements of consolidated
financial position and statements of consolidated cash flows included in the
Prospectus for them to be in conformity with generally accepted accounting
principles, or the unaudited statements of consolidated income, statements of
consolidated financial position and statements of consolidated cash flows
included in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations thereunder.
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements from
which such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis
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for the corresponding amounts in the audited consolidated financial statements
included in the Prospectus.
(C) the unaudited financial statements which were
not included in the Prospectus but from which were derived any unaudited
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and referred
to in Clause (B) were not determined on a basis substantially consistent with
the basis for the audited consolidated financial statements included in the
Prospectus.
(D) any unaudited pro forma consolidated
financial statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements.
(E) as of a specified date not more than five
days prior to the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated long-term debt
of the Company and its subsidiaries, or any decreases in consolidated working
capital, net current assets or net assets or other items specified by the
Representative, or any changes in any items specified by the Representatives,
in each case as compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur or which
are described in such letter.
(F) for the period from the date of the latest
financial statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net income
or any other changes in any other items specified by the Representatives, in
each case as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the Representatives,
except in each case for changes, decreases or increases which the Prospectus
discloses have occurred or may occur or which are described in such letter.
(iv) In addition to the audit referred to in their
report(s) included in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraph (iii)
above, they have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records of the
Company and its subsidiaries for the periods covered by their reports and any
interim or other periods since the latest period covered by their reports,
which appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information with
the accounting records of the Company and its subsidiaries and have found them
to be in agreement.
