EXHIBIT 1.1
Xxxxxxxxxx & Xxxxx
10/23/95
2,765,493 Shares
CHARTER POWER SYSTEMS, INC.
Common Stock
UNDERWRITING AGREEMENT
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October ___, 1995
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXX, XXXXXXXX & COMPANY, L.P.
As representatives of the
several U.S. underwriters
named in Schedule I hereto and
the several international managers
named in Schedule II hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Charter Power Systems, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined below) an
aggregate of 200,000 shares of its common stock, $0.01 par value ("Common
Stock"), and certain stockholders of the Company named in Schedules III and IV
hereto (the "Selling Stockholders" and, collectively with the Company, the
"Sellers") severally propose to sell to the several Underwriters an aggregate of
2,565,493 shares of Common Stock of the Company. The 200,000 shares of Common
Stock to be issued and sold by the Company are hereinafter called the Company
Shares. The 2,565,493 shares of Common Stock to be sold by the Selling
Stockholders are hereinafter called the Stockholder Shares. The Company Shares
and the Stockholder Shares are hereinafter called the Firm Shares.
It is understood that, subject to the conditions hereinafter stated,
2,052,395 Stockholder Shares (the "U.S. Stockholder Shares") and 160,000 Company
Shares (the "U.S. Company Shares" and, together with the U.S. Stockholder
Shares, the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. Underwriters") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. Underwriters and International Managers of even date
herewith), and 513,098 Stockholder Shares (the "International Stockholder
Shares") and 40,000 Company Shares (the "International Company Shares" and,
together with the International Stockholder Shares, the "International Firm
Shares") will be sold to the several International Managers named in Schedule II
hereto (the "International Managers") in connection with the offering and sale
of such International Firm Shares outside the United States and Canada to
persons other than United States and Canadian Persons. Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation and Xxxxxxxxx, Xxxxxxxx & Company, L.P. shall
act as representatives (in such capacity, the "U.S. Representatives") of the
several U.S. Underwriters, and Xxxxxxxxx Lufkin & Xxxxxxxx Securities
Corporation and Xxxxxxxxx, Xxxxxxxx & Company, L.P. shall act as representatives
(in such capacity, the "International Representatives") of the several
International Managers. The U.S. Underwriters and the International Managers
are hereinafter collectively referred to as the "Underwriters". Notwithstanding
anything to the contrary contained herein, in the event that International
Managers are not selected, all of the Shares to be purchased and sold hereunder
shall be purchased by and sold to the U. S. Underwriters and all of the Shares
to be purchased and sold hereunder shall be U. S. Stockholder Shares or U. S.
Company Shares, as applicable. In the event that no International Managers are
selected, all of the Shares to be purchased and all of the Stockholder Shares to
be sold hereunder shall be set forth on Schedules I and III, respectively, and
the Share amounts set forth in this paragraph shall be deemed to be accordingly
modified.
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 414,824 shares of Common Stock (the
"Additional Shares"), if requested by the U.S. Underwriters as provided in
Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively called the Shares. The Company and the Selling Stockholders are
hereinafter collectively referred to as the Sellers.
1. Registration Statement and Prospectus. The Company has prepared
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and filed with the Securities and
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Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively called the "Act"), a registration statement
on Form S-3 including a prospectus relating to the Shares, which may be amended.
Such registration statement and the prospectus constituting a part thereof
(including in each case all documents incorporated or deemed to be incorporated
by reference therein and the information, if any, deemed to be a part thereof
pursuant to Rule 430A under the Act), as from time to time amended or
supplemented pursuant to the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively. All references in
this Agreement to financial statements and schedules and other information which
is "contained," "included," "stated," "disclosed" or "described" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
2. Agreements to Sell and Purchase. The Company hereby agrees to
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issue and sell the U.S. Company Shares to the several U.S. Underwriters, and
each Selling Stockholder, severally and not jointly, hereby agrees to sell to
the several U.S. Underwriters the number of U.S. Stockholder Shares set forth
opposite such Selling Stockholder's name in Schedule III hereto, and each of the
U.S. Underwriters, upon the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions, agrees,
severally and not jointly, to purchase from the Company and such Selling
Stockholder at a price per share of $___ (the "Purchase Price"), the respective
number of U.S. Company Shares and U.S. Stockholder Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the number of U.S. Company Shares
and U.S. Stockholder Shares to be sold by the Company or by such Selling
Stockholder, as the case may be, as the number of U.S. Firm Shares set forth in
Schedule I hereto opposite the
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name of such U.S. Underwriter bears to the total number of U.S. Firm Shares set
forth opposite the names of all U.S. Underwriters in Schedule I hereto.
The Company hereby agrees to issue and sell the International Company
Shares to the several International Managers, and each Selling Stockholder,
severally and not jointly, hereby agrees to sell to the several International
Managers the number of International Stockholder Shares set forth opposite such
Selling Stockholder's name in Schedule IV hereto, and each of the International
Managers, upon the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, agrees, severally and not
jointly, to purchase from the Company and such Selling Stockholder at the
Purchase Price the respective number of International Company Shares and
International Stockholder Shares (subject to such adjustments to eliminate
fractional shares as the International Representatives may determine) that bears
the same proportion to the number of International Company Shares and
International Stockholder Shares to be sold by the Company or by such Selling
Stockholder, as the case may be, as the number of International Firm Shares set
forth in Schedule II hereto opposite the name of such International Manager
bears to the total number of International Firm Shares set forth opposite the
names of all International Managers in Schedule II hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the U.S. Underwriters the Additional Shares and the U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
414,824 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The U.S. Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. The U.S. Representatives shall give any such notice on
behalf of the U.S. Underwriters and such notice shall specify the aggregate
number of Additional Shares to be purchased pursuant to such exercise and the
date for payment and delivery thereof. The date specified in any such notice
shall be a business day (i) no earlier than the Closing Date (as hereinafter
defined), (ii) no later than ten business days after such notice has been given
and (iii) no earlier than two business days after such
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notice has been given. If any Additional Shares are to be purchased, each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Company the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as the U.S. Representatives may determine) which bears the same
proportion to the total number of Additional Shares to be purchased from the
Company as the number of U.S. Firm Shares set forth opposite the name of such
U.S. Underwriter in Schedule I bears to the total number of U.S. Firm Shares.
The Company hereby agrees and the Company shall, concurrently with the
execution of this Agreement, deliver an agreement executed by each stockholder
listed on Annex I, pursuant to which each such stockholder, severally and not
jointly, agrees not to offer, sell, contract to sell, grant any option to
purchase or otherwise dispose of any Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or, in any manner, transfer
all or a portion of the economic consequences associated with the ownership of
any Common Stock, except to the Underwriters pursuant to this Agreement, for a
period of 120 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing stock option plans and (ii) the Company may
issue shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof.
3. Terms of Public Offering. The Sellers are advised by you that the
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Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
Each U.S. Underwriter hereby makes to and with the Company the
representations and agreements of such U.S. Underwriter contained in the fifth
paragraph of Section 3 of the Agreement Between U.S. Underwriters and
International Managers of even date herewith. Each International Manager hereby
makes to and with the Company the representations and agreements of such
International Manager contained in the seventh, eighth, ninth and tenth
paragraphs of Section 3 of such Agreement.
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4. Delivery and Payment. Delivery to the Underwriters of and payment
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for the Firm Shares shall be made at 10:00 A.M., New York City time, on the
third business day (the "Closing Date") following the date of the public
offering, at such place as you shall designate. The Closing Date and the
location of delivery of and the form of payment for the Firm Shares may be
varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the U.S. Underwriters shall be made at such place as the U.S.
Representatives shall designate at 10:00 A.M., New York City time, on the date
specified in the applicable exercise notice given by you pursuant to Section 2
(an "Option Closing Date"). Any such Option Closing Date and the location of
delivery of and the form of payment for such Additional Shares may be varied by
agreement between the U.S. Representatives and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by
certified or official bank checks or wire transfers (at the discretion of the
U.S. Representatives) payable to the order of the Company and the Custodian (as
hereinafter defined) on behalf of the Selling Stockholders.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time (to the extent that the
Registration Statement has not become effective prior to the execution and
delivery of this Agreement).
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the
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Registration Statement has become effective and when any post-effective
amendment to it becomes effective, (ii) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares
for offering or sale in any jurisdiction, or the initiation of any
proceeding for such purposes, and (iv) of the happening of any event during
the period referred to in paragraph (e) below which makes any statement of
a material fact made in the Registration Statement or the Prospectus untrue
or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal or
lifting of such order at the earliest possible time.
(c) To furnish to you, without charge, three signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including, in each case, all exhibits filed therewith or
incorporated by reference therein and other documents incorporated or
deemed to be incorporated by reference therein, and to furnish to you and
each Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which you shall
not previously have been advised or to which you shall reasonably object;
and to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause the
same to become promptly effective.
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(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus as such Underwriter
or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters
it becomes 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 it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such
consents to service of process or other documents as may be necessary in
order to effect such registration or qualification; provided, that, the
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Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not so qualified or required to file such a consent.
(h) To make generally available to its stockholders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement (but
in no event commencing later than 90
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days after such date) which shall satisfy the provisions of Section 11(a)
of the Act and Rule 158 thereunder, and to advise you in writing when such
statement has been so made available.
(i) During the five-year period following the date of this Agreement,
to furnish to you as soon as available a copy of each report or other
publicly available information of the Company mailed to the holders of
Common Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(j) To pay all reasonable costs, expenses, fees and taxes incident to
(i) the preparation (excluding the fees and disbursements of counsel for
the Underwriters), printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the printing and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Shares (including in each case any disbursements of counsel for the
Underwriters relating to such printing and delivery), (iv) the registration
or qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the several states (including in each case the fees and
disbursements of counsel for the Underwriters relating to such registration
or qualification and memoranda relating thereto), (v) filing fees related
to filings and clearance with the National Association of Securities
Dealers, Inc. in connection with the offering, (vi) delisting of the Common
Stock from the American Stock Exchange and the listing of the Common Stock
on The Nasdaq National Market, (vii) furnishing such copies of the
Registration Statement, the Prospectus and all amendments and supplements
thereto as may be requested for use in connection with the offering or sale
of the Shares by the Underwriters or by dealers to whom Shares may be sold
and (viii) the performance by the Sellers of their other obligations under
this Agreement.
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Nothing contained herein shall obligate the Company to pay any fees and
expenses of any separate counsel to the Selling Stockholders or any out-of-
pocket expenses of the Selling Stockholders, which fees and expenses shall
not be the obligation of the Underwriters.
(k) To use every reasonable effort to maintain the inclusion of the
Common Stock in The Nasdaq National Market (or on a national securities
exchange) for a period of three years after the effective date of the
Registration Statement; provided, that, the foregoing shall not be breached
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as a result of the failure of the Common Stock to be included in The Nasdaq
National Market (or on a national securities exchange) by reason of the
failure of the Company to have a sufficient number of stockholders or the
failure of the Company to meet the financial criteria for continued
listing.
(l) To use every reasonable effort to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date or any Option Closing Date, as the case
may be, and to satisfy all conditions precedent to the delivery of the
Shares.
(m) During the period when the Prospectus is required to be delivered
under the Act, to file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the
time periods required by the Exchange Act.
6. Representations and Warranties of the Company. The Company
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represents and warrants to each Underwriter 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, to the knowledge
of the Company, threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part became
effective, did not contain and each such part, as amended or supplemented,
if applicable, will not at the time so amended or supplemented contain, any
untrue statement of a material fact or omit to state a material fact
required
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to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, 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
Act and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not at the time so amended or
supplemented 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
(b) 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 preliminary prospectus dated October 3, 1995, and each
preliminary prospectus filed thereafter as part of the Registration
Statement or as part of any amendment thereto, or filed pursuant to Rule
424 under the Act, complied when so filed in all material respects with the
Act; and did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Company and each of its Significant Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as it is currently being conducted
and to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do business
in each jurisdiction in which the nature of its business or its ownership
or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. As used in this Agreement,
"Significant Subsidiary" shall mean C&D Charter Power Systems, Inc.,
C&D/Charter Holdings,
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Inc., Cactus Holdings Inc. and International Power Systems, Inc.
(e) Except as described in the Prospectus, all of the outstanding
shares of capital stock of, or other ownership interests in, each of the
Company's Significant Subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders, other than
Shares not issued as of the date hereof which are evidenced by options (the
"Option Shares")), have been duly authorized and validly issued and are
fully paid, non-assessable and not subject to any preemptive or, to the
best of the Company's knowledge, similar rights; and the Shares to be
issued and sold by the Company hereunder and the Option Shares have been
duly authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement and, as to the Option
Shares, the relevant option agreements, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not be subject to
any preemptive or, to the best of the Company's knowledge, similar rights.
All of the options underlying the Option Shares are presently exercisable
and will be exercisable on the Closing Date.
(g) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in
the Prospectus in all material respects.
(h) Neither the Company nor any of its Significant Subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or any of its
Significant Subsidiaries or their respective property is bound, except for
any such violation or default the occurrence of which would not have a
material adverse effect on the Company and its
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subsidiaries, taken as a whole, or an adverse effect on the consummation of
the transactions contemplated hereby.
(i) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except for any of
the foregoing which has been obtained and except as such may be required
under the Act or state securities or Blue Sky laws) and will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of its
Significant Subsidiaries or any agreement, indenture or other instrument to
which it or any of its Significant Subsidiaries is a party or by which it
or any of its Significant Subsidiaries or their respective property is
bound, or violate or conflict with any laws, administrative regulations or
rulings or court decrees applicable to the Company, any of its Significant
Subsidiaries or their respective property, except for any such consents,
approvals, authorizations, orders, conflicts, breaches, defaults and
violations, the failure of which to obtain or the occurrence of which (as
applicable) would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or an adverse effect on the consummation of
the transactions contemplated hereby.
(j) (i) Except as disclosed in the Prospectus, there are no material
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any of their respective property is
the subject, and, to the best of the Company's knowledge, no such material
proceedings are threatened or contemplated. (ii) No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(k) Except as disclosed in the Prospectus, neither the Company nor any
of its Significant Subsidiaries has violated (i) any foreign, federal,
state or local law or regulation relating to the
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protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) any federal or state law relating to discrimination in the
hiring, promotion or pay of employees or any applicable federal or state
wages and hours laws, or (iii) any provisions of the Employee Retirement
Income Security Act or the rules and regulations promulgated thereunder,
which in the case of any of (i), (ii) or (iii) above would reasonably be
expected to result in any material adverse change in the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole.
(l) Except as disclosed in the Prospectus: (i) the Company and the
Significant Subsidiaries have such material permits, licenses, franchises
and authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental Laws, as
are necessary to own, lease and operate their properties and to conduct
their business, taken together as a whole; (ii) the Company and each of its
Significant Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and, to the best of the Company's
knowledge, no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit; and
(iii) such permits contain no restrictions that have or that the Company
reasonably expects would have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole.
(m) In the ordinary course of its business, the Company conducts a
periodic review of the compliance by the Company and the Significant
Subsidiaries with Environmental Laws, in the course of which it identifies
and evaluates associated costs and liabilities (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). On the basis of such review,
the Company has reasonably concluded that, as of the date hereof and the
Closing Date, such
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associated costs and liabilities would not, singly or in the aggregate,
result in a material adverse change in the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(n) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, the
Company and each of its Significant Subsidiaries has good and, to the
extent applicable, marketable title, free and clear of all liens, claims,
encumbrances and restrictions, except liens for taxes not yet due and
payable, to all property and assets described in the Registration Statement
as being owned by it. All leases to which the Company or any of its
Significant Subsidiaries is a party are valid and binding and no default
has occurred or is continuing thereunder, in each case, which would
reasonably be expected to result in any material adverse change in the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, and the Company and its
Significant Subsidiaries enjoy peaceful and undisturbed possession under
all such leases to which any of them is a party as lessee with such
exceptions as do not materially interfere with the use made by the Company
or such Significant Subsidiary.
(o) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(p) To the best knowledge of the Company, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible securities,
commitments of sale or liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital stock of, or other
ownership interest in, the Company or any subsidiary thereof except as
otherwise disclosed in the Registration Statement.
(q) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its Significant Subsidiaries or, to
the best knowledge of the Company, threatened against any of them, before
the National Labor Relations Board or any
15
state or local labor relations board, and no significant grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is pending against the Company or any of its Significant
Subsidiaries or, to the best knowledge of the Company, threatened against
any of them, and (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Company or any of its Significant Subsidiaries
or, to the best knowledge of the Company, threatened against it or any of
its Significant Subsidiaries, which, in the case of clause (i) and (ii)
above, singly or in the aggregate, would reasonably be expected to result
in a material adverse change in the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(r) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith or that have been duly
extended, and all material taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due as indicated in such
returns or pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good faith
and for which adequate reserves have been provided.
(s) The Company and each of its subsidiaries maintains, in the
Company's reasonable judgment, adequate insurance.
(t) Coopers & Xxxxxxx L.L.P. are independent public accountants with
respect to the Company as required by the Act.
(u) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus,
present fairly the consolidated financial position, results of operations
and changes in financial position of the Company and its subsidiaries on
the basis stated in the Registration Statement at the respective dates or
for the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and
16
the other financial and statistical information and data set forth in the
Registration Statement and the Prospectus is, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(v) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(w) Following the consummation of the transactions contemplated
hereby, no holder of any security of the Company will have any right to
require registration of shares of Common Stock or any other security of the
Company.
(x) The Company is not required to disclose any information in the
Prospectus pursuant to Section 517.075, Florida Statutes (Chapter 92-198,
Laws of Florida).
(y) The Company and each of its subsidiaries owns or possesses all
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and similar rights material to the conduct of the
business of the Company and its subsidiaries, taken together as a whole, as
currently carried on and as described in the Registration Statement and
Prospectus; except as stated in the Registration Statement and Prospectus,
to the knowledge of the Company, none of the intellectual property utilized
by the Company or any of its subsidiaries infringes upon any patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets or other similar rights of others to the extent
that any such infringement (or the inability to use any such infringing
intellectual property) has resulted in or would reasonably be expected to
result in any material adverse change in the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, and neither the Company nor any of its subsidiaries has
received any notice alleging any such infringement.
17
(z) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with
the requirements of the Exchange Act and, when read together with the other
information in the Prospectus, at the time the Registration Statement and
any amendments thereto become effective and at the Closing Date, will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
7. Representations and Warranties of the Selling Stockholders. Each
----------------------------------------------------------
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has (except
as set forth in the proviso to this sentence), and on the Closing Date will
have, good and clear title to such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests and claims whatsoever;
provided, that, on the date of this Agreement, (i) the Shares to be sold by
-------- ----
Xxxxxx Xxxxx secure the obligations of Xx. Xxxxx under the Xxxxx Note (as
defined in the Prospectus), (ii) the Shares other than the Option Shares to
be sold by Xxxxxx Xxxxxx secure the obligations of Xx. Xxxxxx under the
Alvine Note (as defined in the Prospectus) and (iii) the Shares to be sold
by Messrs. Xxxxxxx, Xxxx and Xxxxx and Xx. Xxxxxxx are secured by notes in
favor of Charterhouse Group International, Inc.; provided, further, that,
with respect to any Option Shares, the representations set forth in this
sentence shall be made only as of the Closing Date. Messrs. Weber, Alvine,
Xxxxxxx, Xxxx and Xxxxx and Xx. Xxxxxxx represent and warrant,
respectively, that the security interests described in the preceding
sentence will be terminated simultaneously with the consummation of the
transactions contemplated hereby. Such Selling Stockholder is the lawful
owner of any options evidencing Option Shares to be sold by such Selling
Stockholder pursuant to this Agreement. Such Selling Stockholder has all
necessary right, power and authority to exercise any such options and all
such options are presently exercisable and will be
18
exercisable on the Closing Date. Such options will be exercised by such
Selling Stockholder simultaneously with the consummation of the
transactions contemplated hereby.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever (other than any lien in favor of
the Underwriters or their transferees).
(c) Such Selling Stockholder has, and on the Closing Date (and Option
Closing Date, if applicable) will have, full legal right, power and
authority to enter into this Agreement, the Custody Agreement and any
related agreement between the Selling Stockholders and [Proskauer Xxxx
Xxxxx & Xxxxxxxxxx LLP], as Custodian (the "Custody Agreement") and to
sell, assign, transfer and deliver such Shares in the manner provided
herein and therein, and this Agreement, the Custody Agreement and any
related agreement have been duly authorized, executed and delivered by or
on behalf of such Selling Stockholder and each of this Agreement, the
Custody Agreement and any related agreement is a valid and binding
agreement of such Selling Stockholder enforceable in accordance with its
terms, except as rights to indemnity and contribution hereunder may be
limited by applicable law.
(d) The power of attorney signed by or on behalf of such Selling
Stockholder appointing Xxxxxx Xxxxx and Xxxxxxx X. Xxxxxxx, Xx., or either
one of them, as his, her or its attorney-in-fact to the extent set forth
therein with regard to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding instrument of such Selling Stockholder enforceable in
accordance with its terms, and, pursuant to such power of attorney, such
Selling Stockholder has authorized Xxxxxx Xxxxx and Xxxxxxx X. Xxxxxxx,
Xx., or either one of them, to execute and deliver on his, her or its
behalf this Agreement and any other document necessary or desirable in
connection with transactions contemplated hereby and to deliver the Shares
to be sold by such Selling Stockholder pursuant to this Agreement.
19
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably
be expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to the distribution contemplated by this Agreement, and
other than as permitted by the Act, the Selling Stockholder has not
distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement, the
Custody Agreement, the related power of attorney and any other related
agreement by such Selling Stockholder, compliance by such Selling
Stockholder with all the provisions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except for any of
the foregoing which has been obtained and except as such may be required
under the Act or state securities laws or Blue Sky laws) and will not
conflict with or constitute a breach of any of the terms or provisions of,
or a default under, any organizational documents of such Selling
Stockholder, if not an individual, or any agreement, indenture or other
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder or property of such Selling Stockholder is bound, or
violate or conflict with any law, administrative regulation or ruling or
court decree applicable to such Selling Stockholder or property of such
Selling Stockholder, except for such consents, approvals, authorizations,
orders, conflicts, breaches, defaults and violations, the failure to obtain
or the occurrence of which (as applicable) would not have an adverse effect
on the consummation of the transactions contemplated by this Agreement, the
Custody Agreement, the related power of attorney of any other related
agreement.
(g) Such parts of the Registration Statement under the caption
"Selling Stockholders" which specifically relate to such Selling
Stockholder do not, and will not on the Closing Date (and any Option
Closing Date, if applicable), contain any untrue statement of a material
fact or omit to state any
20
material fact required to be stated therein or necessary to make the
statements therein, in light of circumstances under which they were made,
not misleading.
(h) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g)
above, such Selling Stockholder will immediately notify you of such change.
(i) Certificates in negotiable form for all Shares to be sold by such
Selling Stockholder hereunder have been placed in custody with the
Custodian for the purpose of effecting delivery under the Underwriting
Agreement, except that any certificates representing Option Shares shall
not be negotiable by the Custodian until the exercise of the options that
such Shares underly.
(j) Except as noted by such Selling Stockholder in Attachment B to the
power of attorney executed and delivered by such Selling Stockholder, such
Selling Stockholder is not affiliated with or a person associated with a
member of the National Association of Securities Dealers, Inc.
8. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any preliminary
prospectus, 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,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriters furnished in writing to the Company by or on behalf of any
Underwriter through you expressly for use therein. Each Selling Stockholder
severally and not jointly agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims,
21
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus or any preliminary prospectus, 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 specifically relating to such Selling Stockholder.
Notwithstanding the foregoing sentence, the aggregate liability of any Selling
Stockholder pursuant to the provisions of this paragraph shall be limited to an
amount equal to the aggregate purchase price less underwriting discounts and
commissions received by such Selling Stockholder from the sale of such Selling
Stockholder's Shares hereunder. The indemnity agreement provided in this Section
8(a) with respect to any preliminary prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) based upon any untrue
statement of material fact or omission or alleged omission to state therein a
material fact purchased Shares, if a copy of the Prospectus in which such
statement or omission was corrected has not been sent or given to such person
within the time required by the Act and the rules and regulations thereunder,
unless such failure is the result of noncompliance by the Company with Section
5(e) hereof.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company and the
Selling Stockholders, such Underwriter shall promptly notify the Company (who
shall promptly notify the Selling Stockholders) in writing and the Company and
the Selling Stockholders shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all reasonable fees and expenses. Any Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of such Underwriter or such
controlling person unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company (and the
Selling Stockholders, if appropriate) shall have failed to assume the defense
and employ counsel or (iii) the named
22
parties to any such action (including any impleaded parties) include both such
Underwriter or such controlling person and the Company or any Selling
Stockholder, as the case may be, and such Underwriter or such controlling person
shall have been advised by such counsel that a conflict of interest may exist
between it and the Company or a Selling Stockholder as a result of which it
would be inappropriate for counsel to the Company or a Selling Stockholder to
represent both it and the Company or a Selling Stockholder, as the case may be
(in which case the Company and the Selling Stockholders shall not have the right
to assume the defense of such action on behalf of such Underwriter or such
controlling person, it being understood, however, that the Company and the
Selling Stockholders shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys in any
jurisdiction for all such Underwriters and controlling persons, which firm shall
be designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
and that all reasonable fees and expenses of those attorneys shall be reimbursed
as they are incurred). A Seller shall not be liable for any settlement of any
such action effected without the written consent of such Seller but if settled
with the written consent of such Seller, such Seller agrees to indemnify and
hold harmless any Underwriter and any such controlling person from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, settle, compromise
or consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened proceeding in respect of which indemnification or
contribution may be sought hereunder (whether any party entitled to
indemnification under this Section 8 is a party thereto), unless such
settlement, compromise, consent or termination includes an unconditional release
of each party entitled to indemnification hereunder from all liabilities arising
out of such pending or threatened proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
23
the same extent as the foregoing indemnity from the Sellers to each Underwriter
but only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus or any
amendment or supplement thereto. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling the
Company or any Selling Stockholder or any person controlling such Selling
Stockholder based on the Registration Statement, the Prospectus or any
preliminary prospectus and in respect of which indemnity may be sought against
any Underwriter, the Underwriter shall have the rights and duties given to the
Sellers (except that if any Seller shall have assumed the defense thereof such
Underwriter shall not be required to do so (as the Company and the Selling
Stockholders would be so required under Section 8(b) hereof if an action would
have been brought against an Underwriter or a person controlling such
Underwriter), but may employ separate counsel therein and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), and the Company, its directors, any such officers
and any person controlling the Company and the Selling Stockholders and any
person controlling such Selling Stockholders shall have the rights and duties
given to the Underwriter, by Section 8(b) hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sellers and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Sellers and the Underwriters shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting
24
expenses) received by the Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable 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 which 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) Each Seller hereby designates the CT Corporation System at its
offices in New York County, the State of New York, as its authorized agent, upon
which process may be served in any action, suit or proceeding which may be
instituted in any state or federal court in the
00
Xxxxx xx Xxx Xxxx by any Underwriter or person controlling an Underwriter
asserting a claim for indemnification or contribution under or pursuant to this
Section 8, and each Seller will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense to any such action, suit or proceeding based upon lack of personal
jurisdiction or venue. A copy of any such process shall be sent or given to such
Seller, at the address for notices specified in Section 13 hereof. Nothing
contained herein shall be construed as a general consent to jurisdiction or
service of process in the State of New York.
9. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending before or, to the knowledge of the
Company, contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus at the time of the execution and
delivery of this Agreement, and except as described in the Prospectus at
the time of the execution and delivery of this Agreement, there shall not
have been any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, affairs or business prospects, whether or
not arising in the ordinary course of business, of the Company, (ii) since
the date of the latest balance sheet included in the Registration Statement
and the Prospectus there shall not have been any change (excluding a change
resulting from the exercise of stock options, the existence of which are
disclosed in the Prospectus) or any
26
development involving a prospective material adverse change, in the capital
stock of the Company or any material adverse change, or any development
involving a prospective material adverse change, in the long-term debt of
the Company, in each case from that set forth in the Registration Statement
and Prospectus, (iii) the Company and its subsidiaries shall have no
liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and other than liabilities
or obligations incurred in the ordinary course of business since the date
of the latest balance sheet included in the Registration Statement and
Prospectus, and (iv) on the Closing Date you shall have received a
certificate dated the Closing Date, signed by Xxxxxx Xxxxx and Xxxxxxx X.
Xxxxxxx, Xx., in their capacities as the President and Chief Financial
Officer of the Company, respectively, confirming the matters set forth in
paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing
Date, from each Selling Stockholder.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP, counsel for the Company and
the Selling Stockholders, to the effect that:
(i) the Company and each of its Significant Subsidiaries has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority required to carry on its business as
it is currently being conducted, as described in the Prospectus, and
to own, lease and operate its properties;
(ii) the Company and each of its Significant Subsidiaries is
duly qualified and is in good standing as a foreign corporation
authorized to do
27
business in the jurisdictions set forth in a schedule to the opinion
of such counsel;
(iii) all of the outstanding shares of capital stock of each
of the Significant Subsidiaries have been duly and validly authorized
and issued and are fully paid and non-assessable. All of the
outstanding shares of capital stock of each of the Significant
Subsidiaries is held of record by the Company or a Significant
Subsidiary and, to the knowledge of such counsel, is beneficially
owned by the Company or a Significant Subsidiary free and clear of any
adverse claims (within the meaning of Section 8-302 of the New York
Uniform Commercial Code), except as set forth in or incorporated by
reference into the Prospectus;
(iv) all the outstanding shares of Common Stock (including the
Shares to be sold by the Selling Stockholders) have been duly
authorized and all are or, with respect to any Option Shares, will
when issued upon the exercise of the underlying stock options be
validly issued, fully paid and non-assessable, and are not or will
when issued upon the exercise of such stock options not be subject to
any preemptive rights or rights of first offer or refusal contained in
the Company's Certificate of Incorporation or By-laws or any agreement
included as an exhibit to, or to any document incorporated by
reference into, the Registration Statement or, to the knowledge of
such counsel, otherwise evidenced; the stock options underlying any
Option Shares are presently exercisable by their terms and, by such
terms, will be exercisable at all times prior to the Closing;
(v) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and will be validly issued, fully paid and
non-assessable when issued and paid for as contemplated by this
Agreement, and will when issued not be subject to any preemptive
rights or rights of first offer or refusal contained in the Company's
Certificate of Incorporation or By-laws or any agreement included as
an exhibit to, or to any document incorporated by reference into, the
Registration Statement or, to the knowledge of such counsel, otherwise
evidenced;
28
(vi) this Agreement has been duly authorized, executed and
delivered by the Company and each of the Selling Stockholders and is a
valid and binding agreement of the Company and each Selling
Stockholder enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws relating to or
affecting creditors' rights and remedies generally and by general
equitable principles (whether applied by a court of law or equity) and
except as rights of indemnity under Section 8 of this Agreement may be
limited by federal or state securities laws or the public policy
underlying those laws;
(vii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus in all material respects;
(viii) the Registration Statement has become effective under
the Act; to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement is in effect and no
proceedings for that purpose are pending before or contemplated by the
Commission;
(ix) the statements under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings;
(x) the execution, delivery and performance of this Agreement
by the Company, compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other
governmental body (except as such may be required under the Act or
other securities or Blue Sky laws or by the NASD and except that the
foregoing opinion may be to knowledge with respect to any consents,
approvals, authorizations or other orders not of general
applicability) and will not
29
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the Certificate of Incorporation or By-Laws of
the Company or any of its Significant Subsidiaries or any agreement,
indenture or other instrument included as an exhibit to, or to any
document incorporated by reference into, the Registration Statement,
or violate or conflict with any laws or administrative regulations,
or, to the knowledge of such counsel, rulings or court decrees,
applicable to the Company or any of its subsidiaries;
(xi) the execution, delivery and performance of this Agreement
by each Selling Stockholder, compliance by such Selling Stockholder
with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under the Act or other securities or Blue Sky laws or by
the NASD and except that the foregoing opinion may be to knowledge
with respect to any consents, approvals, authorizations or other
orders not of general applicability) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under the organizational documents of any Selling Stockholder that is
not an individual or, to the knowledge of such counsel, any agreement,
indenture or other instrument to which any Selling Stockholder is a
party or by which any Selling Stockholder or any of their respective
properties are bound, or violate or conflict with any laws or
administrative regulations, or, to the knowledge of such counsel,
rulings or court decrees, applicable to any Selling Stockholder or any
of their respective properties;
(xii) after due inquiry, such counsel does not know of any
material legal or governmental proceeding pending or threatened to
which the Company or any of its subsidiaries is a party or to which
any of their respective property is subject which is required to be
described in the Registration Statement or the Prospectus, except as
described in the Prospectus, or of any contract
30
or other document which is required to be described in the
Registration Statement or the Prospectus or is required to be filed as
an exhibit to the Registration Statement which is not described or
filed as required;
(xiii) the Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(xiv) (1) the Registration Statement and the Prospectus
(except for financial statements, schedules and other financial or
statistical information included therein or incorporated by reference
as to which no opinion need be expressed) comply as to form in all
material respects with the Act, and (2) such counsel believes that
(except for financial statements, schedules and other financial or
statistical information as aforesaid) the Registration Statement and
the prospectus included therein at the time the Registration Statement
became effective did 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, and that the
Prospectus (except for financial statements, schedules and other
financial or statistical information as aforesaid) does not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(xv) the Custody Agreement has been duly authorized, executed
and delivered by or on behalf of each Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles (whether applied by a court of law or equity);
(xvi) upon delivery of the Shares to the Underwriters, the
Underwriters will acquire
31
ownership of the Shares free and clear of any adverse claims within
the meaning of Section 8-302 of the New York Uniform Commercial Code,
assuming that the Underwriters are purchasing the Shares in good faith
without notice of any adverse claim within the meaning of the New York
Uniform Commercial Code;
(xvii) the power of attorney signed by each Selling
Stockholder appointing Xxxxxx Xxxxx and Xxxxxxx X. Xxxxxxx, Xx., or
either of them, as his, her or its attorney-in-fact to the extent set
forth therein with regard to the transactions contemplated hereby and
by the Registration Statement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and are valid
and binding instruments of such Selling Stockholder enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles (whether applied by a court of law or equity);
and
(xviii) based on such counsel's review of the applicable
documents, each document filed pursuant to the Exchange Act (except
for financial statements, schedules and other financial or statistical
information included therein or incorporated by reference therein, as
to which no opinion need be expressed) and incorporated or deemed to
be incorporated by reference in the Prospectus complied when so filed
as to form in all material respects with the applicable requirements
of the Exchange Act.
In giving such opinion with respect to the matters covered by clause
(xiv) such counsel may state that their opinion and belief 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 opinion of Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP described above
in this paragraph (e) shall be rendered to you at the request of the
Company or one or
32
more of the Selling Stockholders, as the case may be, and shall so state
therein.
Notwithstanding anything to the contrary in this Section (e), to the
extent that any Selling Stockholder is not represented by Proskauer Xxxx
Xxxxx & Xxxxxxxxxx in connection with the transactions contemplated hereby,
you shall have received an opinion of counsel to such Selling Stockholder
with respect to the matters set forth in clauses (iv) (but only with
respect to that portion of such opinion that is to knowledge), (vi), (xi),
(xv), (xvi) and (xvii) as to such Selling Stockholder or the Shares to be
sold thereby, as applicable.
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxxxxxxx & Xxxxx LLP, counsel for the Underwriters, as
to the matters referred to in clauses (v), (vi) (but only with respect to
the Company), (viii), (ix) (but only with respect to the statements under
the captions "Description of Capital Stock" and "Underwriting") and (xiv)
of the foregoing paragraph (e). In giving such opinion with respect to the
matters covered by clause (xiv) such counsel may state that their opinion
and belief 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.
(g) You shall have received a letter on and as of the Closing Date, in
form and substance satisfactory to you, from Coopers & Xxxxxxx L.L.P.,
independent public accountants, with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus and substantially in the form and substance of the
letter delivered to you by Coopers & Xxxxxxx L.L.P. on the date of this
Agreement.
(h) The Company shall have delivered to you the agreements specified
in Section 2 hereof.
(i) The Company and the Selling Stockholders shall not have failed at
or prior to the Closing Date to perform or comply with any of the
agreements herein
33
contained and required to be performed or complied with by them at or prior
to the Closing Date.
(j) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person to the effect that such
Selling Stockholder is not a U.S. Person (as defined under applicable U.S.
federal tax legislation), which certificate may be in the form of a
properly completed and executed United States Treasury Department Form W-8
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(k) The Company shall have delisted its Common Stock from the American
Stock Exchange and the Common Stock shall have begun trading in The Nasdaq
National Market simultaneously with the sale of the Firm Shares.
The several obligations of the U.S. Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
applicable Option Closing Date of such documents as you may reasonably request
upon reasonable notice with respect to the (i) good standing of the Company,
(ii) the due authorization and issuance of such Additional Shares, (iii) other
matters related to the issuance of such Additional Shares and (iv) any other
matters.
10. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any adverse change or development
involving a prospective adverse change in the condition, financial or otherwise,
of the Company or any of its subsidiaries or the earnings, affairs or business
prospects of the Company or any of its subsidiaries, whether or not arising in
the ordinary course of business, which would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of
34
the United States or elsewhere that, in your judgment, is material and adverse
and would, in your judgment, make it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus, (iii) the suspension or
material limitation of trading in securities on the New York Stock Exchange, the
American Stock Exchange or The Nasdaq National Market System or limitation on
prices for securities on any of the foregoing, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business or operations of the Company or any subsidiary, (v) the declaration of
a banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I and/or Schedule II, as applicable,
bears to the total number of Firm Shares which all the non-defaulting
Underwriters, as the case may be, have agreed to purchase, or in such other
proportion as you may specify, to purchase the Firm Shares or Additional Shares,
as the case may be, which such defaulting Underwriter or Underwriters, as the
case may be, agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Firm Shares or Additional Shares, as the
case may be, which any Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 10 by an amount in excess of one-
ninth of such number of Firm Shares or Additional Shares, as the case may be,
without the written consent of such Underwriter. If on the Closing Date or on
an Option Closing Date, as the case may be, any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares,
35
or Additional Shares, as the case may be, and the aggregate number of Firm
Shares or Additional Shares, as the case may be, with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares to be
purchased on such date by all Underwriters and arrangements satisfactory to you
and the applicable Sellers for purchase of such Shares are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter and the applicable Sellers. In any such
case which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Stockholders. Each Selling Stockholder
--------------------------------------
severally and not jointly agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company and
the Underwriters to cause the Registration Statement to become effective at
the earliest possible time, to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this
Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Charter
Power Systems, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000,
with copies to Xxxxxx X. Xxxxxxxxxxx, Esq., Proskauer Xxxx Xxxxx & Xxxxxxxxxx
LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, (b) if to the Selling Stockholders, c/o
Xxxxxx X. Xxxxxxx, Xx., Charter Power Systems, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000, with copies to Xxxxxx X. Xxxxxxxxxxx, Esq.,
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, and
(c) if to any Underwriter or to you, to you c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, 000 Xxxxxxxx, Xxx Xxxx, Xxx
00
Xxxx 00000, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company agrees to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
37
Please confirm that the foregoing correctly sets forth the agreement between the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
CHARTER POWER SYSTEMS, INC.
By:
-----------------------------
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULES III and IV
HERETO
By:
-----------------------------
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXX, XXXXXXXX &
COMPANY, L.P.
Acting severally on behalf of
themselves and the several
U.S. Underwriters named in
Schedule I hereto and the
several International Managers named
in Schedule II hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
-----------------------------
38
