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Exhibit 1.1
_________ Shares
WATERLINK, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1997
XXXXX XXXXXX INC.
XXXXXXXXXXX & CO., INC.
XXXXXXX XXXXXX XXXXX
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Waterlink, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate of _________ shares ("Firm Shares") of its common
stock, $0.001 par value per share (the "Common Stock"), to the several
Underwriters named in Schedule I hereto (the "Underwriters"). The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 2 hereof, up to an additional shares (the "Additional Shares") of Common
Stock. The Firm Shares and, to the extent such Additional Shares are issued, the
Additional Shares are hereinafter collectively referred to as the "Shares".
The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several Underwriters on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 under the Act, including a
prospectus subject to completion relating to the Shares. The term "Registration
Statement" as used in this Agreement means such registration statement
(including all financial schedules and exhibits), as
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amended at the time it becomes effective, or, if such registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. The term "Prospectus" as used
in this Agreement means the prospectus in the form included in the Registration
Statement, or, if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Act and such information is
included in a prospectus filed with the Commission pursuant to Rule 424(b) under
the Act, the term "Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement as supplemented by the addition
of the Rule 430A information contained in the prospectus filed with the
Commission pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in
this Agreement means the prospectus subject to completion in the form included
in the registration statement at the time of the initial filing of the
registration statement with the Commission, and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus.
2. AGREEMENTS TO SELL AND PURCHASE. Subject to such adjustments as you
may determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $_____ per Share (the
"purchase price per share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Company, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised at
any time and from time to time prior to 9:00 P.M., New York City time, on the
30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of _________
Additional Shares from the Company. Additional Shares may be purchased only for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. Upon any exercise of the over-allotment option, each
Underwriter, severally and not jointly, agrees to purchase from the Company the
number of Additional Shares (subject to such adjustments as you may determine in
order to avoid fractional shares) which bears the same proportion to the
aggregate number of Additional Shares to be purchased by the Underwriters as the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 10 hereof) bears to the aggregate number of Firm Shares.
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
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4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Subject to Section 8
hereof, delivery to the Underwriters of and payment by the Underwriters for the
Firm Shares shall be made at the office of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New York City time, on _________,
1997 (the "Closing Date"). The place of closing for the Firm Shares and the
Closing Date may be varied by agreement between you and the Company.
Subject to Section 8 hereof, delivery to the Underwriters of and
payment for any Additional Shares to be purchased by the Underwriters shall be
made at the aforementioned office of Xxxxx Xxxxxx Inc. at such time on such date
(the "Option Closing Date"), which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the Underwriters to
the Company of the Underwriters' determination to purchase a number, specified
in such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and any Additional
Shares to be purchased hereunder shall be delivered to you on the Closing Date
or the Option Closing Date, as the case may be, against payment of the purchase
price therefor in immediately available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible and will advise
you promptly and, if requested by you, will confirm such advice in writing, when
the Registration Statement or such post-effective amendment has become
effective.
(b) The Company will advise you promptly and, if requested by
you, will confirm such advice in writing: (i) of any request by the Commission
for amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or
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other), business, prospects, properties, net worth or results of operations, or
of the happening of any event or any new information, which makes any statement
of a material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented) untrue or which requires the making of any additions to
or changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act to be stated
therein or necessary in order to make the statements therein not misleading, or
of the necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, three
signed copies of the registration statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, and will also furnish to you, without charge, such number of
conformed copies of the registration statement as originally filed and of each
amendment thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the
Registration Statement or make any amendment or supplement to the Prospectus of
which you shall not previously have been advised in writing or to which you
shall object after being so advised or (ii) so long as, in the opinion of
counsel for the Underwriters, a Prospectus is required to be delivered in
connection with sales by any Underwriter or dealer, file any information,
documents or reports pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act") without delivering a copy of such information, documents or
reports to you, as Representatives of the Underwriters, prior to or concurrently
with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by dealers, prior to the date of the Prospectus,
of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement
as possible and thereafter from time to time for such period as in the opinion
of counsel for the Underwriters a prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer, the Company
will expeditiously deliver to each Underwriter and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales
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by any Underwriter or dealer. If during such period of time any event shall
occur that in the judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Act or any other law, the Company will forthwith promptly
prepare and, subject to the provisions of paragraph (d) above, file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of the
several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such domestic and foreign jurisdictions as
you may designate and will file such consents to service of process or other
documents necessary or appropriate in order to effect such registration or
qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security
holders a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section ll(a) of the Act.
(i) During the period of five years hereafter, the Company
will furnish to you (i) as soon as available, a copy of each report of the
Company mailed to stockholders or filed with the Commission, and (ii) from time
to time such other information concerning the Company as you may request.
(j) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (otherwise than pursuant to
the second paragraph of Section 10 hereof or by notice given by you terminating
this Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
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(k) The Company will apply the net proceeds from the sale of
the Shares substantially in accordance with the description set forth in the
Prospectus.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will advise
you of the time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not
sell, contract to sell or otherwise dispose of any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
grant any options or warrants to purchase Common Stock, for a period equal to
the longer of (x) 180 days after the date of the Prospectus or (y) December 31,
1997 (the "Lock-up Period"), without the prior written consent of Xxxxx Xxxxxx
Inc., except that the Company may (i) issue on the Closing Date the shares of
Common Stock to be issued in connection with the acquisitions to be consummated
on the Closing Date, as described in the Registration Statement, so long as the
purchasers of such shares agree to be bound by a lock-up letter in form and
substance satisfactory to you pursuant to which such purchasers agree with the
Company not to sell, offer to sell, solicit an offer to buy, contract to sell,
grant any option to purchase, or otherwise transfer or dispose of, any such
shares at any time before the expiration of the Lock-up Period and the
certificates evidencing such shares bear a legend to such effect, (ii) issue up
to ____________ shares of Common Stock ("Acquisition Shares") during the Lock-up
Period in connection with additional acquisitions so long as the purchaser of
such Acquisition Shares agrees to be bound by a lock-up letter in form and
substance satisfactory to you pursuant to which such purchaser agrees with the
Company not to sell, offer to sell, solicit an offer to buy, contract to sell,
grant any option to purchase, or otherwise transfer or dispose of, any such
Acquisition Shares at any time before the expiration of the Lock-up Period and
the certificates evidencing such Acquisition Shares bear a legend to such
effect, (iii) issue shares of Common Stock during the Lock-up Period pursuant to
the (x) conversion of shares of the Company's Preferred Stock, par value $.001
per share (the "Preferred Stock"), and (y) exercise of warrants issued by the
Company (A) to the Company's senior bank lender, Bank of America Illinois (the
"Bank"), prior to the date hereof, and (B) in connection with the issuance by
the Company of its Subordinated Notes in the aggregate principal amount of
$10,000,000 (the "1997 Notes"), as described in the Registration Statement, so
long as the holders of the Preferred Stock who elect to convert shares of
Preferred Stock held by them into shares of Common Stock and the Bank and the
holders of the 1997 Notes who elect to exercise such warrants agree to be bound
by a lock-up letter in form and substance satisfactory to you pursuant to which
such holders agree with the Company not to sell, offer to sell, solicit an offer
to buy, contract to sell, grant any option to purchase or otherwise transfer or
dispose of, any shares acquired pursuant to the conversion of such shares of
Preferred Stock or the exercise of such warrants at any time before the
expiration of the Lock-up Period and the certificates evidencing such shares
bear a legend to such effect, (iv) issue warrants in connection with the
issuance of 1997 Notes by the Company after the date hereof, as described in the
Registration Statement, and (v) grant awards and permit the exercise of awards
granted pursuant to the Company's 1995 Stock Option Plan and the Company's 1997
Stock Option Plan during the
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Lock-up Period. The Company further agrees for the express benefit of the
Underwriters that, during the Lock-Up Period, it will not, without the prior
written consent of Xxxxx Xxxxxx Inc., waive any provision of any registration
rights agreement, stockholders agreement or any reorganization agreement in each
case relating to any restriction imposed on the subsequent transfer or other
disposition of shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock and will take reasonable steps to
cause its transfer agent to enforce any such provision so as to limit the
transfer or other disposition of shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock during the
Lock-Up Period.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you
who holds 10,000 or more shares of Common Stock.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The Commission
has not issued any order preventing or suspending the use of any Prepricing
Prospectus.
(b) The Registration Statement in the form in which it became
or becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 424(b) under the
Act complied or will comply in all material respects with the provisions of the
Act and did not or will not at any such times 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, except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus or any amendment or supplement
thereto made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) As of the date of this Agreement, the Company has
authorized capital stock consisting of ________ shares of Common Stock and
__________ shares of Preferred Stock, $0.01 par value per share ("Preferred
Stock"), of which _______ shares of Common Stock
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and _______ shares of Preferred Stock are issued and outstanding. As of the
Closing Date, the Company will have authorized capital stock consisting of ___
shares of Common Stock and ___ shares of Preferred Stock, of which ___ shares of
Common Stock and ___ shares of Preferred Stock will be issued and outstanding.
All the outstanding shares of capital stock of the Company as of the date of
this Agreement and as of the Closing Date have been or will be, as applicable,
duly authorized and validly issued, fully paid and nonassessable and free of and
not issued in violation of any preemptive or similar rights; the Shares to be
issued and sold by the Company have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with the
terms hereof, will be validly issued, fully paid and nonassessable and free of
and will not have been issued in violation of any preemptive or similar rights.
Except as described in the Prospectus, (a) there are no outstanding options,
warrants or other rights calling for the issuance of, and there are no
commitments to issue any shares of, capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company, and (b) there is no holder of any securities of the company or any
other person who has the right, contractual or otherwise, to cause the Company
to sell or otherwise issue to him or her, or permit him or her to underwrite the
sale of, any of the Shares. The capital stock of the Company conforms to the
description thereof in the Registration Statement and the Prospectus.
(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
(e) All the Company's subsidiaries (collectively, the
"Subsidiaries") are identified in an exhibit to the Registration Statement. Each
Subsidiary and each of Bioclear, Inc. ("Bioclear") and Lanco Environmental
Products, Inc. ("Lanco" and, together with Bioclear, the "Acquired Companies")
is a corporation duly organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
register or qualify does not have a Material Adverse Effect; all the outstanding
shares of capital stock of each of the Subsidiaries and the Acquired Companies
have been duly authorized and validly issued, are fully paid and nonassessable,
and are owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance. Other than with respect to the Subsidiaries and the
Acquired Companies, the Company does not have, directly or indirectly, any
ownership interest or
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agreement or agreement in principal to acquire any ownership interest which is
material to the Company in consideration of its consolidated assets, in any
corporation, partnership, joint venture, association or other business
organization.
(f) There are no legal or governmental proceedings pending or,
to the best knowledge of the Company, threatened, against the Company, any of
the Subsidiaries or the Acquired Companies, or to which the Company, any of the
Subsidiaries or the Acquired Companies, or to which any of their respective
properties, is subject that are required to be described in the Registration
Statement or the Prospectus but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement that are not described or filed as
required by the Act.
(g) Neither the Company, any of the Subsidiaries, nor the
Acquired Companies is in violation of its certificate or articles of
incorporation or by-laws, or other organizational documents, or of any statute,
law, ordinance, administrative or governmental rule or regulation applicable to
the Company, any of the Subsidiaries or either of the Acquired Companies or of
any judgment, injunction, order or decree of any court or governmental agency or
body having jurisdiction over the Company, any of the Subsidiaries or either of
the Acquired Companies, or in default in any material respect in the performance
of any obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any material agreement, indenture,
lease or other instrument to which the Company, any of the Subsidiaries or
either of the Acquired Companies is a party or by which any of them or any of
their respective properties may be bound.
(h) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (A) requires
any consent, approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required for the registration of
the Shares under the Act and the Exchange Act and compliance with the securities
or Blue Sky laws of various jurisdictions, all of which have been or will be
effected in accordance with this Agreement) or conflicts or will conflict with
or constitutes or will constitute as of the date hereof and on the Closing Date
and any Option Closing Date a breach of, a default under, the certificate or
articles of incorporation or bylaws, or other organizational documents, of the
Company, any of the Subsidiaries or either of the Acquired Companies or (B)
conflicts or will conflict with or constitutes or will constitute as of the date
hereof and on the Closing Date and any Option Closing Date a breach of, or a
default under, any agreement, indenture, lease or other instrument to which the
Company, any of the Subsidiaries, or either of the Acquired Companies is a party
or by which any of them or any of their respective properties may be bound, or
violates or will violate as of the date hereof and on the Closing Date and any
Option Closing Date any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company, any of the Subsidiaries
or, to the knowledge of the Company, either of the Acquired Companies or
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any of their respective properties, or as of the date hereof and on the Closing
Date and any Option Closing Date will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company, any
of the Subsidiaries or either of the Acquired Companies pursuant to the terms of
any agreement or instrument to which any of them is a party or by which any of
them may be bound or to which any of the property or assets of any of them is
subject.
(i) The accountants, Ernst & Young LLP, Ernst & Young AB,
Ernst & Young, Xxxxxx X. Xxxx & Company, Ltd., Sink, Xxxxxxxx & Xxxxxx LLP and
Plant & Xxxxx, LLP who have certified or shall certify the financial statements
included in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) are independent public accountants as required by the Act.
(j) The historical financial statements, together with the
related schedules and notes, included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly in all
material respects (i) the consolidated financial position, results of
operations, shareholders' equity (and deficit) and cash flows of the Company and
its Subsidiaries, and (ii) the separate financial position, results of
operations, shareholders equity (and deficit) and cash flows of the Nordic Water
Products Group, Bioclear and Lanco, in each case on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such financial statements and related schedules and notes have
been prepared in accordance with generally accepted accounting principles as
applicable, (A) in the Kingdom of Sweden (in the case of the Nordic Water
Products Group), (B) in Canada (in the case of Bioclear), and (C) in the United
States (in all other cases) consistently applied throughout the periods
involved, except as disclosed therein; and the summary financial and statistical
information and data included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) present fairly the information shown
therein and such data have been compiled on a basis consistent with the
financial statements presented therein and the books and records of the Company,
its Subsidiaries the Nordic Water Products Group, Bioclear and Lanco. The pro
forma combined financial statements of the Company and its Subsidiaries
(including Bioclear and Lanco), together with the related schedules and notes,
as set forth in the Registration Statement and the Prospectus (and any amendment
or supplement thereto), present fairly the information shown therein, have been
prepared in accordance with the applicable provisions of Article 11 of
Regulation S-X promulgated by the Commission with respect to pro forma financial
statements and have been properly compiled on the pro forma bases described
therein and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein, and the other financial and statistical information and data included
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company and the
Subsidiaries.
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(k) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except that enforceability may be subject to the effect (i) any applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
other laws affecting the creditors' rights generally, (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law), and (iii) except as rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws. The execution and
delivery of, and the performance by the Company of its obligations under, each
of [title of Lanco acquisition agreement] and [title of Bioclear acquisition
agreement] (collectively, the "Acquisition Agreements") have been duly and
validly authorized by the Company and each Acquisition Agreement has been duly
authorized, executed and delivered by the Company, and constitutes the legal,
valid and binding agreement of the respective parties thereto, except as that
enforceability may be subject to the effect of (i) any applicable bankruptcy,
fraudulent conveyance, insolvency, reorganizations, moratorium or other laws
affecting creditors' rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity of at law) and (iii) any implied covenant of good faith or fair dealing.
(l) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), neither the Company nor any of the Subsidiaries (including the
Acquired Companies) has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary course of
business, that is material to the Company and the Subsidiaries (including the
Acquired Companies) taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term debt, of
the Company or any of the Subsidiaries (including the Acquired Companies), or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective Material Adverse Effect.
(m) Each of the Company and the Subsidiaries (including the
Acquired Companies) has good and marketable title to all property (real and
personal) described in the Registration Statement and the Prospectus or in a
document filed as an exhibit to the Registration Statement as being owned by it,
free and clear of all liens, claims, security interests or other encumbrances,
except such as are described in the Registration Statement and the Prospectus or
in a document filed as an exhibit to the Registration Statement or which are not
material to the Company and/or the applicable Subsidiary, and all the property
described in the Prospectus as being held under lease by the Company or any
Subsidiary (including the Acquired Companies) is held by the Company or such
Subsidiary (including the Acquired Companies) under valid, subsisting and
enforceable leases.
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(n) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act.
(o) The Company and each of the Subsidiaries (including the
Acquired Companies) has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own its
respective properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the Prospectus
and except where the failure to have such permits would not have a Material
Adverse Effect; the Company and each of the Subsidiaries and, to the knowledge
of the Company, each of the Acquired Companies has fulfilled and performed all
its material obligations with respect to such permits, licenses, franchises and
authorizations and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or results, or after
notice or lapse of time would result, in any other material impairment of the
rights of the holder of any such permit, license, franchise or authorization,
subject in each case to such qualification as may be set forth in the
Prospectus; and, except as described in the Prospectus, none of such permits,
licenses, franchises or authorizations contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries (including the
Acquired Companies).
(p) The Company and, to the knowledge of the Company, each of
the Acquired Companies maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, the Acquired Companies nor any employee or agent
of the Company or any Subsidiary has made any payment of funds of the Company or
any Subsidiary (or the Acquired Companies) or received or retained any funds in
violation of any statute, law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the Prospectus.
(r) The Company and each of the Subsidiaries (including the
Acquired Companies) have filed in a timely manner all tax returns required to be
filed with any taxing authority, which returns are complete and correct and, to
the best knowledge of the Company, are not the subject of any audit proceedings,
and neither the Company nor any Subsidiary (including
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the Acquired Companies) is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto. The
merger pursuant to which the Company acquired Water Equipment Technologies, Inc.
constituted a tax free merger under the applicable requirements of the Internal
Revenue Code of 1986, as amended (the "Code"). None of the indebtedness of the
Company incurred in connection with the acquisition of any of the Subsidiaries
(including the Acquired Companies) constitutes or will constitute "corporate
acquisition indebtedness" as such term is defined in section 279 of the Code.
(s) The Company and each of the Subsidiaries (including the
Acquired Companies) have conducted their respective businesses in compliance
with all applicable Federal, state, provincial, foreign and local laws and
regulations including, without limitation, those promulgated under the
Occupational Safety and Health Act (the "OSHA Laws") and those applicable to
emissions into the environment, waste management and waste disposal (the
"Environmental Laws") and, to the Company's best knowledge, under current law
there are no existing circumstances that would prevent, interfere with, or
materially increase the cost of the Company's compliance with such OSHA Laws or
Environmental Laws in the future, except for any lack of compliance or the
existence of any such circumstance as would not have, individually or in the
aggregate, a Material Adverse Effect.
(t) Except as set forth in the Registration Statement and the
Prospectus, there is no material claim under any OSHA Law or Environmental Law,
including common law, pending or threatened against the Company or any of the
Subsidiaries (including the Acquired Companies) (an "OSHA Claim" or an
"Environmental Claim", as applicable) and, to the Company's best knowledge,
there are no past or present actions, activities, circumstances, events or
incidents, including, without limitation, releases of any material into the
environment, that would reasonably be expected to form the basis of any material
claim against the Company or any of the Subsidiaries.
(u) Each holder of a security of the Company that has any
right (a "registration right") to require registration of shares of Common Stock
or any other security of the Company because of the filing of the Registration
Statement or consummation of the transactions contemplated by this Agreement has
been notified, in accordance with the notice requirements set forth in the
agreement or instrument providing for such registration rights, of the Company's
intent to file the Registration Statement with the Commission and has agreed in
writing to waive such holder's registration rights with respect to the public
offering contemplated hereby.
(v) The Company and the Subsidiaries (including the Acquired
Companies) own or possess valid and enforceable rights to use all patents,
trademarks, trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them or any of them or material to
the conduct of their respective businesses, and the Company is not aware of any
claim to the contrary or any challenge by any other person or entity to the
rights of the
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Company and the Subsidiaries (including the Acquired Companies) with respect to
the foregoing or of any infringement by any other person or entity with respect
to the foregoing.
(w) The Company is not now, and after sale of the Shares to be
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(x) The Shares have been approved for listing, upon notice of
issuance, on the New York Stock Exchange.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages, liabilities and expenses (including, without limitation,
reasonable costs of investigation and reasonable attorneys fees and expenses)
arising out of, based upon or relating to any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or in any
Prepricing Prospectus or the Prospectus or in any amendment or supplement
thereto, or arising out of, based upon or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission of a material fact or alleged untrue statement
or omission of a material fact which has been made therein or omitted therefrom
in reliance upon and in conformity with the information relating to such
Underwriter furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing indemnity agreement shall be
in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel which shall be
of nationally recognized standing and satisfactory to Xxxxx Xxxxxx Inc. (which
may include, among others, Benesch, Friedlander, Xxxxxx & Xxxxxxx) and payment
of all fees and
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expenses. The Company shall not agree to settle any such action, suit or
proceeding without the written consent of Xxxxx Xxxxxx Inc., which consent shall
not be unreasonably withheld. Such Underwriter or any such controlling person
shall have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or such controlling
person unless (i) the Company agreed in writing to pay such fees and expenses,
(ii) the Company failed promptly to assume the defense and employ counsel, or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons having
actual or potential differing interests, which firm shall be designated in
writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses shall be
reimbursed promptly as they are incurred. The Company shall not be liable for
any settlement of any such action, suit or proceeding effected without its
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Company agrees to indemnify and hold harmless any Underwriter, to the extent
provided in the preceding paragraph, and any such controlling person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with respect to information relating to such Underwriter furnished in writing by
or on behalf of such Underwriter expressly for use in the Registration
Statement, the Prospectus or any Prepricing Prospectus, or any amendment or
supplement thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, or any such controlling
person based on the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph (c),
such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
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Company, its directors, any such officer, and any such controlling person shall
have the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which any
Underwriter may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares, 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 on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other 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; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company, or the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company , and the underwriting
discounts and commissions received by the Underwriters, from the sale of such
Additional Shares, in each case computed on the basis of the respective amounts
set forth in the notes to the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or by the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) The Company, and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such
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Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to indemnify or
contribute, as applicable, pursuant to this Section 7 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased as set forth in
Section 10 hereof) in relation to the aggregate number of Firm Shares and not
joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered,
it is necessary for the registration statement or a post-effective amendment
thereto to be declared effective before the offering of the Shares may commence,
the registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any Underwriter,
threatened 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 your satisfaction.
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(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries (including the Acquired Companies) not contemplated by the
Prospectus, which in your opinion, as Representatives of the several
Underwriters, would adversely affect the market for the Shares, or (ii) any
event or development relating to or involving the Company or any Subsidiary
(including the Acquired Companies) or any officer or director of the Company or
any Subsidiary (including the Acquired Companies) which makes any statement made
in the Prospectus an untrue statement of a material fact or which, in the
opinion of the Company and its counsel or the Underwriters and their counsel,
requires the making of any addition to or change in the Prospectus in order to
state a material fact required by the Act or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
your opinion, as Representatives of the several Underwriters, adversely affect
the market for the Shares.
(c) You shall have received on the Closing Date, an opinion of
Benesch, Friedlander, Xxxxxx & Xxxxxxx LLP, counsel for the Company, dated the
Closing Date and addressed to you, as Representatives of the several
Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated
and validly existing in good standing under the laws of the State of Delaware
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify does not have a Material
Adverse Effect;
(ii) Each of the Subsidiaries (including the Acquired
Companies) is a corporation duly incorporated and validly existing in good
standing under the laws of the jurisdiction of its organization, with full
corporate power and authority to own, lease, and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) and is duly qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify does not have a Material
Adverse Effect; and all the outstanding shares of capital stock of each of the
Subsidiaries (including the Acquired Companies) have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear of
any security interest, lien, adverse claim, equity or, to the knowledge of such
counsel after reasonable inquiry, other encumbrance;
(iii) The authorized and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; and the authorized capital stock of
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the Company conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the caption "Description
of Capital Stock";
(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold by the
Company hereunder, have been duly authorized and validly issued, and are fully
paid and nonassessable;
(v) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and will
not have been issued in violation of the preemptive or, to the knowledge of such
counsel after reasonable inquiry, other similar rights that entitle or will
entitle any person to acquire any shares upon issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms
to the requirements of the Delaware General Corporation Law;
(vii) Based on telephonic confirmation from the
Commission on ________, 1997, the Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the knowledge of
such counsel after reasonable inquiry, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(viii) The Company has the corporate power and
authority to enter into this Agreement and to issue, sell and deliver the Shares
to be sold by it to the Underwriters as provided herein. This Agreement has been
duly authorized, executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that enforceability may be subject to the effect (i) any
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other laws affecting the creditors' rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), and except as enforcement of rights to
indemnity and contribution hereunder may be limited by Federal or state
securities laws or principles of public policy;
(ix) Neither the Company nor any of the Subsidiaries
(including the Acquired Companies) is in violation of its respective certificate
or articles of incorporation or bylaws, or other organizational documents or, to
the knowledge of such counsel after reasonable inquiry, is in default in the
performance or observance of any material obligation,
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agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness, or other material agreement, lease or instrument, except as may
be disclosed in the Prospectus;
(x) Neither the issuance, offer, sale or delivery of
the Shares, the execution, delivery or performance of this Agreement, compliance
by the Company with the provisions hereof, nor consummation by the Company of
the transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, or other organizational documents, of
the Company or any of the Subsidiaries (including the Acquired Companies) or any
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries (including the Acquired Companies) is a party or by which any
of them or any of their respective properties is bound which has been described
in or filed as an exhibit to the Registration Statement, or that is material and
that is known to such counsel after reasonable inquiry, or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries (including the Acquired
Companies), nor (assuming compliance with all applicable state or foreign
securities and Blue Sky laws) will any such action result in any violation of
any existing statute, law, rule, regulation, ruling, judgment, injunction, order
or decree applicable to the Company, the Subsidiaries (including the Acquired
Companies) or any of their respective properties and which, in such counsel's
experience, are known to be applicable to transactions of the type contemplated
by this Agreement;
(xi) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency, or official is
required on the part of the Company (except as have been obtained under the Act
and the Exchange Act or such as may be required under state or foreign
securities or Blue Sky laws governing the purchase and distribution of the
Shares) for the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement;
(xii) (A) Other than as described in the Prospectus
(or any amendment or supplement thereto), there are no legal or governmental
proceedings pending or, to the best knowledge of such counsel after reasonable
inquiry, threatened against the Company or any of the Subsidiaries (including
the Acquired Companies), or to which the Company or any of the Subsidiaries
(including the Acquired Companies), or any of their property, is subject which
are required to be described in the Registration Statement or Prospectus (or any
amendment or supplement thereto), (B) there are no agreements, contracts,
indentures, leases or other instruments that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement, as the case
may be, that are not described or filed as required and (C) other than as
described in the Prospectus (or any amendment or supplement thereto), there are
no outstanding options, warrants or other rights calling for the issuance of,
and such counsel knows of no commitment, plan or arrangement to issue any share
of capital stock of the Company or any security convertible into or exercisable
or exchangeable for capital stock of the Company or of any Subsidiary or
Acquired Company;
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(xiii) The statements in the Registration Statement
and Prospectus, insofar as they are descriptions of contracts, agreements,
instruments or other legal documents, or refer to statements of law or legal
conclusions, are accurate in all material respects and present fairly the
information required to be shown;
(xiv) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the financial statements
and the notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act;
(xv) Upon delivery of the Shares pursuant to this
Agreement and payment therefor as contemplated herein the Underwriters will
acquire good and marketable title to the Shares free and clear of any lien,
claim, security interest, or other encumbrance, restriction on transfer or other
defect in title; and
(xvi) The Shares, subject to official notice of
issuance, have been approved for listing on the New York Stock Exchange;
In addition, such counsel shall state that although such counsel has
not undertaken to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in conferences with
officers and other representatives of the Company and its Subsidiaries,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were discussed and participated
in the preparation of the Registration Statement and the Prospectus and nothing
has come to the attention of such counsel that has caused him to believe that
the Registration Statement at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that any amendment or supplement
to the Prospectus, as of its respective date, and as of the Closing Date or the
Option Closing Date, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
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which they were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements and the notes
thereto and the schedules and other financial and statistical data included in
the Registration Statement or the Prospectus).
In rendering his opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by him or
the Company as to laws of any jurisdiction other than the United States or the
States of Ohio and Delaware, provided that (1) each such local counsel is
acceptable to the Representatives, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is addressed and
delivered to the Representatives and is, in form and substance satisfactory to
them and their counsel, and (3) counsel shall state in his opinion that he
believes that he and the Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Underwriters, dated the Closing
Date and addressed to you, as Representatives of the several Underwriters, with
respect to the matters referred to in clauses (v), (vii), the first sentence of
(viii) and the final paragraph of (xii) of the foregoing paragraph (c) and such
other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from Ernst & Young LLP, Ernst & Young AB, Ernst & Young, Xxxxxx X.
Xxxx & Company, Ltd., Sink Xxxxxxxx & Xxxxxx LLP and Plant & Xxxxx, LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(f) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company or the
Underwriters, shall be contemplated by the Commission at or prior to the Closing
Date; (ii) there shall not have been any change in the capital stock of the
Company nor any material increase in the short-term or long-term debt of the
Company (other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may otherwise be
stated in the Registration Statement and Prospectus (or any amendment or
supplement thereto), any Material Adverse Effect; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectus (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as
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are acceptable to you), to the effect set forth in this Section 8(f) and in
Section 8(g), 8(h) and 8(j) hereof.
(g) The acquisitions of Lanco and BioClear shall have been
consummated as of the Closing Date on the terms set forth in the Registration
Statement and the Acquisition Agreements, without waiver or modifications of any
material term or provision of the Acquisition Agreements, except as may be
approved by you.
(h) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(i) The Shares shall have been listed or approved for listing
upon notice of issuance on the New York Stock Exchange.
(j) The Company shall have furnished or caused to be furnished
to you such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company to
each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (h) and (j) shall be dated the
Option Closing Date in question and the opinions and letter called for by
paragraphs (c), (d) and (e) shall be revised to reflect the sale of Additional
Shares.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and filing
with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight or similar charges
and charges for counting and packaging) of such copies of the Registration
Statement, each Prepricing Prospectus, the Prospectus, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in
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connection with the original issuance and sale of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Shares; (v)
the registration of the Common Stock under the Exchange Act and the listing of
the Shares on the New York Stock Exchange; (vi) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the fees and expenses of counsel for
the Underwriters in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Shares; and (ix) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying you, or
by you, as Representatives of the several Underwriters, by notifying the
Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters are obligated but fail or refuse to purchase is not more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date, each non-defaulting Underwriter shall be
obligated, severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I hereto bears to the aggregate number of
Firm Shares set forth opposite the names of all non-defaulting Underwriters or
in such other proportion as you may specify in accordance with Section 20 of the
Master Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to purchase the Shares
which such defaulting Underwriter or Underwriters are obligated, but fail or
refuse, to purchase. If any one or more of the Underwriters shall fail or refuse
to purchase Shares which it or they are obligated to purchase on the Closing
Date and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares which the
Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case which does not
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result in termination of this Agreement, either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Company, purchases Shares which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, American Stock Exchange or the Nasdaq
National Market shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York or Ohio shall have been
declared by either federal or state authorities, or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given to
the Company by telegram, telecopy or telephone and shall be subsequently
confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first paragraph, the third paragraph, the
second sentence of the seventh paragraph and the tenth paragraph under the
caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 6(b) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 0000 Xxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxx, Xxxx 00000-0000,
Attention: Chief Executive Officer; or (ii) if to you, as Representatives of the
several Underwriters, in care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
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This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Shares in his
status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters with respect to the matters
addressed herein.
Very truly yours,
WATERLINK, INC.
By: _____________________________
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
XXXXX XXXXXX INC.
XXXXXXXXXXX & CO., INC.
XXXXXXX XXXXXX XXXXX
As Representatives of the Several Underwriters
By: XXXXX XXXXXX INC.
By: _____________________________
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
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SCHEDULE I
WATERLINK, INC.
Number of
Underwriter Firm Shares
----------- -----------
Xxxxx Xxxxxx Inc..........................................
Xxxxxxxxxxx & Co., Inc....................................
Xxxxxxx Xxxxxx Mun.y......................................
-----------
Total...................................
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