EXHIBIT 1.1
7,500,000 Shares
MEDSOURCE TECHNOLOGIES, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
__________, 2002
_____________, 2002
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
First Union Securities, Inc.
Xxxxxx Xxxxxx Partners LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
MEDSOURCE TECHNOLOGIES, INC., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") 7,500,000 shares of its common stock, par
value $.01 per share (the "Firm Shares"). The Company and certain stockholders
of the Company (the "Selling Stockholders") named in Schedule II hereto also
severally propose to sell to the several Underwriters not more than an
additional 1,125,000 shares of common stock, $.01 par value, of the Company (the
"Additional Shares") if and to the extent that you, as Managers of the offering,
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3
hereof. An aggregate of fifty percent (50%) of any Additional Shares purchased
by the Underwriters are to be sold by the Selling Stockholders, each Selling
Stockholder selling the percentage set forth opposite such Selling Stockholder's
name in Schedule II hereto; provided, however, that the Selling Stockholders
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shall in no event sell more than 325,000 Additional Shares in the aggregate,
each Selling Stockholder subject to the maximum number of Additional Shares set
forth opposite such Selling Stockholder's name in Schedule II hereto. The
remaining Additional Shares are to be sold by the Company. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "Shares."
The shares of common stock, par value $.01 per share, of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock." The Company and the Selling Stockholders are
hereinafter sometimes collectively referred to as the "Sellers."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-76842), including a prospectus, relating to the Shares. The registration
statement as amended at the time it becomes effective, including the information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended
(the "Securities Act"), is hereinafter referred to as the "Registration
Statement"; the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the "Prospectus."
The term "preliminary prospectus" as used in this Agreement
shall mean each preliminary prospectus included in the Registration Statement
prior to the time it becomes effective. If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"),
then any reference herein to the term "Registration Statement" shall be deemed
to include such Rule 462 Registration Statement.
Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") has
agreed to reserve a portion of the Shares to be purchased by it under this
Agreement for sale to the Company's directors, officers, employees and business
associates and other parties related to the Company (collectively,
"Participants"), as set forth in the Prospectus under the heading "Underwriters"
(the "Directed Share Program"). The Shares to be sold by Xxxxxx Xxxxxxx and its
affiliates pursuant to the Directed Share Program are referred to hereinafter as
the "Directed Shares." The Directed Shares will be sold to the Participants at
the public offering price pursuant to the terms of this Agreement. Any Directed
Shares not confirmed for purchase by any Participant by the end of the business
day on which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any 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, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as
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described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole. For purposes of this
Agreement, "Subsidiaries" shall include both direct and indirect
subsidiaries of the Company.
(d) Each Subsidiary of the Company has been duly incorporated
or formed, as the case may be, is validly existing as a corporation or
limited liability company, as the case may be, is in good standing
under the laws of the jurisdiction of its incorporation or formation,
as the case may be, has the power and authority to own its property and
to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Subsidiaries,
taken as a whole; all of the issued shares of capital stock and
membership interests of each Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable
and are owned directly by the Company or its wholly-owned subsidiary
MedSource Technologies, LLC, free and clear of all liens, encumbrances,
equities or claims, except pursuant to the existing senior credit
facility and the new senior credit facility as described in the
Prospectus under the captions "Management's Discussion and Analysis of
Financial Conditions and Results of Operations - Existing Senior Credit
Facility" and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations - New Senior Credit Facility";
there are no outstanding securities convertible into or exchangeable
for, or warrants rights or options to purchase from the Company or any
Subsidiary, or obligations of the Company or any Subsidiary to issue,
any shares of capital stock or membership interests in any Subsidiary.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Stockholders) outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable. No person is entitled to
preemptive or similar rights to acquire the Shares, and following
consummation of the transactions contemplated hereby, no person is
entitled to preemptive or similar rights to acquire any securities of
the Company. There are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase from the
Company, or obligations of
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the Company to issue, any shares of its Common Stock or any other class
of shares of capital stock of the Company, except as set forth in the
Prospectus.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in accordance with
the terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene (i) any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement
or other instrument binding upon the Company or any of its Subsidiaries
that is material to the Company and its Subsidiaries, taken as a whole,
or (ii) any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any Subsidiary that is
binding upon the Company or any of its Subsidiaries or any properties
of the Company and its Subsidiaries that are material to the Company
and its Subsidiaries taken as a whole, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by the Company of its
obligations under this Agreement, except such as has been obtained or
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its Subsidiaries is a party
or to which any of the properties of the Company or any of its
Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described, or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the
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Prospectus, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(n) The Company and its Subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except in each case described in the preceding clauses
(i), (ii) and (iii), where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries, taken as a
whole.
(o) The Company and its Subsidiaries are not subject to any
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties)
which would, singly or in the aggregate, have a material adverse effect
on the Company and its Subsidiaries, taken as a whole.
(p) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement. All persons who possess such rights have effectively waived
them with respect to the offering of the Shares.
(q) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the
Company and its Subsidiaries, taken as a whole, have not incurred any
material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business;
(ii) the Company has not purchased any of its outstanding capital
stock; (iii) the Company has not declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock, except in
each case as described in the Prospectus; and (iv) there has not been
any material change in the capital stock, short-term debt or long-term
debt of the Company and its Subsidiaries, taken as a whole, except in
each case described in the preceding clauses (i) through (iv), as
described in the Prospectus.
(r) The Company and each of its Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to
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all personal property owned by such entity which is material to the
business of the Company and its Subsidiaries, taken as a whole, free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries; and any real or personal property and buildings held
under lease by the Company and each of its Subsidiaries are held by
such entity under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the
use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries, in each case described in this clause
(r), except as described in the Prospectus.
(s) The Company and its Subsidiaries own or possess adequate
licenses or other rights to use the patents and patent applications,
copyrights, trademarks, service marks, trade names, technology and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary rights) necessary to conduct the business of
the Company and its Subsidiaries in all material respects in the manner
described in the Prospectus (collectively, the "Company Intellectual
Property"); neither the Company nor any of its Subsidiaries is
obligated to pay a royalty, grant a license, or provide other
consideration to any third party in connection with the Company
Intellectual Property other than as disclosed in the Prospectus; except
as disclosed in the Prospectus, (i) neither the Company nor any of its
Subsidiaries has received any notice of infringement or conflict with
(and the Company and its Subsidiaries do not know of any infringement
or conflict with) asserted rights of others with respect to any Company
Intellectual Property, (ii) the discoveries, inventions, products or
processes of the Company and its Subsidiaries referred to in the
Prospectus do not, to the best knowledge of the Company and its
Subsidiaries, infringe or conflict with any right or patent of any
third party, or any discovery, invention, product or process which is
the subject of a patent application filed by any third party, known to
the Company and its Subsidiaries, and (iii) no third party, including
any academic or governmental organization, possesses rights to the
Company Intellectual Property which, if exercised, could enable such
party to develop products competitive to those of the Company and its
Subsidiaries or could have a material adverse effect on the ability of
the Company and its Subsidiaries, taken as a whole, to conduct their
business in the manner described in the Prospectus.
(t) The Company and its Subsidiaries have duly and properly
filed or caused to be filed with the United States Patent and Trademark
Office (the "PTO") and applicable foreign and international patent
authorities all patent applications owned by the Company or any
Subsidiary (the "Company Patent Applications"); in connection with the
filing of the Company Patent Applications, the Company and its
Subsidiaries conducted reasonable investigations of the published
literature and patent references relating to the inventions claimed in
such applications; the Company and its Subsidiaries have complied with
the PTO's duty of candor and disclosure for the Company Patent
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Applications and have made no material misrepresentation in the Company
Patent Applications; the Company and its Subsidiaries are not aware of
any facts material to a determination of patentability regarding the
Company Patent Applications not called to the attention of the PTO; the
Company and its Subsidiaries are not aware of any facts not called to
the attention of the PTO which would preclude the grant of a patent for
the Company Patent Applications; and the Company and its Subsidiaries
have no knowledge of any facts which would preclude them from having
clear title to the Company Patent Applications.
(u) No material labor dispute with the employees of the
Company or any of its Subsidiaries exists, or, to the knowledge of the
Company or any Subsidiary, is imminent; and the Company and its
Subsidiaries are not aware of any existing, threatened or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect
on the Company and its Subsidiaries, taken as a whole.
(v) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in
which they are engaged; neither the Company nor any of its Subsidiaries
has been refused any insurance coverage sought or applied for; and
neither the Company nor any of its Subsidiaries has received notice
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(w) The Company and its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, including without limitation all such certificates,
authorizations and permits required by the United States Food and Drug
Administration or any other federal, state or foreign agencies or
bodies engaged in the regulation of medical devices, except for such
certificates and authorizations, the failure of which to possess would
not have a material adverse effect on the Company and its Subsidiaries
taken as a whole, and neither the Company nor any of its Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company
and its Subsidiaries, taken as a whole.
(x) The Company and each of its Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in
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accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) Each of Ernst & Young LLP, Bertram, Vallez, Xxxxxx &
Talbot, Ltd., PricewaterhouseCoopers LLP, Xxxxx X. Xxxxxx and Xxxxx
Xxxxxxxx, LLP are, and during the periods covered in their report
included in the Registration Statement and the Prospectus were,
independent accountants with respect to the Company and its
Subsidiaries as required by the applicable rules of the Commission.
(z) The consolidated financial statements of each of the
Company, Kelco Industries, Inc., National Wire and Stamping, Inc.,
Portlyn Corporation, Texcel, Inc., The MicroSpring Company, Inc., W.N.
Rushwood, Inc. and ACT Medical, Inc. (in each case, together with the
related notes thereto) included in the Registration Statement and the
Prospectus present fairly the consolidated financial position and
results of the operations of the respective companies as of the
respective dates indicated and for the respective periods specified;
and such consolidated financial statements (together with the related
notes thereto) have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods
involved except as otherwise stated therein. The selected financial
data included in the Registration Statement and the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited consolidated financial information
included in the Registration Statement and the Prospectus. The pro
forma consolidated financial information of the Company and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the pro forma consolidated financial position of the
Company after giving effect to the pro forma transactions and
assumptions described in the notes thereto as at the respective dates
thereof and have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial information;
and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(aa) Each material contract, agreement and license to which
the Company or any Subsidiary is bound is legal, valid, binding,
enforceable, and in full force and effect against the Company or such
Subsidiary, and to the knowledge of the Company and its Subsidiaries,
each other party thereto, except for such contracts, agreements and
licenses the failure of which to be legal, valid, binding, enforceable
or in full force and effect against the Company or such Subsidiary or
each other party thereto could not have a material adverse effect on
the Company and its Subsidiaries taken as a whole. Neither the Company
or any Subsidiary nor, to the Company's and its Subsidiaries'
knowledge, any other party is in breach or default with respect to any
such contract, agreement and license, and, to the Company's and its
Subsidiaries' knowledge, no event has occurred
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which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under
any such contract, agreement or license. No party has repudiated any
provision of any such contract, agreement or license.
(bb) No customer of the Company or its Subsidiaries that
accounted for more than 5% of the Company's consolidated revenues for
either the fiscal year ended June 30, 2001 or for the six months ended
December 30, 2001, has threatened or notified the Company or any
Subsidiary, orally or in writing, that such customer has terminated,
intends to terminate, or is considering terminating its business
relationship with the Company or its Subsidiaries or modifying such
relationships in a manner which is materially less favorable to the
Company and its Subsidiaries, taken as a whole.
(cc) The Shares have been approved for quotation on the Nasdaq
National Market subject to official notice of issuance and other
customary conditions.
(dd) The Registration Statement, the Prospectus and any
preliminary prospectus comply, and any amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection
with the Directed Share Program.
(ee) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
obtained, is required in connection with the offering of the Directed
Shares in any jurisdiction where the Directed Shares are being offered.
(ff) The Company has not offered, or caused Xxxxxx Xxxxxxx or
its affiliates to offer, Shares to any person pursuant to the Directed
Share Program with the intent to unlawfully influence (i) a customer or
supplier of the Company or any Subsidiary to alter the customer's or
supplier's level or type of business with the Company or any
Subsidiary, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or any Subsidiary or
their products.
(gg) All persons who have options to purchase shares of
capital stock of the Company have executed agreements that contain (i)
"lock-up" provisions with transfer restrictions substantially similar
to those set forth in the agreement attached as Exhibit A hereto or
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(ii) provisions whereby such option holders agree, if requested by the
Underwriters, to execute "lock-up" agreements with transfer
restrictions substantially similar to those set forth in the agreement
attached as Exhibit A hereto.
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2. Representations and Warranties of the Selling Stockholders. Each of
the Selling Stockholders, severally and not jointly, represents and warrants to
and agrees with each of the Underwriters that:
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(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(b) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, this Agreement, the Custody Agreement signed by such Selling
Stockholder and ______________, as Custodian, relating to the deposit
of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and the Power of Attorney appointing certain individuals as
such Selling Stockholder's attorneys-in-fact to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "Power of Attorney") will not contravene
any provision of applicable law, the certificate of incorporation or
by-laws of such Selling Stockholder (if such Selling Stockholder is a
corporation), or any agreement or other instrument binding upon such
Selling Stockholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such
Selling Stockholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required
for the performance by such Selling Stockholder of its obligations
under this Agreement or the Custody Agreement or Power of Attorney of
such Selling Stockholder, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares.
(c) On the Option Closing Date, such Selling Stockholder will
have valid title to, or a valid "security entitlement" within the
meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by such Selling Stockholder free and
clear of all security interests, claims, liens, equities or other
encumbrances and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney and to sell, transfer and deliver
the Shares to be sold by such Selling Stockholder or a security
entitlement in respect of such Shares.
(d) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Stockholder and
are valid and binding agreements of such Selling Stockholder.
(e) Delivery of the Shares to be sold by such Selling
Stockholder and payment therefor pursuant to this Agreement will pass
valid title to such Shares, free and clear of any adverse claim within
the meaning of Section 8-102 of the New York Uniform Commercial Code,
to each Underwriter who has purchased such Shares without notice of an
adverse claim.
(f) All information relating to such Selling Stockholder
furnished to the Company in writing by or on behalf of such Selling
Stockholder for use in the Registration Statement or the Prospectus is,
and on the Option Closing Date will be, true, correct, and complete,
and does not, and on the Option Closing Date will
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not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make such information not misleading.
3. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "Purchase Price").
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, each Seller
severally and not jointly, agrees to sell to the Underwriters the Additional
Shares, and the Underwriters shall have the right to purchase, severally and not
jointly, up to 1,125,000 Additional Shares, each at the Purchase Price. You may
exercise this right on behalf of the Underwriters in whole or from time to time
in part by giving written notice of each election to exercise the option not
later than 30 days after the date of this Agreement. Any exercise notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Each purchase date must be at
least one business day after the written notice is given and may not be earlier
than the Closing Date (as defined below) nor later than ten business days after
the date of such notice. Additional Shares may be purchased as provided in this
Section 3 and Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. On any
Option Closing Date (as defined below), each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased on such
Option Closing Date as the number of Firm Shares set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the
period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder, (B) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing, provided that the recipient of such shares of Common Stock
executes and delivers to you on or before the date of such issuance a "lock-up"
agreement in the form of Exhibit A, (C) the grant by the Company of options to
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purchase common shares pursuant to the Company's 1999 Stock Plan, provided that
such options are not
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exercisable within such 180-day period unless the recipient of shares of Common
Stock issuable upon exercise of such options executes and delivers to you on or
before the date of such issuance a "lock-up" agreement in the form of Exhibit A
---------
or (D) transactions by any person other than the Company relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the offering of the Shares. In addition, each Selling Stockholder,
agrees that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of
the Underwriters, it will not, during the period ending 180 days after the date
of the Prospectus, make any demand for, or exercise any right with respect to,
the registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing (i) gifts and transfers by will
or intestacy or (ii) transfers to (A) a Selling Stockholder's members, partners,
affiliates or immediate family or (B) a trust, the beneficiaries of which are
such Selling Stockholder and/or members of such Selling Stockholder's immediate
family, shall not be prohibited by this agreement; provided, that (x) the donee
or transferee agrees in writing to be bound by the foregoing in the same manner
as it applies to the undersigned and (y) if the donor or transferor is a
reporting person subject to Section 16(a) of the Securities Exchange Act of 1934
(the "Exchange Act"), any gifts or transfers made in accordance with this
paragraph shall not require such person to, and such person shall not
voluntarily, file a report of such transaction under the Exchange Act (other
than a filing on a Form 5 made after the expiration of the 180-day period
referred to above). "Immediate family" shall mean spouse, lineal descendants,
father, mother, brother or sister of the transferor and father, mother, brother
or sister of the transferor's spouse.
4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at $_____________ a share (the "Public Offering Price") and to certain
dealers selected by you at a price that represents a concession not in excess of
$______ a share under the Public Offering Price, and that any Underwriter may
allow, and such dealers may re-allow, a concession, not in excess of $_____ a
share, to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on ____________, 2002,
[T+3] or at such other time on the same or such other date, not later than
_________, 2002,[+5] as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "Closing Date." The Closing
of the offering and sale of the Firm Shares will be held at the offices of Ropes
& Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000-0000.
Payment for any Additional Shares to be sold by each Seller
shall be made to such Seller in Federal or other funds immediately available in
New York City against
12
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
corresponding notice described in Section 3 or at such other time on the same or
on such other date, in any event not later than _______, 2002, [green shoe
expiration +10] as shall be designated in writing by you. The time and date of
any such payment are hereinafter referred to as an "Option Closing Date." The
Closing of the offering and sale of the Additional Shares will be held at the
offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000-0000.
The Firm Shares and Additional Shares shall be registered in
such names and in such denominations as you shall request in writing not later
than one full business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The
obligations of the Sellers to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date and the Option Closing Date, as the case may be, are subject to
the condition that the Registration Statement shall have become effective not
later than [_____] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date and, if any, the Option Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its Subsidiaries, taken as a
whole, from that set forth in the Prospectus that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
and, if any, the Option Closing Date, a certificate, dated such date
and signed by an executive officer of the Company, to the effect set
forth in Section 6(a)(i) above
13
and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of such
date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before such date.
The officer signing and delivering such certificate
may rely upon the best of his or her knowledge as to proceedings
threatened.
(c) The Underwriters shall have received on the Closing Date
and, if any, the Option Closing Date, an opinion of Jenkens & Xxxxxxxxx
Xxxxxx Xxxxxx LLP, outside counsel for the Company, dated such date, to
the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the State of Delaware, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction set
forth on a schedule to such opinion;
(ii) each Subsidiary of the Company has been duly
incorporated or formed, as the case may be, is validly
existing as a corporation or limited liability company, as the
case may be, is in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case
may be, has the power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction set forth on a schedule to such opinion;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iv) the shares of Common Stock (including the Shares
to be sold by the Selling Stockholders) outstanding prior to
the issuance of the Shares to be sold by the Company have been
duly authorized and are validly issued, fully paid and
non-assessable;
(v) all of the issued shares of capital stock of, or
membership interests in, each Subsidiary of the Company have
been duly and validly authorized and issued, are fully paid
and non-assessable, and are to such counsel's knowledge, owned
directly by the Company or the Company's wholly owned
subsidiary MedSource Technologies, LLC, free and clear of all
liens, encumbrances, equities or claims, except pursuant to
the existing senior credit facility and the new senior credit
facility described in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Conditions
and Results of Operations - Existing Senior Credit Facility"
and "Management's Discussion and Analysis of Financial
Conditions and Results of Operations - New Senior Credit
Facility";
14
(vi) the Shares to be sold by the Company have been
duly authorized and, when issued, paid for and delivered in
accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar
rights granted by statute, in the Company's certificate of
incorporation or bylaws or, to such counsel's knowledge,
pursuant to a written contract or agreement;
(vii) to the knowledge of such counsel, except as
described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any
person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company or to require the
Company to include such securities with the Shares registered
pursuant to the Registration Statement, and all persons
described in the Prospectus as possessing such rights have
effectively waived them with respect to the offering of the
Shares;
(viii) this Agreement has been duly authorized,
executed and delivered by the Company;
(ix) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not materially contravene (A) any
provision of applicable law or the certificate of
incorporation or by-laws of the Company or, to such counsel's
knowledge, any agreement or other instrument binding upon the
Company or any of its Subsidiaries that is filed as an exhibit
to the Registration Statement or, (B) to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or
any Subsidiary that is binding upon the Company or any of its
Subsidiaries or any properties of the Company and its
Subsidiaries that are material to the Company and its
Subsidiaries taken as a whole, and no material consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as has been obtained or such as may be
required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares;
(x) the statements (A) in the Prospectus under the
captions "Risk Factors -- If our manufacturing processes,
products and services fail to meet the highest quality
standards, our reputation could be damaged and our results of
operations could be harmed," "Risk Factors -- We and our
customers are subject to governmental health, safety and
consumer product regulations that are burdensome and carry
significant penalties for noncompliance," "Risk Factors -- Our
facilities are subject to environmental regulation that
exposes us to potential financial liability,"
15
"Risk Factors -- There may be sales of a substantial amount of
our common stock 180 days after this offering, or earlier, by
our stockholders, and these sales could cause our stock price
to fall," "Risk Factors -- Provisions in our charter documents
and Delaware law may deter takeover efforts that you feel
would be beneficial to stockholder value," "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations - New Senior Credit Facility," "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations - Existing Senior Credit Facility," "Management's
Discussion and Analysis of Financial Conditions and Results of
Operations - Senior Subordinated Notes," "Business -
Intellectual Property" (as to the description of an employment
and license agreement with one of the Company's employees),
"Business - Quality," "Business - Government Regulation,"
"Related Party Transactions," "Shares Eligible for Future
Sale," "Description of Capital Stock" and "Underwriting" (as
to the description of the Underwriting Agreement) and (B) in
the Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal
matters, documents or proceedings, as the case may be, and
fairly summarize them;
(xi) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any
of the properties of the Company or any of its Subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xii) the Company is not and, after giving effect to
the offering and sale of the Shares and, assuming the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xiii) nothing has come to the attention of such
counsel that causes such counsel to believe that (A) the
Registration Statement or the Prospectus (except for the
financial statements and financial schedules and other
financial, accounting and statistical data included therein,
as to which such counsel need not express any belief) do not
comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder, (B) the
Registration Statement or the prospectus included therein
(except for the financial statements and financial schedules
and other financial, accounting and statistical data included
therein, as to which such counsel
16
need not express any belief) at the time the Registration
Statement became effective contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or (C) the Prospectus (except for the financial
statements and financial schedules and other financial,
accounting and statistical data included therein, as to which
such counsel need not express any belief) as of its date or as
of the Closing Date contained or contains an untrue statement
of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(d) The Underwriters shall have received on each applicable
Option Closing Date an opinion of Xxxxx Xxxxxx, Esq., counsel for X.X.
Xxxxxxx Mezzanine Fund, L.P. ("Whitney"), dated the Option Closing
Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of Whitney;
(ii) the execution and delivery by Whitney of, and
the performance by Whitney of its obligations under, this
Agreement and the Custody Agreement and Powers of Attorney of
Whitney will not contravene any provision of applicable law,
or the organizational documents or, to such counsel's
knowledge, any agreement or other instrument binding upon
Whitney or, to such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court having
jurisdiction over Whitney, and no consent, approval,
authorization or order of, or qualification with, any New York
State or U.S. Federal governmental body or agency is required
for the performance by Whitney of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of
Whitney, except such as may be required by the securities or
Blue Sky laws of the various states in connection with offer
and sale of the Shares;
(iii) to such counsel's knowledge, Whitney has valid
title to, or a valid security entitlement in respect of, the
Shares to be sold by Whitney on the Option Closing Date free
and clear of all security interests, claims, liens, equities
and other encumbrances;
(iv) Whitney has the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and the Custody Agreement and Power of Attorney of
Whitney and to sell, transfer and deliver the Shares to be
sold by Whitney or a security entitlement in respect of such
Shares;
17
(v) the Custody Agreement and the Power of Attorney
of Whitney have been duly authorized, executed and delivered
by Whitney and are valid and binding agreements of Whitney;
and
(vi) delivery of stock certificates representing the
Shares to be sold by Whitney, endorsed to the Underwriters and
payment therefor pursuant to this Agreement will pass valid
title to such Shares, free and clear of any adverse claim
within the meaning of Section 8-102 of the New York Uniform
Commercial Code, to each Underwriter who has purchased such
Shares without notice of an adverse claim within the meaning
of Section 8-105 thereof.
(e) The Underwriters shall have received on each applicable
Option Closing Date an opinion of White & Case, LLP, counsel for German
American Capital Corporation ("GACC"), dated the Option Closing Date,
to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of GACC;
(ii) the execution and delivery by GACC of, and the
performance by GACC of its obligations under, this Agreement
and the Custody Agreement and Powers of Attorney of GACC will
not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of GACC or, to such
counsel's knowledge, any agreement or other instrument binding
upon GACC or, to such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court having
jurisdiction over GACC, and no consent, approval,
authorization or order of, or qualification with, any New York
State or U.S. Federal governmental body or agency is required
for the performance by GACC of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of
GACC, except such as may be required by the securities or Blue
Sky laws of the various states in connection with offer and
sale of the Shares;
(iii) to such counsel's knowledge, GACC has valid
title to, or a valid security entitlement in respect of, the
Shares to be sold by GACC on the Option Closing Date free and
clear of all security interests, claims, liens, equities and
other encumbrances;
(iv) GACC has the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and the Custody Agreement and Power of Attorney of
GACC and to sell, transfer and deliver the Shares to be sold
by such Selling Stockholder or a security entitlement in
respect of such Shares;
(v) the Custody Agreement and the Power of Attorney
of GACC have been duly authorized, executed and delivered by
GACC and are valid and binding agreements of GACC; and
18
(vi) delivery of stock certificates representing the
Shares to be sold by GACC, endorsed to the Underwriters and
payment therefor pursuant to this Agreement will pass valid
title to such Shares, free and clear of any adverse claim
within the meaning of Section 8-102 of the New York Uniform
Commercial Code, to each Underwriter who has purchased such
Shares without notice of an adverse claim within the meaning
of Section 8-105 thereof.
(f) The Underwriters shall have received on the Closing Date
and, if any, the Option Closing Date, an opinion dated such date of
Ropes & Xxxx, counsel for the Underwriters, covering the matters
referred to in Sections 6(c)(vi), 6(c)(viii), 6(c)(x) (but only as to
the statements in the Prospectus under "Description of Capital Stock"
and "Underwriting") and 6(c)(xiii) above.
With respect to Section 6(c)(xiii) and Section 6(f) (with
respect to the matters in Section 6(c)(xiii)) above, such counsel may state that
their beliefs are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
and review and discussion of the contents thereof, but are without independent
check or verification, except as specified.
The opinions of Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP, Xxxxx
Xxxxxx, Esq. and White & Case, LLP described in Sections 6(c), 6(d) and 6(e)
above, respectively, shall be rendered to the Underwriters at the request of the
Company or one or more of the Selling Stockholders, as the case may be, and
shall so state therein.
(g) The Underwriters shall have received, on each of the date
hereof, the Closing Date and, if any, the Option Closing Date, a letter
dated such date in form and substance satisfactory to the Underwriters,
from each of Ernst & Young LLP, Bertram, Vallez, Xxxxxx & Xxxxxx, Ltd.,
PricewaterhouseCoopers LLP, Xxxxx X. Xxxxxx and Xxxxx Xxxxxxxx, LLP,
independent public accountants, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain stockholders, officers and
---------
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities of
the Company, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date and the Option Closing Date,
as the case may be.
(i) The Underwriters shall have received on the Option Closing
Date a certificate dated the Option Closing Date and signed by each of
the Selling Stockholders to the effect that the representations and
warranties of such Selling Stockholder contained in this Agreement are
true and correct as of the Option
19
Closing Date and that such Selling Stockholder has complied with all of
the agreements and satisfied all of the conditions to be performed or
satisfied on the part of such Selling Stockholder hereunder on or
before the Option Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such other documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
20
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request, provided that in connection therewith the Company
shall not be required to qualify the Shares in any jurisdiction where
it would require the Company to qualify as a foreign corporation,
become subject to taxation, or file a general consent to service of
process.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending ________, 2003 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of the
Sellers' obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's
accountants and counsel for the Selling Stockholders in connection with
the registration and delivery of the Shares under the Securities Act
and all other fees or expenses in connection with the preparation and
filing of the Registration Statement, any preliminary prospectus, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related
to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost
of printing or producing any Blue Sky memorandum in connection with the
offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification
and in connection with the Blue Sky memorandum, (iv) all filing fees
and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in
connection with the road show, (ix) the document production charges and
expenses associated with creating
21
and printing this agreement, (x) all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other takes, if
any, incurred by the Underwriters in connection with the Directed Share
Program, and (xi) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 8 entitled
"Indemnity and Contribution," Section 9 entitled "Directed Share
Program Indemnification," and the last paragraph of Section 11 below,
the Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel; stock transfer taxes payable
on resale of any of the Shares by them; and any advertising expenses
connected with any offers they may make.
(g) To place stop transfer orders on any Directed Shares that
have been sold to Participants who are subject to the three month
restriction on sale, transfer, assignment, pledge or hypothecation
imposed by NASD Regulation, Inc. under its Interpretative Material
2110-1 on free-riding and withholding to the extent necessary to ensure
compliance with the three month restrictions.
(h) To comply with all applicable securities and other
applicable laws, rules and regulations in each jurisdiction in which
the Directed Shares are offered in connection with the Directed Share
Program.
(i) To enforce the Company's rights under the agreements
referred to in Section 1(gg) above (i) to restrict the transfer of
securities by such option holders during the 180-day period following
the Closing Date and (ii) to obtain executed copies of "lock-up"
agreements in the form of Exhibit A from each option holder who
exercises an option during the 180-day period following the Closing
Date.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of any Underwriter
within the meaning of Rule 405 under the Securities Act, from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar
as such losses, claims, damages or liabilities arise out of or are
caused by any such untrue statement or omission or alleged untrue
22
statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein; provided, however, that the
-------- -------
foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(b) Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act and each affiliate of any Underwriter within the meaning of Rule
405 under the Securities Act, and the Company, its directors, its
officers who sign the Registration Statement and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to information relating to such Selling Stockholder furnished
in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto. The liability of
each Selling Stockholder under this Agreement shall be limited to an
amount equal to the net proceeds received by the Selling Stockholder
from the offering of the Additional Shares sold by such Selling
Stockholder, except with respect to (i) any breach of the
representations and warranties set forth in Sections 2(a), 2(b), 2(c),
2(d) or 2(e) hereof, (ii) any intentional misrepresentation or (iii)
fraud.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the
Company or such Selling Stockholder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities
23
(including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action
or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a), 8(b) or 8(c),
such person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel chosen by the indemnifying party and
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate
in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if
any, who control any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act or who are
affiliates of any Underwriter within the meaning of Rule 405 under the
Securities Act, (ii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors,
its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either such Section
and (iii) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Selling Stockholders and all
persons, if any, who control any Selling Stockholder within the meaning
of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm
for the Underwriters and such control persons and affiliates of any
Underwriters, such firm shall be designated in writing by Xxxxxx
Xxxxxxx. In the case of any such separate firm for the Company, and
such directors, officers and
24
control persons of the Company, such firm shall be designated in
writing by the Company. In the case of any such separate firm for the
Selling Stockholders and such control persons of any Selling
Stockholders, such firm shall be designated in writing by the persons
named as attorneys-in-fact for the Selling Stockholders under the
Powers of Attorney. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(e) To the extent the indemnification provided for in Section
8(a), 8(b) or 8(c) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 8(e)(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 8(e)(i)
above but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by
the Sellers on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of
the Shares (before deducting expenses) received by each Seller and the
total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of
the Prospectus (or if the over-allotment has been exercised, in each
case as set forth in the Prospectus under the caption "Underwriting"),
bear to the aggregate Public Offering Price of the Shares. The relative
fault of the Sellers on the one
25
hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Sellers or
by the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(f) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in Section 8(e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(g) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements
of the Company and the Selling Stockholders contained in this Agreement
shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter, any person controlling any Underwriter or
any affiliate of any Underwriter, any Selling Stockholder or any person
controlling any Selling Stockholder, or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
9. Directed Share Program Indemnification.
(a) The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxxx and its affiliates within the meaning of Rule 405 under the
Securities Act and each person, if any, who controls Xxxxxx Xxxxxxx or
its affiliates within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act ("Xxxxxx Xxxxxxx
Entities"), from and against any and all losses, claims,
26
damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in
any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share
Program, or caused by any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of Directed Shares that the
Participant has agreed to purchase; or (iii) related to, arising out
of, or in connection with the Directed Share Program other than losses,
claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or
gross negligence of Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental
investigation) shall be instituted involving any Xxxxxx Xxxxxxx Entity
in respect of which indemnity may be sought pursuant to Section 9(a),
the Xxxxxx Xxxxxxx Entity seeking indemnity shall promptly notify the
Company in writing and the Company, upon request of the Xxxxxx Xxxxxxx
Entity, shall retain counsel chosen by the Company and reasonably
satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx
Xxxxxxx Entity and any other indemnified party that the Company may
designate in such proceeding and shall pay the fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
Xxxxxx Xxxxxxx Entity shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of
such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Company
and the Xxxxxx Xxxxxxx Entity and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interests between them. The Company shall not, in respect of
the legal expenses of the Xxxxxx Xxxxxxx Entities in connection with
any proceeding or related proceedings in the same jurisdiction, be
liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Xxxxxx Xxxxxxx Entities. Any
such firm for the Xxxxxx Xxxxxxx Entities shall be designated in
writing by Xxxxxx Xxxxxxx. The Company shall not be liable for any
settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the Company agrees to indemnify the Xxxxxx Xxxxxxx Entities
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time a
Xxxxxx Xxxxxxx Entity shall have requested the Company to reimburse it
for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the Company agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by the Company of the aforesaid request and (ii) the
Company shall not have reimbursed the Xxxxxx Xxxxxxx Entity in
accordance with such request prior to the date of such settlement. The
Company shall not, without the prior written consent of
27
Xxxxxx Xxxxxxx, effect any settlement of any pending or threatened
proceeding in respect of which any Xxxxxx Xxxxxxx Entity is or could
have been a party and indemnity could have been sought hereunder by
such Xxxxxx Xxxxxxx Entity, unless such settlement includes an
unconditional release of the Xxxxxx Xxxxxxx Entities from all liability
on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section
9(a) is unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then the Company, in lieu of indemnifying the Xxxxxx Xxxxxxx
Entity thereunder, shall contribute to the amount paid or payable by
the Xxxxxx Xxxxxxx Entity as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Xxxxxx Xxxxxxx Entities on the other hand from the offering of the
Directed Shares or (ii) if the allocation provided by clause 9(c)(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 9(c)(i) above but also the relative fault of the Company on the
one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in
connection with the offering of the Directed Shares shall be deemed to
be in the same respective proportions as the net proceeds from the
offering of the Directed Shares (before deducting expenses) and the
total underwriting discounts and commissions received by the Xxxxxx
Xxxxxxx Entities for the Directed Shares, bear to the aggregate Public
Offering Price of the Shares. If the loss, claim, damage or liability
is caused by an untrue or alleged untrue statement of a material fact,
the relative fault of the Company on the one hand and the Xxxxxx
Xxxxxxx Entities on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement or
the omission or alleged omission relates to information supplied by the
Company or by the Xxxxxx Xxxxxxx Entities and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it
would not be just or equitable if contribution pursuant to this Section
9 were determined by pro rata allocation (even if the Xxxxxx Xxxxxxx
Entities were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 9(c). The amount paid or payable
by the Xxxxxx Xxxxxxx Entities as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by the
Xxxxxx Xxxxxxx Entities in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
Section 9, no Xxxxxx Xxxxxxx Entity shall be required to contribute any
amount in excess of the amount by which the total price at which the
Directed Shares distributed to the public were offered to the public
exceeds
28
the amount of any damages that such Xxxxxx Xxxxxxx Entity has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The remedies provided for in
this Section 9 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Xxxxxx Xxxxxxx Entity
at law or in equity.
(e) The indemnity and contribution provisions contained in
this Section 9 shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Xxxxxx Xxxxxxx Entity or the
Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Directed
Shares.
10. Termination. The Underwriters may terminate this Agreement
by notice given by you to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on, or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange
or the Chicago Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market,
(iii) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (iv) any moratorium on
commercial banking activities shall have been declared by Federal or New York
State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that,
in your judgment, is material and adverse and which, singly or together with any
other event specified in this clause (v), makes it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or an Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any
29
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders. In any such case either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. If, on an Option Closing Date, any Underwriter or Underwriters shall
fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
Option Closing Date, the non-defaulting Underwriters shall have the option to
(i) terminate their obligation hereunder to purchase the Additional Shares to be
sold on such Option Closing Date or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of any Seller to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason any Seller shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York that
apply to contracts made and performed entirely within such state.
14. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
30
Very truly yours,
MEDSOURCE TECHNOLOGIES, INC.
By:
---------------------------------
Name:
Title:
The Selling Stockholders named in
Schedule II hereto, acting
severally:
By:
---------------------------------
Name:
Title: Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
FIRST UNION SECURITIES, INC.
XXXXXX XXXXXX PARTNERS LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
--------------------------
Name:
Title:
SCHEDULE I
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
First Union Securities, Inc.
Xxxxxx Xxxxxx Partners LLC
---------------
Total................................ 7,500,000
---------------
SCHEDULE II
Percentage of Maximum Number of
Additional Shares To Additional Shares To
Selling Stockholders Be Sold Be Sold
-------------------- ------- -------
X.X. Xxxxxxx Mezzanine Fund, L.P. 37.5% 243,750
German American Capital Corporation 12.5% 81,250
----- -------
Total 50% 325,000
===== =======
Exhibit A
[FORM OF LOCK-UP LETTER]
________________, 2001
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with MedSource Technologies, Inc., a Delaware
corporation (the "Company") providing for the public offering (the "Public
Offering") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"Underwriters"), of shares (the "Shares") of the common stock, par value $.01
per share, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement, or (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
Notwithstanding the foregoing, (i) gifts and transfers by will or
intestacy or (ii) transfers to (A) the undersigned's members, partners,
affiliates or immediate family or (B) a trust, the beneficiaries of which are
the undersigned and/or members of the undersigned's immediate family, shall not
be prohibited by this agreement; provided, that (x) the donee or transferee
agrees in writing to be bound by the foregoing in the same manner as it applies
to the undersigned and (y) if the donor or transferor is a reporting person
subject to Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), any gifts or transfers made in accordance with this paragraph shall not
require such person to, and such person shall not voluntarily, file a report of
such transaction under the Exchange Act (other than a filing on a Form 5 made
after the expiration of the 180-day period referred to above). "Immediate
family" shall mean spouse, lineal descendants, father, mother, brother or sister
of the transferor and father, mother, brother or sister of the transferor's
spouse.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
---------------------------
(Name)
---------------------------
(Address)
