EXHIBIT 1
[Draft--9/25/95]
Alpha Technologies Group, Inc.
$25,000,000
% Convertible Subordinated Debentures Due 2005 */
-
Underwriting Agreement
New York, New York
, 1995
Unterberg Harris
Swiss Bank Tower
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Alpha Technologies Group, Inc., a Delaware corporation (the
"Company"), proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representative") are acting as
representative, $25,000,000 principal amount of its % Convertible
Subordinated Debentures Due 2005 (the "Underwritten Securities"), to be issued
under an indenture (the "Indenture") to be dated as of , 1995,
between the Company and , as Trustee (the
"Trustee"). The Company also proposes to grant to the Underwriters an option to
purchase up to an additional $3,750,000 principal amount of its % Convertible
Subordinated Debentures Due 2005 (the "Option Securities"; the Option
Securities, together with the Underwritten Securities, being hereinafter called
the "Securities"). The Securities are convertible into shares of Common Stock
of the Company ("Common Stock").
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto or
any Rule 462(b) Registration Statement became or
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*/ Plus an option to purchase from Alpha Technologies Group, Inc. up to an
-
additional $3,750,000 principal amount of Convertible Subordinated Debentures to
cover overallotments.
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become effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in Section 1,
paragraph (a) below, and any preliminary prospectus included in the Registration
Statement at the Effective Date that omits Rule 430A Information. "Prospectus"
shall mean the prospectus relating to the Securities that is first filed
pursuant to Rule 424(b) or Rule 434 after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date; if the Rule 434 Delivery Alternative is used, such term shall
also include the Rule 434 Term Sheet. "Registration Statement" shall mean the
registration statement referred to in Section 1, paragraph (a) below, exhibits
and financial statements, as amended at the Execution Time (or, if not effective
at the Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 434 Term Sheet
becomes effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended. Such term shall include Rule
430A Information and Rule 434 Information deemed to be included therein at the
Effective Date as provided by Rule 430A and Rule 434, respectively. "Rule 424",
"Rule 430A", "Rule 434" and "Rule 462(b)" refer to such rules under the Act.
"Rule 430A Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. "Rule 434 Delivery Alternative" shall
mean the delivery alternative permitted by Rule 434. "Rule 434 Information"
shall mean any information to be included in a Rule 434 Term Sheet. "Rule 434
Term Sheet" shall mean the term sheet or abbreviated term sheet delivered by the
Underwriters to investors and filed by the Company with the Commission pursuant
to Rule 434. "Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the final Delayed Offering covered by the initial Registration Statement
referred to in Section 1, paragraph (a) below.
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1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (file number 33- ) on
Form S-2, including a related preliminary prospectus, for the registration
under the Securities Act of 1933 (the "Act") of the offering and sale of
the Securities. The Company may have filed one or more amendments thereto,
including the related preliminary prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission
either (i) prior to effectiveness of such registration statement, a further
amendment to such registration statement (including the form of final
prospectus) or (ii) after effectiveness of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4), and/or
Rule 434. In the case of clause (ii), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information and Rule 434 Information) required by the
Act and the rules thereunder to be included in the Prospectus with respect
to the Securities and the offering thereof. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all Rule
430A Information, together with all other such required information, with
respect to the Securities and the offering thereof and, except to the
extent the Representatives shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time, shall
contain only such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein.
If the Rule 434 Delivery Alternative is used, the Company will also file
the Rule 434 Term Sheet in accordance with Rule 434. As filed, such Rule
434 Term Sheet shall contain all the information required by Rule 434, and
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only
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such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein. Upon
your request, but not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with Rule 462(b).
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus and any Rule 434 Term Sheet is first filed (if
required) in accordance with Rule 424(b) or Rule 434 and on the Closing
Date, the Prospectus (and any supplements thereto) will, comply in all
material respects with the applicable requirements of the Act, the
Securities Exchange Act of 1934 (the "Exchange Act") and the Trust
Indenture Act of 1939 (the "Trust Indenture Act") and the respective rules
thereunder; on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; on the Effective Date and on
the Closing Date, the Indenture did or will comply in all material respects
with the applicable requirements of the Trust Indenture Act and the rules
thereunder; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) or Rule 434 and on the Closing Date, the Prospectus
(together with any supplement thereto) will not, include 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; provided, however, that the
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Company makes no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of Eligibility
and Qualification (Form T-1) under the Trust Indenture Act of the Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of any Underwriter through the Representative specifically
for inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
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(c) The Company's authorized equity capitalization is as set forth
in the Prospectus; all the issued and outstanding shares of capital stock,
including Common Stock, of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable; each of the
Company and its subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full power and
authority to own its properties and conduct its business as described in
the Prospectus, and the Company has full power and authority to execute and
deliver this Agreement and to issue and sell the Securities as herein
contemplated.
(d) Each of the Company and its subsidiaries is duly qualified or
licensed by and is in good standing in each jurisdiction in which it
conducts its respective business; and each of the Company and its
subsidiaries is in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions.
(e) Neither the Company nor any of its subsidiaries is in breach of,
or in default under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under), its
respective charter or amended and restated by-laws or in the performance or
observance of any obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them is bound, and the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby will not result in any breach of or
constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under), any
provisions of the charter or amended and restated by-laws of the Company or
any of its subsidiaries or under any provisions of any license, indenture,
mortgage, deed of trust, bank loan or credit agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or
by which any of them or their respective properties may be bound or
affected, or under any Federal, state, local or foreign law,
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regulation or rule or any decree, judgment or order applicable to the
Company or any of its subsidiaries.
(f) This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
similar laws affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(g) The Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act, and,
assuming it has been authorized, executed and delivered by the Trustee,
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect); and the Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture.
(h) The capital stock of the Company, including the Common Stock, and
the Securities conforms in all material respects to the description thereof
contained in the Prospectus, and the certificates for the Common Stock and
the Securities are in due and proper form and the holders of the Common
Stock and the Securities will not be subject to personal liability by
reason of being such holders.
(i) No approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Securities as contemplated hereby other than registration of
the Securities under
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the Act and any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Securities are being offered
by the Underwriters.
(j) No person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of
capital stock of the Company upon the issue and sale of the Securities to
the Underwriters hereunder or upon the conversion of the Securities, nor
does any person have preemptive rights, rights of first refusal or other
rights to purchase any of the Securities or the Common Stock.
(k) Xxxxxx Xxxxxxxx LLP, whose reports on the consolidated financial
statements of the Company and its subsidiaries are filed with the
Commission as part of the Registration Statement and Prospectus, are
independent accountants within the meaning of the Act and the applicable
published rules and regulation thereunder.
(l) Each of the Company and its subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any Federal, state, local or foreign law, regulation
or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct their respective
businesses; neither the Company nor any of its subsidiaries is in violation
of, or in default under, any such license, authorization, consent or
approval or any Federal, state, local or foreign law, regulation or rule or
any decree, order or judgment applicable to the Company or any of its
subsidiaries.
(m) All legal or governmental proceedings, contracts or documents 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 have
been so described or filed as required.
(n) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries or any of their respective properties, at law or in equity, or
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before or by any Federal, state local or foreign governmental or regulatory
commission, board, body, authority or agency which are reasonably likely to
result in a judgment, decree or order having a material adverse effect on
the operations, business, condition, prospects or property of the Company
and its subsidiaries taken as a whole.
(o) The financial statements included in the Registration Statement
and the Prospectus present fairly the consolidated financial position of
the Company and its subsidiaries as of the dates indicated and the
consolidated results of operations and changes in financial position of the
Company and its subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as may be
otherwise stated in the Registration Statement or Prospectus, there has not
been (A) any material and unfavorable change, financial or otherwise, in
the business, properties, regulatory environment, results of operations or
condition (financial or otherwise), present or prospective, of the Company
and its subsidiaries taken as a whole, (B) any transaction, which is
material to the Company and its subsidiaries taken as a whole, contemplated
or entered into by the Company or any of its subsidiaries or (C) any
obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any of its subsidiaries which is material to the Company and its
subsidiaries taken as a whole.
(q) The Securities have been approved for inclusion on The Nasdaq
SmallCap Market subject to official notice of issuance. The Common Stock is
quoted on Nasdaq under the symbol "ATGI".
2. Purchase and Sale. (a) Subject to the terms and conditions and
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in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
% of the principal amount thereof, plus accrued
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interest, if any, on the Securities from , 1995, to the Closing Date,
the principal amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
$3,750,000 principal amount of the Option Securities at the same purchase price
per Option Security as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in the
sale of the Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of the Prospectus upon written or telegraphic notice
by the Representative to the Company setting forth the principal amount of the
Option Securities as to which the several Underwriters are exercising the option
and the settlement date. Delivery of Option Securities by the Company, and
payment therefor to the Company, shall be made as provided in Section 3 hereof.
The principal amount of Option Securities to be purchased by each Underwriter
shall be the same percentage of the total principal amount of Option Securities
to be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
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Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the second business
day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
, 1995, or such later date (not later than , 1995) as the
Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representative for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representative of the
purchase price thereof to or upon the order of the Company by certified or
official bank check or checks drawn on or by
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a New York Clearing House bank and payable in next day funds. Delivery of the
Underwritten Securities and the Option Securities shall be made at such location
as the Representative shall reasonably designate at least one business day in
advance of the Closing Date and payment for such Securities shall be made at the
office of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
Certificates for the Securities shall be registered in such names and in such
denominations as the Representative may request not less than three full
business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representative in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
If the option provided for in Section 2(b) hereof is exercised after
the second business day prior to the Closing Date, the Company will deliver (at
the expense of the Company) to the Representative, at such location as the
Representative shall reasonably designate, on the date specified by the
Representative (which shall be within three business days after exercise of
said option), certificates for the Option Securities in such names and
denominations as the Representative shall have requested against payment of the
purchase price thereof to or upon the order of the Company by certified or
official bank check or checks drawn on or by a New York Clearing House bank and
payable in next day funds. If settlement for the Option Securities occurs after
the Closing Date, the Company will deliver to the Representative on the
settlement date for the Option Securities, and the obligation of the
Underwriters to purchase the Option Securities shall be conditioned upon receipt
of, supplemental opinions, certificates and letters confirming as of such date
the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
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Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Company agrees with the several Underwriters
-----------
that:
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(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement without your prior consent. Subject to the foregoing sentence,
if the Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representative of such timely
filing. If the Rule 434 Delivery Alternative is used, the Company will
also cause the Rule 434 Term Sheet, properly completed, to be filed with
the Commission pursuant to Rule 434 within the time period prescribed and
will provide evidence satisfactory to the Representative of such timely
filing. Upon your request, the Company will cause the Rule 462(b)
Registration Statement, properly completed, to be filed with the Commission
pursuant to Rule 462(b) and will provide evidence satisfactory to the
Representative of such filing. The Company will promptly advise the
Representative (A) when the Registration Statement, if not effective at
the Execution Time, and any amendment thereto, shall have become effective,
(B) when the Prospectus, and any supplement thereto, any Rule 434 Term
Sheet or any Rule 462(b) Registration Statement shall have been filed (if
required) with the Commission pursuant to the applicable rule under the
Act, (C) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (D) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Prospectus or for any
additional information, (E) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
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proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representative an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representative and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representative may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange for the qualification of the Securities
for sale under the laws of such jurisdictions as the Representative may
designate, will maintain such qualifications in effect so long as required
for the distribution of the Securities and will pay the fee of the National
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Association of Securities Dealers, Inc., in connection with its review of
the offering.
(f) The Company will not, for a period of 180 days following the
Execution Time, without the prior written consent of Unterberg Harris,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any other shares of Common Stock
or any securities convertible into, or exchangeable for, shares of Common
Stock; provided, however, that the Company may issue and sell Common Stock
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pursuant to any employee stock option plan, stock ownership plan,
restricted stock purchase plan or dividend reinvestment plan of the Company
in effect at the Execution Time and the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.
6. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representative agree in writing to a later time,
the Registration Statement will become effective not later than (i) 6:00 PM New
York City time on the date of determination of the public offering price, if
such determination occurred at or prior to 3:00 PM New York City time on such
date or (ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred after 3:00
PM New York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period required
by Rule 424(b), or if the filing of the Rule 434 Term Sheet is required pursuant
to Rule 434, the Rule 434 Term Sheet will be filed in the manner and within the
time period required under
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Rule 434; and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the Representative the
opinion of Xxxxxxxxxxx & Xxxxxx, counsel for the Company, dated the Closing
Date, which states to the effect that:
(i) each of the Company and its subsidiaries (individually a
"Subsidiary" and collectively the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business;
(ii) all the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of such counsel,
after due inquiry, any other security interests, claims, liens or
encumbrances;
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectus under the heading "Description of Capital Stock"; the
shares of Common Stock initially issuable upon conversion of the Securities
have been duly and validly authorized and reserved for issuance upon such
conversion and when issued upon conversion will be validly issued, fully
paid and nonassessable; the Securities and the Common Stock conform, as to
legal matters, to the descriptions thereof contained in the Prospectus
under the headings "Description of Debentures" and "Description of Capital
Stock"; the Securities issuable upon conversion of the Securities have been
approved for quotation on the Nasdaq SmallCap Market, subject to official
15
notice of issuance and the shares of Common Stock issuable upon conversion
of the Securities have been approved for quotation on the Nasdaq National
Market, subject to official notice of issuance; the certificates for the
Securities are in valid and sufficient form; and the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities or the Shares of Common Stock
issuable upon the conversion thereof;
(iv) the Indenture has been duly authorized, executed and delivered by
the Company, has been duly qualified under the Trust Indenture Act, and,
assuming it has been authorized, executed and delivered by the Trustee,
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect); and the Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this Agreement,
will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture;
(v) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as required;
(vi) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b), or if the Rule 434 Term Sheet was used, the
required filing has been made in the manner and time period required by
Rule 434; to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and the
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Registration Statement and the Prospectus (other than the financial
statements and other financial and statistical information contained
therein and the Statement of Eligibility and Qualification of the Trustee
on Form T-1, as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the Act,
the Exchange Act and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe that at the Effective
Date the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(vii) this Agreement has been duly authorized, executed and delivered by
the Company;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in such
opinion) as have been obtained;
(ix) neither the execution and delivery of the Indenture, the issue and
sale of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of the Company or the terms
of any indenture or other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a party or bound or any
judgement, order or decree known to such counsel to be applicable to the
Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
17
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Delaware or the
United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. Reference to the Prospectus in
this paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representative shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions or letters, dated
the Closing Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and the
Company and shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representative a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplement to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
18
(iii) since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been no
material adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(e) At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx
LLP, shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representative, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable published rules and regulations thereunder and stating
in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Act, the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its Subsidiaries; carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the stockholders,
directors and stock option and compensation committees of the Company and
the Subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to July 30, 1995,
nothing came to their attention which caused them to believe that with
respect to the period subsequent to July 30, 1995, there were any changes,
at a specified date not more than five business days prior to the date of
the letter, in the long-term debt of the Company and its subsidiaries or
capital stock of the
19
Company or decreases in the stockholders' equity of the Company or
decreases in working capital of the Company and its subsidiaries as
compared with the amounts shown on the July 30, 1995 consolidated balance
sheet included in the Registration Statement and the Prospectus, or for the
period from July 30, 1995 to such specified date there were any decreases,
as compared with the corresponding period in the preceding fiscal year, in
subsidiaries' gross profit or income before taxes or in total or per share
amounts of net income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary by the
Representative;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Prospectus agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal interpretation; and
(iv) On the basis of a reading of the unaudited pro forma financial
statements included in the Registration Statement and the Prospectus (the
"pro forma financial statements"), carrying out certain specified
procedures, inquiries of certain officials of the Company who have
responsibility for financial and accounting matters, and proving the
arithmetic accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing came to
their attention which caused them to believe that the pro forma financial
statements do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
20
The Representative shall have also received from Xxxxxx Xxxxxxxx LLP a
letter stating that the Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
financial statements of the Company and its subsidiaries.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(g) At the Execution Time, the Company shall have furnished to the
Representative a letter substantially in the form of Exhibit A hereto from each
executive officer and director of the Company and Steel Partners, L.P. and
Steel Partners II, L.P. addressed to the Representative, in which each such
person agrees not to offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce an offering of, any shares of Common Stock
beneficially owned by such person or any securities convertible into, or
exchangeable for, shares of Common Stock for a period of 180 days following the
Execution Time without the prior written consent of Unterberg Harris other
than shares of Common Stock disposed of as bona fide gifts.
(h) Prior to the Closing Date, the Company shall have furnished to
the Representative such further information, certificates and documents as the
Representative may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material
21
respects when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representative and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representative. Notice of such cancellation
shall be given to the Company in writing or by telephone or telegraph confirmed
in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
---------------------------------
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
22
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that (i) the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representative specifically for inclusion therein and (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any director, officer, employee or agent of such Underwriter or
any person controlling such Underwriter) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities that are the subject
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Securities to such
person in any case where such delivery is required under the Act and any untrue
statement or omission of a material fact contained in any Preliminary Prospectus
was corrected in the Prospectus (or the Prospectus as supplemented). This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by or on
behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set forth in
each Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the
Representative, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in
23
respect thereof is to be made against the indemnifying party under this Section
8, notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an
24
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
--------
however, that in no case shall any Underwriter (except as may be provided in any
-------
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or commission
applicable to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses), and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Underwriters. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person
who controls an Underwriter within the meaning of either the Act or the
25
Exchange Act and each director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
--------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
-------- -------
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representative shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
10. Termination. This Agreement shall be subject to termination in
------------
the absolute discretion of the Representative, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have
26
been suspended by the Commission or Nasdaq or trading in securities generally on
the New York Stock Exchange or Nasdaq shall have been suspended or limited or
minimum prices shall have been established on either of such Exchange or Market,
(ii) a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the judgment of the Representative, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
--------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, care of Unterberg Harris, Swiss
Bank Tower, 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at 000 Xxxxxxx Xxx, Xxxxx 000, Xxxxxxx, Xxxxx, Attention: Secretary.
13. Successors. This Agreement will inure to the benefit of and be
-----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
---------------
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us
27
the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
Very truly yours,
Alpha Technologies Group, Inc.
By: ..........................
[Title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Unterberg Harris
By: .........................
[Title]
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
