EXHIBIT 1.1
15,000,000 SHARES
EVERGREEN SOLAR, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May 23, 2007
XXXXXX BROTHERS INC.
As Representative of the several
Underwriters named in Schedule 1 attached hereto,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Evergreen Solar, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell 15,000,000 shares (the "FIRM STOCK") of the Company's common
stock, par value $0.01 per share (the "COMMON STOCK"). In addition, the Company
proposes to grant to the underwriters (the "UNDERWRITERS") named in Schedule 1
attached to this agreement (this "AGREEMENT") an option to purchase up to
2,250,000 additional shares of the Common Stock on the terms set forth in
Section 2 (the "OPTION STOCK"). The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "STOCK." This is to confirm
the agreement concerning the purchase of the Stock from the Company by the
Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 relating to the Stock has
(i) been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the
rules and regulations (the "RULES AND REGULATIONS") of the Securities and
Exchange Commission (the "COMMISSION") thereunder; (ii) been filed with
the Commission under the Securities Act; and (iii) become effective under
the Securities Act. Copies of such registration statement and any
amendment thereto have been delivered by the Company to you as the
representative (the "REPRESENTATIVE") of the Underwriters. As used in this
Agreement:
(i) "APPLICABLE TIME" means 9:00 a.m. (New York City time) on
May 24, 2007;
(ii) "EFFECTIVE DATE" means any date as of which any part of
such registration statement relating to the Stock became, or is
deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations;
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(iii) "ISSUER FREE WRITING PROSPECTUS" means each "free
writing prospectus" (as defined in Rule 405 of the Rules and
Regulations) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the offering of the
Stock and listed on Schedule 3 hereto;
(iv) "PRELIMINARY PROSPECTUS" means any preliminary prospectus
relating to the Stock included in such registration statement or
filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, including any preliminary prospectus supplement thereto
relating to the Stock;
(v) "PRICING DISCLOSURE PACKAGE" means, as of the Applicable
Time, the most recent Preliminary Prospectus, together with the
information included in Schedule 2 hereto and each Issuer Free
Writing Prospectus filed or used by the Company on or before the
Applicable Time, other than a road show that is an Issuer Free
Writing Prospectus under Rule 433 of the Rules and Regulations;
(vi) "PROSPECTUS" means the final prospectus relating to the
Stock, including any prospectus supplement thereto relating to the
Stock, as filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations; and
(vii) "REGISTRATION STATEMENT" means, collectively, the
various parts of such registration statement, each as amended as of
the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration
statement.
Any reference to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act as of the date of
such Preliminary Prospectus or the Prospectus, as the case may be. Any
reference to the "MOST RECENT PRELIMINARY PROSPECTUS" shall be deemed to
refer to the latest Preliminary Prospectus included in the Registration
Statement or filed pursuant to Rule 424(b) prior to or on the date hereof
(including, for purposes hereof, any documents incorporated by reference
therein prior to or on the date hereof). Any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the
Company on Form 10-K filed with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act after the Effective Date that is incorporated
by reference in the Registration Statement. The Commission has not issued
any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending the effectiveness of the Registration
Statement, and no proceeding or examination for such purpose has been
instituted or, to the Company's knowledge, threatened by the Commission.
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(b) The Company was not at the time of initial filing of the
Registration Statement and at the earliest time thereafter that the
Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) of the Rules and Regulations) of the Stock, is
not on the date hereof and will not be on the applicable Delivery Date an
"ineligible issuer" (as defined in Rule 405). The Company has been since
the time of the initial filing of the Registration Statement and continues
to be eligible to use Form S-3 for the offering of the Stock.
(c) The Registration Statement conformed and will conform in all
material respects on the Effective Date and on the applicable Delivery
Date, and any amendment to the Registration Statement filed after the date
hereof will conform in all material respects when filed, to the
requirements of the Securities Act and the Rules and Regulations. The most
recent Preliminary Prospectus conformed, and the Prospectus will conform,
in all material respects when filed with the Commission pursuant to Rule
424(b) and on the applicable Delivery Date to the requirements of the
Securities Act and the Rules and Regulations. The documents incorporated
by reference in any Preliminary Prospectus or the Prospectus conformed,
and any further documents so incorporated will conform, when filed with
the Commission, in all material respects to the requirements of the
Exchange Act or the Securities Act, as applicable, and the rules and
regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Registration
Statement in reliance upon and in conformity with information furnished to
the Company through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified in
Section 8(e).
(e) The Prospectus will not, as of its date and on the applicable
Delivery Date, 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, in the light of the circumstances under which they
were made, not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Prospectus in
reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified in
Section 8(e).
(f) The documents incorporated by reference in any Preliminary
Prospectus or the Prospectus did not, and any further documents filed and
incorporated by reference therein will not, when filed with the
Commission, 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, in the light of the circumstances under which they
were made, not misleading.
(g) The Pricing Disclosure Package did not, as of the Applicable
Time, contain an untrue statement of a material fact or omit to state a
material fact necessary to
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make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Pricing Disclosure Package in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on
behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e).
(h) Each Issuer Free Writing Prospectus (including, without
limitation, any road show that is a free writing prospectus under Rule
433), when considered together with the Pricing Disclosure Package as of
the Applicable Time, did not 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, in the light of the
circumstances under which they were made, not misleading.
(i) Each Issuer Free Writing Prospectus conformed or will conform in
all material respects to the requirements of the Securities Act and the
Rules and Regulations on the date of first use, and the Company has
complied with any filing requirements applicable to such Issuer Free
Writing Prospectus pursuant to the Rules and Regulations. The Company has
not made any offer relating to the Stock that would constitute an Issuer
Free Writing Prospectus without the prior written consent of the
Representative, except as set forth on Schedule 3 hereto. The Company has
retained in accordance with the Rules and Regulations all Issuer Free
Writing Prospectuses that were not required to be filed pursuant to the
Rules and Regulations.
(j) Each of the Company and its subsidiaries (as defined in Section
17) has been duly organized, is validly existing and in good standing as a
corporation or other business entity under the laws of its jurisdiction of
organization and is duly qualified to do business and in good standing as
a foreign corporation or other business entity in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so qualified
or in good standing would not, in the aggregate, reasonably be expected to
have a material adverse effect on the condition (financial or otherwise),
results of operations, stockholders' equity, properties, business or
prospects of the Company and its subsidiaries taken as a whole (a
"MATERIAL ADVERSE EFFECT"); each of the Company and its subsidiaries has
all power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged. The Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than Evergreen Solar GmbH, Evergreen Solar Securities Corp.
and a one-third equity interest in EverQ GmbH, provided it is agreed and
understood that EverQ GmbH shall not be considered a subsidiary for
purposes of this Agreement. None of the subsidiaries of the Company is a
"significant subsidiary" (as defined in Rule 405).
(k) The Company had, as of the date of such table, an authorized
capitalization as set forth in each of the most recent Preliminary
Prospectus and the Prospectus under the "actual" column in the
"capitalization" table, and all of the issued shares of capital stock of
the Company have been duly authorized and validly issued, are fully paid
and non-assessable, conform in all material respects to the description
thereof
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contained in the most recent Preliminary Prospectus and were issued in
compliance with federal and state securities laws and not in violation of
any preemptive right, resale right, right of first refusal or similar
right. All of the Company's options, warrants and other rights to purchase
or exchange any securities for shares of the Company's capital stock have
been duly authorized and validly issued, conform in all material respects
to the description thereof contained in the most recent Preliminary
Prospectus and were issued in compliance with federal and state securities
laws. All of the issued shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims, except for such
liens, encumbrances, equities or claims as could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(l) The shares of the Stock to be issued and sold by the Company to
the Underwriters hereunder have been duly authorized and, upon payment and
delivery in accordance with this Agreement, will be validly issued, fully
paid and non-assessable, will conform in all material respects to the
description thereof contained in the most recent Preliminary Prospectus,
will be issued in compliance with federal and state securities laws and
will be free of statutory and contractual preemptive rights, rights of
first refusal and similar rights.
(m) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by
the Company.
(n) The execution, delivery and performance of this Agreement by the
Company, the consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of the Stock as described under
"USE OF PROCEEDS" in the most recent Preliminary Prospectus will not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, impose any lien, charge or encumbrance upon any property or
assets of the Company and its subsidiaries, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, license or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject; (ii) result in any violation of the provisions of
the charter or by-laws (or similar organizational documents) of the
Company or any of its subsidiaries; or (iii) result in any violation of
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets, except, in the case of
(i) and (iii), those conflicts, breaches or violations that would not
reasonably be expected to have a Material Adverse Effect.
(o) No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets is required for the execution, delivery and
performance of this Agreement by the Company, the consummation of the
transactions contemplated hereby, the application of the proceeds from the
sale of the
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Stock as described under "Use of Proceeds" in the most recent Preliminary
Prospectus, except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and sale of the
Stock by the Underwriters.
(p) Except as described in the most recent Preliminary Prospectus,
there are no contracts, agreements or understandings between the Company
and any person granting such person the right (other than rights which
have been waived in writing or otherwise satisfied) to require the Company
to file a registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement.
(q) The Company has not sold or issued any securities that would be
integrated with the offering of the Stock contemplated by this Agreement
pursuant to the Securities Act, the Rules and Regulations or the
interpretations thereof by the Commission.
(r) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the most recent Preliminary Prospectus, any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, and since such
date, except as described in the most recent Preliminary Prospectus, there
has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any adverse change, or any
development involving a prospective adverse change, in or affecting the
condition (financial or otherwise), results of operations, stockholders'
equity, properties, management, business or prospects of the Company and
its subsidiaries taken as a whole, in each case except as would not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(s) Since the date as of which information is given in the most
recent Preliminary Prospectus and except as described in the most recent
Preliminary Prospectus, the Company has not (i) incurred any material
liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (ii)
entered into any material transaction not in the ordinary course of
business or (iii) declared or paid any dividend on its capital stock.
(t) The historical financial statements (including the related notes
and supporting schedules) included or incorporated by reference in the
most recent Preliminary Prospectus comply as to form in all material
respects with the requirements of Regulation S-X under the Securities Act
and present fairly the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates and for
the periods indicated and have been prepared in conformity with accounting
principles generally accepted in the United States applied on a consistent
basis throughout the periods involved.
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(u) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries, whose report
appears in the most recent Preliminary Prospectus or is incorporated by
reference therein and who have delivered the initial letter referred to in
Section 7(f) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations; and to the Company's
knowledge, Leipzig, Germany PricewaterhouseCoopers AG, whose report dated
February 27, 2007 relating to the financial statements of EverQ GmbH
appears in the most recent Preliminary Prospectus or is incorporated by
reference therein, were independent public accountants as required by the
Securities Act and the Rules and Regulations during the periods covered by
the financial statements on which they reported contained or incorporated
by reference in the most recent Preliminary Prospectus.
(v) The statistical and market-related data included under the
captions "Prospectus Supplement Summary," "Summary," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Industry Background," and "Business" in the most recent Preliminary
Prospectus are based on or derived from sources that the Company believes
to be reliable and accurate in all material respects.
(w) Neither the Company nor any subsidiary is, and as of the
applicable Delivery Date and, after giving effect to the offer and sale of
the Stock and the application of the proceeds therefrom as described under
"Use of Proceeds" in the most recent Preliminary Prospectus and the
Prospectus, none of them will be, (i) an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT"), and the rules and regulations of the
Commission thereunder or (ii) a "business development company" (as defined
in Section 2(a)(48) of the Investment Company Act).
(x) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject that
would, in the aggregate, reasonably be expected to have a Material Adverse
Effect or would, in the aggregate, reasonably be expected to have a
material adverse effect on the Company's ability to perform its
obligations under this Agreement or the consummation of the transactions
contemplated hereby; and to the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or other
persons.
(y) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, that is required
to be described in the most recent Preliminary Prospectus which is not so
described.
(z) No labor disturbance by the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is imminent that
could reasonably be expected to have a Material Adverse Effect.
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(aa) (i) Each "employee benefit plan" (within the meaning of Section
3(3) of the Employee Retirement Security Act of 1974, as amended
("ERISA")) for which the Company or any member of its "Controlled Group"
(defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the "CODE")) would have any liability (each a
"PLAN") has been maintained in material compliance with its terms and with
the requirements of all applicable statutes, rules and regulations
including ERISA and the Code; (ii) with respect to each Plan subject to
Title IV of ERISA (a) no "reportable event" (within the meaning of Section
4043(c) of ERISA) has occurred or is reasonably expected to occur, (b) no
"accumulated funding deficiency" (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred or
is reasonably expected to occur, (c) the fair market value of the assets
under each Plan exceeds the present value of all benefits accrued under
such Plan (determined based on those assumptions used to fund such Plan)
and (d) neither the Company or any member of its Controlled Group has
incurred, or reasonably expects to incur, any liability under Title IV of
ERISA (other than contributions to the Plan or premiums to the PBGC in the
ordinary course and without default) in respect of a Plan (including a
"MULTIEMPLOYER PLAN", within the meaning of Section 4001(c)(3) of ERISA);
and (iii) each Plan that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or
by failure to act, which would cause the loss of such qualification.
(bb) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof, subject to permitted
extensions, and have paid all taxes due thereon (except for such taxes, if
any, that are being contested in good faith and as to which adequate
reserves have been provided), and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries, nor does the Company
have any knowledge of any tax deficiencies that would, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(cc) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Company or sale by the Company of
the Stock.
(dd) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws (or similar organizational documents),
(ii) is in default, and no event has occurred that, with notice or lapse
of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, license or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (iii) is in
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or its property or
assets or has failed to obtain any license, permit, certificate, franchise
or other governmental authorization or permit necessary to the ownership
of its property or to the conduct of its business, except in the case of
clauses (ii) and (iii), to the extent any such
9
conflict, breach, violation or default would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ee) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such,
to comply with the provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith.
(ff) The Company and each of its subsidiaries have such permits,
licenses, patents, franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities ("PERMITS") as
are necessary under applicable law to own their properties and conduct
their businesses in the manner described in the most recent Preliminary
Prospectus, except for any of the foregoing that would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect; each
of the Company and its subsidiaries has fulfilled and performed all of its
obligations with respect to the Permits, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other impairment of the rights of
the holder or any such Permits, except for any of the foregoing that would
not reasonably be expected to have a Material Adverse Effect.
(gg) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights, licenses, know-how, software, systems and
technology (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses and
have no reason to believe that the conduct of their respective businesses
will conflict with, and have not received any notice of any claim of
conflict with, any such rights of others.
(hh) The Company and each of its subsidiaries (i) are, and at all
times prior hereto were, in compliance with all laws, regulations,
ordinances, rules, orders, judgments, decrees, permits or other legal
requirements of any governmental authority, including without limitation
any international, national, state, provincial, regional, or local
authority, relating to the protection of human health or safety, the
environment, or natural resources, or to hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") applicable to
such entity, which compliance includes, without limitation, obtaining,
maintaining and complying with all permits and authorizations and
approvals required by Environmental Laws to conduct their respective
businesses, and (ii) have not received notice of any actual or alleged
violation of Environmental Laws, or of any potential liability for or
other obligation concerning the presence, disposal or release of hazardous
or toxic substances or wastes, pollutants or contaminants, except in the
case of clause (i) or (ii) where such non-compliance, violation,
liability, or other obligation would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as described in the
most recent Preliminary Prospectus, (A) there are no proceedings that are
pending, or known by the Company to be contemplated, against the Company
or any of its subsidiaries under Environmental Laws in which a
governmental authority is also a party, other than such
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proceedings regarding which it is reasonably believed no monetary
sanctions of $100,000 or more will be imposed, (B) the Company and its
subsidiaries are not aware of any issues regarding compliance with
Environmental Laws, or liabilities or other obligations under
Environmental Laws or concerning hazardous or toxic substances or wastes,
pollutants or contaminants, that could reasonably be expected to have a
Material Adverse Effect, and (C) none of the Company and its subsidiaries
anticipates material capital expenditures necessary to be incurred in
order to comply with any obligations arising under Environmental Laws.
(ii) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any
other distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in the
most recent Preliminary Prospectus.
(jj) Neither the Company nor any of its subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries, has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(kk) The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
"MONEY LAUNDERING LAWS") and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened, except, in each case, as would not reasonably be expected to
have a Material Adverse Effect.
(ll) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
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(mm) The Company has not distributed and, prior to the later to
occur of any Delivery Date and completion of the distribution of the
Stock, will not distribute any offering material in connection with the
offering and sale of the Stock other than any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus set forth on Schedule 3
hereto.
(nn) The Company has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that could
reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the shares of the Stock.
(oo) The Stock has been approved for inclusion, subject to official
notice of issuance, in The NASDAQ Global Market.
Any certificate required by this Agreement signed by any officer of
the Company and delivered to the Representative or counsel for the Underwriters
in connection with the offering of the Stock shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 15,000,000 shares of
the Firm Stock to the several Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representative may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 2,250,000 additional shares of Option Stock. Such option is
exercisable in the event that the Underwriters sell more shares of Common Stock
than the number of Firm Stock in the offering and as set forth in Section 4
hereof. Each Underwriter agrees, severally and not jointly, to purchase the
number of shares of Option Stock (subject to such adjustments to eliminate
fractional shares as the Representative may determine) that bears the same
proportion to the total number of shares of Option Stock to be sold on such
Delivery Date as the number of shares of Firm Stock set forth in Schedule 1
hereto opposite the name of such Underwriter bears to the total number of shares
of Firm Stock.
The price of both the Firm Stock and any Option Stock purchased by
the Underwriters shall be $8.25 per share.
The Company shall not be obligated to deliver any of the Firm Stock
or Option Stock to be delivered on the applicable Delivery Date, except upon
payment for all such Stock to be purchased on such Delivery Date as provided
herein.
3. Offering of Stock by the Underwriters. Upon authorization by the
Representative of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions to be set
forth in the Prospectus.
12
4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at 10:00 A.M., New York City time, on the third
full business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representative and the
Company. This date and time are sometimes referred to as the "INITIAL DELIVERY
DATE." Delivery of the Firm Stock shall be made to the Representative for the
account of each Underwriter against payment by the several Underwriters through
the Representative and of the respective aggregate purchase prices of the Firm
Stock being sold by the Company to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds to the accounts
specified by the Company. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Company shall deliver the Firm
Stock through the facilities of DTC unless the Representative shall otherwise
instruct.
The option granted in Section 2 will expire 30 days after the date
of this Agreement and may be exercised in whole or from time to time in part by
written notice being given to the Company by the Representative; provided that
if such date falls on a day that is not a business day, the option granted in
Section 2 will expire on the next succeeding business day. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representative, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the Initial Delivery Date nor earlier than
the second business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which the
option shall have been exercised. Each date and time the shares of Option Stock
are delivered is sometimes referred to as an "OPTION STOCK DELIVERY DATE," and
the Initial Delivery Date and any Option Stock Delivery Date are sometimes each
referred to as a "DELIVERY DATE."
Delivery of the Option Stock by the Company and payment for the
Option Stock by the several Underwriters through the Representative shall be
made at 10:00 A.M., New York City time, on the date specified in the
corresponding notice described in the preceding paragraph or at such other date
or place as shall be determined by agreement between the Representative and the
Company. On the Option Stock Delivery Date, the Company shall deliver or cause
to be delivered the Option Stock to the Representative for the account of each
Underwriter against payment by the several Underwriters through the
Representative and of the respective aggregate purchase prices of the Option
Stock being sold by the Company to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds to the accounts
specified by the Company. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Company shall deliver the Option
Stock through the facilities of DTC unless the Representative shall otherwise
instruct.
5. Further Agreements of the Company and the Underwriters. (a) The
Company agrees:
(i) To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the
13
Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment or
any supplement to the Registration Statement or the Prospectus prior to
the last Delivery Date except as provided herein; to advise the
Representative, promptly after it receives notice thereof, of the time
when any amendment or supplement to the Registration Statement or the
Prospectus has been filed and to furnish the Representative with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Stock; to advise the Representative, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of the Prospectus
or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding or examination for any
such purpose or of any request by the Commission for the amending or
supplementing of the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus or for additional information; and, in the event
of the issuance of any stop order or of any order preventing or suspending
the use of the Prospectus or any Issuer Free Writing Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(ii) To furnish promptly or make available to the Representative and
to counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(iii) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (A)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings), (B)
each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus, (C) each Issuer Free Writing Prospectus and (D)
any document incorporated by reference in any Preliminary Prospectus or
the Prospectus; and, if the delivery of a prospectus is required at any
time after the date hereof in connection with the offering or sale of the
Stock or any other securities relating thereto and if at such time any
events that shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act, to notify the Representative and, upon its reasonable
request, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Representative may from time to time reasonably request of an amended or
supplemented Prospectus that will correct such statement or omission or
effect such compliance;
14
(iv) To file promptly with the Commission any amendment or
supplement to the Registration Statement or the Prospectus that may, in
the judgment of the Company or the Representative, be required by the
Securities Act or requested by the Commission;
(v) Prior to filing with the Commission any amendment or supplement
to the Registration Statement or the Prospectus, any document incorporated
by reference in the Prospectus or any amendment to any document
incorporated by reference in the Prospectus, to furnish a copy thereof to
the Representative and counsel for the Underwriters; provided that no such
filing shall be made if the Representative shall promptly notify the
Company of its reasonable objection to the contents thereof;
(vi) Not to make any offer relating to the Stock that would
constitute an Issuer Free Writing Prospectus without the prior written
consent of the Representative.
(vii) To comply with all applicable requirements of Rule 433 with
respect to any Issuer Free Writing Prospectus; and if at any time after
the date hereof any events shall have occurred as a result of which any
Issuer Free Writing Prospectus, as then amended or supplemented, would
conflict with the information in the Registration Statement, the most
recent Preliminary Prospectus or the Prospectus or would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (when considered together with
the Pricing Disclosure Package), or, if for any other reason it shall be
necessary to amend or supplement any Issuer Free Writing Prospectus, to
notify the Representative and, upon its request, to file such document in
a form determined by the Company; provided that no such filing shall be
made if the Representative shall promptly notify the Company of its
reasonable objection to the contents thereof and to prepare and furnish
without charge to each Underwriter as many copies as the Representative
may from time to time reasonably request of an amended or supplemented
Issuer Free Writing Prospectus that will correct such conflict, statement
or omission or effect such compliance;
(viii) As soon as practicable after the Effective Date and in any
event not later than 16 months after the date hereof, to make generally
available to the Company's security holders and to deliver to the
Representative an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations;
(ix) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Stock for offering
and sale under the securities laws of Canada and such other jurisdictions
as the Representative may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Stock;
provided that in connection therewith the Company shall not be required to
(i) qualify as a foreign corporation in any jurisdiction in which it would
not otherwise be required to so qualify, (ii) file a general consent to
service of process in any such jurisdiction or (iii) subject itself to
taxation in any jurisdiction in which it would not otherwise be subject;
15
(x) For a period commencing on the date hereof and ending on the
90th day after the date of the Prospectus (the "LOCK-UP PERIOD"), not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device that is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the Stock
and shares issued pursuant to employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights
not issued under one of those plans), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the grant of
options pursuant to option plans existing on the date hereof), (2) enter
into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, (3) file or cause to be filed a
registration statement, including any amendments, with respect to the
registration of any shares of Common Stock or securities convertible,
exercisable or exchangeable into Common Stock or any other securities of
the Company (other than any registration statement on Form S-8) or (4)
publicly disclose the intention to do any of the foregoing, in each case
without the prior written consent of Xxxxxx Brothers Inc., on behalf of
the Underwriters (the lock-up applicable to the Company as described in
this paragraph being the "COMPANY LOCK-UP"), and to cause each Section 16
officer, director and stockholder of the Company set forth on Schedule 4
hereto to furnish to the Representative, prior to the Initial Delivery
Date, a letter or letters, substantially in the form of Exhibit A hereto
(the "LOCK-UP AGREEMENTS"); provided, however, that the Company Lock-Up
shall not apply to (a) the Stock to be sold hereunder, or (b) issuances by
the Company of shares of the Company's Common Stock as consideration in
one or more acquisitions of the assets or capital stock of a company or
business or in strategic transactions in an aggregate amount not to exceed
the greater of (i) an aggregate market value of up to $100 million on the
date of issuance and (ii) up to 10% of the Company's total outstanding
Common Stock on the date of issuance. Notwithstanding the foregoing, if
(1) during the last 17 days of the Lock-Up Period, the Company issues an
earnings release or material news or a material event relating to the
Company occurs or (2) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the 16-day
period beginning on the last day of the Lock-Up Period, then the
restrictions imposed in this paragraph shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the announcement of the material news or the occurrence of the
material event, unless Xxxxxx Brothers Inc., on behalf of the
Underwriters, waive such extension in writing;
(xi) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus;
(b) Each Underwriter severally agrees that such Underwriter shall
not include any "issuer information" (as defined in Rule 433) in any "free
writing prospectus" (as defined in Rule 405) used or referred to by such
Underwriter without the prior consent of
16
the Company (any such issuer information with respect to whose use the
Company has given its consent, "PERMITTED ISSUER INFORMATION"); provided
that (i) no such consent shall be required with respect to any such issuer
information contained in any document filed by the Company with the
Commission prior to the use of such free writing prospectus and (ii)
"issuer information," as used in this Section 5(b), shall not be deemed to
include information prepared by or on behalf of such Underwriter on the
basis of or derived from issuer information.
6. Expenses. The Company agrees, whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
to pay all costs, expenses, fees and taxes incident to and in connection with
(a) the authorization, issuance, sale and delivery of the Stock and any stamp
duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Stock; (b) the preparation, printing and filing
under the Securities Act of the Registration Statement (including any exhibits
thereto), any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus and any amendment or supplement thereto; (c) the distribution of the
Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment
or supplement thereto, or any document incorporated by reference therein, all as
provided in this Agreement; (d) the production and distribution of this
Agreement, any supplemental agreement among Underwriters, and any other related
documents in connection with the offering, purchase, sale and delivery of the
Stock; (e) the inclusion of the Stock on The NASDAQ Global Market; (f) the
qualification of the Stock under the securities laws of the several
jurisdictions as provided in Section 5(a)(ix) and the preparation, printing and
distribution of a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (g) the preparation, printing and distribution of
one or more versions of the Preliminary Prospectus and the Prospectus for
distribution in Canada, often in the form of a Canadian "wrapper" (including
related fees and expenses of Canadian counsel to the Underwriters) (h) the
investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the Stock, including, without limitation, expenses associated with
any electronic road show, travel and lodging expenses of the representatives and
officers of the Company and one-half of the cost of any aircraft chartered in
connection with the road show; and (i) all other costs and expenses incident to
the performance of the obligations of the Company; provided that, except as
provided in this Section 6, the Underwriters shall pay their own costs and
expenses, including but not limited to the costs and expenses of their counsel,
their costs and expenses of the road show including food, lodging, travel and
other expenses for their representatives and one-half of the cost of any
aircraft chartered in connection therewith, any transfer taxes on the Stock
which they may sell and the expenses of advertising any offering of the Stock
made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a)(i); the Company shall have complied with
all filing
17
requirements applicable to any Issuer Free Writing Prospectus used or
referred to after the date hereof; no stop order suspending the
effectiveness of the Registration Statement or preventing or suspending
the use of the Prospectus or any Issuer Free Writing Prospectus shall have
been issued and no proceeding or examination for such purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement,
the Prospectus or the Pricing Disclosure Package, or any amendment or
supplement thereto, contains an untrue statement of a fact which is
material or omits to state a fact which is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement, the Prospectus and any Issuer Free Writing
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx Professional Corporation shall
have furnished to the Representative its written opinion, as counsel to
the Company, addressed to the Underwriters and dated such Delivery Date,
in form and substance reasonably satisfactory to the Representative.
(e) The Representative shall have received from King & Spalding LLP,
counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and the Pricing Disclosure Package
and other related matters as the Representative may reasonably require,
and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(f) At the time of execution of this Agreement, the Representative
shall have received from PricewaterhouseCoopers LLP a letter, in form and
substance satisfactory to the Representative, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the most recent
Preliminary Prospectus, as of a date not more than three days prior to the
date hereof), the conclusions and findings of such firm with respect to
the
18
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.
(g) With respect to the letter of PricewaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Representative
concurrently with the execution of this Agreement (the "INITIAL LETTER"),
the Company shall have furnished to the Representative a letter (the
"BRING-DOWN LETTER") of such accountants, addressed to the Underwriters
and dated such Delivery Date (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than three days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(h) The Company shall have furnished to the Representative a
certificate, dated such Delivery Date, of its Chief Executive Officer and
its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct on and as of such Delivery Date, and the
Company has complied with all its agreements contained herein and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Delivery Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued; and no proceedings or examination for that
purpose have been instituted or, to the knowledge of such officers,
threatened; and
(iii) They have carefully examined the Registration Statement, the
Prospectus and the Pricing Disclosure Package, and, in their opinion, (A)
(1) the Registration Statement, as of the Effective Date, (2) the
Prospectus, as of its date and on the applicable Delivery Date, or (3) the
Pricing Disclosure Package, as of the Applicable Time, did not and do not
contain any untrue statement of a material fact and did not and do not
omit to state a material fact required to be stated therein or necessary
to make the statements therein (except in the case of the Registration
Statement, in the light of the circumstances under which they were made)
not misleading, and (B) since the Effective Date, no event has occurred
that should have been set forth in a supplement or amendment to the
Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus that has not been so set forth;
(i) Except as described in the most recent Preliminary Prospectus,
(i) neither the Company nor any of its subsidiaries shall have sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the most recent Preliminary Prospectus, any
loss or interference with its business from fire, explosion,
19
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree or (ii)
since such date there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, stockholders'
equity, properties, management, business or prospects of the Company and
its subsidiaries taken as a whole, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded to the Company's
debt securities or preferred stock by any "nationally recognized
statistical rating organization" (as that term is defined by the
Commission for the purposes of Rule 436(g)(2) of the Rules and
Regulations), and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of the Company's debt securities or preferred
stock.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions, including, without
limitation, as a result of terrorist activities after the date hereof (or
the effect of international conditions on the financial markets in the
United States shall be such), as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(l) The NASDAQ Global Market, Inc. shall have approved the Stock for
inclusion, subject only to official notice of issuance.
(m) The Lock-Up Agreements between the Representative and the
officers, directors and stockholders of the Company set forth on Schedule
4, delivered to the Representative on or before the date of this
Agreement, shall be in full force and effect on such Delivery Date.
20
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its directors, officers and employees and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in (A)
any Preliminary Prospectus, the Registration Statement, the Prospectus or
in any amendment or supplement thereto, (B) any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or (C) any Permitted
Issuer Information used or referred to in any "free writing prospectus"
(as defined in Rule 405) used or referred to by any Underwriter, (D) any
"road show" (as defined in Rule 433) not constituting an Issuer Free
Writing Prospectus (a "NON-PROSPECTUS ROAD SHOW") or (E) any Blue Sky
application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company for use
therein) specifically for the purpose of qualifying any or all of the
Stock under the securities laws of any state or other jurisdiction (any
such application, document or information being hereinafter called a "BLUE
SKY APPLICATION"), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any amendment or supplement thereto
or in any Permitted Issuer Information, any Non-Prospectus Road Show or
any Blue Sky Application, any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall
reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, any Issuer Free Writing Prospectus or in any such
amendment or supplement thereto or in any Permitted Issuer Information,
any Non-Prospectus Road Show or any Blue Sky Application, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representative by or on behalf of any
Underwriter specifically for inclusion therein, which information consists
solely of the information specified in Section 8(e). The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any
21
Underwriter or to any director, officer, employee or controlling person of
that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its directors, officers and employees, and each
person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company or any such director, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or
supplement thereto or in any Non-Prospectus Road Show or Blue Sky
Application, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus or in any amendment or supplement thereto
or in any Non-Prospectus Road Show or Blue Sky Application, any material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representative by or on behalf of that Underwriter specifically for
inclusion therein, which information is limited to the information set
forth in Section 8(e). The foregoing indemnity agreement is in addition to
any liability that any Underwriter may otherwise have to the Company or
any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 8 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that the
indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and those other indemnified parties and
their respective directors, officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of
22
which indemnity may be sought under this Section 8 if (i) the indemnified
party and the indemnifying party shall have so mutually agreed; (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified
party and its directors, officers, employees and controlling persons shall
have reasonably concluded that there may be legal defenses available to
them that are different from or in addition to those available to the
indemnifying party; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the indemnified parties or
their respective directors, officers, employees or controlling persons, on
the one hand, and the indemnifying party, on the other hand, and
representation of both sets of parties by the same counsel would be
inappropriate due to actual or reasonably potential differing interests
between them, and in any such event the fees and expenses of such separate
counsel shall be paid by the indemnifying party. No indemnifying party
shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding and does not include any
findings of fact or admissions of fault or culpability as to the
indemnified party, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment for the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) 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, from the offering of the Stock or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of the Company, on the one hand, and the Underwriters, on
the other, with respect to the statements or omissions that resulted in
such loss, claim, damage or liability, or action in respect thereof, 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, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses, but after
deducting underwriting discounts and commissions) received by the Company,
as set forth in the table on the cover page of the Prospectus, on the one
hand, and the total underwriting discounts and commissions received by the
Underwriters with respect to the shares of the
23
Stock purchased under this Agreement, as set forth in the table on the
cover page of the Prospectus, on the other hand. The relative fault shall
be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(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 that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(d) shall be deemed to
include, for purposes of this Section 8(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 8(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the net proceeds
from the sale of the Stock underwritten by it exceeds the amount of any
damages that such Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
and agrees that the statements regarding delivery of shares by the
Underwriters set forth on the cover page of, and the concession figures
and the paragraphs appearing under the caption "Underwriting" entitled
"Stabilization, Short Positions and Penalty Bids" and "Passive Market
Making" in, the most recent Preliminary Prospectus and the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Non-Prospectus Road Show.
9. Defaulting Underwriters. If, on any Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock that the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm
Stock set forth opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the Stock
on such Delivery Date if the total number of shares of the Stock that the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any
24
remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the number of shares of the Stock that it agreed to purchase on
such Delivery Date pursuant to the terms of Section 2. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representative who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Stock to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representative do not elect to purchase the shares that the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to any Option Stock Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections 6
and 11. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Stock
that a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default. If
other Underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing Underwriter, either the Representative or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representative by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(i) and 7(j) shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled for any reason or (b) the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement, the Company will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the
Company shall pay the full amount thereof to the Representative. If this
Agreement is terminated pursuant to Section 9 by reason of the default of one or
more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
12. Research Analyst Independence. The Company acknowledges that the
Underwriters' research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that such Underwriters'
research analysts may hold views and make statements or
25
investment recommendations and/or publish research reports with respect to the
Company and/or the offering that differ from the views of their respective
investment banking divisions. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any conflict of interest that may arise from
the fact that the views expressed by their independent research analysts and
research departments may be different from or inconsistent with the views or
advice communicated to the Company by such Underwriters' investment banking
divisions. The Company acknowledges that each of the Underwriters is a full
service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account of
its customers and hold long or short positions in debt or equity securities of
the companies that may be the subject of the transactions contemplated by this
Agreement.
13. No Fiduciary Duty. The Company acknowledges and agrees that in
connection with this offering, sale of the Stock or any other services the
Underwriters may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company and
any other person, on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or otherwise, to the
Company, including, without limitation, with respect to the determination of the
public offering price of the Stock, and such relationship between the Company,
on the one hand, and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Underwriters may have to the Company shall be limited to those duties
and obligations specifically stated herein; and (iv) the Underwriters and their
respective affiliates may have interests that differ from those of the Company.
The Company hereby waives any claims that the Company may have against the
Underwriters with respect to any breach of fiduciary duty in connection with
this offering.
14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Registration (Fax:
000-000-0000), with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax:
000-000-0000);
(b) if to the Company, shall be delivered or sent by mail or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxxx El-Xxxxxx, Chief Financial
Officer (Fax: 000-000-0000); and
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the
Underwriters by Xxxxxx Brothers Inc.
26
15. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the directors,
officers and employees of the Underwriters and each person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (B) the indemnity agreement of the Underwriters contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of the directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
15, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday that is not a day on which banking institutions in
New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
EVERGREEN SOLAR, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
[Signature Page to Underwriting Agreement]
Accepted:
XXXXXX BROTHERS INC.
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Authorized Representative
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
[Signature Page to Underwriting Agreement]
SCHEDULE 1
Number of Shares of
Underwriters Firm Stock
------------------------------------------------------ -------------------
Xxxxxx Brothers Inc................................... 8,250,000
Xxxxx Xxxxxxx & Co.................................... 3,000,000
Xxxxx & Company, LLC.................................. 2,250,000
Pacific Growth Equities, LLC.......................... 1,500,000
-------------------
Total................................................. 15,000,000
===================
SCHEDULE 2
ORALLY CONVEYED PRICING INFORMATION
ISSUER: EVERGREEN SOLAR, INC.
OFFERING SIZE: 15,000,000 PRIMARY SHARES
GREENSHOE: 2,250,000 PRIMARY SHARES
SYMBOL: ESLR
OFFER PRICE: $8.25
LAST SALE: $8.78
UNDERWRITING DISCOUNTS AND COMMISSIONS: $0.3918
4.75%
NET PROCEEDS TO THE COMPANY $117,873,000
TRADE DATE: 5/23/2007
SETTLEMENT DATE: 5/30/2007
MANAGER(S): XXXXXX (SOLE BOOKRUNNER)
PIPER JAFFRAY, COWEN, PACIFIC GROWTH
EQUITIES (CO-MANAGERS)
CUSIP NUMBER: 00000X000
SHARES OUTSTANDING: 92,201,416 SHARES POST OFFERING
SCHEDULE 3
FREE WRITING PROSPECTUSES
Free Writing Prospectus filed by the Company with the Commission on May 22, 2007
relating DC Chemical Co., Ltd.'s participation in the offering.
SCHEDULE 4
PERSONS DELIVERING LOCK-UP AGREEMENTS
Directors
Xxxxxxx X. Xxxxx
Xx. Xxxxx X. Xxxxxx
Xxxxx X. Xxxxx
Xxxxxx Xxxxx
Xx. Xxxxxx X. Xxxxxx
Xxx X. Xxxxxxx
Officers
Xxxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxx
Xx. Xxxxx F. Xxxxxxxx
Xxxxxxx El-Xxxxxx
Dr. J. Xxxxx Xxxxxx
Stockholders
DC Chemical Co., Ltd
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
As Representative of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms (the
"UNDERWRITERS") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") providing for the purchase by the Underwriters of
shares (the "STOCK") of Common Stock, par value $0.01 per share (the "COMMON
STOCK"), of Evergreen Solar, Inc., a Delaware corporation (the "COMPANY"), and
that the Underwriters propose to reoffer the Stock to the public (the
"OFFERING").
In consideration of the execution of the Underwriting Agreement by
the Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any options or
warrants) or securities convertible into or exercisable or exchangeable for
Common Stock (other than the Stock), (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, (3) make any
demand for or exercise any right or cause to be filed a registration statement,
including any amendments thereto, with respect to the registration of any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock or any other securities of the Company or (4) publicly disclose
the intention to do any of the foregoing, for a period commencing on the date
hereof and ending on the 90th day after the date of the Prospectus relating to
the Offering (such 90-day period, the "LOCK-UP PERIOD").
Notwithstanding the foregoing, if (1) during the last 17 days of the
Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs or (2) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-Up Period, then
the restrictions imposed by this Lock-Up Letter Agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the announcement of the material news or the occurrence of
the material event, unless Xxxxxx Brothers Inc. waives such extension in
writing. The undersigned hereby
A-1
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Letter Agreement during the
period from the date of this Lock-Up Letter Agreement to and including the 34th
day following the expiration of the Lock-Up Period, it will give notice thereof
to the Company and will not consummate such transaction or take any such action
unless it has received written confirmation from the Company that the Lock-Up
Period (as such may have been extended pursuant to this paragraph) has expired.
The foregoing restrictions shall not apply to bona fide gifts, affiliate
transfers or affiliate distributions of shares of any class of the Company's
capital stock, in each case that are made exclusively between and among the
undersigned or members of the undersigned's family, or affiliates of the
undersigned, including its partners (if a partnership) or members (if a limited
liability company); provided that it shall be a condition to any such transfer
that (i) the transferee/donee agrees to be bound by the terms of the lock-up
letter agreement (including, without limitation, the restrictions set forth in
the preceding sentence) to the same extent as if the transferee/donee were a
party hereto, (ii) no filing by any party (donor, donee, transferor or
transferee) under the Exchange Act of 1934, as amended, (the "EXCHANGE ACT")
shall be required or shall be voluntarily made in connection with such transfer
or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G
(or 13D-A or 13G-A) made after the expiration of the 90-day period referred to
above), (iii) each party (donor, donee, transferor or transferee) shall not be
required by law (including without limitation the disclosure requirements of the
Securities Act of 1933, as amended, and the Exchange Act) to make, and shall
agree to not voluntarily make, any public announcement of the transfer or
disposition, and (iv) the undersigned notifies Xxxxxx Brothers Inc. at least two
business days prior to the proposed transfer or disposition. Notwithstanding
anything herein to the contrary, the undersigned may sell shares of common stock
of the Company pursuant to a trading plan that complies with Rule 10b5-1 under
the Exchange Act (a "10B5-1 TRADING PLAN") in existence as of the date hereof.
In furtherance of the foregoing, the Company and its transfer agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies the Underwriters that
it does not intend to proceed with the Offering, if the Underwriting Agreement
does not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Stock, the undersigned will be released
from its obligations under this Lock-Up Letter Agreement. This Lock-Up Letter
Agreement shall automatically terminate and be of no further effect as of 5 p.m.
Eastern Time on July 31, 2007 if a closing for the Offering has not yet occurred
as of that time.
The undersigned understands that the Company and the Underwriters
will proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
A-2
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
-------------------------------
Name:
Title:
Dated:
----------------------------
A-3
