Libbey Inc. Secondary Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
3,826,088
Secondary Common Stock
August 12, 2010
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As Representative of the several
Underwriters named in Schedule 1 attached hereto,
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several
Underwriters named in Schedule 1 attached hereto,
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx Xxxxx PCG, Inc., a Delaware Corporation (the “Selling Stockholder”), proposes to sell
an aggregate of 3,101,507 shares (the “Firm Stock”), of the common stock, of Libbey Inc., a
Delaware corporation (the “Company”) par value $0.01 per share (the “Common Stock”), including
2,168,362 shares of Common Stock issuable pursuant to the Selling Stockholder’s exercise of the
Series I Warrant, issued by the Company to the Selling Stockholder on October 28, 2009 (the “Series
I Warrant”), on the date hereof. In addition, the Selling Stockholder proposes to sell 724,581
shares (the “Warrant Stock”) of Common Stock issuable upon exercise of the Series I Warrant which
exercise shall occur and which shares will be sold following the sale by the Selling Stockholder of
the Firm Stock. In addition, the Selling Stockholder proposes to grant to the underwriters (the
“Underwriters”) named in Schedule 1 attached to this agreement (this “Agreement”) an option
to purchase up to an aggregate of 573,913 additional shares of the Common Stock on the terms set
forth in Section 3 (the “Option Stock”). The Firm Stock, the Warrant 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 Selling Stockholder 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 (the “Stockholder
Registration Statement”) to be sold by the Selling Stockholder 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 5:00 pm (New York City time) August 12, 2010;
(ii) “Effective Date” means any date as of which any part of the 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;
(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;
(iv) “Preliminary Prospectus” means any preliminary prospectus relating to the
Stock included in the 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 3
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;
(vii) “Registration Statement” means the registration statement and 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; and
(viii) “Stockholder Effective Date” means any date as of which any part of the
Stockholder Registration Statement became, or is deemed to have become, effective
under the Securities Act in accordance with the Rules and Regulations.
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) of the Rules and Regulations 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
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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 applicable 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 threatened by the Commission.
(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 of the Rules and Regulations). The Company has been since
the time of 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) of the Rules and
Regulations 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 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 10(f).
(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 necessary in
order 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
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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 10(f).
(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 necessary in order 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 in order 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 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 10(f).
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433 of the Rules and Regulations), when
considered together with the Pricing Disclosure Package and the disclosures directly
relating thereto and the number of shares of Stock to be sold as set forth on the cover page
of the Prospectus, as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(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. 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 19) (i) has been
duly organized and is validly existing as a corporation or other business entity in good
standing under the laws of its respective jurisdictions of organization, (ii) has power and
authority (corporate or otherwise) to own or hold their properties and conduct its business
as described in the most recent Preliminary Prospectus and to perform their obligations
under this Agreement and to consummate the transactions contemplated hereby and (iii) has
been duly qualified as a foreign corporation or other business entity for the transaction of
business and is in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such qualification, except, in the case of clauses (ii) and (iii), as would not reasonably be
expected to have a material adverse effect on the business, properties, management,
financial position,
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or results of operations of the Company and its subsidiaries taken as a
whole (each, a “Material Adverse Effect”). Exhibit 21 to Company’s Annual Report on Form
10-K for the most recent fiscal year sets forth all of the direct and indirect subsidiaries
of the Company.
(k) The Company has an authorized capitalization as set forth in each of the most
recent Preliminary Prospectus and the Prospectus, 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 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 (i) for such liens, encumbrances, equities
or claims as could not, in the aggregate, have a Material Adverse Effect and (ii) as
otherwise described in each of the Pricing Disclosure Package and the Prospectus.
(l) The shares of the Stock to be sold 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. The shares of
Stock to be sold by the Selling Stockholder will be sold in compliance with federal and
state securities laws.
(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 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 the violation of
any law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority having jurisdiction over the Company or any of its
subsidiaries,
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except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation or default that would not, individually or in the aggregate, 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, except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, orders, registrations or qualifications (i) 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; or (ii) as otherwise described in
each of the Pricing Disclosure Package and the Prospectus.
(p) Except as disclosed in the Pricing Disclosure Package and the 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 or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(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) Except as disclosed in the Pricing Disclosure Package and the Prospectus, since the
date of the latest audited financial statements included in the Pricing Disclosure Package
and the Prospectus, (i) the Company and its subsidiaries, taken as a whole, have not
sustained any material loss or interference with their business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or court or governmental action, order or decree and (ii) since such date there has
not been any material change in the capital stock or long-term debt of the Company or any of
its subsidiaries, taken as a whole, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the financial condition,
results of operations, properties, management or business of the Company and its
subsidiaries, taken as a whole.
(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 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.
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(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 in all material respects the consolidated financial
position of the Company as of the dates indicated and the results of operations and changes
in 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 (“GAAP”)applied on a consistent basis throughout the periods involved,
except as otherwise stated therein.
(u) Ernst & Young 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 9(h) hereof, are independent registered public accountants as
required by the Securities Act and the Rules and Regulations.
(v) The Company and its consolidated subsidiaries maintain a system of internal control
over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that complies
with the requirements of the Exchange Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP. As of the date of the
most recent balance sheet of the Company and consolidated subsidiaries reviewed or audited
by Ernst & Young LLP and the audit committee of the board of directors of the Company, there
were no material weaknesses in the Company’s internal controls.
(w) The Company and its consolidated subsidiaries each maintain disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Exchange Act) that comply with the
requirements of the Exchange Act. Such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and its consolidated
subsidiaries is made known to the Company’s principal executive officer and principal
financial officer by others within those entities. Such disclosure controls and procedures
are effective in all material respects to perform the function for which they are
established. Since the date of the latest audited financial statements included in the
Preliminary Prospectus, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting including any corrective
actions with regard to significant deficiencies and material weaknesses.
(x) Since the date of the most recent balance sheet of the Company and its consolidated
subsidiaries reviewed or audited by Ernst & Young LLP and the audit committee of the board
of directors of the Company, the Company has not been advised of (i) any significant
deficiencies in the design or operation of internal controls that could
materially adversely affect the ability of the Company or any of its consolidated
subsidiaries to record, process, summarize and report financial data, or any material
weaknesses in internal controls, and (ii) any fraud relating to the Company that involves
management
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or employees who have a significant role in the internal controls of the Company
and each of its consolidated subsidiaries.
(y) The statistical and market-related data included under the captions “Prospectus
Supplement Summary” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the most recent Preliminary Prospectus and the consolidated
financial statements of the Company and its subsidiaries included or incorporated by
reference in the most recent Preliminary Prospectus are based on or derived from sources
that the Company believes to be reliable in all material respects.
(z) Neither the Company nor any subsidiary is, and as of the applicable Delivery Date
and, after giving effect to the offer of the Stock, 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).
(aa) Except as described in the most recent Preliminary Prospectus, 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 have a Material Adverse Effect or would, individually or in the aggregate
have a material adverse effect on the performance of this Agreement or the consummation of
the transactions contemplated hereby. To the Company’s or any of its subsidiaries’
knowledge, no such proceedings are threatened in writing by governmental authorities or
others.
(bb) The Company and its subsidiaries maintain insurance against such losses and risks
as are prudent and customary in the businesses in which they are engaged. Neither the
Company nor any of its subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage (including self-insurance) at commercially reasonable cost from similar insurers.
(cc) 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.
(dd) No labor disturbance by the employees of the Company or its subsidiaries exists
or, to the knowledge of the Company, is imminent.
(ee) With respect to each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the
Company or any member of the Company’s “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”) (i) each such Plan has been maintained in compliance
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with its terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, except for any non-compliance
that would not have a Material Adverse Effect; (ii) no prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan excluding transactions effected pursuant to a statutory or administrative exemption
or transactions which would not have, individually or in the aggregate, a Material Adverse
Effect; (iii) each Plan that is subject to Section 412 of the Code or Section 302 of ERISA
has complied in all material respects with the requirements of Sections 412 and 430 of the
Code and Sections 302 and 303 of ERISA; (iv) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred which would have, individually or in the aggregate, a
Material Adverse Effect; and (v) neither the Company nor any member of the Controlled Group
has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other
than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation, in
the ordinary course and without default) in respect of a Plan (including a “multiemployer
plan”, within the meaning of Section 4001(a)(3) of ERISA) that would, individually or in the
aggregate, have a Material Adverse Effect.
(ff) (i) The Company and each of its subsidiaries have timely paid all federal, state,
local and foreign taxes (including any related interest and penalties) required to be paid
by any of them through the date hereof, including as a withholding agent, and have timely
filed all federal, state, local and foreign tax returns required to be filed by any of them
through the date hereof; and (ii) there is no unpaid tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its subsidiaries or any
of their respective properties or assets; except, in the case of each of clauses (i) or (ii)
above, for any such payment failures, filing failures or unpaid deficiencies as would not,
individually or in the aggregate, have a Material Adverse Effect.
(gg) 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 law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except, in the case of
clauses (ii) and (iii), above, for any such default, event or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(hh) There is and has been no material failure on the part the Company or any of the
Company’s directors or officers, in their capacities as such, to comply with any provision
of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection
therewith (the “Xxxxxxxx-Xxxxx Act”).
(ii) The Company and its subsidiaries possess all licenses, qualifications,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities
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that are necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses in the manner described in the most recent
Preliminary Prospectus, except where the failure to possess or make the same would not have
a Material Adverse Effect; and except as described in the most recent Preliminary
Prospectus, neither the Company nor any of its subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or authorization will not
be renewed in the ordinary course, except where any such revocation, modification or failure
to renew would not have a Material Adverse Effect.
(jj) Except as disclosed in the most recent Preliminary Prospectus or as would not,
individually or in the aggregate, have a Material Adverse Effect, (i) the Company and its
subsidiaries own or possess adequate rights to use all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses and know-how (including trade secrets and other proprietary or
confidential information, systems or procedures) necessary for the conduct of their
respective businesses; (ii) and the conduct of their respective businesses will not conflict
with any such rights of others, and the Company and its subsidiaries have not received any
notice of any claim of infringement of or conflict with any such rights of others.
(kk) Except as described in the most recent Preliminary Prospectus and except as would
not have a Material Adverse Effect, (i) the Company and its subsidiaries (x) are in
compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, requirements, orders and the common law relating to pollution and the
protection of the environment, natural resources, and of human health and safety, including
those relating to the Release, threat of Release and remediation of Hazardous Materials
(collectively, “Environmental Laws”), (y) have received and are in compliance with all
permits, licenses, certificates or other authorizations or approvals required of them under
applicable Environmental Laws to conduct their current respective businesses, and (z) have
not received written notice of any actual or potential liability under or violation of any
Environmental Laws, including for the investigation or remediation of Hazardous Materials,
and have no knowledge of any event or condition that would reasonably be expected to result
in any such notice, (ii) there are no costs or liabilities associated with Environmental Laws
of or relating the Company or its subsidiaries; and (iii) there are no past or present
actions, conditions or occurrences caused by the Company or any of its subsidiaries which
would reasonably be expected to result in a violation of or liability under any
Environmental law on the part of any of them. For purposes of this Agreement, “Hazardous
Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound
or constituent ,in any form, including asbestos and asbestos-containing materials, which is
regulated or can give rise to liability under any Environmental Law; and “Release” means any
release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping,
emptying, injection or leaching into the environment (including ambient air, indoor air,
surface water, groundwater, and surface and subsurface strata).
(ll) No subsidiary of the Company is currently prohibited, directly or indirectly, from
paying any dividends to the Company, from making any other distribution on
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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.
(mm) Neither the Company or its subsidiaries, nor, to the knowledge of the Company, any
of their respective directors, officers or employees has taken any action, directly or
indirectly, that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended (including the rules and regulations thereunder) (the
“FCPA”), including, without limitation, offered, paid, promised to pay or authorized the
payment of any money or offer, gift, promise to give or authorized the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA, and each of the Company and its subsidiaries has conducted, and
has caused each of its affiliates to conduct, its business in compliance with the FCPA and
has instituted and maintains policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure continued compliance therewith.
(nn) 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, the rules and regulations thereunder having jurisdiction over the
Company and the Company’s subsidiaries or their respective property or assets (collectively,
the “Money Laundering Laws”) and, to the knowledge of the Company, 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 threatened.
(oo) 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.
(pp) Subsequent to the execution and delivery of this Agreement and prior to the
Delivery Date, no “nationally recognized statistical rating organization” as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act (i) downgraded the rating
accorded to the Company’s debt securities or (ii) publicly announced that is has under
surveillance or review, with possible negative implications, its rating in the Company’s
debt securities.
(qq) 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
-11-
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to which the Representative
have consented in accordance with Section 1(i) or 6(a)(vi).
(rr) 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.
(ss) The Stock has been approved for inclusion, subject to official notice of issuance,
on the NYSE Amex.
Any certificate 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. Representations, Warranties and Agreements of the Selling Stockholder. The Selling
Stockholder represents, warrants and agrees that:
(a) Neither the Selling Stockholder nor any person acting on behalf of the Selling
Stockholder (other than, if applicable, the Company and the Underwriters) has used or
referred to any “free writing prospectus” (as defined in Rule 405 of the Rules and
Regulations), relating to the Stock;
(b) Upon the exercise of the Series I Warrant the Selling Stockholder will have, and on
the applicable Delivery Date will have, valid title to, or a valid “security entitlement”
within the meaning of Section 8-501 of the New York Uniform Commercial Code (the “UCC”) in
respect of, the Firm Stock to be sold by the Selling Stockholder free and clear of all
security interests, claims, liens, or other encumbrances.
(c) On the applicable Delivery Date the Selling Stockholder will have valid title to,
or a valid “security entitlement” within the meaning of Security 8-501 of the UCC in respect
of, the Warrant Stock or Option Stock, as applicable, to be sold by the Selling Stockholder
free and clear of all security interests, claims, liens, or other encumbrances.
(d) The Selling Stockholder has full right, power and authority, corporate or
otherwise, to enter into this Agreement.
(e) This Agreement has been duly and validly authorized, executed and delivered by or
on behalf of the Selling Stockholder.
(f) The execution, delivery and performance of this Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the transactions contemplated
hereby do not and will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, license or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is bound or to which any
of the property or assets of the Selling Stockholder is subject (ii) result in any violation
of
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the provisions of the charter or by-laws (or similar organizational documents) of the
Selling Stockholder 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 Selling
Stockholder or the property or assets of the Selling Stockholder, except in the case of (i)
and (iii) where such contravention would not, singly or in the aggregate, have a material
adverse effect the power and ability of the Selling Stockholder to perform its obligations
under this Agreement (a “Seller Material Adverse Effect”).
(g) No consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Selling Stockholder or
the property or assets of the Selling Stockholder is required for the execution, delivery
and performance of this Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby, 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 or foreign securities laws in connection with the purchase and sale of the Stock by
the Underwriters, except the filing of an amended Schedule 13G and Forms 3 and 4 such as may
be required by the securities or Blue Sky laws of the various states in connection with the
exercise of the Series I Warrant and the offer and sale of the Shares, and except for any
consents, approvals, authorizations, orders or qualifications, or filings or registrations,
the absence of which would not, singly or in the aggregate, have a Seller Material Adverse
Effect.
(h) Neither the Preliminary Prospectus, the Registration Statement, the Prospectus, any
Issuer Free Writing Prospectus nor any amendments or supplements thereto or in any Permitted
Issuer Information, any Blue Sky Application or any “free writing prospectus” (as defined in
Rule 405 of the Rules and Regulations) includes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, provided that such
representations and warranties set forth in this subsection (b)(i) apply only to statements
or omissions made in reliance upon and in conformity with information relating to the
Selling Stockholder furnished in writing by or on behalf of the Selling Stockholder
expressly for inclusion therein (the “Selling Stockholder Information”), which shall
be understood to be limited to the information in Section 10(g) hereof.
(i) The Selling Stockholder is not prompted to sell shares of Common Stock by any
information concerning the Company that is not set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
(j) The Selling Stockholder has not taken and will not take, directly or indirectly,
any action that is 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.
Any certificate signed by any officer of the Selling Stockholder and delivered to the
Representative or counsel for the Underwriters in connection with the offering of the Stock
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shall
be deemed a representation and warranty by the Selling Stockholder, as to matters covered thereby,
to each Underwriter.
3. 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, (a) the
Selling Stockholder agrees to sell 3,101,507 shares of the Firm Stock to the several Underwriters,
and (b) the Selling Stockholder agrees to sell 724,581 shares of the Warrant 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 and Warrant Stock set forth opposite that Underwriter’s name in
Schedule 1 hereto. Each Underwriter shall be obligated to purchase from the Selling
Stockholder, that number of shares of the Firm Stock and Warrant Stock, as applicable, that
represents the same proportion of the number of shares of the Firm Stock and Warrant Stock, to be
sold by the Selling Stockholder as the number of shares of the Firm Stock and Warrant Stock set
forth opposite the name of such Underwriter in Schedule 1 represents of the total number of
shares of the Firm Stock and Warrant Stock to be purchased by all of the Underwriters pursuant to
this Agreement. The respective purchase obligations of the Underwriters with respect to the Firm
Stock and Warrant Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representative may determine.
In addition, the Selling Stockholder grants to the Underwriters an option to purchase up to
573,913 of shares of Option Stock. Such option is exercisable in the event that the Underwriters
sell more shares of Common Stock than the aggregate number of shares of Firm Stock and Warrant
Stock in the offering and as set forth in Section 5 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 the Firm Stock, Warrant Stock and any Option Stock purchased by the Underwriters
shall be $9.6863 per share.
The Selling Stockholder shall not be obligated to deliver any of the Firm Stock, Warrant 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.
4. Offering of Stock by the Underwriters. Upon authorization by the Representative
of the release of the Firm Stock and Warrant Stock, the several Underwriters propose to offer the
Firm Stock and Warrant Stock for sale upon the terms and conditions to be set forth in the
Prospectus.
5. 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 fourth 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 Selling Stockholder. This date and time are
sometimes referred to as the “Initial Delivery Date.” Delivery of the Initial Closing Stock
shall be made to the Representative for the account of each Underwriter against payment by the
several
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Underwriters through the Representative and of the respective aggregate purchase prices of
the Firm Stock being sold by the Selling Stockholder to or upon the order of the Selling
Stockholder of the purchase price by wire transfer in immediately available funds to the accounts
specified by the Selling Stockholder. 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 Selling Stockholder shall deliver the Initial Closing Stock through the
facilities of DTC unless the Representative shall otherwise instruct.
Delivery of and payment for the 724,581 shares of Warrant Stock shall be made as soon as
practicable following settlement of the sale of the Firm Stock on the Initial Delivery Date as
shall be determined by agreement between the Representative and the Selling Stockholder. Delivery
of the Warrant 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 aggregate
purchase price of the Warrant Stock being sold by the Selling Stockholder to or upon the order of
the Selling Stockholder of the purchase price by wire transfer in immediately available funds to
the account specified by the Selling Stockholder. 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 Selling Stockholder shall deliver the Warrant Stock through the
facilities of DTC unless the Representative shall otherwise instruct.
The option granted in Section 3 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 and
the Selling Stockholder by the Representative; provided that if such date falls on a day that is
not a business day, the options granted in Section 3 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
options are 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 immediately following the settlement of
the Firm Stock on the Initial Delivery Date nor earlier than the second business day after the date
on which the options shall have been exercised nor later than the fifth business day after the date
on which the options 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 Selling Stockholder 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
Selling Stockholder. On the Option Stock Delivery Date, the Selling Stockholder 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 aggregate
purchase price of the Option Stock being sold by the Selling Stockholder to or upon the order of
the Selling Stockholder of the purchase price by wire transfer in
immediately available funds to the accounts specified by the Selling Stockholder. Time shall
be of the essence, and delivery at the time and place specified pursuant to this Agreement is a
further condition
-15-
of the obligation of each Underwriter hereunder. The Selling Stockholder shall
deliver the Option Stock through the facilities of DTC unless the Representative shall otherwise
instruct.
6. 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) of the Rules and Regulations under the
Securities Act not later than the 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 to each of 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 shall have occurred as a result of which the Prospectus as then amended or
supplemented
-16-
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 their 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;
(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 and obtain the consent of the Representative to the filing;
(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, 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 their request, to file such
document 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;
-17-
(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;
(x) For a period commencing on the date hereof and ending on the 75th 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 pursuant to employee benefit plans existing on the date hereof and consistent
with past practice), (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 Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, on behalf of the Underwriters, and to cause each officer, director and
stockholder of the Company set forth on Schedule 3 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”);
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
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, on behalf of the Underwriters,
waive such extension in writing;
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(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 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 6(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.
7. Further Agreements of the Selling Stockholder. The Selling Stockholder agrees:
(a) During 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), (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) make any demand for or exercise any right or 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 or (4) publicly disclose the intention
to do any of the foregoing, in each case without the prior written consent of Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, on behalf of the Underwriters; 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 Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, on behalf of the Underwriters, waive such extension in writing;
(b) Neither the Selling Stockholder nor any person acting on behalf of the Selling
Stockholder (other than, if applicable, the Company and the Underwriters) shall use or refer
to any “free writing prospectus” (as defined in Rule 405), relating to the Stock;
(c) To deliver to the Representative prior to the Initial Delivery Date a properly
completed and executed United States Treasury Department Form W-8 (if the Selling
Stockholder is a non-United States person) or Form W-9 (if the Selling Stockholder is a
United States person).
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(d) To deliver to the transfer agent prior to the time required under Section 5 to
deliver any shares of Firm Stock, Warrant Stock or Option Stock a notice of exercise
resulting in the exercise of the number of shares under the Series I Warrant required to be
owned by the Sellling Stockholder to fulfill the Selling Stockholder’s delivery obligation
under Section 5
8. 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 similar taxes payable in connection therewith, 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) any required review by the Financial Industry
Regulatory Authority (the “FINRA”) of the terms of sale of the Stock (including related documented
fees and expenses of counsel to the Underwriters in an amount not greater than $10,000); (f) the
listing of the Stock on the NYSE Amex and/or any other exchange; (h) the qualification of the Stock
under the securities laws of the several jurisdictions as provided in Section 6(a)(ix) and the
preparation, printing and distribution of a Blue Sky Memorandum (including related documented fees
and expenses of counsel to the Underwriters); (i) 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); (j) [reserved]; (k) the investor presentations on any “road show” undertaken in
connection with the marketing of the Stock, including, without limitation, expenses associated with
any electronic roadshow, travel and lodging expenses of the representatives and officers of the
Company and fifty percent (50%) of the cost of any aircraft chartered in connection with the road
show; and (l) all other costs and expenses incident to the performance of the obligations of the
Company and the Selling Stockholder under this Agreement; provided that, except as provided in this
Section 8 and in Section 13, the Underwriters shall pay their own costs and expenses, including the
costs and expenses of their counsel and the expenses of advertising any offering of the Stock made
by the Underwriters, and, subject to the Company’s obligations pursuant to the Amended and Restated
Registration Rights Agreement, dated as of October 28, 2009, by and between the Company and the
Selling Stockholder (the “Registration Rights Agreement”), the Selling Stockholder shall pay the
fees and expenses of their counsel, and any transfer taxes payable in connection with their
respective sales of Stock to the Underwriters.
9. 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 and the Selling Stockholder contained herein, to the performance by
the Company and the Selling Stockholder of their respective obligations hereunder, and to each of
the following additional terms and conditions:
-20-
(a) The Prospectus shall have been timely filed with the Commission in accordance
with Section 6(a)(i); the Company shall have complied with all filing 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, in the opinion of Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Underwriters,
is material or omits to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary in order 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 and the Selling
Stockholder shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) (i) Xxxxxx & Xxxxxxx LLP and (ii) Xxxxx X. Xxxxxx, General Counsel, in each case,
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) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP shall have furnished to the Representative
its written opinion, as special counsel to the Selling Stockholder, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representative.
(f) The Representative shall have received from Xxxxxx Xxxxxx & Xxxxxxx 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.
(g) At the time of execution of this Agreement, the Representative shall have received
from Ernst & Young LLP a letter, in form and substance satisfactory to the Representative,
addressed to the Underwriters and dated the date hereof (i) confirming that
-21-
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 financial information and other
matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection
with registered public offerings.
(h) With respect to the letter of Ernst & Young 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.
(i) 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 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 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
applicable
-22-
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;
(j) The Selling Stockholder shall have furnished to the Representative on such Delivery
Date a certificate, dated such Delivery Date, signed by, or on behalf of, the Selling
Stockholder stating that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct on and as of such Delivery Date and that
the Selling Stockholder has complied with all its agreements contained herein and has
satisfied all the conditions on its part to be performed or satisfied hereunder at or prior
to such Delivery Date in all material respects.
(k) Except as disclosed in the Pricing Disclosure Package and the Prospectus, since the
date of the latest audited financial statements included in the Pricing Disclosure Package
and the Prospectus, (i) the Company and its subsidiaries, taken as a whole, have not
sustained any material loss or interference with their business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or court or governmental action, order or decree and (ii) since such date there has
not been any material change in the capital stock or long-term debt of the Company or any of
its subsidiaries, taken as a whole, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the financial condition,
results of operations, properties, management, business or prospects of the Company and its
subsidiaries, taken as a whole.
(l) 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 NYSE Amex 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 or clearance 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.
(m) The NYSE Amex shall have approved the Stock for inclusion, subject only to official
notice of issuance.
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(n) The Lock-Up Agreements between the Representative and the officers, directors and
stockholders of the Company set forth on Schedule 3, delivered to the Representative
on or before the date of this Agreement, shall be in full force and effect on such Delivery
Date.
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.
10. 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 of the Rules and Regulations) used or referred to by any Underwriter or
(D) 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”) 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 Permitted Issuer Information 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 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 10(f). The foregoing indemnity
agreement is in addition to any liability which the Company
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may otherwise have to any Underwriter or to any director,
officer, employee or controlling person of that Underwriter.
(b) The Selling Stockholder 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 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 Blue Sky
Application or any “free writing prospectus” (as defined in Rule 405), prepared by or on
behalf of the Selling Stockholder or used or referred to by the Selling Stockholder in
connection with the offering of the Stock in violation of Section 7(d) (a “Selling
Stockholder Free Writing Prospectus”) or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, Registration Statement, the Prospectus, any Issuer Free Writing
Prospectus or in any amendment or supplement thereto or in any Permitted Issuer Information,
any Blue Sky Application or any Selling Stockholder Free Writing Prospectus, any material
fact required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter, its directors, officers and employees and
each such controlling person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, its directors, officers and employees or controlling persons
in connection with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred, 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 the
Selling Stockholder furnished to the Company by or on behalf of the Selling Stockholder
specifically for inclusion therein, which information is limited to the information set
forth in Section 10(g). The liability of the Selling Stockholder under the indemnity
agreement contained in this paragraph shall be limited to an amount equal to the total gross
proceeds from the offering of the shares of the Stock purchased under the Agreement received
by the Selling Stockholder, as set forth in the table on the cover page of the Prospectus.
The foregoing indemnity agreement is in addition to any liability that the Selling
Stockholder may otherwise have to any Underwriter or any officer, employee or controlling
person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, the Selling Stockholder, their respective directors, officers and employees, and
each person, if any, who controls the Company or such Selling Stockholder 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, such Selling
Stockholder 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
-25-
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 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 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 10(f). The foregoing indemnity agreement is in addition to any liability
that any Underwriter may otherwise have to the Company, such Selling Stockholder or any such
director, officer, employee or controlling person and shall not limit the indemnification of
the Selling Stockholder by the Company pursuant to the Registration Rights Agreement.
(d) Promptly after receipt by an indemnified party under this Section 10 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 10, 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 10 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 10. 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 10 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
one outside counsel and one local counsel to represent such 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
which indemnity may be sought under this Section 10 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
-26-
of both sets of parties by the same counsel would be inappropriate due to
actual or potential differing interests between them, and in any such event the reasonable
and documented 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. If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable and documented fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 10(a) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 10 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 10(a),
10(b), 10(c) or 10(g) 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 and the Selling Stockholder, respectively 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 and the Selling Stockholder, respectively, 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 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,
the Selling Stockholder 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, the Selling Stockholder and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 10(e) were to be
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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 10(e) shall be deemed to include, for purposes of this
Section 10(e), 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 10(e), 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 10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm and the Company and each Selling Stockholder
acknowledges and agrees that the statements regarding delivery of shares by the Underwriters
set forth on the cover page of, and the concession and reallowance figures and the paragraph
relating to stabilization by the Underwriters appearing under the caption “Underwriting” 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.
(g) The Selling Stockholder confirms and the Company and the Underwriters acknowledge
and agree that the information appearing in the table under the caption “Selling
Stockholder” opposite the name of the Selling Stockholder and the corresponding footnotes in
the most recent Preliminary Prospectus and the Prospectus constitute the only information
concerning the Selling Stockholder furnished in writing to the Company by or on behalf of
the Selling Stockholder specifically for inclusion in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto, any Blue Sky Application or any Selling Stockholder Free
Writing Prospectus.
11. 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 or Warrant Stock, as applicable, 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 or
Warrant Stock, as applicable, 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
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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 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 3. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to
the Representative who so agrees, 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 Selling Stockholder to sell, the
Option Stock) shall terminate without liability on the part of any non-defaulting Underwriter or
the Company or the Selling Stockholder, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 8 and 13. 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 11,
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 and the Selling Stockholder 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 Selling Stockholder 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.
12. Termination. The obligations of the Underwriters hereunder may be terminated by the
Representative by notice given to and received by the Company and the Selling Stockholder prior to
delivery of and payment for the Firm Stock if, prior to that time, (x) any of the events described
in Sections 9(k) and 9(l) shall have occurred, (y) the events described in Section 9(m) shall not
have occurred or (z) if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
13. Reimbursement of Underwriters’ Expenses. If the Selling Stockholder shall fail to tender
the Stock for delivery to the Underwriters 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 and documented out-of-pocket expenses (including reasonable and
documented fees and disbursements of one outside counsel and one local counsel on behalf of all of
the Underwriters) 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 11 by reason of the default of
one or more Underwriters, neither the Company nor the Selling Stockholder shall be obligated to
reimburse any defaulting Underwriter on account of those expenses.
14. Research Analyst Independence. The Company acknowledges that the Underwriters’ research
analysts and research departments are required to be independent from
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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 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 and the Selling Stockholder hereby waive and release, to the fullest extent permitted by
law, any claims that the Company or the Selling Stockholder 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 or the Selling Stockholder by such Underwriters’
investment banking divisions. The Company and the Selling Stockholder 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.
15. No Fiduciary Duty. The Company and the Selling Stockholder acknowledge and agree 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 , Selling
Stockholder 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 either the Company or the
Selling Stockholder, including, without limitation, with respect to the determination of the public
offering price of the Stock, and such relationship between the Company and the Selling Stockholder,
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 or Selling Stockholder 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 and the Selling Stockholder. The Company and the Selling Stockholder
hereby waive any claims that the Company or the Selling Stockholder may have against the
Underwriters with respect to any breach of fiduciary duty in connection with this offering.
16. 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 hand delivery, mail, telex,
overnight courier or facsimile transmission to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx, 00000, attention of Syndicate Department,
with a copy to ECM Legal, Attention: Xxxxxx Xxxxxx with a copy to Xxxxxx Xxxxxx & Xxxxxxx
llp, 00 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx, 00000, Facsimile (000) 000-0000, Attention:
Xxxxxxxx X. Xxxxxxxxx;
(b) if to the Company, shall be delivered or sent by mail, telex, overnight courier or
facsimile transmission to the Company at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, Facsimile
(000) 000-0000, Attention: Xxxxx X. Xxxxxx, General Counsel, with a
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copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Facsimile (000) 000-0000, Attention: Xxxxxxxxxxx X. Xxxxxxx; and
(c) if to the Selling Stockholder, shall be delivered or sent by mail, telex, overnight
courier or facsimile transmission to Bank of America Xxxxxxx Xxxxx, Xxxxxxx Xxxxx PCG, Inc.,
Xxx Xxxxxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxx Xxxxxxx
with copies to 2 World Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx Xxxxx, Facsimile (000) 000-0000 and Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Facsimile (000) 000-0000, Attention:
Xxxxxxx X. Xxxxxx.
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company and the Selling Stockholder shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Underwriters by Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, and the Company and the Underwriters shall be entitled to act
and rely upon any request, consent, notice or agreement given or made by the Selling Stockholder.
17. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Selling Stockholder 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 and the Selling Stockholder 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 10(c) 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 and the directors, officers and employees, and any person
controlling the Selling Stockholder 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 17, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
18. Survival. The respective indemnities, representations, warranties and agreements of the
Company, the Selling Stockholder 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.
19. 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.
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20. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws that would require
the application of the laws of another jurisdiction.
21. 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.
22. 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 among the Company, the Selling Stockholder and the
Underwriters, please indicate your acceptance in the space provided for that purpose below.
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If the foregoing correctly sets forth the agreement among the Company, the Selling Stockholder
and the Underwriters, please indicate your acceptance in the space provided for that purpose below.
| Very truly yours, LIBBEY INC. |
||||
| By: | /s/ Xxxxx Xxxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx Xxxxxx | |||
| Title: | Vice President, General Counsel and Secretary | |||
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| XXXXXXX XXXXX PCG, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Director | |||
Accepted:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
For themselves and as Representative
of the several Underwriters named
in Schedule 1 hereto
of the several Underwriters named
in Schedule 1 hereto
| By: | Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated | |||
| By: | /s/ Perry Hall | |||
| Authorized Representative | ||||
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SCHEDULE 1
| Number of Shares of | ||||
| Underwriters | Firm Stock | |||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
3,252,175 | |||
Xxxxxxxx Inc. |
573,913 | |||
Total |
3,826,088 | |||
SCHEDULE 2
PERSONS DELIVERING LOCK-UP AGREEMENTS
Directors
Xxxxxx X. Duno
Xxxxxxx X. Xxxxx
Xxxx-Xxxx Xxxxxxxx
Xxxxx X. McC. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxx
Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Duno
Xxxxxxx X. Xxxxx
Xxxx-Xxxx Xxxxxxxx
Xxxxx X. McC. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxx
Xxxxxxxx X. Xxxxxxx
Officers
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
SCHEDULE 3
ORALLY CONVEYED PRICING INFORMATION
1. Public offering price per share of $10.25
2. Total offering size of 3,826,088 shares
Exhibit A
LOCK-UP LETTER AGREEMENT
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As Representative of the several
Underwriters named in Schedule 1,
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several
Underwriters named in Schedule 1,
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxx Xxxxxx Xxxx
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 $.01 per share (the “Common Stock”), of Libbey 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 Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 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, (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
75th day after the date of the Prospectus relating to the Offering (such 75-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
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Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated waive such extension in writing. The
undersigned hereby 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.
Notwithstanding the foregoing, the undersigned may transfer shares of Common Stock as a bona
fide gift, will or intestate succession or to a trust for the benefit of undersigned or members of
the undersigned’s “immediate family,” which shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin, provided that each resulting transferee agree to be
bound in writing by the restrictions set forth herein.
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.
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, the Selling Stockholder and the Underwriters.
[Signature page follows]
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:
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