___________ SHARES
COMFORT SYSTEMS USA, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 1998
BT ALEX. XXXXX INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXXXX XXXXXX XXXXX INC.
c/o BT Alex. Xxxxx Incorporated
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Gentlemen:
Comfort Systems USA, Inc., a Delaware corporation (the "Company"), and
certain shareholders of the Company (the "Selling Shareholders") propose to sell
to you (the "Underwriters") for whom you are acting as representatives ("the
Representatives") an aggregate of ____________ shares of the Company's Common
Stock, par value $.01 per share (the "Firm Shares"). The respective amounts of
the Firm Shares, of which _______ shares will be sold by the Company and
________ shares will be sold by the Selling Shareholders. The respective amounts
of the Firm Shares to be so purchased by each of the several Underwriters are
set forth opposite their names in Schedule I hereto, and the respective amounts
to be sold by the Selling Shareholders are set forth opposite their names in
Schedule II hereto. The Company and the Selling Shareholders are sometimes
referred to herein collectively as the "Sellers." The Company also propose to
sell at the Underwriters' option an aggregate of up to _______ additional shares
of the Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement, and (b)
that you are willing, acting severally and not jointly, to purchase the numbers
of Firm Shares set forth opposite your respective names in Schedule I, plus your
pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the Underwriters.
The Firm Shares and
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the Option Shares (to the extent the aforementioned option is exercised) are
herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS.
The Company represents and warrants to each of the Underwriters as
follows:
(a) The Company represents and warrants to each of the Underwriters as
follows:
(i) A registration statement on Form S-1 (Reg. No. 333-_______) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and the Rules and Regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder
and has been filed with the Commission. Copies of such registration
statement, including any amendments thereto, the preliminary prospectuses
(meeting the requirements of the Rules and Regulations) contained therein
and the exhibits, financial statements and schedules, as finally amended
and revised, have heretofore been delivered by the Company to you. Such
registration statement, together with any registration statement filed by
the Company pursuant to Rule 462(b) under the Act, herein referred to as
the "Registration Statement," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and
no post-effective amendment to the Registration Statement has been filed
as of the date of this Agreement. "Prospectus" means (a) the form of
prospectus first filed with the Commission pursuant to Rule 424(b), or (b)
the last preliminary prospectus included in the Registration Statement
filed prior to the time it becomes effective or filed pursuant to Rule
424(a) under the Act that is delivered by the Company to the Underwriters
for delivery to purchasers of the Shares, together with the term sheet or
abbreviated term sheet filed with the Commission pursuant to Rule
424(b)(7) under the Act. Each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus."
(ii) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement. Each of
the acquired companies listed on Exhibit 21.1 to the Registration
Statement (collectively the "Acquired Companies") has been duly organized
and is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and
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conduct its business as described in the Registration Statement. As of the
date hereof, the Company has no subsidiaries except those listed in
Exhibit 21.1 to the Registration Statement. The Company and each of the
Acquired Companies are duly qualified to transact business in all
jurisdictions in which the conduct of their respective businesses requires
such qualification, except where the failure to so qualify would not have
a materially adverse effect on the business and operations of the Company
and the Acquired Companies taken as a whole. The outstanding shares of
capital stock of each of the Acquired Companies have been duly authorized
and validly issued, are fully paid and non-assessable. As of the Closing
Date (as hereinafter defined), all of the outstanding shares of capital
stock of each of the Acquired Companies will be owned by the Company free
and clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in any of the Acquired
Companies will be outstanding.
(iii) The outstanding shares of Common Stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein will
be validly issued, fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to any of the Shares or the issue and
sale thereof. Neither the filing of the Registration Statement nor the
offering or sale of the Shares as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or satisfied,
for or relating to the registration of any shares of Common Stock.
(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(v) The Commission has not issued an order preventing or suspending
the use of any Prospectus relating to the proposed offering of the Shares
nor instituted proceedings for that purpose. The Registration Statement
contains, and the Prospectus and any amendments or supplements thereto
will contain, all statements which are required to be stated therein by,
and will conform to the requirements of the Act and the Rules and
Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and
do not omit, and will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The Prospectus and any supplements thereto do not contain, and will not
contain, any untrue statement of a material fact and do not omit, and will
not 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;
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provided, however, that the Company makes no representations or warranties
as to information contained in or omitted from the Registration Statement
or the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Company by or
on behalf of any Underwriter through the Representatives, specifically for
use in the preparation thereof.
(vi) All of the financial statements of the Company and the separate
financial statements of any Acquired Company, in each case together with
related notes and schedules, as set forth in the Registration Statement,
present fairly in all material respects the financial position and the
results of operations and cash flows of the Company and of the Acquired
Companies, respectively, at the indicated dates and for the indicated
periods. Such financial statements and related schedules have been
prepared in accordance with generally accepted principles of accounting,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results
for such periods have been made. The summary historical, pro forma and pro
forma combined financial and statistical data included in the Registration
Statement present fairly the information shown therein and such data have
been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company and the
Acquired Companies, as applicable. The pro forma financial statements of
the Company and the Acquired Companies (including the supplemental pro
forma information shown therein), together with the related notes, as set
forth in the Registration Statement, present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the pro forma bases described therein, and in the
opinon of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein.
(vi) Xxxxxx Xxxxxxxx LLP and Xxxxxx, Xxxxxxxx & Xxxxxxx, who have
each certified certain of the financial statements filed with the
Commission as part of the Registration Statement, are each independent
public accountants as required by the Act and the Rules and Regulations.
(vii) There is no action, suit, claim or proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of the
Acquired Companies before any court or administrative agency or otherwise,
which if determined adversely to the Company or such Acquired Company is
reasonably likely to result in any material adverse change in the
earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Acquired Companies, taken as a whole, or to prevent the consummation of
the transactions contemplated hereby except as set forth in the
Registration Statement.
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(viii) Each of the Company and the Acquired Companies has good and
marketable title to all of its properties and assets reflected in its
financial statements (or as described in the Registration Statement)
hereinabove described, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such financial
statements (or as described in the Registration Statement) or which are
not material in amount. Each of the Company and the Acquired Companies
occupies its leased properties under valid and binding leases conforming
in all material respects to the description thereof set forth in the
Registration Statement.
(ix) Each of the Company and the Acquired Companies has filed all
Federal, state, local and foreign income tax returns which have been
required to be filed and have paid all taxes indicated by said returns and
all assessments received by it or any of them to the extent that such
taxes have become due and are not being contested in good faith. All tax
liabilities have been adequately provided for in the financial statements
of the Company and the Acquired Companies, as applicable.
(x) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there
has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise), or prospects of the Company and the Acquired
Companies, taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being entered
into by the Company or the Acquired Companies, other than transactions in
the ordinary course of business and changes and transactions described in
the Registration Statement, as it may be amended or supplemented. Neither
the Company nor any of the Acquired Companies has any material contingent
obligations which are not disclosed in the Company's or such Acquired
Company's financial statements, as applicable, included in the
Registration Statement.
(xi) Neither the Company nor any of the Acquired Companies is, or
with the giving of notice or lapse of time or both, will be, in violation
of or in default under its Charter or By-Laws or under any agreement,
lease, contract, indenture or other instrument or obligation to which it
is a party or by which it, or any of its properties, is bound and which
default is of material significance in respect of the condition (financial
or otherwise) of the Company and the Acquired Companies, taken as a whole,
or the business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the
Acquired Companies, taken as a whole. The execution and delivery of this
Agreement and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a
material breach of any of the terms or provisions of, or constitute a
material default under, any indenture, mortgage, deed of trust or other
agreement or instrument to which
5
the Company or any of the Acquired Companies is a party, or of the Charter
or By-Laws of the Company or any of the Acquired Companies or any order,
rule or regulation applicable to the Company or any of the Acquired
Companies of any court or, assuming compliance with all applicable state
securities or blue sky laws, of any regulatory body or administrative
agency or other governmental body having jurisdiction.
(xii) Each material approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such additional
steps as may be necessary to qualify the Shares for public offering by the
Underwriters under state securities or Blue Sky laws) has been obtained or
made and is in full force and effect.
(xiii) The Company and each of the Acquired Companies hold all
material licenses, certificates and permits from governmental authorities
which are necessary to the conduct of their businesses; and neither the
Company nor any of the Acquired Companies has infringed any patents,
patent rights, trade names, trademarks or copyrights, which infringement
is material to the business of the Company or such Acquired Company. The
Company knows of no material infringement by others of patents, patent
rights, trade names, trademarks or copyrights owned by or licensed to the
Company or any of the Acquired Companies.
(xiv) Neither the Company, nor to the Company's best knowledge, any
of its affiliates or any of the Acquired Companies or any of their
affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale
of the Shares.
(xv) Neither the Company nor any of the Acquired Companies is an
"investment company" within the meaning of such term under the Investment
Company Act of 1940 and the rules and regulations of the Commission
thereunder.
(xvi) The Company and each of the Acquired Companies maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with
management's general or specific authorization; (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization; and (d)
the recorded accountability for
6
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xvii) The Company and each of the Acquired Companies carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in
similar industries.
(xviii) The Company and each of the Acquired Companies are in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any of the Acquired Companies would have any
liability; neither the Company nor any of the Acquired Companies has
incurred nor expects to incur liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan," or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company or any of the
Acquired Companies would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(b) Each of the Selling Shareholders severally represent and warrant as
follows:
(i) Such Selling Shareholder now has and at the Closing Date and the
Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and marketable title to the Firm Shares and the
Option Shares to be sold by such Selling Shareholder, free and clear of
any liens, encumbrances, equities and claims, and full right, power and
authority to effect the sale and delivery of such Firm Shares and Option
Shares; and upon delivery of, against payment for, such Firm Shares and
Option Shares pursuant to this Agreement, the Underwriters will acquire
good and marketable title thereto, free and clear of any liens,
encumbrances, equities and claims.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement, the Power of Attorney, and the
Custodian Agreement referred to below and to perform its obligations under
such Agreements. The execution and delivery of this Agreement and the
consummation by such Selling Shareholder of the transactions herein
contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not require any consent, approval, authorization, or other
order of any court, regulatory body, administrative agency or other
governmental body (except as may be required under the Act, state
securities laws or Blue Sky laws) and will not result in a
7
breach of any of the terms and provisions of, or constitute a default
under, organizational documents of such Selling Shareholder, of not an
individual, or any indenture, mortgage, deed of trust or other agreement
or instrument to which such Selling Shareholder is a party, or of any
order, rule or regulation applicable to such Selling Shareholder of any
court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock of the
Company and, other than as permitted by the Act, the Selling Shareholder
will not distribute any prospectus or other offering material in
connection with the offering of the Shares.
(iv) Without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties of
the Company contained herein or the information contained in the
Registration Statement, such Selling Shareholder has no reason to believe
that the representation and warranties of the Company contained in this
Section 1 are not true and correct, is familiar with the Registration
Statement and has no knowledge of any material fact, condition or
information not disclosed in the Registration Statement which has
adversely affected or may adversely affect the business of the Company or
any of the Acquired Companies; and the sale of the Firm Shares and the
Option Shares by such Selling Shareholder pursuant hereto is not prompted
by any information concerning the Company or any of the Acquired Companies
which is not set forth in the Registration Statement. The information
pertaining to such Selling Shareholder under the Caption "Principal and
Selling Stockholders" in the Prospectus is complete and accurate in all
material respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the
Sellers agree to sell to the Underwriters and each Underwriter agrees,
severally and not jointly, to purchase, at a price of $______ per share,
the number of Firm Shares set forth opposite the name of each Underwriter
in Schedule I hereof, subject to adjustments in accordance with Section 9
hereof. The number of Firm Shares to be purchased by each Underwriter from
each Seller shall be as nearly as practicable in the same proportion to
the total number of Firm Shares being sold by each Seller as the number of
Firm Shares being purchased by each of the Underwriters bears to the total
number of Firm Shares to be sold hereunder. The obligation of the Company
and of each of the Selling Shareholders shall be several and not joint.
8
(b) Certificates in negotiable form for the total number of the
Shares to be sold hereunder by the Selling Shareholders have been place in
custody with Xxxxxxx Xxxxxx, III, as custodian (the "Custodian") pursuant
to the Custodian and Power of Attorney Agreements executed by each Selling
Shareholder for delivery of all Firm Shares. Each of the Selling
Shareholders specifically agrees that the Firm Shares held in custody for
the Selling Shareholders under the Custodian and Power of Attorney
Agreement are subject to the interests of the Underwriters hereunder, that
the arrangements made by the Selling Shareholders for such custody are to
that extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed of the
Selling Shareholders (or by any other person, firm or corporation
including the Company, the Custodian or the Underwriters) or by operation
of law (including the death of an individual Selling Shareholder or the
dissolution of a corporate Selling Shareholder) or by the occurence of any
other event or events, except as set forth in the Custodian and Power of
Attorney Agreement. If any such event should occur prior to the delivery
to the Underwriters of the Firm Shares hereunder, certificates for the
Firm Shares shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such event has not occured.
The Custodian is authorized to receive and acknowledge receipt of the
proceeds of sale of the Shares held by it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made
in same day funds via wire transfer to the order of the Company for the
shares to be sold by it and to the order of Xxxxxxx Xxxxxx, III, "as
Custodian" for the shares to be sold by the Selling Shareholders, in each
case against delivery of certificate therefor to the Representatives for
the several accounts of the Underwriters. Such payment and delivery are to
be made at the offices of BT Alex. Xxxxx Incorporated, 0 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m., Baltimore time, on the third business
day after the date of this Agreement or at such other time and date not
later than five business days thereafter as you and the Company shall
agree upon, such time and date being herein referred to as the "Closing
Date." (As used herein, "business day" means a day on which the New York
Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.)
The certificates for the Firm Shares will be delivered in such
denominations and in such registrations as the Representatives request in
writing not later than the second full business day prior to the Closing
Date, and will be made available for inspection by the Representatives at
least one business day prior to the Closing Date.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the
first paragraph of this Section 2. The option granted hereby may be
exercised in whole or in part by giving written notice (i) at any time
before the
9
Closing Date and (ii) only once thereafter within 30 days after the date
of this Agreement, by you, as Representatives of the several Underwriters,
to the Company, the Attorney-in-Fact and the Custodian setting forth the
number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the Option
Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which certificates
for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to
the Closing Date (such time and date being herein referred to as the
"Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the
Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares,
adjusted by you in such manner as to avoid fractional shares. The option
with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company. To the extent, if any, that
the option is exercised, payment for the Option Shares shall be made on
the Option Closing Date in same day funds via wire transfer to the order
of the Company for the Option Shares sold by it against delivery of
certificates therefor at the offices of BT Alex. Xxxxx Incorporated, 0
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
(e) If on the Closing Date or the Option Closing Date, as the case
may be, any Selling Shareholder fails to sell the Firm Shares which such
Selling Shareholder has agreed to sell on such date as set forth in
Schedule II hereto, the Company agrees that it will sell or arrange for
the sale of that number of shares of Common Stock to the Underwriters
which represents Firm Shares which such Selling Shareholder has failed to
so sell, as set forth in Schedule II hereto, or such lesser number as may
be requested by the Representatives.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the Underwriters are to make a public offering of
the Firm Shares as soon as the Representatives deem it advisable to do so
following execution of this Agreement. The Firm Shares are to be initially
offered to the public at the public offering price set forth on the cover of the
Prospectus. The Representatives may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.
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It is further understood that you will act in accordance with a Master
Agreement Among Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
(a) The Company covenants and agrees with the Underwriters that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Representatives containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, and (B) not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not
in compliance with the Rules and Regulations.
(ii) The Company will advise the Representatives promptly (A) when
the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission,
(C) of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of
the Prospectus or of the institution of any proceedings for that purpose.
The Company will use its best efforts to prevent the issuance of any such
stop order preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have designated
in writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to
continue such qualifications in effect for so long a period as the
Representatives may reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives , from time to time, as many copies of any Preliminary
Prospectus as the Representatives
11
may reasonably request. The Company will deliver to, or upon the order of,
the Representatives during the period when delivery of a Prospectus is
required under the Act, as many copies of the Prospectus in final form, or
as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or
before the Closing Date, three signed, xeroxed copies of the Registration
Statement and all amendments thereto including all exhibits filed
therewith, and will deliver to the Representatives such number of copies
of the Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including any
documents incorporated by reference therein, and of all amendments
thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances existing at
the time the Prospectus is delivered to a purchaser, not misleading, or,
if it is necessary at any time to amend or supplement the Prospectus to
comply with any law, the Company promptly will prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with the
law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings statement
shall satisfy the requirements of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations and will advise you in writing when such
statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Underwriters copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act
or the Exchange Act. The Company will deliver to the Representatives
similar reports with respect to significant subsidiaries, as that term is
defined in the Rules and Regulations, which are not consolidated in the
Company's financial statements.
12
(viii) No offering, sale, short sale or other disposition of any
shares of Common Stock of the Company or other securities convertible into
or exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such) will be made for a period of 180 days
after the date of the Prospectus, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of BT Alex.
Xxxxx Incorporated, except that the Company may, without such consent,
issue shares (A) upon exercise of options granted under its stock option
plans, (B) upon exercise of warrants outstanding on the date of this
Agreement, (C) in connection with acquisitions of businesses, (D) in
connection with conversion of shares of Restricted Common Stock to Common
Stock or (E) pursuant to employee benefit or compensation plans existing
on the date hereof.
(ix) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the New York Stock Exchange.
(x) The Company has caused each executive officer and director of
the Company to furnish to you, on or prior to the date of this Agreement,
a letter or letters, in form and substance satisfactory to the
Underwriters, pursuant to which each such person has agreed not to offer,
sell, sell short or otherwise dispose of any shares of Common Stock of the
Company owned by such person (or as to which such person has the right to
direct the disposition of) or request the registration for the offer or
sale of any of the foregoing for a period of 180 days after the date of
the Prospectus, directly or indirectly, except with the prior written
consent of BT Alex. Xxxxx Incorporated ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of
the proceeds therefrom as may be required in accordance with Rule 463
under the Act.
(xii) The Company shall not invest, or otherwise use, the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Acquired Companies to register as
an investment company under the Investment Company Act of 1940, as amended
(the "1940 Act").
(xiii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for
the Common Stock.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
13
(b) Each of the Selling Shareholders covenants and agrees with the several
Underwriters that:
(i) No offering, sale, short sale or other disposition of any shares
of Common Stock of the Company or other capital stock of the Company or
other securities convertible, exchangeable or exercisable for Common Stock
or derivative of Common Stock owned by the Selling Shareholder or request
for registration for the offer or sale of any of the foregoing (or as to
which the Selling Shareholder has the right to direct the disposition of)
will be made for a period of 180 days after the date of this Agreement,
directly or indirectly, by such Selling Shareholder otherwise than
hereunder or with the prior written consent of BT Alex. Xxxxx
Incorporated.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance
Act of 1983 with respect to the transactions herein contemplated, each of
the Selling Shareholders agrees to deliver to you prior or at the Closing
Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company and the
Selling Shareholders; the cost of printing and delivering to, or as requested
by, the Underwriters copies of the Registration Statement, Preliminary
Prospectuses, the Prospectus, this Agreement; the filing fees of the Commission;
the filing fees and expenses (including disbursements but excluding legal fees
of counsel to the Underwriters) incident to securing any required review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Shares; the Listing Fee of The New York Stock Exchange; and the
expenses, including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Shares under State
securities or Blue Sky laws. The Selling Shareholders have agreed with the
Company to reimburse the Company for a portion of such expenses. To the extent,
if at all, that any of the Selling Shareholders engage special counsel to
represent them in connection with this offering, the fees and expenses of such
counsel shall be borne by such Selling Shareholder. Any transfer taxes imposed
on the sale of the Shares to the several Underwriters will be paid by the
Sellers pro rata.
14
The Sellers shall not, however, be required to pay for any of the Underwriters'
expenses (other than those related to qualification under NASD regulations and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Underwriters pursuant to Section 11
hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of any Underwriter, then the
Company shall reimburse the Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company and the
Selling Shareholders shall not in any event be liable to any of the Underwriters
for damages on account of loss of anticipated profits from the sale by them of
the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company and the
Selling Shareholders contained herein, and to the performance by the Company and
the Selling Shareholders of their covenants and obligations hereunder and to the
following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company and the Selling Shareholders, shall be
contemplated by the Commission and no injunction, restraining order, or order of
any nature by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date or the Option Closing Date, as the case may be,
which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Xxxxxxxxx &
Xxxxxxxxx L.L.P., counsel for the Company and the Selling Shareholders, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to
the Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
15
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement; each of the Acquired Companies has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own or lease its properties and
conduct its business; the Company and each of the Acquired Companies
are duly qualified to transact business in each of the jurisdictions
set forth on a schedule to such opinion; and the outstanding shares
of capital stock of each of the Acquired Companies have been duly
authorized and validly issued and will be fully paid and
non-assessable and will be owned by the Company; and, to the best of
such counsel's knowledge, the outstanding shares of capital stock of
each of the Acquired Companies will be owned by the Company, free
and clear of all liens, encumbrances and equities and claims, and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations into
any shares of capital stock of or other ownership interests in any
of the Acquired Companies will be outstanding.
(ii) The Company has authorized capital stock as set forth
under the caption "Capitalization" in the Prospectus; the authorized
shares of the Company's Preferred Stock and Common Stock have been
duly authorized; the outstanding shares of the Company's Common
Stock, including the Shares to be sold by the Selling Shareholders,
have been duly authorized and validly issued and are fully paid and
non-assessable; all of the Shares conform to the description thereof
contained in the Prospectus; the certificates for the Shares,
assuming they are in the form filed with the Commission, are in due
and proper form; the Firm Shares and Option Shares, if any, to be
sold by the Company pursuant to this Agreement have been duly
authorized and will be validly issued, fully paid and non-assessable
when issued and paid for as contemplated by this Agreement; and no
preemptive rights of stockholders exist under statute or under
agreements known to such counsel with respect to any of the Shares
or the issue or sale thereof.
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or exchangeable
into or evidencing the right to purchase or subscribe for any shares
of capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating
the Company to issue any shares of its capital stock or any
securities convertible or exchangeable into or evidencing the right
to purchase or subscribe for any shares of such stock; and except as
described in the Prospectus, to the knowledge of such counsel, no
holder of any securities of the Company or any other person has the
right,
16
contractual or otherwise, which has not been satisfied or
effectively waived, to cause the Company to sell or otherwise issue
to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any shares of Common Stock or other
securities of the Company included in the Registration Statement or
the right, as a result of the filing of the Registration Statement,
to require registration under the Act of any shares of Common Stock
or other securities of the Company.
(iv) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending
or threatened under the Act.
(v) The Registration Statement, the Prospectus and each
amendment or supplement thereto comply as to form in all material
respects with the requirements of the Act and the applicable rules
and regulations thereunder (except that such counsel need express no
opinion as to the financial statements, notes thereto and related
schedules and other financial and statistical information included
therein or any information furnished by the Underwriters for use
therein).
(vi) The statements under the captions "Business-Regulation,"
"Business-Legal Proceedings," "Management-Executive Compensation;
Employment Agreements; Covenants-not-to-Compete,"
"Management-Long-Term Incentive Compensation Plan," "Certain
Transactions," "Description of Capital Stock" and "Shares Eligible
for Future Sale" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly present in all material
respects the information called for with respect to such documents
and matters.
(vii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are
not so filed or described as required, and the descriptions of such
contracts and documents required to be described in the Registration
Statement or the Prospectus are correct in all material respects.
(viii) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Acquired Companies except as set forth in the Prospectus.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute
17
a default under, the Charter or By-Laws of the Company, or, in any
respect material to the Company and the Acquired Companies, taken as
a whole, any agreement or instrument known to such counsel to which
the Company or any of the Acquired Companies is a party or by which
the Company or any of the Acquired Companies may be bound.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by
the NASD or as required by State securities and Blue Sky laws as to
which such counsel need express no opinion), except such as have
been obtained or made, specifying the same.
(xii) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
(xiii) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholders.
(xiv) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required
by State securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the
portion of the Shares to be sold by such Selling Shareholder.
(xv) The Custodian Agreement and the Power of Attorney
executed and delivered by each Selling Shareholder is valid and
binding.
(xvi) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) have
acquired good and marketable title to the Shares being sold by each
Selling Shareholder on the Closing Date free and clear of all liens,
encumbrances, equities and claims.
In rendering such opinion, Xxxxxxxxx & Xxxxxxxxx L.L.P. may provide
that its opinion is limited to matters governed by the laws of Texas and
the General Corporation law of the State of Delaware, and the Federal
securities laws of the United States, may
18
rely on counsel to one or more of the Acquired Companies with respect to
matters related to the Acquired Companies and as to matters set forth in
subparagraphs (xiii), (xiv), (xv) and (xvi) on opinions of other counsel
representing the Selling Shareholders, provided that, in lieu of such
reliance, Xxxxxxxxx & Xxxxxxxxx L.L.P. may provide separate opinions of
such counsel so long as such opinions are addressed to the Underwriters,
and further provided, that, in each case, Xxxxxxxxx & Xxxxxxxxx L.L.P.
shall state that they believe that they and the Underwriters are justified
in relying on such other counsel. In addition to the matters set forth
above, the opinion of Xxxxxxxxx & Xxxxxxxxx L.L.P. shall also include a
statement of belief to the effect that nothing has come to the attention
of such counsel which leads them to believe that (i) the Registration
Statement, at the time it became effective under the Act (but after giving
effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) the Prospectus, or
any supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements, in the
light of the circumstances under which they are made, not misleading
(except that such counsel need express no view as to financial statements,
schedules or other financial and statistical information therein). With
respect to such statement of belief, Xxxxxxxxx & Xxxxxxxxx L.L.P. may
state that their belief is based upon the procedures set forth therein,
but is without independent check and verification.
(c) The Representatives shall have received from Piper & Marbury
L.L.P., counsel for the Underwriters, an opinion dated the Closing Date or
the Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (ii), (iii), (iv), and (xi) of Paragraph (b) of
this Section 6, and that the Company is a duly organized and validly
existing corporation under the laws of the State of Delaware. In rendering
such opinion, Piper & Marbury L.L.P. may rely as to the matters relating
to the laws of the States other than Maryland and Delaware on the opinions
of counsel referred to in Paragraph (b) of this Section 6. In addition to
the matters set forth above, such opinion shall also include a statement
to the effect that nothing has come to the attention of such counsel which
leads them to believe that (i) the Registration Statement, or any
amendment thereto, as of the time it became effective under the Act (but
after giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Act) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant
to the Rules and Regulations and as of the Closing Date or the Option
Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact, necessary in order to
make the statements, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no view as
to
19
financial statements, schedules and statistical information therein). With
respect to such statement, Piper & Marbury L.L.P. may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(d) The Representatives shall have received, on the date hereof, the
Closing Date and the Option Closing Date, as the case may be, letters
dated the date hereof, the Closing Date or the Option Closing Date, as the
case may be, in form and substance satisfactory to the Underwriterss, of
Xxxxxx Xxxxxxxx LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating that, in their opinion, the
financial statements and schedules of the Company and the Acquired
Companies examined by them and included in the Registration Statement
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
and containing such other statements and information as is ordinarily
included in accountants' "comfort letters" to Underwriters with respect to
such financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(e) The Representatives shall have received, on the date hereof, the
Closing Date and the Option Closing Date, as the case may be, letters
dated the date hereof, the Closing Date or the Option Closing Date, as the
case may be, in form and substance satisfactory to the Underwriterss, of
Xxxxxx, Xxxxxxxx & Xxxxxxx confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating that, in their opinion, the
financial statements and schedules of F&G Mechanical Corp. and its
affiliate examined by them and included in the Registration Statement
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
and containing such other statements and information as is ordinarily
included in accountants' "comfort letters" to Underwriters with respect to
such financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or certificates
of the Company and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the Closing
Date or the Option Closing Date, as the case may be:
(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by
the Commission;
20
(ii) The representations and warranties of the Company
contained in Section 1 hereof are true and correct in all material
respects as of the Closing Date or the Option Closing Date, as the
case may be;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) As of the effective date of the Registration Statement,
the statements contained in the Registration Statement were true and
correct in all material respects, and such Registration Statement
and Prospectus did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth in
a supplement to or an amendment of the Prospectus which has not been
so set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not
been any material adverse change or any development involving a
prospective material adverse change in or affecting the condition,
financial or otherwise, of the Company or any of the Acquired
Companies or the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects
of the Company or any of the Acquired Companies, whether or not
arising in the ordinary course of business, except as set forth in,
or contemplated by, the Prospectus or as described in such
certificate.
(g) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein
and related matters as the Representatives may reasonably have requested.
(h) The Firm Shares and Option Shares, if any, shall have been
approved for designation upon notice of issuance on the New York Stock
Exchange.
(i) The Lockup Agreements described in Section 4(j) shall be in full
force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters, in their reasonable judgment.
21
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Underwriters by notifying the Company and the Selling Shareholders of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.
In such event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company and the Selling Shareholders, jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of the Act, against
any losses, claims, damages or liabilities to which such Underwriter or
any such controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter and each such controlling person upon
demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding
or in responding to a subpoena or governmental inquiry related to the
offering of the Shares, whether or not such Underwriter or controlling
person is a party to any action or proceeding; provided, however, that the
Company and the Selling Shareholders will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement, or
omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or such amendment or supplement,
in reliance upon and in conformity with written information furnished to
the Company by or through the Representatives specifically for use in the
preparation thereof. In no event, however, shall the liability of any
Selling Shareholder for indemnification under Section 8(a) exceed
22
the proceeds received by such Selling Shareholder from the Underwriters in
the offering. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and
hold harmless the Company, each of its directors, each of its officers who
has signed the Registration Statement, the Selling Shareholders, and each
person, if any, who controls the Company or the Selling Shareholders
within the meaning of the Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer, Selling
Shareholder or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
in the light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, Selling Shareholder or controlling person
in connection with investigating or defending any such loss, claim,
damage, liability, action or proceeding; provided, however, that each
Underwriter will be liable in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or alleged omission has been made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available to
any party who shall fail to give notice as provided in this Section 8(c)
if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than
on account of the provisions of Section 8(a) or (b). In case any such
proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party and shall pay as
23
incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days
of presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them
or (iii) the indemnifying party shall have failed to assume the defense
and employ counsel acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate firm for all
such indemnified parties. Such firm shall be designated in writing by you
in the case of parties indemnified pursuant to Section 8(a) and by the
Company and the Selling Shareholders in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. In addition, the indemnifying party will not, without the
prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim,
action or proceeding of which indemnification may be sought hereunder
(whether or not any indemnified party is an actual or potential party to
such claim, action or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above (other than by reason of the exceptions provided
in such paragraphs) in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and
the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other in
connection with the statements, omissions or
24
breaches of representations and warranties which resulted in such losses,
claims, damages or liabilities, (or actions or proceedings in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholders
bears to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling
Shareholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 8(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
above in this Section 8(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter and
(ii) no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation, and (iii)
no Selling Shareholders shall be required to contribute any amount in
excess of the lesser of (A) that proportion of the total of such losses,
claims, damages or liabilities indemnified or contributed against equal to
the proportion of the total Shares sold hereunder which is being sold by
such Selling Shareholder, or (B) the proceeds received by such Selling
Shareholder from the Underwriters in the offering. The Underwriters'
obligations in this Section 8(d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process
issuing from such court may be served upon him or it by any other
contributing party and consents to the service of such process and agrees
that any other contributing party may
25
join him or it as an additional defendant in any such proceeding in which
such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified
party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter, the Company, its
directors or officers or any persons controlling the Company , (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
either Underwriter shall fail to purchase and pay for any portion of the Shares
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a Selling
Shareholder), the non-defaulting Underwriters, shall use their reasonable
efforts to procure within 36 hours thereafter one or more other underwriters to
purchase from the Company and the Selling Shareholder such amounts as may be
agreed upon and upon the terms set forth herein, the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter failed to purchase.
If during such 36 hours the non-defaulting Underwriter shall not have procured
such other underwriters, or any others, to purchase the Firm Shares or Option
Shares, as the case may be, agreed to be purchased by the defaulting
Underwriter, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the non-defaulting Underwriter shall
be obligated, severally, in proportion to the respective numbers of Firm Shares
or Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter failed to purchase, or (b) if the aggregate
number of shares of Firm Shares or Option Shares, as the case may be, with
respect to which such default shall occur exceeds 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the Company and the Selling
Shareholders or the non-defaulting Underwriter will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriter or of the Company or of the Selling Shareholders except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter, as set forth in this Section 9, the Closing Date or Option Closing
Date, as the case
26
may be, may be postponed for such period, not exceeding seven days, as the
non-defaulting Underwriter may determine in order that the required changes in
the Registration Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any person
substituted for a defaulting Underwriter. Any action taken under this Section 9
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to BT Alex. Xxxxx Incorporated,
Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxx X. Xxxxxxx, Principal,
with a copy to BT Alex. Xxxxx Incorporated, Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 Attention: General Counsel; and if to the Company or the Selling
Shareholders; to Comfort Sytems USA, Inc., Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, Attention: Xxxx X Xxxxxxxx, Chief Executive Officer, with copies to
Xxxxxxxxx & Xxxxxxxxx L.L.P., South Tower Pennzoil Place, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxxxx, Esq. and
Xxxxxxx Xxxxxx III, Esq., General Counsel, Comfort Systems USA, Inc., Xxxxx
Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
11. TERMINATION.
This Agreement may be terminated by you by notice to the Sellers as
follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters, or
(ii) 11:30 a.m. on the date of this Agreement;
(b) at any time prior to the Closing Date if any of the following
has occurred: (i) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any material
adverse change or any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise, of the
Company and the Acquired Companies taken as a whole or the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Acquired
Companies taken as a whole, whether or not arising in the ordinary course
of business, (ii) any outbreak or escalation of hostilities or declaration
of war or national emergency or other national or international calamity
or crisis or change in economic or political conditions if the effect of
such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States would, in your
reasonable judgment, make it impracticable to market the Shares or to
enforce contracts for the sale of the Shares, (iii) suspension of trading
in securities generally on the New York Stock Exchange or
27
the American Stock Exchange or limitation on prices (other than
limitations on hours or numbers of days of trading) for securities on
either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or
other governmental authority which in your opinion materially and
adversely affects or may materially and adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by
United States or New York State authorities, (vi) the suspension of
trading of the Company's Common Stock by the Commission on the New York
Stock Exchange, or (vii) the taking of any action by any governmental body
or agency in respect of its monetary or fiscal affairs which in your
reasonable opinion has a material adverse effect on the securities markets
in the United States; or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), legends required by Item 502(d)
of Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnity and contribution agreements contained in this
Agreement and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
28
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the Underwriters in accordance with its terms.
29
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
COMFORT SYSTEMS USA, INC.
By: _________________________________
Xxxx X. Xxxxxxxx,
Chief Executive Officer
Selling Shareholders listed on Schedule II
By: _________________________________
Xxxxxxx Xxxxxx III,
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. XXXXX INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXXXX XXXXXX XXXXX INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Xxxxx Incorporated
By _________________________
Authorized Officer
30
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
UNDERWRITER TO BE PURCHASED
BT Alex. Xxxxx Incorporated...........................................
Bear, Xxxxxxx & Co. Inc...............................................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation...................
Xxxxxxx Xxxxxx Xxxxx Inc..............................................
Total.....................................................________
31
SCHEDULE II
32
SCHEDULE III
33
