Exhibit 1
3,000,000 Shares*
SYPRIS SOLUTIONS, INC.
Common Stock
UNDERWRITING AGREEMENT
March __, 2002
Xxxxxxx & Company, Inc.
X.X. Xxxxxxx & Sons, Inc.
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sypris Solutions, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell 3,000,000 shares (the "Firm Shares") of the Company's
Common Stock, $.01 par value per share (the "Common Stock"), to you and to the
several other Underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 450,000
shares of Common Stock, on the terms and for the purposes set forth in Section
1(b) (the "Option Shares"). The Firm Shares and the Option Shares are referred
to collectively herein as the "Shares."
The Company confirms as follows its agreement with the Representatives
and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to issue and sell the Firm Shares to the
several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company the respective number of Firm
Shares set forth opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $[____] for each Firm Share.
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* Plus an option to purchase up to an additional 450,000 shares to cover
over-allotments.
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(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally and
not jointly, up to 450,000 Option Shares at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telegraphic
notice (the "Option Shares Notice") by the Representatives to the Company no
later than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date"), setting forth the aggregate number of Option Shares
to be purchased and the time and date for such purchase. On the Option Closing
Date, the Company will issue and sell to the Underwriters the number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, as adjusted by the Representatives
in such manner as they deem advisable to avoid fractional shares.
2. Delivery and Payment
Delivery of the Firm Shares shall be made to the Representatives for
the accounts of the Underwriters against payment of the purchase price by wire
transfer payable in same-day funds to an account at banks specified by the
Company to the order of the Company at the office of Xxxxxxx & Company, Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or the offices of its counsel,
Xxxxxxxx Xxxxx & Deutsch LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 10110), at
10:00 a.m., New York City time, on the third (or, if the purchase price set
forth in Section 1(a) hereof is determined after 4:30 p.m., Washington D.C.
time, the fourth) business day following the commencement of the offering
contemplated by this Agreement, or at such time on such other date, not later
than seven business days after the date of this Agreement, as may be agreed upon
by the Company and the Representatives (such date is hereinafter referred to as
the "Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at the offices specified above at least 24 hours prior
to the Closing Date or the Option Closing Date, as the case may be.
The cost of original issue tax stamps and other transfer taxes, if any,
in connection with the issuance and delivery of the Firm Shares and Option
Shares by the Company to the respective Underwriters shall be borne by the
Company. The Company will pay and save each Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter of the Shares.
3. Representations and Warranties of the Company
The Company represents, warrants and covenants to each Underwriter
that:
(a) The Company meets the requirements for use of Form S-2 and a
registration statement (Registration No. 333-82446) on Form S-2 relating 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 prepared by the Company under the provisions of the Securities Act of
1933, as amended (the "Act"), and the rules and regulations (collectively
referred to as the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus, including the documents incorporated by reference therein, as
contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments and of each related preliminary prospectus have been
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delivered to the Representatives. If such registration statement has not become
effective, 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, 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" means the registration statement as amended at the time
it becomes or became effective (the "Effective Date"), including all documents
incorporated by reference therein, financial statements and all exhibits and
schedules thereto and any information deemed to be included by Rule 430A, and
includes any registration statement relating to the offering contemplated by
this Agreement and filed pursuant to Rule 462(b) of the Rules and Regulations.
The term "Prospectus" means the prospectus, including the documents incorporated
by reference therein, as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus, including the documents incorporated by reference therein,
included in the Registration Statement at the Effective Date. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the Effective Date,
the date of any preliminary prospectus or the date of the Prospectus, as the
case may be, and through and including the Closing Date and, if later, the
Option Closing Date and deemed to be incorporated therein by reference.
(b) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and no stop order suspending the
effectiveness of the Registration Statement (including any related registration
statement filed pursuant to Rule 462(b) under the Act) or any post-effective
amendment thereto has been issued, and no proceeding for that purpose has been
initiated or threatened by the Commission. On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times thereafter during the period through and including the
Closing Date and, if later, the Option Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company shall
have filed with the Commission any amendment or supplement thereto), including
the financial statements included in the Prospectus, did and will comply in all
material respects with all applicable provisions of the Act, the Exchange Act,
the rules and regulations under the Exchange Act (the "Exchange Act Rules and
Regulations"), and the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes effective, no
part of the Registration Statement, the Prospectus or any such amendment or
supplement thereto did or will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. At the Effective Date, the
date the Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date and, if later, the Option Closing
Date, the Prospectus did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section 3(b) do
not apply to any statements or omissions made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the Company
by the Representatives specifically for inclusion in the Registration Statement
or Prospectus or any amendment or supplement thereto. The Company acknowledges
that the statements set forth in the paragraphs under the heading "Underwriting"
in the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement. In connection with this offering, some
of the underwriters and selling group members, if any, or their affiliates may
engage in passive market making transactions in our common stock on the Nasdaq
National Market immediately prior to the commencement of sales in this offering,
in accordance with Rule 103 of Regulation M under the Exchange Act. Passive
market making may stabilize or maintain the market price of our common stock at
a level above that which might otherwise prevail and, if commenced, may be
discontinued at any time.
(c) The documents that are incorporated by reference in the preliminary
prospectus and the Prospectus or from which information is so incorporated by
reference, and any amendments thereto, when they became or become effective or
were or are filed with the Commission, as the case may be, complied or will
comply in all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the Rules and Regulations or the Exchange Act Rules and
Regulations, as applicable; and any documents so filed and incorporated by
reference subsequent to the Effective Date shall, when they are filed with the
Commission, comply in all material respects
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with the requirements of the Act or the Exchange Act, as applicable, and the
Rules and Regulations or the Exchange Act Rules and Regulations, as applicable.
(d) The Company does not own, and at the Closing Date and, if later,
the Option Closing Date, will not own, directly or indirectly, any shares of
stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any corporation, limited liability company, firm,
partnership, joint venture, association or other entity, other than (i) the
subsidiaries listed in Exhibit 21 to the Company's Form 10-K for the year ended
December 31, 2001 and (ii) other subsidiaries individually and collectively not
material to the Company and its business or financial condition (the
"Subsidiaries"). The Company and each of its Subsidiaries is, and at the Closing
Date and, if later, the Option Closing Date, will be, a corporation or limited
liability company duly organized or formed, as the case may be, validly existing
and in good standing under the laws of its jurisdiction of incorporation or
formation. The Company and each of its Subsidiaries has, and at the Closing Date
and, if later, the Option Closing Date, will have, full power and authority to
conduct all the activities conducted by it, to own or lease all the assets owned
or leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. The Company and each of its Subsidiaries is, and
at the Closing Date and, if later, the Option Closing Date, will be, duly
licensed or qualified to do business and in good standing as a foreign
corporation or limited liability company, as the case may be, in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such license or
qualification necessary, except to the extent that the failure to be so licensed
or qualified or be in good standing would not materially and adversely affect
the Company or its business, properties, condition (financial or other) or
results of operations. All of the outstanding shares of capital stock, units or
other ownership interests of each Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable, and owned by the Company
free and clear of all claims, liens, charges and encumbrances, except any lien
or security interest in such shares, units or other ownership interests pursuant
to the principal credit facility of the Company described in the Prospectus (the
"Credit Facility"); there are no securities outstanding that are convertible
into or exercisable or exchangeable for capital stock, units or other ownership
interest of any Subsidiary. The Company is not, and at the Closing Date and, if
later, the Option Closing Date, will not be, engaged in any discussions or a
party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws. Complete and correct copies of the certificate of incorporation
and of the by-laws of the Company and each of its Subsidiaries and all
amendments thereto have been delivered to the Representatives, and no changes
therein will be made subsequent to the date hereof and prior to the Closing Date
or, if later, the Option Closing Date.
(e) All of the outstanding shares of capital stock of the Company have
been duly authorized, validly issued and are fully paid and nonassessable and
were issued in compliance with all applicable state and federal securities laws;
the Shares have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and nonassessable; no
preemptive or similar rights exist with respect to any of the Shares or the
issue and sale thereof. The description of the capital stock of the Company in
the Registration Statement and the Prospectus is, and at the Closing Date and,
if later, the Option Closing Date, will be, complete and accurate in all
material respects. Except as set forth in the Prospectus, the Company does not
have outstanding, and at the Closing Date and, if later, the Option 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 commitments to issue or sell, any shares of capital stock, or
any such warrants, convertible securities or obligations. No further approval or
authority of stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares as contemplated herein.
(f) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present fairly in all
material respects the financial condition of the Company and its consolidated
Subsidiaries as of the respective dates thereof and the results of operations
and cash flows of the Company and its consolidated Subsidiaries for the
respective periods covered thereby, all in conformity with United States
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act, the Exchange Act Rules and Regulations or
the Rules and Regulations to be included in the Registration Statement or the
Prospectus. Ernst & Young LLP (the "Accountants"), who have reported on such
financial statements and schedules, are independent accountants with respect to
the Company as
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required by the Act and the Rules and Regulations. The summary consolidated
financial and statistical data included in the Registration Statement present
fairly the information shown therein as at the respective dates and for the
respective periods specified and have been compiled on a basis consistent with
the audited financial statements presented in the Registration Statement.
(g) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to or on the Closing
Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the Company
(other than in connection with the exercise of options to purchase the Company's
Common Stock granted pursuant to the Company's stock option and equity incentive
plans from the shares reserved therefor as described in the Registration
Statement), or any material adverse change in the business, properties,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries, taken as a whole, arising for any reason whatsoever, (ii)
neither the Company nor any of its Subsidiaries has incurred nor will any of
them incur, except in the ordinary course of business as described in the
Prospectus, any material liabilities or obligations, direct or contingent, nor
has the Company or any of its Subsidiaries entered into nor will any of them
enter into, except in the ordinary course of business as described in the
Prospectus, any material transactions other than pursuant to this Agreement and
the transactions referred to herein, and (iii) the Company has not and will not
have paid or declared any dividends or other distributions of any kind on any
class of its capital stock.
(h) The Company is not and will not become as a result of the
transactions contemplated hereby an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(i) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company, or any of
its Subsidiaries or any of their officers in their capacity as such, nor to the
knowledge of the Company is there any basis therefor, before or by any Federal
or state court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding might materially and adversely affect the Company and its
Subsidiaries taken as a whole or the business, properties, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole.
(j) The Company and each Subsidiary has, and at the Closing Date and,
if later, the Option Closing Date, will have, performed in all material respects
all the obligations required to be performed by it, and is not, and at the
Closing Date, and, if later, the Option Closing Date, will not be, in default,
under any contract or other instrument to which it is a party or by which its
property is bound or affected, which default might reasonably be expected to
materially and adversely affect the Company or the business, properties,
condition (financial or other) or results of operations of the Company and its
Subsidiaries taken as a whole. To the best knowledge of the Company, no other
party under any contract or other instrument to which it or any of its
Subsidiaries is a party is in default in any respect thereunder, which default
might reasonably be expected to materially and adversely affect the Company and
its Subsidiaries taken as a whole or the business, properties, condition
(financial or other) or results of operations of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
is, and at the Closing Date and, if later, the Option Closing Date, will be, in
violation of any provision of its certificate or articles of incorporation or
by-laws or other organizational documents.
(k) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under foreign securities laws, state securities or Blue
Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares.
(l) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof except (i)
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles and (ii) to the
extent that rights to indemnity or contribution under this Agreement may be
limited by Federal and state securities laws or the public
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policy underlying such laws. The performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any party a right to terminate any of its obligations under, or result
in the acceleration of any obligation under, the certificate or articles of
incorporation, by-laws or other organizational documents of the Company or any
of its Subsidiaries, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company, any of
its Subsidiaries or any of their properties is bound or affected, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company or any of its Subsidiaries.
(m) The Company and its Subsidiaries have good and, in the case of real
property, marketable title to all properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus or are not
material to the business of the Company and its Subsidiaries taken as a whole.
The Company and its Subsidiaries have valid, subsisting and enforceable leases
for the properties described in the Prospectus as leased by them. The Company
and its Subsidiaries own or lease all such properties as are necessary to their
operations as now conducted or as proposed to be conducted, except where the
failure to so own or lease would not materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
(n) There is no document, contract, permit or instrument 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 is not described or
filed or incorporated by reference as required. All such contracts to which the
Company or any of its Subsidiaries is a party have been duly authorized,
executed and delivered by the Company or such Subsidiary, constitute valid and
binding agreements of the Company or such Subsidiary and are enforceable against
and by the Company or such Subsidiary in accordance with the terms thereof
except (i) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
and (ii) to the extent that rights to indemnity or contribution under this
Agreement may be limited by Federal and state securities laws or the public
policy underlying such laws.
(o) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
Section 4 of this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect in any material respect.
(p) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date or, if later, the Option Closing Date, and
(ii) completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement and other materials, if
any, permitted by the Act. Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement, which rights have not been waived by the holder thereof
as of the date hereof.
(r) The Common Stock is registered under Section 12(g) of the Exchange
Act, and the Company has filed an application to list the Shares on the Nasdaq
National Market ("NNM") and has received notification that the listing has been
approved, subject to notice of issuance of the Shares.
(s) Except as disclosed in or specifically contemplated by the
Prospectus (i) the Company and its Subsidiaries have sufficient trademarks,
trade names, patents, patent rights, mask works, copyrights, licenses, approvals
and governmental authorizations necessary to conduct their businesses as now
conducted, and to the
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Company's knowledge, none of the foregoing intellectual property rights owned
or licensed by the Company is invalid or unenforceable, (ii) the Company has no
knowledge of any infringement by it or any of its Subsidiaries of trademarks,
trade name rights, patents, patent rights, mask work rights, copyrights,
licenses, trade secrets or other similar rights of others, where such
infringement could have a material and adverse effect on the Company, and its
Subsidiaries taken as a whole or the business, properties, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole, (iii) the Company is not aware of any infringement, misappropriation
or violation by others of, or conflict by others with rights of the Company with
respect to, any of the foregoing intellectual property rights, and (iv) no claim
has been made against the Company or any of its Subsidiaries, or to the best of
the Company's knowledge, any employee of the Company or any of its Subsidiaries,
regarding trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement which could have a material and adverse effect on
the Company and its Subsidiaries taken as a whole or the business,
properties,condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole.
(t) The Company and each of its Subsidiaries has filed all federal,
state, local and foreign income tax returns which have been required to be filed
and has paid all taxes and assessments received by it to the extent that such
taxes or assessments have become due. Neither the Company nor any of its
Subsidiaries has any tax deficiency which has been or, to the best knowledge of
the Company, might be asserted or threatened against it which could have a
material and adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole.
(u) The Company or its Subsidiaries owns or possesses all
authorizations, approvals, orders, licenses, registrations, other certificates
and permits of and from all governmental regulatory officials and bodies,
necessary to conduct their respective businesses as contemplated in the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not materially and adversely affect the Company and its Subsidiaries taken as a
whole or the business, properties condition (financial or otherwise) or results
of operations of the Company and its Subsidiaries taken as a whole. There is no
proceeding pending or, to the knowledge of the Company, threatened (or any basis
therefor known to the Company) which may cause any such authorization, approval,
order, license, registration, certificate or permit to be revoked, withdrawn,
cancelled, suspended or not renewed; and the Company and each of its
Subsidiaries is conducting its business in compliance with all laws, rules and
regulations applicable thereto (including, without limitation, all applicable
federal, state and local environmental laws and regulations) except where such
noncompliance would not materially and adversely affect the Company, and its
Subsidiaries taken as a whole or the business, properties condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole.
(v) The Company and each of its Subsidiaries maintains insurance of the
types and in the amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company and its Subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(w) Neither the Company nor any of its Subsidiaries has nor, to the
best of the Company's knowledge, any of its or their respective employees or
agents at any time during the last five years (i) made any unlawful contribution
to any candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any federal or
state governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
4. Agreements of the Company
The Company covenants and agrees with the several Underwriters as
follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
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(b) The Company will notify the Representatives promptly, and will
confirm such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment thereto becomes effective, (ii)
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
or the threat thereof, (iv) of the happening of any event during the period
mentioned in the second sentence of Section 4(e) that in the judgment of the
Company makes any statement made in the Registration Statement or the Prospectus
contain an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances in which they are made, not misleading If at any time the
Commission shall issue any 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 moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will comply with the provisions of and
make all requisite filings with the Commission pursuant to said Rule 430A and
notify the Representatives promptly of all such filings. If the Company elects
to rely upon Rule 462(b) under the Act, the Company shall file a registration
statement under Rule 462(b) with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing fee
for such Rule 462(b) registration statement or give irrevocable instructions for
the payment of such fee pursuant to the Rules and Regulations.
(c) The Company will furnish to each Representative, without charge,
one signed copy of each of the Registration Statement and of any pre- or
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any pre- or post-effective amendment thereto,
including financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, so long as
delivery of a prospectus by an Underwriter or dealer is, in the reasonable
opinion of the Underwriters, required by the Act or the Rules and Regulations,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several 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 any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur the result of which in the
judgment of the Company or counsel to the Underwriters results or would result
in the Prospectus, as then amended or supplemented, including an untrue
statement of material fact or omitting to state any material fact necessary in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with the Act or other applicable securities laws, the
Company will forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each of the Underwriters,
without charge, such number of copies of such supplement or amendment to the
Prospectus as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Representatives and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives may
request; 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 taxation or general service of process in any
jurisdiction where it is not now so subject.
(g) During the period of three years commencing on the Effective Date,
the Company will furnish to the Representatives and each other Underwriter who
may so request a copy of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
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(h) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the
Availability Date (as defined below) an earnings statement (which need not be
audited but shall be in reasonable detail) covering a period of 12 months
commencing after the Effective Date which will satisfy the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations). For the
purpose of the preceding sentence, "Availability Date" means the 45th day after
the end of the fourth fiscal quarter following the fiscal quarter that includes
such Effective Date, except that if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter.
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or reimburse
if paid by the Representatives all costs and expenses incident to the
performance of the obligations of the Company under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing and filing
of the Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters' Questionnaires, any
Underwriters' Powers of Attorney, and any invitation letters to prospective
Underwriters, (iv) furnishing (including costs of shipping and mailing) such
copies of the Registration Statement, the Prospectus and any preliminary
prospectus, and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the Underwriters
or by dealers to whom Shares may be sold, (v) the listing of the Shares on the
NNM, (vi) any filings required to be made by the Underwriters with the NASD, and
the reasonable fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (vii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 4(f), including the reasonable
fees, disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (viii) fees, disbursements and other
charges of counsel to the Company (but not those of counsel for the
Underwriters, except as otherwise provided herein) and (ix) the transfer agent
for the Shares.
(j) The Company will not at any time, directly or indirectly, take any
action designed or which might reasonably be expected to cause or result in, or
which will constitute, stabilization of the price of the shares of Common Stock
to facilitate the sale or resale of any of the Shares.
(k) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds"
(l) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, without the
prior written consent of Xxxxxxx & Company, Inc., the Company will not (1)
offer, sell, contract to sell, pledge, grant options, warrants or rights to
purchase, or otherwise dispose of any equity securities of the Company or any
other securities convertible into or exchangeable for its Common Stock or other
equity security (other than pursuant to employee stock option or equity
incentive plans disclosed in the Prospectus or pursuant to the conversion of
convertible securities or the exercise of warrants in each case outstanding on
the date of this Agreement), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise.
(m) The Company will cause each of its officers, directors and certain
stockholders designated by the Representatives to, enter into lock-up agreements
with the Representatives to the effect that they will not, without the prior
written consent of Xxxxxxx & Company, Inc., sell, contract to sell or otherwise
dispose of any shares of Common Stock or rights to acquire such shares according
to the terms set forth in Schedule II hereto.
5. Conditions of the Obligations of the Underwriters
The obligations of each Underwriter hereunder are subject to the
following conditions:
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(a) Notification that the Registration Statement has become effective
shall be received by the Representatives not later than 10:00 p.m., New York
City time, on the date of this Agreement or at such later date and time as shall
be consented to in writing by the Representatives and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made. If the
Company has elected to rely upon Rule 462(b), the registration statement filed
under Rule 462(b) shall have become effective by 10:00 P.M., New York City time,
on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement shall be in effect and no proceeding
for such purpose shall be pending before or threatened by the Commission (iii)
the Representatives shall have received certificates, dated the Closing Date
and, if later, the Option Closing Date and signed by the Chief Executive Officer
and the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the effect
of clauses (i) and (ii) of this paragraph.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been a material
adverse change in the business, properties, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course of business, in
each case other than as described in or contemplated by the Registration
Statement and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company, any of its Subsidiaries, or
any of its or their officers or directors in their capacities as such, before or
by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would, in
the judgment of the Representatives, materially and adversely affect the
business, properties, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date
and, with respect to the Option Shares, at the Option Closing Date, and all
covenants and agreements contained herein to be performed on the part of the
Company and all conditions contained herein to be fulfilled or complied with by
the Company at or prior to the Closing Date and, with respect to the Option
Shares, at or prior to the Option Closing Date, shall have been duly performed,
fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters from Xxxxx, Tarrant & Xxxxx, LLP, counsel to the Company, with
respect to the following matters:
(i) Each of the Company and its Subsidiaries is a corporation
or other entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization;
has full corporate or other power and authority to conduct all the
activities conducted by it, to own or lease all the assets owed or
leased by it and to conduct its business as described in the
Registration Statement and Prospectus; and is duly licensed or
qualified to do business and is in good standing, where applicable, as
a foreign entity in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or
leased by it of which such counsel has knowledge after due inquiry
makes such license or qualification necessary and where the failure to
be licensed or qualified would have a material and adverse effect on
the business or financial condition of the Company and Subsidiaries,
taken as a whole.
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued and are fully paid
and nonassessable and to such counsel's knowledge after due inquiry
were
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not issued in violation of or subject to any preemptive or, to such
counsel's knowledge after due inquiry, similar rights.
(iii) The specimen certificate evidencing the Common Stock
filed or incorporated by reference as an exhibit to the Registration
Statement is in due and proper form under Delaware law, the Shares have
been duly authorized and, when issued and paid for as contemplated by
this Agreement, will be validly issued, fully paid and nonassessable;
and no statutory or, to such counsel's knowledge after due inquiry,
contractual preemptive or similar rights exist with respect to any of
the Shares or the issue and sale thereof.
(iv) To such counsel's knowledge, the Company does not own or
control, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity other than the Subsidiaries. All of the
outstanding shares of capital stock, units or other equity interest of
each Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, and are owned of record by the Company to
such counsel's knowledge after due inquiry free and clear of all
claims, liens, charges and encumbrances, except for any lien or
security interest in such shares pursuant to the Credit Facility; to
such counsel's knowledge, there are no securities outstanding that are
convertible into or exercisable or exchangeable for capital stock,
units or other equity interest of any Subsidiary.
(v) The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
this Agreement or pursuant to reservations, agreements, employee
benefit plans or the exercise of convertible securities, options or
warrants referred to in the Prospectus). To such counsel's knowledge,
except as disclosed in or specifically contemplated by the Prospectus,
there are no outstanding options, warrants or other rights calling for
the issuance of, and no commitments, plans or arrangements 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.
The description of the capital stock of the Company in the Registration
Statement and the Prospectus conforms in all material respects to the
terms thereof.
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its Subsidiaries is a party 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 so described.
(vii) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is
required for the consummation by the Company of the transactions on its
part contemplated under this Agreement, except such as have been
obtained or made under the Act or the Rules and Regulations and such as
may be required under foreign or state securities or Blue Sky laws, as
to which foreign or state securities or Blue Sky laws such counsel
renders no opinion, or the by-laws and rules of the NASD in connection
with the purchase and distribution by the Underwriters of the Shares.
(viii) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The execution and delivery of this Agreement, the
compliance by the Company with all of the terms hereof and the
consummation of the transactions contemplated hereby does not
contravene any provision of United States Federal or Kentucky law, or
the Delaware General Corporation Law, or the Certificate of
Incorporation or By-Laws of the Company or the organizational and
governing documents of any of its Subsidiaries, and to the best of such
counsel's knowledge after due inquiry will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Subsidiaries pursuant to the terms and
provisions of, result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any party a right
to terminate any of its obligations under, or result in the
acceleration of any obligation under, any indenture, mortgage, deed of
trust, voting
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trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument known to such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its
Subsidiaries, or any of their respective properties is bound or
affected, or violate or conflict with (i) any judgment, ruling, decree
or order known to such counsel which breach, violation or conflict
would have a material adverse effect on the Company and its
Subsidiaries, taken as a whole, or (ii) any United States Federal or
Kentucky, or to such counsel's knowledge any other state, statute,
rule or regulation of any governmental agency or body, applicable to
the business or properties of the Company or any of its Subsidiaries
which breach, violation or conflict would have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
(x) To such counsel's knowledge, 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 which is not described or filed or incorporated
by reference as required, and each description of such contracts and
documents that is contained in the Registration Statement and
Prospectus fairly presents in all material respects the information
required under the Act and the Rules and Regulations.
(xi) The statements under the captions "Risk Factors - Our
stock price may decline if additional shares are sold in the market
after the offering" and "Risk Factors -Our current or proposed
anti-takeover provisions and the concentration of ownership of our
common stock may deter potential acquirers and may depress our stock
price" (relating to shares eligible for future sale and anti-takeover
provisions), "Certain Relationships and Related Transactions",
"Description of Capital Stock" and "Shares Eligible for Future Sale" in
the Prospectus, insofar as the statements constitute a summary of
documents referred to therein or matters of law, are accurate summaries
and fairly and correctly present, in all material respects, the
information called for with respect to such documents and matters of
law (provided, however, that such counsel may rely on representations
of the Company with respect to the factual matters contained in such
statements, and provided further that such counsel shall state that
nothing has come to the attention of such counsel which leads them to
believe that such representations are not true and correct in all
material respects).
(xii) The Company is not an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(xiii) Such counsel has received oral notification from the
NNM that the Shares have been duly authorized for listing on the NNM,
subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities of
the Company has rights, which have not been waived, to require the
Company to register with the Commission shares of Common Stock or other
securities, as part of the offering contemplated hereby.
(xv) Based on a telephonic communication with the Commission,
the Registration Statement has become effective under the Act, and to
the best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending, or
threatened.
(xvi) The Registration Statement and the Prospectus, as of
their respective effective or issue dates, appeared to be appropriately
responsive in all material respects to the requirements of the Act and
the Rules and Regulations (other than the financial statements,
schedules and other financial data contained or incorporated by
reference in the Registration Statement or the Prospectus, as to which
such counsel need express no opinion).
(xvii) Such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the Representatives and representatives of the independent accountants
of the Company, at which the contents of the Registration Statement and
the Prospectus and related matters were discussed. Although such
counsel is not passing upon, and is not assuming responsibility for,
the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, on the basis of the
foregoing, no facts have come to the attention of such counsel which
leads
-12-
such counsel to believe that, as of the Effective Date the Registration
Statement (other than the financial statements, schedules and other
financial data contained or incorporated by reference therein, as to
which such counsel need express no opinion), contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, or any amendment or
supplement thereto, as of its date, contained any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the financial
statements, schedules and other financial data contained or
incorporated by reference therein, as to which such counsel need
express no opinion).
(xviii) The documents incorporated by reference in the
Prospectus (other than the financial statements, schedules and other
financial data contained therein, as to which such counsel need express
no opinion), subject to any amendments thereto and any subsequently
filed documents which supersede such documents when they were filed
with the Commission appeared to be appropriately responsive in all
material respects with the requirements of the Exchange Act and the
Exchange Act Rules and Regulations.
In rendering such opinion, such counsel may rely, as to matters of
local law, on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters, provided that the opinion of
counsel to the Company shall state that they are doing so, that they have no
reason to believe that they and the Underwriters are not entitled to rely on
such opinions and that copies of such opinions are to be attached to the
opinion.
(g) The Representatives shall have received an opinion, dated the
Closing Date and the Option Closing Date, from Xxxxxxxx Xxxxx & Deutsch LLP,
counsel to the Underwriters, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Representatives.
(h) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its Subsidiaries as required by the
Act and the Exchange Act and the Rules and Regulations and with respect to
certain financial and other statistical and numerical information contained or
incorporated by reference in the Registration Statement. At the Closing Date
and, as to the Option Shares, the Option Closing Date, the Accountants shall
have furnished to the Representatives a letter, dated the date of its delivery,
which shall confirm, on the basis of a review in accordance with the procedures
set forth in the letter from the Accountants, that nothing has come to their
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than three days prior to
the Closing Date and the Option Closing Date, as the case may be, which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.
(i) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives a certificate,
dated the date of its delivery, signed by each of the Chief Executive Officer
and the Chief Financial Officer of the Company, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct.
(ii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to
be satisfied or fulfilled on or prior to the date of such certificate
has been duly, timely and fully satisfied or fulfilled.
(j) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(o).
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(k) Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the NNM upon official notice of issuance.
6. 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 each 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, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, or the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading in the light of the circumstances in which
they were made, or arise out of or are based in whole or in part on any
inaccuracy in the representations and warranties of the Company contained herein
or any failure of the Company to perform its obligations hereunder or under law
in connection with the transactions contemplated hereby; provided, however, that
(i) the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives, on behalf of any Underwriter, expressly for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus and (ii) the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability,
expense, or damage arising out of or based on any untrue statement or omission
or alleged untrue statement or omission or alleged omission to state a material
fact in the preliminary prospectus which is corrected in the Prospectus if the
person asserting any such loss, claim, liability, expense or damage purchased
Shares from such Underwriter but was not sent or given a copy of the Prospectus
at or prior to the written confirmation of the sale of such Shares to such
person and if copies of the Prospectus were timely delivered to such Underwriter
pursuant to Section 5 hereof. The Company acknowledges that the statements set
forth under the heading "Underwriting" in the preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by the Representatives on behalf of the Underwriters
expressly for inclusion in the Registration Statement, the preliminary
prospectus or the Prospectus. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the Registration
Statement, and each person, if any, 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, as set forth in
Section 6(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company acknowledges that the statements set forth under the heading
"Underwriting" in the preliminary prospectus and the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the Company
by the Representatives on behalf of the Underwriters expressly for inclusion in
the Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the loss of
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substantive rights or defenses by the indemnifying party. If any such action is
brought against any indemnified party and it notifies the indemnifying party of
its commencement, the indemnifying party will be entitled to participate in and,
to the extent that it elects by delivering written notice to the indemnified
party promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has reasonably concluded (based on advice of counsel) that a conflict or
potential conflict exists between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (iii) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action 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 (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld or
delayed).
(d) If the indemnification provided for in this Section 6 is applicable
in accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and
(c) of this Section 6 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) by such indemnified party as a result of
such losses, claims, liabilities, expenses and damages in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand. The relative benefits
received by the Company, on the one hand, and the Underwriters, on the other
hand, 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. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other hand, with respect to the
statements or omissions which resulted in such loss, claim, liability, expense
or damage, or action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representatives on behalf of the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
6(d) were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
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the loss claim, liability, expense or damage, or action in respect thereof,
referred to above in this Section 6(d) shall be deemed to include, for purposes
of this Section 6(d), 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 Section 6(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each director and each officer of
the Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against any such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 6(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section
6 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor or (iii) any termination of this
Agreement.
7. Reimbursement of Certain Expenses
In addition to its other obligations under Section 6(a) of this
Agreement, the Company hereby agrees to reimburse on a quarterly basis the
Underwriters for all reasonable legal and other expenses incurred in connection
with investigating or defending any claim, action, investigation, inquiry or
other proceeding arising out of or based upon, in whole or in part, any
statement or omission or alleged statement or omission, or any inaccuracy in the
representations and warranties of the Company contained herein or failure of the
Company to perform its or their respective obligations hereunder or under law,
all as described in Section 6(a), notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 7 and the possibility that such payment might later be held to be
improper; provided, however, that, to the extent any such payment is ultimately
held to be improper, the persons receiving such payments shall promptly refund
them.
8. Termination
The obligations of the several Underwriters under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to the
Option Shares, on or prior to the Option Closing Date), by notice to the Company
from the Representatives, without liability on the part of any Underwriter to
the Company if, prior to delivery and payment for the Firm Shares or Option
Shares, as the case may be, in the sole judgment of the Representatives, (i)
trading in any of the equity securities of the Company shall have been suspended
by Commission or by the NNM, (ii) trading in securities generally on the NNM
shall have been suspended or limited or minimum or maximum prices shall have
been generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange, by order of the
Commission or any court or other governmental authority, or by the NNM, (iii) a
general banking moratorium shall have been declared by either Federal or New
York State authorities or (iv) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any new outbreak or material escalation of
hostilities or other calamity or crisis shall have occurred, the effect of which
on financial markets of the United States is such as to make it, in the sole
judgment of the Representatives, impracticable or inadvisable to proceed with
completion of the public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 9 hereof, the
Company shall be under no liability to any Underwriter except as provided in
Sections 4(i), 6 and 7 hereof; but, if for any reason the Company shall fail,
refuse or be unable to perform its obligations hereunder, the Company will
reimburse the several Underwriters for
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all out-of-pocket expenses (including the fees, disbursements and other
charges of counsel to the Underwriters) incurred by them in connection
with the offering of the Shares.
9. Substitution of Underwriters
If any one or more of the Underwriters shall fail or refuse to purchase
any of the Firm Shares which it or they have agreed to purchase hereunder, and
the aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Firm Shares, the other Underwriters shall be
obligated, severally, to purchase the Firm Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase, in the
proportions which the number of Firm Shares which they have respectively agreed
to purchase pursuant to Section 1 bears to the aggregate number of Firm Shares
which all such non-defaulting Underwriters have so agreed to purchase, or in
such other proportions as the Representatives may specify; provided that in no
event shall the maximum number of Firm Shares which any Underwriter has become
obligated to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by more than one-ninth of such number of Firm Shares without the prior
written consent of such Underwriter. In any such case either the Representatives
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than five business days, in order that the required changes, if
any, in the Registration Statement and the Prospectus or in any other documents
or arrangements may be effected. If any Underwriter or Underwriters shall fail
or refuse to purchase any Firm Shares and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter and the Company for the purchase or sale of any
Shares under this Agreement. Any action taken pursuant to this Section 9 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
10. Miscellaneous
Notice given pursuant to any of the provisions of this Agreement shall
be in writing and, unless otherwise specified, shall be mailed or delivered (a)
if to the Company, at the office of the Company, 000 Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, with a copy to Xxxxx,
Tarrant & Xxxxx, LLP, 000 Xxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, XX
00000, Attention: Xxxxxx X. Xxxxx, Esq., or (b) if to the Underwriters, to the
Representatives at the offices of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department, with a copy to
Xxxxxxxx Xxxxx & Deutsch LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention:
Xxxxxxx X. Xxxxxxxxxx, Esq. and Xxxxx X. Xxxxx, Esq Any such notice shall be
effective only upon receipt.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, and the controlling persons, directors and
officers referred to in Section 6, and their respective successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
Any action required or permitted to be made by the Representatives
under this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
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 entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
SYPRIS SOLUTIONS, INC.
By:
-------------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned:
Xxxxxxx & Company, Inc.
X.X. Xxxxxxx & Sons, Inc.
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
By: Xxxxxxx & Company, Inc.
By:
-----------------------------------
Name:
Title:
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SCHEDULE I
UNDERWRITERS
Number of
Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc. ............................... [ ]
X.X. Xxxxxxx & Sons, Inc. ............................. [ ]
---------
Total ...................................... 3,000,000
=========
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SCHEDULE II
FORM OF LOCK-UP AGREEMENT
AND DIRECTORS, OFFICERS AND STOCKHOLDERS
OF THE COMPANY WHO SHALL SIGN SUCH AGREEMENT
The undersigned is a holder of securities of Sypris Solutions, Inc., a
Delaware corporation (the "Company"), and wishes to facilitate the public
offering of shares of the Common Stock (the "Common Stock") of the Company (the
"Offering"). The undersigned recognizes that such Offering will be of benefit to
the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he, she or it will not, without the prior written approval of Xxxxxxx & Company,
Inc., acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he, she or it may own,
exclusive of any shares of Common Stock purchased in connection with the
Company's public offering or purchased in the public trading market, for a
period commencing as of the date hereof and ending on the date which is one
hundred eighty (180) days after the date of the final Prospectus relating to the
Offering; provided, however, that the foregoing shall not prohibit any
distribution by a partnership to its partners so long as such partners agree to
be bound by the terms of this Agreement or the sale of up to 20,000 shares of
Common Stock by the undersigned in connection with the exercise of stock
options. The undersigned confirms that he, she or it understands that the
underwriters and the Company will rely upon the representations set forth in
this Agreement in proceeding with the Offering. The undersigned further confirms
that the agreements of the undersigned are irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of securities held by the
undersigned except in compliance with this Agreement.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
---------------------------------
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