Exhibit 1.1
8,000,000 SHARES
GENERAC PORTABLE PRODUCTS, INC.
COMMON STOCK $.01 PAR VALUE
UNDERWRITING AGREEMENT
__________ __, 1999
___________ __, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
BT Alex. Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
GENERAC PORTABLE PRODUCTS, INC., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule II hereto (the "Underwriters") 8,000,000 shares of its Common Stock,
$.01 par value per share (the "Firm Shares"). Certain shareholders of the
Company (the "Selling Shareholders") named in Schedule I hereto severally
propose to sell to the several Underwriters not more than an additional
1,200,000 shares of Common Stock, $.01 par value per share, of the Company (the
"Additional Shares"), each Selling Shareholder selling the amount set forth
opposite such Selling Shareholder's name in Schedule I hereto, if and to the
extent that you, as Managers of the offering, shall have determined to exercise,
on behalf of the Underwriters, the right to purchase such shares of common stock
granted to the Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares." The
shares of Common Stock, $.01 par value per share, of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock." The Company and the Selling Shareholders are
hereinafter sometimes collectively referred to as the "Sellers."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") has
agreed to reserve up to __ shares of the Firm Shares to be purchased by it under
this Agreement for sale to the Company's directors, officers, employees and
business associates and other parties related to the Company
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(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriters" (the "Directed Share Program"). The shares to be sold by Xxxxxx
Xxxxxxx pursuant to the Directed Share Program (the "Directed Shares") will be
sold by Xxxxxx Xxxxxxx pursuant to this Agreement at the public offering price.
Any Directed Shares not orally confirmed for purchase by any Participants by the
end of the first business day after the date on which this Agreement is executed
will be offered to the public by Xxxxxx Xxxxxxx as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company, threatened by the Commission.
(i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus, or any amendment or
supplement thereto (if applicable), based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole.
(c) GPPD, Inc., a Delaware corporation ("GPPD"), GPPW, Inc., a
Wisconsin corporation ("GPPW"), and Generac Portable Products, LLC, a Delaware
limited liability company ("GPPLLC"), are the only subsidiaries of the Company;
each subsidiary of the Company has been duly organized, is validly existing in
good standing under the laws of the jurisdiction of its organization, has the
power and authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in good
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standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole;
all of the issued shares of capital stock of GPPD and GPPW have been duly and
validly authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances, equities or
claims; and all of the membership interests in GPPLLC are indirectly owned by
the Company, free and clear of all liens, encumbrances, equities or claims.
(d) This Agreement has been duly authorized, executed and delivered by
the Company.
(e) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the caption
"Description of Capital Stock".
(f) The shares of Common Stock (including the Shares to be sold by the
Selling Shareholders) outstanding prior to the issuance of the Shares to be sold
by the Company have been duly authorized and are validly issued, fully paid and
non-assessable.
(e) The Shares to be sold by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of this Agreement against
payment therefor, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar rights.
(f) Neither the Company nor any of its subsidiaries is, and upon the
performance by the Company and its subsidiaries of their businesses as described
in the Prospectus, neither the Company nor any of its subsidiaries will be, in
violation of its organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound which violation or default would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(g) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not violate any
provision of law applicable to the Company or any of its subsidiaries or the
certificate of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as have been obtained under the Securities Act and such as may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Shares.
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(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(i) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(j) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(k) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(l) PricewaterhouseCoopers LLP and Deloitte & Touche LLP, each of whom
have certified certain financial statements included in the Registration
Statement, are each independent public accountants within the meaning of the
Securities Act and the rules and regulations of the Commission thereunder.
(m) The Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (ii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(n) ordinary course of its business, the Company conducts a periodic
review of the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries. On the basis of such review, the
Company has reasonably concluded that with
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respect only to those Environmental Laws in effect as of the date of this
Agreement, any liabilities arising under or pursuant to, or the cost of
complying with such Environmental Laws, will not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, except as stated therein, (i)
the Company and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction not
in the ordinary course of business; (ii) the Company has not purchased any of
its outstanding capital stock, nor declared, paid or otherwise made any dividend
or distribution of any kind on its capital stock other than ordinary and
customary dividends; and (iii) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement).
(q) The Company and its subsidiaries have marketable title in fee
simple to all real property and marketable title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries, in each
case except as described in the Prospectus and except for matters which would
not have a material adverse effect on the Company and its subsidiaries, taken as
a whole.
(r) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate licenses or other rights to use all patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them, except
where the failure to own or possess or have the right to acquire would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole;
and neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of the foregoing which, singly or in the aggregate, if the
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subject of an unfavorable decision, ruling or finding, would result in a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(s) No labor dispute with the employees of the Company or any of its
subsidiaries exists, except as described in or contemplated by the Prospectus,
or, to the knowledge of the Company, is imminent except for disputes that would
not have a material adverse effect on the Company and its subsidiaries, taken as
a whole.
(t) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of the businesses in which they are engaged.
(u) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
to the extent that the failure to possess such certificates, authorizations and
permits would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any such subsidiary
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company and its subsidiaries, taken
as a whole, except as described in the Prospectus.
(v) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the "Year 2000 Problem"
(that is, any significant risk that the computer hardware or software
applications used by the Company and its subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to January
1, 2000); as a result of such review, (i) the Company has no reason to believe,
and does not believe, that (A) there are any issues related to the Company's
preparedness to address the Year 2000 Problem that are of a character required
to be described or referred to in the Registration Statement or the Prospectus
which have not been accurately described in the Registration Statement or the
Prospectus and (B) the Year 2000 Problem will have a material adverse effect on
the Company and its subsidiaries, taken as a whole and (ii) the Company
reasonably believes, after due inquiry, that the suppliers, vendors, customers
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or other material third parties used or serviced by the Company and such
subsidiaries are addressing or will address the Year 2000 Problem in a timely
manner, except to the extent that a failure to address the Year 2000 Problem by
any supplier, vendor, customer or material third party would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(x) The Registration Statement, the Prospectus and any preliminary
prospectus comply, and any amendments or supplements thereto will comply, with
any applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share Program.
(y) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction in which
the Directed Shares are being offered.
(z) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
1. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. (a) Each
of the Selling Shareholders, severally and not jointly, represents and warrants
to and agrees with each of the Underwriters that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(ii) The execution and delivery by such Selling Shareholder
of, and the performance by such Selling Shareholder of its obligations
under, (A) this Agreement and (B) the Power of Attorney and Custody
Agreement (the "Power of Attorney and Custody Agreement") signed by
such Selling Shareholder, certain individuals as such Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact") and
BankBoston, N.A. as Custodian (the "Custodian"), relating to the
transactions contemplated hereby and by the Registration Statement,
will not violate any provision of law applicable to such Selling
Shareholder, or the certificate of incorporation or by-laws of such
Selling Shareholder (if such Selling Shareholder is a corporation), or
any agreement or other instrument binding upon such Selling Shareholder
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Shareholder, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement or the
Power of Attorney and Custody Agreement of such Selling Shareholder,
except such as has been obtained under the Securities Act or otherwise
and
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such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(iii) Such Selling Shareholder has, and on the Closing Date
will have, valid title to the Shares to be sold by such Selling
Shareholder and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement and the Power of
Attorney and Custody Agreement and to sell, transfer and deliver the
Shares to be sold by such Selling Shareholder.
(iv) The Power of Attorney and Custody Agreement has been duly
authorized, executed and delivered by such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder.
(v) Upon delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement against payment therefor, title
to such Shares will pass to the Underwriters free and clear of any
security interests, claims, liens, equities and other encumbrances.
(b) Beacon Group III - Focus Value Fund, L.P. ("Beacon") represents to
and agrees with each of the Underwriters that (i) the Registration Statement,
when it became effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph 2(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) Each of the Selling Shareholders, other than Beacon, represents to
and agrees with each of the Underwriters that, to the extent that any statements
or omissions made in the Registration Statement, any preliminary Prospectus, the
Prospectus or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by such Selling
Shareholder expressly for use therein, such preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder and
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will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $______ a share (the "Purchase Price") the respective numbers of Firm
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) set forth in Schedule II hereto.
On the basis of the representations and warranties contained in this Agreement,
and subject to its terms and conditions, each Selling Shareholder agrees to sell
to the Underwriters such Selling Shareholder's Pro Rata Portion (as that term is
defined in the Power of Attorney and Custody Agreement) of Additional Shares,
and the Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 1,200,000 Additional Shares at the Purchase Price. If you, on
behalf of the Underwriters, elect to exercise such option, you shall so notify
the Company and the Attorneys-in-Fact for the Selling Shareholders in writing
not later than 30 days after the date of this Agreement, which notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Such date may be the same as
the Closing Date (as defined below) but not earlier than the Closing Date nor
later than ten business days after the date of such notice. Additional Shares
may be purchased as provided in Section 5 hereof solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the total number of Additional Shares to be
purchased as the number of Firm Shares set forth in Schedule II hereto opposite
the name of such Underwriter bears to the total number of Firm Shares.
Each Seller hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period ending 180
days after the date of the Prospectus, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of shares of Common Stock upon the
exercise of an option or warrant outstanding on the date hereof of which the
Underwriters have been advised in writing or which is described in the
Prospectus, (C) transactions by any person other than the Company relating to
shares of Common Stock or other securities acquired in open market transactions
after the
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completion of the offering of the Shares or (D) bona fide gifts to donees who
agree in writing to be bound by the restrictions set forth in the foregoing
sentence. In addition, each Selling Shareholder agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. Notwithstanding the foregoing, the restrictions
contained in this paragraph shall cease to be binding on the Sellers in the
event that the offering of Shares contemplated hereby has not been consummated
on or before [DATE 60 DAYS AFTER THE DATE OF THIS AGREEMENT].
3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_______ a share (the "Public Offering Price") and to certain dealers selected
by you at a price that represents a concession not in excess of $______ a share
under the Public Offering Price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold by the
Company shall be made to the Company in Federal (same day) or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on [DATE 3 BUSINESS DAYS OR, IF PRICING IS AFTER 4:30 P.M. EASTERN TIME, 4
BUSINESS DAYS AFTER THE DATE OF THIS AGREEMENT] or at such other time on the
same or such other date, not later than [DATE 5 BUSINESS DAYS AFTER PREVIOUS
DATE] as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Custodian in Federal
(same day) or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than [DATE 10 BUSINESS DAYS AFTER EXPIRATION OF
GREEN SHOE] as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall be in definitive
form and registered in such names and in such denominations as you shall request
in writing not later than one full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and Additional Shares shall be delivered to you on the Closing Date or
the Option Closing Date, as the case may be, for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection with the
transfer of the Shares to the Underwriters duly paid, against payment of the
Purchase Price therefor.
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5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Sellers to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [TIME] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following further
conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date:
(i) a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in clause
(a)(i) above and to the effect that the representations and warranties
of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date; and
(ii) a certificate, dated the Closing Date and signed by each
Selling Shareholder to the effect that the representations and
warranties of such Selling Shareholder contained in this Agreement are
true and correct as of the Closing Date and that such Selling
Shareholder has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on
or before the Closing Date.
The persons signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
12
(c) The Underwriters shall have received on the Closing Date an opinion
of King & Spalding, outside counsel for the Company, dated the Closing Date, to
the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(ii) each subsidiary of the Company has been duly organized,
is validly existing in good standing under the laws of the jurisdiction
of its organization, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus under the caption "Description of Capital
Stock";
(iv) the shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) (A) all of the issued shares of each of GPPD and GPPW have
been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims and (B) all of the
membership interests in GPPLLC are indirectly owned by the Company,
free and clear of all liens, encumbrances, equities or claims;
(vi) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement against payment therefor, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
13
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of law applicable to the Company and
its subsidiaries or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its subsidiaries
that is filed as an exhibit to the Registration Statement, or, to the
best of such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as have been obtained under the Securities Act and such as
may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares;
(ix) the statements (A) in the Prospectus under the captions
"Business - Engine Supply," "Certain Relationships and Related Party
Transactions - Stockholders' Agreements," "Description of Certain
Indebtedness - The Credit Facility," "Description of Capital Stock" and
"Underwriters" and (B) in the Registration Statement in Item 14, in
each case insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present
the information required to be described with respect to such legal
matters, documents and proceedings and fairly summarize such legal
matters and documents required to be described;
(x) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and are
not so described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(xi) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xii) such counsel (A) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and notes
thereto, the financial statement schedules and other financial and
statistical data included therein as to which such counsel need not
express any opinion) comply as to form in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) has no reason to believe that (except for
financial statements and notes thereto, the financial statement
schedules and other financial and statistical data included therein as
to which such counsel need not express any belief) the Registration
Statement and the prospectus
14
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (C) has no reason to
believe that (except for financial statements and notes thereto, the
financial statement schedules and other financial and statistical data
included therein as to which such counsel need not express any belief)
the Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) The Underwriters shall have received on the Closing Date an opinion
from counsel for each Selling Shareholder, such counsel to be reasonably
satisfactory to counsel for the Underwriters, dated the Closing Date, to the
effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder;
(ii) the execution and delivery by such Selling Shareholder
of, and the performance by such Selling Shareholder of its obligations
under, this Agreement and the Power of Attorney and Custody Agreement
of such Selling Shareholder will not contravene any provision of law
applicable to such Selling Shareholder, or the certificate of
incorporation or by-laws of such Selling Shareholder (if such Selling
Shareholder is a corporation), or, to the best of such counsel's
knowledge, any material agreement or other material instrument binding
upon such Selling Shareholder or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over such Selling Shareholder, and
no consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement or the
Power of Attorney and Custody Agreement of such Selling Shareholder,
except such as have been obtained under the Securities Act and such as
may be required by the securities or Blue Sky laws of the various
states in connection with offer and sale of the Shares;
(iii) such Selling Shareholder has valid title to the Shares
to be sold by such Selling Shareholder and has the legal right and
power, and all authorization and approval required by law, to enter
into this Agreement and the Power of Attorney and Custody Agreement of
such Selling Shareholder and to sell, transfer and deliver the Shares
to be sold by such Selling Shareholder;
(iv) the Power of Attorney and Custody Agreement of such
Selling Shareholder has been duly authorized, executed and delivered by
such Selling Shareholder and is a valid and binding agreement of such
Selling Shareholder;
(v) upon delivery of the Shares to be sold by such Selling
Shareholder against payment therefor pursuant to this Agreement and the
Power of Attorney and Custody
15
Agreement, and assuming such shares are purchased without notice of any
adverse claim (within the meaning of the New York Uniform Commercial
Code (the "UCC"), the Underwriters purchasing such shares will acquire
valid title to such Shares free and clear of any adverse claim pursuant
to Section 8-302 of the UCC.
(e) The Underwriters shall have received on the Closing Date an opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 6(c)(vi), 6(c)(vii), 6(c)(ix) (but
only as to the statements in the Prospectus under "Description of Capital Stock"
and "Underwriters") and 6(c)(xii) above.
With respect to Section 6(c)(xii) above, King & Spalding and
Xxxxx Xxxx & Xxxxxxxx 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. In rendering
the foregoing opinions, such counsel may rely, with respect to factual
matters and to the extent they deem appropriate, upon representations
or certificates of responsible officers of the Company and certificates
of public officials. With respect to Section 6(d) above, counsel for
each Selling Shareholder may rely with respect to factual matters and
to the extent such counsel deems appropriate, upon the representations
of each Selling Shareholder contained herein and in the Power of
Attorney and Custody Agreement of such Selling Shareholder and in other
documents and instruments; PROVIDED that copies of such Power of
Attorney and Custody Agreements and of any such other documents and
instruments shall be delivered to you and shall be in form and
substance satisfactory to your counsel.
The opinions of King & Spalding and counsel for each Selling
Shareholder described in Sections 6(c) and 6(d) above, respectively,
shall be rendered to the Underwriters at the request of the Company or
one or more of the Selling Shareholders, as the case may be, and shall
so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from each
of PricewaterhouseCoopers LLP and Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; PROVIDED that the letter delivered on
the Closing Date shall use a "cut-off date" not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of Exhibit
A hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
16
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company and certain matters related to the sale of the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 7(c) below, as many
copies of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement without
your prior consent, such consent not to be unreasonably withheld, and to file
with the Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the Prospectus
is required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by
you on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request; provided that, in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction.
17
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-month
period ending _______, 2000 that satisfies the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder.
(f) To direct the transfer agent to place stop transfer orders on any
Directed Shares that have been sold to Participants subject to the three month
restriction on sale, transfer, assignment, pledge or hypothecation imposed by
NASD Regulation, Inc. under its Interpretative Material 2110-1 on free-riding
and withholding to the extent necessary to ensure compliance with the three
month restrictions. [Xxxxxx Xxxxxxx will notify the Company as to which
Participants will need to be so restricted.]
(g) To comply with all applicable securities and other laws, rules and
regulations in each jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
(h) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company agrees to pay or cause
to be paid all expenses incident to the performance of the Sellers' obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel, the Company's accountants and counsel for the Selling
Shareholders in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any Blue
Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all reasonable expenses in connection
with the qualification of the Shares for offer and sale under state securities
laws as provided in Section 7(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., including the reasonable fees and disbursements of
counsel to Xxxxxx Xxxxxxx in its capacity as "qualified independent
underwriter," (v) all fees and expenses in connection with the preparation and
filing of the registration statement on Form 8-A relating to the Common Stock
and all costs and expenses incident to listing the Shares on the NYSE, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of
18
any consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) all fees
and disbursements of counsel incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or other taxes,
if any, incurred by the Underwriters in connection with the Directed Share
Program, and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section. It is understood, however, that except as provided in this
Section, Section 8 entitled "Indemnity and Contribution", and the last paragraph
of Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees, without limitation, and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make. The provisions of
this Section shall not supersede or otherwise affect any agreement that the
Sellers may otherwise have for the allocation of such expenses among themselves.
7. INDEMNITY AND CONTRIBUTION. (a) The Sellers, jointly and severally,
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; PROVIDED, HOWEVER,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law to have been so delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 7(a) or Section 7(c).
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls each Underwriter or the Company within the
19
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but only
with reference to information relating to such Selling Shareholder furnished in
writing by or on behalf of such Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto. [Notwithstanding anything contained herein to
the contrary, no Selling Shareholder, other than Beacon, shall be liable under
this Section 8 for any amount in excess of the total proceeds (before deducting
expenses) received by such Selling Shareholder from the Underwriters for the
Shares sold by such Selling Shareholder hereunder.]
(c) The Company agrees to indemnify and hold harmless Xxxxxx Xxxxxxx
and each person, if any, who controls Xxxxxx Xxxxxxx within the meaning of
either Section 15 of the Securities Act, or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages, liabilities and judgments
incurred as a result of Xxxxxx Xxxxxxx'x participation as a "qualified
independent underwriter" within the meaning of Rule 2720 of the National
Association of Securities Dealers' Conduct Rules in connection with the offering
of the Shares, except for any losses, claims, damages, liabilities, and
judgments resulting from Xxxxxx Xxxxxxx'x or such controlling person's, willful
misconduct.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section
20
8(a), 8(b), 8(c) or 8(d), such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder within
the meaning of either such Section, and that all such reasonable fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of any Underwriters,
such firm shall be designated in writing by Xxxxxx Xxxxxxx. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Shareholders and such
control persons of any Selling Shareholders, such firm shall be designated in
writing by the Attorneys-in-Fact for the Selling Shareholders. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought pursuant
to Section 8(c) hereof in respect of such action or proceeding, then in addition
to such separate firm for the indemnified parties, the indemnifying party shall
be liable for the reasonable fees and expenses of not more than one separate
firm (in addition to any local counsel) for Xxxxxx Xxxxxxx in its capacity as a
"qualified independent underwriter' and all persons, if any, who control Xxxxxx
Xxxxxxx within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by
21
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(f) To the extent the indemnification provided for in Section 8(a),
8(b), 8(c) or 8(d) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 8(f)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(f)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by PRO RATA
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(f). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, [(i)] no Underwriter shall be required to
contribute any amount
22
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue [statement or
omission or alleged omission and (ii) no Selling Shareholder, other than Beacon,
shall be required to contribute any amount in excess of the amount by which the
net proceeds received from the sale of the Shares by such Selling Shareholder
exceeds the amount of damages that such Selling Shareholder has otherwise been
required to pay by reason of such untrue or alleged untrue] statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company and
the Selling Shareholders contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (i) acceptance of and payment for any of the Shares.
8. DIRECTED SHARE PROGRAM INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless Xxxxxx Xxxxxxx and each person, if any, who controls
Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act ("Xxxxxx Xxxxxxx Entities"), from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any Xxxxxx Xxxxxxx Entity in respect of which
indemnity may be sought pursuant to Section 9(a), the Xxxxxx Xxxxxxx Entity
seeking indemnity, shall promptly notify the Company in writing and the Company,
upon request of the Xxxxxx Xxxxxxx Entity, shall retain counsel reasonably
satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx Xxxxxxx Entity
and any others the Company may designate in such proceeding and shall pay the
fees and
23
disbursements of such counsel related to such proceeding. In any such
proceeding, any Xxxxxx Xxxxxxx Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Xxxxxx
Xxxxxxx Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Xxxxxx Xxxxxxx
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Xxxxxx Xxxxxxx Entities. Any such
separate firm for the Xxxxxx Xxxxxxx Entities shall be designated in writing by
Xxxxxx Xxxxxxx. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Company agrees to
indemnify the Xxxxxx Xxxxxxx Entities from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time a Xxxxxx Xxxxxxx Entity shall have requested the Company to
reimburse it for fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the Company agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by the Company
of the aforesaid request and (ii) the Company shall not have reimbursed the
Xxxxxx Xxxxxxx Entity in accordance with such request prior to the date of such
settlement. The Company shall not, without the prior written consent of Xxxxxx
Xxxxxxx, effect any settlement of any pending or threatened proceeding in
respect of which any Xxxxxx Xxxxxxx Entity is or could have been a party and
indemnity could have been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless
such settlement includes an unconditional release of the Xxxxxx Xxxxxxx Entities
from all liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 9(a) is
unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company in lieu of
indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall contribute to the
amount paid or payable by the Xxxxxx Xxxxxxx Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Xxxxxx Xxxxxxx Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 9(c)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(c)(i) above but also the
relative fault of the Company on the one hand and of the Xxxxxx Xxxxxxx Entities
on the other hand in connection with any statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Xxxxxx Xxxxxxx Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the Xxxxxx Xxxxxxx Entities for the
24
Directed Shares bear to the aggregate Public Offering Price of the Directed
Shares. If the loss, claim, damage or liability is caused by an untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact, the relative fault of the Company on the one hand and
the Xxxxxx Xxxxxxx Entities on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement or the
omission or alleged omission relates to information supplied by the Company or
by the Xxxxxx Xxxxxxx Entities and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would not
be just or equitable if contribution pursuant to this Section 9 were determined
by PRO RATA allocation (even if the Xxxxxx Xxxxxxx Entities were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 9(C). The amount
paid or payable by the Xxxxxx Xxxxxxx Entities as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the Xxxxxx Xxxxxxx
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Xxxxxx Xxxxxxx Entity shall
be required to contribute any amount in excess of the amount by which the total
price at which the Directed Shares were offered to the Participants exceeds the
amount of any damages that such Xxxxxx Xxxxxxx Entity has otherwise been
required to pay. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 9 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(e) The indemnity and contribution provisions contained in this Section
9 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
10. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 10(a)(i) through
25
10(a)(iv), such event, singly or together with any other such event, makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any one
or more of the Underwriters shall fail or refuse to purchase Shares that it has
or they have agreed to purchase hereunder on such date, and the aggregate number
of Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule II bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; PROVIDED that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 11 by an amount in excess of one-ninth of such number
of Shares without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased, and arrangements satisfactory to you and the Company for the
purchase of such Firm Shares are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders. In any such
case either you or the relevant Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. If, on the Option
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase Additional
Shares or (ii) purchase not less than the number of Additional Shares that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. If this Agreement shall be terminated (other
than pursuant to Section 10) by the Underwriters, or any of them, because of any
failure or refusal on the part of any Seller to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason any Seller
shall be unable to perform its obligations under this Agreement, the Sellers
will reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
26
11. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
13. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
GENERAC PORTABLE PRODUCTS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
The Selling Shareholders named in Schedule I
hereto, acting severally
By:
-------------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
BT Alex. Xxxxx Incorporated
Acting severally on behalf of themselves and the several Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-------------------------
Name:
-----------------------
SCHEDULE I
NUMBER OF FIRM SHARES
SELLING SHAREHOLDER TO BE SOLD
[NAMES OF SELLING SHAREHOLDERS]............
-------------------------
Total: ............................... -------------------------
SCHEDULE II
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
BT Alex. Xxxxx Incorporated
-------------------------
Total: ............................... -------------------------
-------------------------
EXHIBIT A
[FORM OF LOCK-UP LETTER]
[Date]
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
BT Alex. Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx
Xxxxxxx") proposes to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Generac Portable Products, Inc., a Delaware corporation (the
"Company"), providing for the public offering (the "Public Offering") by the
several Underwriters, including Xxxxxx Xxxxxxx (the "Underwriters"), of
8,000,000 shares (the "Shares") of the Common Stock, par value $.01 per share,
of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement, (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering or (c) bona fide gifts
to donees who agree in writing to be bound by the restrictions set forth in the
foregoing sentence. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any
2
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This Agreement shall automatically terminate if the Public Offering has not
been consummated on or before November 30, 1999.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)
