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EXHIBIT 1.1
3,066,500 SHARES*
APPLIED FILMS CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
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, 2000
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XXXXXXX & COMPANY, INC.
X.X. XXXXXXXX & CO.
FIRST SECURITY XXX XXXXXX
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Applied Films Corporation, a Colorado corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of 2,500,000 shares (the "Company Firm Shares") of
the Company's Common Stock, no par value per share (the "Common Stock"), and the
stockholders of the Company named in Schedule B hereto (collectively, the
"Selling Stockholders") propose to sell to the Underwriters the number of shares
set forth opposite their name in Schedule B hereto for an aggregate of 566,500
shares of Common Stock (the "Selling Stockholder Shares"). The Company Firm
Shares and the Selling Stockholders Shares are collectively called the "Firm
Shares." In addition, the Company has granted to the Underwriters an option (the
"Option") to purchase up to an additional 459,975 shares of Common Stock, on the
terms and for the purposes set forth in Section l(b) (the "Option Shares"). The
Firm Shares and the Option Shares are referred to collectively herein as the
"Shares." Xxxxxxx & Company, Inc., X.X. Xxxxxxxx & Co. and First Security Xxx
Xxxxxx have agreed to act as representatives of the several Underwriters (in
such capacity, the "Representatives") in connection with the offering and sale
of the Shares.
The Company and each of the Selling Stockholders confirm their
respective agreements with the Underwriters as follows:
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company
agrees to issue and sell the Company Firm Shares to the several Underwriters,
(ii) each Selling Stockholder, severally and not jointly, agrees to sell to the
several Underwriters the respective number of Selling Stockholder Shares set
forth opposite that Selling Stockholder's name on Schedule B hereto and (iii)
each of the Underwriters, severally and not jointly,
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* Plus an option to purchase up to an additional 459,975 shares to cover
over-allotments.
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agrees to purchase from the Company and from the Selling Stockholders the
aggregate number of Firm Shares set forth opposite that Underwriter's name in
Schedule A hereto, at the purchase price of $ for each Firm Share.
The number of Firm Shares to be purchased by each Underwriter from the Company
and each Selling Stockholder shall be as nearly as practicable in the same
proportion to the total number of Firm Shares being sold by the Company and each
Selling Stockholder as the number of Firm Shares being purchased by each
Underwriter bears to the total number of Firm Shares to be sold hereunder.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to the maximum number of Option Shares set forth in Schedule
A hereto at the same price per share as the Underwriters shall pay for the Firm
Shares. The Option may be exercised only to cover over-allotments in the sale of
the Firm Shares by the Underwriters and 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
this Agreement upon written or telegraphic notice (the "Option Shares Notice")
by the Representatives to the Company no later than 12:00 noon, New York City
time, at least two and no more than five business days before the date specified
for closing in the Option Shares Notice (the "Option Closing Date"), setting
forth the aggregate number of Option Shares to be purchased and the time and
date for such purchase. On the Option Closing Date, the Company will issue and
sell to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each Underwriter will purchase such percentage of the Option
Shares as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be made
to the Representatives for the accounts of the Underwriters against payment of
the purchase price by certified or official bank checks or by wire transfers
payable in same-day funds to the order of the Company for the Firm Shares to be
sold by it and to American Securities Transfer and Trust, Inc., as custodian for
the Selling Stockholders (the "Custodian") for the Firm Shares to be sold by the
Selling Stockholders at the office of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third (or,
if the purchase price set forth in Section l(b) hereof is determined after 4:30
p.m., Washington, D.C. time, the fourth) business day following the date of this
Agreement, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Representatives (such date is hereinafter referred to as the "Closing
Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by the Company to the
respective Underwriters shall be borne by the Company. The Company will pay and
hold each Underwriter and any subsequent holder of the Shares harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to such Underwriter of the Shares.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No. 333-95389) on
Form S-1 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, and has been filed with the
Commission. The term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement. Copies of such
registration statement and amendments and of each related preliminary prospectus
have been delivered to the Representatives. If such registration statement has
not become effective, a further amendment to such registration statement,
including a form of final prospectus, necessary to permit such registration
statement to become effective will be filed promptly by the Company with the
Commission. If such registration statement has become effective, a final
prospectus containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the Rules and Regulations will be filed promptly
by the Company with the Commission in accordance with Rule 424(b) of the Rules
and Regulations. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A and includes any registration statement
relating to the offering contemplated by this Agreement and filed pursuant to
Rule 462(b) of the Rules and Regulations. The term "Prospectus" means the
prospectus as first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the Effective Date.
(b) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission. On the Effective Date, the date
the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did and will comply with all applicable
provisions of the Act and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement, the Prospectus or any such
amendment or supplement did or will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not and 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. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto.
(c) The Company does not own, and at the Closing Date and, if
later, the Option Closing Date, will not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation or
have any equity interest in any corporation, firm, partnership, joint venture,
association or other entity, other than the joint venture with Nippon Sheet
Glass Co., Ltd. ("XXXX") and the subsidiaries listed in Exhibit 21 to the
Registration Statement (collectively, the
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"Subsidiaries"). The Company and each of its Subsidiaries (other than XXXX) is,
and at the Closing Date and, if later, the Option Closing Date, will be, a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. XXXX is a limited liability company duly
organized and validly existing under the laws of the People's Republic of China.
No partner of XXXX has given notice of any intent to dissolve XXXX, and no event
has occurred that could reasonably be expected to constitute an Event of
Withdrawal/Dissolution under the XXXX Equity Joint Venture Contract (the "Joint
Venture Agreement"). The Company and each of its Subsidiaries has, and at the
Closing Date and, if later, the Option Closing Date, will have, full power and
authority to conduct all the activities conducted by it, to own or lease all the
assets owned or leased by it and to conduct its business as described in the
Registration Statement and the Prospectus. The Company and each of its
Subsidiaries is, and at the Closing Date and, if later, the Option Closing Date,
will be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
license or qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not materially and adversely affect
the Company or its business, properties, business prospects, condition
(financial or other) or results of operations. All of the outstanding shares of
capital stock of each Subsidiary (other than XXXX) have been duly authorized and
validly issued and are fully paid and nonassessable, and owned by the Company
free and clear of all claims, liens, charges and encumbrances. The Company's 50%
joint venture interest in XXXX is owned free and clear of all claims, liens,
charges and encumbrances. There are no securities outstanding that are
convertible into or exercisable or exchangeable for capital stock of any
Subsidiary. The Company is not, and at the Closing Date and, if later, the
Option Closing Date, will not be, engaged in any discussions or a party to any
agreement or understanding, written or oral, regarding the acquisition of an
interest in any corporation, firm, partnership, joint venture, association or
other entity where such discussions, agreements or understandings could require
amendment to the Registration Statement pursuant to applicable securities laws.
Complete and correct copies of the certificate of incorporation and of the
bylaws of the Company and each of its Subsidiaries (other than XXXX) and the
Joint Venture Agreement of XXXX, and all amendments to any of the foregoing have
been delivered to the Representatives, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(d) All of the outstanding shares of capital stock of the
Company (including the Selling Stockholder Shares to be sold by the Selling
Stockholders under this Agreement) have been duly authorized, validly issued and
are fully paid and nonassessable and were issued in compliance with all
applicable state and federal securities laws; the Company Firm Shares have been
duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and nonassessable; no preemptive or similar rights
exist with respect to any of the Shares or the issue and sale thereof. The
description of the capital stock of the Company in the Registration Statement
and the Prospectus is, and at the Closing Date and, if later, the Option Closing
Date, will be, complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date and,
if later, the Option Closing Date, will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of capital stock, or any such warrants, convertible securities or
obligations. No further approval or authority of stockholders or the Board of
Directors of the Company will be required for the transfer and sale of the
Selling Stockholder Shares or the issuance and sale of the Company Firm Shares
or the Option Shares as contemplated herein.
(e) The financial statements and schedules included in the
Registration Statement or the Prospectus present fairly the financial condition
of the Company and its consolidated Subsidiaries as of the respective dates
thereof and the results of operations and cash flows of the Company and its
consolidated Subsidiaries for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved,
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except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Company are required by the Act or the Rules and Regulations
to be included in the Registration Statement or the Prospectus. The summarized
financial information for XXXX included in the Prospectus fairly presents the
financial condition of XXXX as of and for the periods presented. Xxxxxx Xxxxxxxx
LLP (the "Accountants"), who have reported on such financial statements and
schedules, are independent accountants with respect to the Company as required
by the Act and the Rules and Regulations. The summary consolidated financial
data included in the Registration Statement present fairly the information shown
therein and have been compiled on a basis consistent with the financial
statements presented therein.
(f) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the Company
(other than in connection with the exercise of options to purchase the Company's
Common Stock granted pursuant to the Company's stock option plans from the
shares reserved therefor as described in the Registration Statement), or any
material adverse change in the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
any of its Subsidiaries, arising for any reason whatsoever, (ii) neither the
Company nor any of its Subsidiaries, singly or taken as a whole, has incurred
nor will any of them incur, except in the ordinary course of business as
described in the Prospectus, any material liabilities or obligations, direct or
contingent, nor has the Company or any of its Subsidiaries entered into nor will
it enter into, except in the ordinary course of business as described in the
Prospectus, any material transactions other than pursuant to this Agreement and
the transactions referred to herein and (iii) the Company has not and will not
have paid or declared any dividends or other distributions of any kind on any
class of its capital stock.
(g) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its business in
a manner that would cause it to become, an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(h) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company, and any
of its Subsidiaries or any of its or their officers in their capacity as such,
nor any basis therefor, before or by any court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding might materially and adversely affect
the Company, any of its Subsidiaries or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries.
(i) The Company and each Subsidiary has, and at the Closing Date
and, if later, the Option Closing Date, will have, performed all the obligations
required to be performed by it, and is not, and at the Closing Date, and, if
later, the Option Closing Date, will not be, in default, under any contract or
other instrument to which it is a party or by which its property is bound or
affected, which default might materially and adversely affect the Company or any
of its Subsidiaries, singly or taken as a whole, or the business, properties,
business prospects, condition (financial or other) or results of operations of
the Company or any of its Subsidiaries, singly or taken as a whole. To the best
knowledge of the Company and its Subsidiaries, no other party under any contract
or other instrument to which it or any of its Subsidiaries is a party is in
default in any respect thereunder, which default might materially and adversely
affect the Company or any of its Subsidiaries, singly or taken as a whole, or
the business, properties, business prospects, condition (financial matters) or
results of operations of the Company or any of its Subsidiaries, singly or taken
as a whole. Neither the Company nor any of its Subsidiaries is,
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and at the Closing Date and, if later, the Option Closing Date, will be, in
violation of any provision of its certificate or articles of organization or
bylaws or other organizational documents.
(j) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part contemplated
herein, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the bylaws and rules of the National Association of Securities Dealers, Inc.
(the "NASD") in connection with the purchase and distribution by the
Underwriters of the Shares.
(k) The Company has full corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with the terms hereof ,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, or other laws affecting creditors rights generally or by general
principles of equity and except as rights to indemnity or contribution may be
limited by federal or state securities laws and the public policy underlying
such laws. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
party a right to terminate, any of its obligations under, or result in the
acceleration of any obligation under, the certificate or articles of
incorporation or bylaws or other organizational documents of the Company or any
of its Subsidiaries, any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company, any of
its Subsidiaries or any of its or their properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company or any of its Subsidiaries.
(l) The Company or a Subsidiary has good and marketable title to
all properties and assets described in the Prospectus as owned by them, free and
clear of all liens (except for liens for taxes not yet due and payable as to
which appropriate reserves have been established and reflected in the Company's
financial statements), charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company
or its Subsidiaries. The Company or its Subsidiaries has valid, existing and
enforceable leases for the properties described in the Prospectus as leased by
them. The Company or its Subsidiaries owns or leases all such properties as are
necessary to its operations as now conducted or as proposed to be conducted.
(m) There is no document or contract 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 which is not described or filed as
required. All such contracts to which the Company or any of its Subsidiaries is
a party have been duly authorized, executed and delivered by the Company or such
Subsidiary, constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against and by the Company or such Subsidiary in
accordance with the terms thereof, except as such enforceability may be limited
by applicable bankruptcy, insolvency, or other laws affecting creditors rights
generally or by general principles of equity.
(n) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
Section 6 of this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect.
(o) Neither the Company nor any of its directors, officers or
controlling persons has taken, directly or indirectly, any action designed, or
which might reasonably be expected, to cause or
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result, under the Act or otherwise, in, or which has constituted, stabilization
or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(p) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(q) The Company has filed an application to list the Shares to
be sold by the Company hereunder on the Nasdaq National Market System ("NNM"),
and has received notification that the listing has been approved, subject to
notice of issuance of such Shares.
(r) Except as disclosed in or specifically contemplated by the
Prospectus, (i) the Company and its Subsidiaries have sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals and governmental
authorizations to conduct their businesses as now conducted, (ii) the Company
has no knowledge of any infringement by it or any of its Subsidiaries of
trademarks, trade name rights, patent rights, copyrights, licenses, trade
secrets or other similar rights of others, where such infringement could have a
material and adverse effect on the Company, any of its Subsidiaries or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any of its Subsidiaries, and (iii) to
the best of the Company's knowledge, there is no claim being made against the
Company or any of its Subsidiaries or any employee of the Company or any of its
Subsidiaries, regarding trademark, trade name, patent, copyright, license, trade
secret or other infringement that could have a material and adverse effect on
the Company, any of its Subsidiaries or the business, properties, business
prospects, condition (financial or otherwise) or results of operations of the
Company or any of its Subsidiaries, singly or taken as a whole.
(s) The Company and each of its Subsidiaries has filed all
federal, state, local an foreign income tax returns which have been required to
be filed and has paid all taxes and assessments that have become due. Neither
the Company nor any of its Subsidiaries has any tax deficiency that has been or,
to the best knowledge of the Company, might be asserted or threatened against it
that could have a material and adverse effect on the Company, any of its
Subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or any of its
Subsidiaries, singly or taken as a whole.
(t) The Company and its Subsidiaries each own or possess all
authorizations, approvals, orders, licenses, registrations, other certificates
and permits of and from all governmental regulatory officials and bodies,
necessary to conduct their respective businesses as contemplated in the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not materially and adversely affect the Company or any Subsidiary or the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company or any Subsidiary singly or taken as a
whole. There is no action or proceeding pending or threatened (or any basis
therefor known to the Company) that may cause any such authorization, approval,
order, license, registration, certificate or permit to be revoked, withdrawn,
canceled, suspended or not renewed; and the Company and each of its Subsidiaries
is conducting its business in compliance with all laws, rules and regulations
applicable thereto (including, without limitation, all applicable environmental
laws and regulations) except where such noncompliance would not materially and
adversely affect the Company, any of its Subsidiaries or the business,
properties, business prospects, condition financial or otherwise) or results of
operations of the Company or any of its Subsidiaries, singly or taken as a
whole.
(u) The Company and each of its Subsidiaries maintains insurance
of the types and in the amounts generally deemed adequate for its business,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
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(v) Neither the Company nor any of its Subsidiaries nor, to the
best of the Company's knowledge, any of its or their respective employees or
agents has at any time during the last five years (i) made any unlawful
contribution to any candidate for foreign office, or failed to disclose fully
any contribution in violation of law, or (ii) made any payment to any
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or other applicable jurisdiction.
(w) The Company and each of its Subsidiaries is in compliance in
all respects with all applicable environmental laws except to the extent that
any noncompliance would not materially and adversely affect the Company, any of
its Subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries, singly or taken as a whole. Except as set forth in the
Registration Statement and Prospectus, neither the Company nor any of its
Subsidiaries has received any notice or other communication (in writing or
otherwise) that alleges that the Company or any of its Subsidiaries is not in
compliance with any environmental law where such noncompliance is required to be
disclosed in the Registration Statement and the Prospectus, and there are no
circumstances that may prevent or interfere with compliance by the Company or
any of its Subsidiaries with any environmental law in the future. For purposes
of this Section 3(w), "environmental law" means any federal, state, local or
foreign legal requirement relating to pollution or protection of human health or
the environment.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING
STOCKHOLDERS. Each Selling Stockholder, severally and not jointly, represents,
warrants and covenants to each Underwriter that:
(a) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this Agreement and
Custody Agreement and Power-of-Attorney (hereinafter referred to as a "Custody
Agreement") , and for the sale and delivery of the Selling Stockholder Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and such
Selling Stockholder has full right, power and authority to enter into this
Agreement and the Custody Agreement, to make the representations, warranties and
agreements hereunder and thereunder, and to sell, assign, transfer and deliver
the Selling Stockholder Shares to be sold by such Selling Stockholder hereunder.
(b) Certificates in negotiable form representing all of the
Selling Stockholder Shares to be sold by such Selling Stockholder have been
placed in custody under the Custody Agreement, in the form heretofore furnished
to you, duly executed and delivered by such Selling Stockholder to the
Custodian, and such Selling Stockholder has duly executed and delivered a
power-of-attorney, in the form heretofore furnished to you and included in the
Custody Agreement (the "Power-of-Attorney"), appointing Xxxxxx X. Xxxxx as such
Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact") with authority
to execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine (subject to the provisions of the Custody Agreement) the purchase
price to be paid by the Underwriters to the Selling Stockholders as provided in
Section 2 hereof, to authorize the delivery of the Selling Stockholder Shares to
be sold by such Selling Stockholder hereunder and otherwise to act on behalf of
such Selling Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement.
(c) The Selling Stockholder specifically agrees that the Selling
Stockholder Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are for the benefit of and
coupled with and subject to the interests of the Underwriters, the Custodian,
the Attorney-in-Fact, each other Selling Stockholder and the Company, that the
arrangements made by such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorney-in-Fact by the
Power-of-Attorney, are to that extent irrevocable, and that the obligations of
such Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death,
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disability, incapacity, liquidation or dissolution of any Selling Stockholder or
by the occurrence of any other event. If any Selling Stockholder or any executor
or trustee for a Selling Stockholder should die or become incapacitated (or if
any Selling Stockholder that is an estate or trust should be terminated, or if a
Selling Stockholder that is a partnership or corporation should be dissolved, or
if any other such event should occur) before the delivery of the Selling
Stockholder Shares hereunder, certificates representing the Selling
Stockholder's Shares shall be delivered by or on behalf of the Selling
Stockholder in accordance with the terms and conditions of this Agreement and of
the Custody Agreement, and actions taken by the Attorney-in-Fact pursuant to the
Powers-of-Attorney shall be as valid as if such death or incapacity (or
termination, dissolution or other event) had not occurred, regardless of whether
or not the Custodian, the Attorney-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other event.
(d) This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by the Selling Stockholder and each such
document constitutes a valid and binding obligation of such Selling Stockholder,
enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or other laws affecting creditors
rights generally or by general principles of equity and, with respect to this
Agreement, as rights to indemnity or contribution may be limited by federal or
state securities laws and the public policy underlying such laws.
(e) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the sale of the Selling Stockholder Shares by the Selling
Stockholder or the consummation by such Selling Stockholder of the transactions
on its part contemplated by this Agreement and the Custody Agreement, except
such as have been obtained under the Act or the Rules and Regulations and such
as may be required under state securities or Blue Sky laws or the bylaws and
rules of the NASD in connection with the purchase and distribution by the
Underwriters of the Shares to be sold by such Selling Stockholder.
(f) The sale of the Selling Stockholder Shares by the Selling
Stockholder hereunder and the performance by such Selling Stockholder of this
Agreement and the Custody Agreement and the consummation of the transactions
contemplated hereby and thereby will not result in the creation or imposition of
any lien, charge or encumbrance upon any of the Selling Stockholder Shares
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any voting
trust agreement, contract or other agreement or instrument, relating directly or
indirectly to any of the Selling Stockholder Shares, to which such Selling
Stockholder is a party, or violate or conflict with any judgment, ruling,
decree, order, statute, rule or regulation of any court or other governmental
agency or body applicable to such Selling Stockholder (or, if such Selling
Stockholder is a corporation, partnership or other entity, the organizational
documents of such Selling Stockholder).
(g) The Selling Stockholder has, and at the Closing Date, will
have, good and marketable title to the Selling Stockholder Shares to be sold by
such Selling Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims whatsoever; and, upon delivery of such Selling Stockholder
Shares and payment therefor pursuant hereto, good and valid title to such
Selling Stockholder Shares, free and clear of all liens, encumbrances, equities
or claims whatsoever, will be delivered to the Underwriters.
(h) On the Closing Date, all stock transfer or other taxes
(other than income taxes) that are required to be paid in connection with the
sale and transfer of the Selling Stockholder Shares to be sold by such Selling
Stockholder to the several Underwriters hereunder will have been fully paid or
provided for by such Selling Stockholder and all laws imposing such taxes will
have been fully complied with.
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(i) Other than as permitted by the Act and the Rules and
Regulations, such Selling Stockholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other offering
material in connection with the offering and sale of the Firm Shares. The
Selling Stockholder has not taken and will not at any time take, directly or
indirectly, any action designed, or which might reasonably be expected, to cause
or result in, or which will constitute, stabilization of the price of shares of
Common Stock to facilitate the sale or resale of any of the Firm Shares.
(j) All information with respect to such Selling Stockholder
contained in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto complied or will comply in all
material respects with all applicable requirements of the Act and the Rules and
Regulations and does not and 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.
(k) The Selling Stockholder has no knowledge of any material
fact or condition not set forth in the Registration Statement or the Prospectus
that has adversely affected, or may adversely affect, the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its Subsidiaries, and the sale of the Shares proposed to be
sold by such Selling Stockholder is not prompted by any such knowledge.
(l) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 3 hereof are
not true and correct.
(m) Such Selling Stockholder agrees to deliver to the
Representatives prior to or at the Closing Date a properly completed and
executed United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
5. AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. The
Company and each of the Selling Stockholders respectively covenants and agrees
with the several Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the Representatives
promptly, and will confirm such advice in writing, (i) when the Registration
Statement has become effective and when any post-effective amendment thereto
becomes effective, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose or the threat thereof, (iv) of the happening of
any event during the period mentioned in the second sentence of Section 5(e)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading and (v) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement
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pursuant to Rule 430A of the Rules and Regulations, the Company will comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and notify the Representatives promptly of all such filings.
(c) The Company will furnish to each Representative, without
charge, one signed copy of each of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the
Company will deliver to each of the Underwriters, without charge, as many copies
of the Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the several Underwriters and by all dealers
to whom the Shares may be sold, both in connection with the offering or sale of
the Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such period
of time any event shall occur that in the judgment of the Company or counsel to
the Underwriters should be set forth in the Prospectus in order to make any
statement therein, in the light of the circumstances under which it was made,
not misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies of such
supplement or amendment to the Prospectus as the Representatives may reasonably
request.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Representatives and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and
Regulations, furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flow of the Company and its consolidated
Subsidiaries, if any, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its Subsidiaries, if any, for such quarter in reasonable detail.
(h) During the period of five years commencing on the Effective
Date, the Company will furnish to the Representatives and each other Underwriter
who may so request copies of such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to the
Representatives and each other Underwriter who may so request a copy of each
annual or other report it shall be required to file with the Commission.
(i) The Company will make generally available to holders of its
securities as soon as may be practicable but in no event later than the last day
of the fifteenth full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited
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but shall be in reasonable detail) for a period of 12 months commencing after
the Effective Date, and satisfying the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations).
(j) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
all costs and expenses incident to the performance of the obligations of the
Company and the Selling Stockholders under this Agreement and in connection with
the transactions contemplated hereby, including but not limited to costs and
expenses of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits to it, each preliminary prospectus,
Prospectus and any amendment or supplement to the Registration Statement or
Prospectus, (ii) the preparation and delivery of certificates representing the
Shares, (iii) the printing of this Agreement, the Agreement Among Underwriters,
any Selected Dealer Agreements, any Underwriters' Questionnaires, the Custody
Agreements, any Underwriters' Powers of Attorney, and any invitation letters to
prospective Underwriters, (iv) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold, (v) the listing of the
Shares on the NNM, (vi) any filings required to be made by the Underwriters with
the NASD, and the fees, disbursements and other charges of counsel for the
Underwriters in connection therewith, (vii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions designated pursuant to Section 5(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (viii) fees, disbursements and other charges of
counsel to the Company (but not those of counsel for the Underwriters, except as
otherwise provided herein) and (ix) the transfer agent for the Shares. The
Selling Stockholders will pay (directly or by reimbursement) all fees and
expenses incident to the performance of their obligations under this Agreement
that are not otherwise specifically provided for herein, including but not
limited to fees and expenses of separate counsel for such Selling Stockholders,
if any, any fees and expenses of the Attorney-in-Fact and the Custodian, and all
expenses and taxes incident to the sale and delivery of the Selling Stockholder
Shares to be sold by such Selling Stockholders to the Underwriters hereunder.
(k) The Company will not at any time, directly or indirectly,
take any action designed or which might reasonably be expected to cause or
result in, or which will constitute, stabilization of the price of the shares of
Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
(m) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the Prospectus,
without the prior written consent of Xxxxxxx & Company, Inc., the Company will
not offer, sell, contract to sell, grant options to purchase or otherwise
dispose of any of the Company's equity securities or any other securities
convertible into or exchangeable for its Common Stock or other equity security
(other than pursuant to employee stock option plans or the conversion of
convertible securities or the exercise of warrants outstanding on the date of
this Agreement).
(n) The Selling Stockholders will, and the Company will cause
each of its officers and directors to, enter into lock-up agreements with the
Representatives to the effect that they will not, without the prior written
consent of Xxxxxxx & Company, Inc., sell, contract to sell or otherwise dispose
of any shares of Common Stock or rights to acquire such shares according to the
form of Lock-up Agreement set forth in Schedule C hereto.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of each Underwriter hereunder are subject to the following
conditions:
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(a) Notification that the Registration Statement has become
effective shall be received by the Representatives not later than 5:00 p.m., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Representatives and all filings required
by Rule 424 and Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives did
not object thereto in good faith. The Representatives shall have received
certificates, dated the Closing Date and, if later, the Option Closing Date,
signed by the Chief Executive Officer and the Chief Financial Officer of the
Company (who may, as to proceedings threatened, provide such information to
their knowledge), to the effect of clauses (i), (ii) and (iii) of this
paragraph.
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, (i) there shall not have been
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company or any of its Subsidiaries, singly or taken as a
whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as described in or contemplated by the
Registration Statement and the Prospectus, and (ii) the Company shall not have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not described in the Registration Statement
and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale of the
Shares by the Underwriters at the initial public offering price.
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company, any of its
Subsidiaries, or any of its or their officers or directors in their capacities
as such, before or by any court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would, in the judgment of
the Representatives, materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company or any of its Subsidiaries, singly or taken as a whole.
(e) Each of the representations and warranties of the Company
and the Selling Stockholders contained herein shall be true and correct in all
material respects at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company or the Selling Stockholders and all
conditions contained herein to be fulfilled or complied with by the Company or
the Selling Stockholders at or prior to the Closing Date and, with respect to
the option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received an opinion, dated the Closing Date
and, with respect to the Option Shares, the Option Closing Date, satisfactory in
form and substance to the
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Representatives and counsel for the Underwriters from Varnum, Riddering, Xxxxxxx
& Xxxxxxx LLP, counsel to the Company and the Selling Stockholders, with respect
to the following matters:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Colorado. The Company has full corporate power and authority to
conduct all the activities conducted by it, to own or lease all
the assets owed or leased by it and to conduct its business as
described in the Registration Statement and Prospectus. The
Company is duly licensed or qualified to do business and is in
good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such license
or qualification necessary except to the extent that the failure
to be so licensed or qualified would not have a material and
adverse effect on the business or financial condition of the
Company.
(ii) All of the outstanding shares of capital stock of the
Company (including the Selling Stockholder Shares) have been duly
authorized, validly issued and are fully paid and nonassessable,
and were not issued in violation of or subject to any preemptive
or similar rights under the articles of incorporation or bylaws
of the Company or any statute or, to such counsel's knowledge
after due inquiry, under any agreement.
(iii) The Shares to be sold by the Company hereunder have
been duly authorized and, when issued and paid for as
contemplated by this Agreement, will be validly issued, fully
paid and nonassessable; and no preemptive or similar rights exist
with respect to any of the Shares or the issue and sale thereof
under the articles of incorporation or bylaws of the Company or
any statute or, to such counsel's knowledge after due inquiry,
under any agreement.
(iv) To such counsel's knowledge, all of the outstanding
shares of capital stock or limited liability company interests of
each Subsidiary are owned by the Company free and clear of all
claims, liens, charges and encumbrances; to such counsel's
knowledge, there are no securities outstanding that are
convertible into or exercisable or exchangeable for capital stock
or limited liability company interests of any Subsidiary.
(v) The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for issuances, if any, after January 1,
2000 pursuant to this Agreement or pursuant to employee benefit
plans or the exercise of options described in the Prospectus). To
such counsel's knowledge, after due inquiry, except as disclosed
in or specifically contemplated by the Prospectus, there are no
outstanding options, warrants of other rights calling for the
issuance of, and no commitments, plans or arrangements to issue,
any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock
of the Company. The description of the capital stock of the
Company in the Prospectus accurately describes in all material
respects the terms thereof.
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its Subsidiaries is a party or to which any of
their respective properties is subject that are required to be
described in the Prospectus that are not so described.
(vii) No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency
or body is required for the consummation by the Company of the
transactions on its part contemplated under this Agreement,
except such as have been obtained or made under the Act or the
Rules and Regulations and such as may be required under state
securities or Blue Sky laws or the bylaws and rules of the NASD
in connection with the purchase and distribution by the
Underwriters of the Shares.
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(viii) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company. This Agreement
constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by the application of
bankruptcy, insolvency or other laws affecting creditors' rights
generally or by general principles of equity and except as rights
to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws.
(ix) The execution and delivery of this Agreement, the
compliance by the Company with all of the terms hereof and the
consummation of the transactions contemplated hereby does not
contravene any provision of applicable law or the articles of
incorporation or bylaws or charter or organizational documents of
the Company or any of its Subsidiaries, and will not result in
the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company or any of its Subsidiaries
pursuant to the terms and provisions of, result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, or give any party a right to terminate any of its
obligations under, or result in the acceleration of any
obligation under, any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other
material agreement or instrument known to such counsel to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries, or any of their respective
properties is bound or affected, or violate or conflict with (i)
any judgment, ruling, decree or order known to such counsel or
(ii) any statute, rule or regulation of any court or other
governmental agency or body, applicable to the business or
properties of the Company or any of its Subsidiaries.
(x) To such counsel's knowledge, there is no document or
contract of a character required to be described in the
Prospectus or to be filed as an exhibit to the Registration
Statement that is not described or filed as required, and each
description of such contracts and documents that is contained in
the Prospectus accurately summarizes the terms thereof.
(xi) The statements under the captions "Risk Factors -
Future sales of our common stock may cause our stock price to
decline," "Risk Factors - Some anti-takeover provisions may
affect the price of our common stock," "Business - XXXX Joint
Venture," "Management - Stock Option and Purchase Plans,"
"Certain Transactions" and "Description of Capital Stock" in the
Prospectus, insofar as the statements constitute a summary of
documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present, in all material
respects, the information called for with respect to such
documents and matters.
(xii) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiii) The Selling Stockholder Shares are duly listed on the
NNM and the Company Firm Shares and Option Shares have been duly
authorized for listing on the NNM, subject to notice of issuance.
(xiv) To such counsel's knowledge, no holder of securities
of the Company has rights, which have not been waived or
satisfied, to require the registration with the Commission of
shares of Common Stock or other securities, as part of the
offering contemplated hereby.
(xv) The Registration Statement has become effective under
the Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no
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proceeding for that purpose has been instituted or is pending, or, to
the best of such counsel's knowledge, threatened or contemplated.
(xvi) The Registration Statement and the Prospectus comply as
to form in all material respects with the requirement of the Act and
the Rules and Regulations (other than the financial statements and
schedules contained in the Registration Statement or the Prospectus,
as to which such counsel need express no opinion).
(xvii) This Agreement and the Custody Agreement have each been
duly executed and delivered by or on behalf of each Selling
Stockholder. The Custody Agreement constitutes a valid and binding
agreement of such Selling Stockholder enforceable in accordance with
its terms, except as the enforceability thereof may be limited by the
application of bankruptcy, insolvency or other laws affecting
creditors' rights generally or by general principles of equity. The
Attorney-in-Fact and the Custodian have been duly authorized by each
Selling Stockholder to deliver the Selling Stockholder Shares on
behalf of such Selling Stockholder in accordance with the terms of
this Agreement. The sale of the Selling Stockholder Shares to be sold
by each Selling Stockholder hereunder, the performance by each Selling
Stockholder of this Agreement and the Custody Agreement and the
consummation of the transactions contemplated hereby and thereby will
not result in a breach or violation of any of the terms or provisions
of, or constitute a default under, or give any party a right to
terminate any of its obligations under, or result in the acceleration
of any obligation under any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental
agency or body applicable to such Selling Stockholder.
(xviii) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body
is required for the consummation by the Selling Stockholders of the
transactions on their part contemplated by this Agreement, except such
as have been obtained or made under the Act or the Rules and
Regulations and such as may be required under state securities or Blue
Sky laws or the bylaws and rules of the NASD in connection with the
purchase and distribution by the Underwriters of the Selling
Stockholder Shares.
(xix) Each Selling Stockholder has full legal right, power
and authority to enter into this Agreement and the Custody Agreement
and to sell, assign, transfer and deliver the Selling Stockholder
Shares to be sold by such Selling Stockholder hereunder. Upon payment
for such Selling Stockholder Shares and assuming that the Underwriters
are purchasing such Firm Shares in good faith and without notice of
any other adverse claim within the meaning of the Uniform Commercial
Code, the Underwriters will have acquired all rights of such Selling
Stockholder in such Selling Stockholder Shares free of any adverse
claim, any lien in favor of the Company and any restrictions on
transfer imposed by the Company.
In rendering such opinion, such counsel may rely as to matters of
local law on opinions of counsel satisfactory in form and substance to the
Representatives and counsel for the Underwriters. Such counsel may also
rely as to matters of fact on a certificate of officers of the Company and
governmental officials. In rendering the opinions in subparagraphs (xvii) -
(xix), such counsel may rely upon opinions of other counsel retained by the
Selling Stockholders acceptable to the Representatives and as to matters of
fact on certificates of the Selling Stockholders. The opinion shall state
that such counsel is relying on opinions of other counsel and factual
certificates and that such counsel has no reason to believe that it
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and the Underwriters are not entitled to rely on such opinions or certificates.
Copies of such opinions or certificates are to be attached to the opinion.
Such counsel shall also state that such counsel has participated in the
preparation of the Registration Statement and Prospectus and has no reason to
believe that, as of the Effective Date, the Closing Date and, if later, the
Option Closing Date, the Registration Statement, and any amendment or supplement
thereto, (other than the financial statements, schedules and other financial
data contained therein, as to which such counsel need express no opinion)
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 or that the Prospectus, and any amendment or supplement thereto,
as of its date and the Closing Date and, if later, the Option Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the financial statements,
schedules and other financial data contained therein, as to which such counsel
need express no opinion).
(g) The representative shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, from Shanghai Zhu & Partners Law Firm, special counsel to the
Company, with respect to the following matters:
(i) XXXX is a limited liability company duly organized and
validly existing under the laws of the People's Republic of China.
XXXX has full power and authority to conduct all the activities
conducted by it, to own or lease all of the assets owned or leased by
it and to conduct its business as described in the Registration
Statement and Prospectus. XXXX is duly licensed or qualified to do
business in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it
makes such license or qualification necessary, except to the extent
that the failure to be so licensed or qualified would not have a
material and adverse effect on the business or financial condition of
XXXX.
(ii) The limited liability company interests of the Company
and Nippon Sheet Glass Co., Ltd. ("NSG") in XXXX have been validly
issued and were not issued in violation of and are not subject to any
preemptive or similar right under XXXX'x articles of association or
the Joint Venture Agreement. The ownership interests of the Company
and NSG in XXXX are correctly described in the Prospectus, and, to
such counsel's knowledge, there are no outstanding rights calling for
the issuance of, and XXXX has no contractual commitments or
obligations requiring it to issue, additional interests in XXXX or to
change the ownership interests in XXXX.
(h) The representative shall have received an opinion, dated
the Closing Date and, with respect to the Option Shares, the Option Closing
Date, satisfactory in form and substance to the Representatives and counsel for
the Underwriters, from , special counsel to the Company, with
respect to the following matters:
(i) DAF Export Corporation ("DISC") is a corporation duly
organized and validly existing under the laws of Barbados. DISC has
full corporate power and authority to conduct all the activities
conducted by it, to own or lease all of the assets owned or leased by
it and to conduct its business. DISC is duly licensed or qualified to
do business in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it
makes such license or qualification necessary, except to the extent
that the failure to be so licensed or qualified would not have a
material and adverse effect on the business or financial condition of
DISC.
(i) The representatives shall have received an opinion,
dated the Closing Date and the Option Closing Date, from Xxxxx, Xxxxxx & Xxxxxx
LLP, counsel to the Underwriters, with respect to
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the Registration Statement, the Prospectus and this Agreement, which opinion
shall be satisfactory in all respects to the Representatives.
(j) Concurrently with the execution and delivery of this Agreement,
the Accountants shall have furnished to the Representatives a letter, dated the
date of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its Subsidiaries as required by the
Act and the Rules and Regulations and with respect to certain financial and
other statistical and numerical information contained in the Registration
Statement. At the Closing Date and, as to the Option Shares, the Option Closing
Date, the Accountants shall have furnished to the Representatives a letter,
dated the date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from the Accountants,
that nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the letter) not
more than five days prior to the Closing Date and the Option Closing Date, as
the case may be, which would require any change in their letter dated the date
hereof if it were required to be dated and delivered at the Closing Date and the
Option Closing Date.
(k) Concurrently with the execution and delivery of this Agreement
and at the Closing Date and, as to the Option Shares, the Option Closing Date,
there shall be furnished to the Representatives a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus (including any exhibits
incorporated by reference into the Registration Statement) and (A) as of
the date of such certificate, such documents are true and correct in all
material respects and do not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
untrue or misleading and (B) in the case of the certificate delivered at
the Closing Date and the Option Closing Date, since the Effective Date no
event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been duly,
timely and fully performed and each condition herein required to be
satisfied or fulfilled on or prior to the date of such certificate has been
duly, timely and fully satisfied or fulfilled.
(l) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to the Representatives a certificate,
dated the date of its delivery, signed by the Selling Stockholders (or the
Attorney-in-Fact on their behalf), in form and substance satisfactory to the
Representatives, to the effect that the representations and warranties of the
Selling Stockholders contained herein are true and correct on and as of the date
of such certificate as if made on and as of the date of such certificate, and
each of the covenants and conditions required herein to be performed or complied
with by the Selling Stockholders on or prior to the date of such certificate has
been duly, timely and fully performed or complied with.
(m) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 5(n).
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(n) The Shares shall be qualified for sale in such jurisdictions as
the Representatives may reasonably request and each such qualification shall be
in effect and not subject to any stop order or other proceeding on the Closing
Date or the Option Closing Date.
(o) The Shares shall have been duly authorized for listing on the
NNM upon official notice of issuance.
(p) The Company and the Selling Stockholders shall have furnished to
the Representatives such certificates, in addition to those specifically
mentioned herein, as the Representatives may have reasonably requested as to the
accuracy and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus, as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company and the Selling Stockholders herein, as to the
performance by the Company and the Selling Stockholders of its and their
respective obligations hereunder, or as to the fulfillment of the conditions to
the obligations hereunder of the Representatives.
7. INDEMNIFICATION.
(a) Each of the Selling Stockholders, severally and not jointly, and
the Company will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), 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, liabilities, expenses or damages
arise out of or are based in whole or in part on (i) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus, (ii) the omission or
alleged omission to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading in the light of
the circumstances in which they were made, or (iii) any inaccuracy in the
representations and warranties of the Company or the Selling Stockholders
contained herein or any failure of the Company or the Selling Stockholders to
perform its or their obligations hereunder or under law in connection with the
transactions contemplated hereby; provided, however, that (x) neither the
Company nor the Selling Stockholders will be liable to the extent that such
loss, claim, liability, expense or damage arises from the sale of the Shares in
the public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives, on behalf of any Underwriter,
expressly for inclusion in the Registration Statement, the preliminary
Prospectus or the Prospectus and (y) neither the Company nor the Selling
Stockholders will be liable to any Underwriter, the directors, officers,
employees or agents of such Underwriter or any person controlling such
Underwriter with respect to any loss, claim, liability, expense, or damage
arising out of or based on any untrue statement or omission or alleged untrue
statement or omission or alleged omission to state a material fact in the
preliminary prospectus which is corrected in the Prospectus if the person
asserting any such loss, claim, liability, charge or damage purchases Shares
from such Underwriter but was not sent or given a copy of the Prospectus at or
prior to the written confirmation of the sale of such Shares to such person, and
(z) the liability of each Selling Stockholder under this Section 7(a) shall not
exceed the product of the purchase price for each Firm Share set forth in
Section 1(a) hereof multiplied by the number of Selling Stockholder Shares sold
by such Selling Stockholder hereunder. The Company and the Selling Stockholders
acknowledge that statements set forth in the second paragraph (first, second and
third sentences only), eighth paragraph, ninth paragraph and tenth paragraph
under the heading "Underwriting" in the
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preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability that the Company or the
Selling Stockholders might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each director of the Company, each officer of the Company who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and each
Selling Stockholder to the same extent as the foregoing indemnity from the
Company and each Selling Stockholder to each Underwriter, as set forth in
Section 7(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company and the Selling Stockholders acknowledge that the statements set forth
in the second paragraph (first, second and third sentences only), eighth
paragraph, ninth paragraph and tenth paragraph under the heading "Underwriting"
in the preliminary prospectus and the Prospectus constitute the only information
relating to any Underwriter furnished in writing to the Company by the
Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section 7 shall, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 7 unless,
and only to the extent that, such omission results in the loss of substantive
rights or defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in and, to
the extent that it elects by delivering written notice to the indemnified party
promptly after receiving notice of the commencement of the action from the
indemnified party, jointly with any other indemnifying party similarly notified,
to assume the defense of the action, with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel will be at the
expense of such indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying party, (ii)
the indemnified party has reasonably concluded that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (iv) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the reasonable fees, disbursements and
other charges of counsel for the indemnified party will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one
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separate firm admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is [or has received written notice
that it is being considered to be made] a party and indemnity was [or, if such
person were made a party could have been] sought hereunder by such indemnified
party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (b) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (a) and (b) of this Section 7 in respect of any losses, claims,
liabilities, expenses and damages referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted) by such
indemnified party as a result of such losses, claims, liabilities, expenses and
damages in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Selling Stockholders, on the one hand,
and the Underwriters, on the other hand. The relative benefits received by the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. If, but only if, the allocation provided by
the foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company and the Selling Stockholders, on the one hand, and
the Underwriters, on the other hand, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Selling Stockholders, on the one hand, or the Underwriters,
on the other hand, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
7(d) were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, liability, expense or damage, or action in respect thereof,
referred to above in this Section 7(d) shall be deemed to include, for purposes
of this Section 7(d), 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 7(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7(d), any person who
controls a party to this Agreement within the meaning of the Act and the
Exchange Act will have the same rights to contribution as that party, and each
officer
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of the Company who signed the Registration Statement will have the same rights
to contribution as the Company, subject in each case to the provisions hereof.
Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against any such party in respect of which a claim
for contribution may be made under this Section 7(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 7(d). Neither the
Company nor any Selling Stockholder will be liable for contribution with respect
to any action or claim settled without the written consent of the Company (which
consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of any of the Shares and payment therefor or (iii)
any termination of this Agreement.
8. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7(a) of this Agreement, the Company hereby agrees to
reimburse the Underwriters on a quarterly basis for all legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon, in
whole or in part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company or the
Selling Stockholders contained herein or failure of the Company or the Selling
Stockholders to perform its or their respective obligations hereunder or under
law, all as described in Section 7(a), notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
Section 7 and the possibility that such payment might later be held to be
improper; provided, however, that, to the extent any such payment is ultimately
held to be improper, the persons receiving such payments shall promptly refund
them.
9. TERMINATION. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the Company if, prior to delivery and payment for the Firm
Shares or Option Shares, as the case may be, in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission or by the NNM, (ii) trading in
securities generally on the NNM shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange, by order of the Commission or any court or other governmental
authority, or by the NNM, (iii) a general banking moratorium shall have been
declared by Federal or New York State authorities, (iv) in the judgment of the
Representatives there shall have occurred any material adverse change in the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a whole, (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
insured, (vi) any material adverse change in the financial or securities markets
in the United States or internationally or any change or development involving a
prospective change in political, financial or economic conditions in the United
States or internationally or any outbreak or material escalation of hostilities
or other calamity or crisis shall have occurred, the effect of which is such as
to make it, in the sole judgment of the Representatives, impracticable or
inadvisable to proceed with completion of the public offering or the delivery of
and payment for the Shares.
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If this Agreement is terminated pursuant to Section 9 hereof, neither
the Company nor any Selling Stockholder shall be under any liability to any
Underwriter except as provided in Sections 5(j), 7 and 8 hereof, but, if the
purchase of the Shares by the Underwriters is not consummated because of a
failure by the Company or the Selling Stockholders to comply with any of the
terms or to fulfill any of the obligations of this Agreement or if for any
reason the Company shall be unable to perform its obligations hereunder, the
Company and the Selling Stockholders will reimburse the several Underwriters for
all reasonable out-of-pocket expenses incurred by them in connection with the
offering of the Shares.
10. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Shares which it or they
have agreed to purchase hereunder, 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 Shares to be purchased on
such date, the other Underwriters shall be obligated, severally, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Shares which they
have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Shares which all such non-defaulting Underwriters have so
agreed to purchase, or in such other proportions as the Representatives may
specify. If any Underwriter or Underwriters shall fail or refuse to purchase any
Shares and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase exceeds one-ninth of the
aggregate number of the Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-faulting Underwriter, the Company or the
Selling Stockholders for the purchase or sale of any Shares under this
Agreement. In any such case either the Representatives or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or in any other documents or arrangements may be effected.
Any action taken pursuant to this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
11. MISCELLANEOUS. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company or the Selling Stockholders, at the
office of the Company, 0000 X-00 Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx, with a copy to Xxxxxxx X. Xxxxxxxx III, Esq.,
Varnum, Riddering, Xxxxxxx & Xxxxxxx LLP, 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx,
Xxxxxxxx 00000, or (b) if to the Underwriters, to the Representatives at the
offices of Xxxxxxx & Company, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Finance Department, with a copy to Xxxxxxxx Xxxxxxxx, Esq.,
Xxxxx, Xxxxxx & Xxxxxx LLP, 000 00xx Xx., Xxxxx 0000, Xxxxxx, XX 00000. Any such
notice shall be effective only upon receipt. Any notice may be made by telex or
telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, the Selling Stockholders and the controlling
persons, directors and officers referred to in Section 7, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from any of the several Underwriters.
Any action required or permitted to be made by the Representatives
under this Agreement may be taken by them jointly or by Xxxxxxx & Company, Inc.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
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This Agreement may be signed in two or more counterparts with the same
effect as if the signature thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company, the Selling Stockholders and the Underwriters each hereby
waives any right they may have to a jury trial, in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated hereby.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
APPLIED FILMS CORPORATION
By:
----------------------------------------------
Title: President and Chief Executive Officer
SELLING STOCKHOLDERS
(named in Schedule B hereto)
By:
----------------------------------------------
Attorney-in-Fact
Confirmed as of the date first above mentioned:
XXXXXXX & COMPANY, INC.
X.X. XXXXXXXX & CO.
FIRST SECURITY XXX XXXXXX
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule A hereto.
By: XXXXXXX & COMPANY, INC.
By:
---------------------------------------------
Title:
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.
Very truly yours,
APPLIED FILMS CORPORATION
By:
----------------------------------------------
Title: President and Chief Executive Officer
SELLING STOCKHOLDERS
(named in Schedule B hereto)
By:
----------------------------------------------
Attorney-in-Fact
Confirmed as of the date first above mentioned:
XXXXXXX & COMPANY, INC.
X.X. XXXXXXXX & CO.
FIRST SECURITY XXX XXXXXX
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule A hereto.
By: XXXXXXX & COMPANY, INC.
By:
---------------------------------------------
Title:
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SCHEDULE A
UNDERWRITERS
Number of Firm
Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxx & Company, Inc.
X.X. Xxxxxxxx & Co.
First Security Xxx Xxxxxx
------------------------
Total 3,066,500
28
SCHEDULE B
Total Number of Total Number of
Firm Shares Option Shares
to be Sold to be Sold
----------------------- ---------------------
Applied Films Corporation 2,500,000 459,975
Selling Stockholders
Xxxxx Xxx Xxxxxxx 250,000 ----
Xxxx X. Xxxxxx 250,000 ----
C. Xxxxxxx Xxxxxx 50,000 ----
Xxxxx Xxxxx 16,500 ----
----------------------- ---------------------
TOTALS 3,066,500 459,975
29
SCHEDULE C
APPLIED FILMS CORPORATION
LOCK-UP AGREEMENT
Xxxxxxx & Company, Inc.
X.X. Xxxxxxxx & Co.
First Security Xxx Xxxxxx
As Representatives of the several Underwriters
c/o Needham & Company, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned is a holder of securities of Applied Films Corporation,
a Colorado corporation (the "Company"), and wishes to facilitate the public
offering of shares of the Common Stock (the "Common Stock") of the Company (the
"Offering"). The undersigned recognizes that such Offering and the public market
for shares of the Company's Common Stock created thereby will be of benefit to
the undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby irrevocably
agrees that he, she or it will not, without the prior written approval of
Xxxxxxx & Company, Inc., acting on its own behalf and on behalf of other
representatives of the underwriters, directly or indirectly, offer, sell,
contract to sell, make any short sale (including, but not limited to, a "short
against the box"), pledge, or otherwise dispose of, any shares of Common Stock,
options to acquire shares of Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock, or any other rights
to purchase or acquire Common Stock of the Company (the "Securities") which he,
she or it may own directly or indirectly or beneficially (as defined by the
Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder), for a period commencing on the date on which the Form S-1
Registration Statement filed on behalf of the Company in connection with the
Offering (the "Registration Statement") shall become effective by order of the
Securities and Exchange Commission (the "Effective Date") and ending on the date
which is one hundred eighty (180) days (the "Lock-Up Period") following the
Effective Date. The foregoing restriction is expressly agreed to preclude the
holder of Securities from engaging in any hedging or other transaction that is
designed or could reasonably be expected to lead to, or result in, a disposition
of Securities during the Lock-Up Period even if such Securities would be
disposed of by the undersigned subsequent to the Lock-Up Period or by someone
other than the undersigned.
Notwithstanding the foregoing, any transfer of Securities which either
(i) will not result in any change in beneficial ownership, including, but not
limited to, pro rata partnership distributions and transfers into trusts for the
benefit of the original holder, or (ii) constitute bona fide gifts of such
shares, will not require your consent; provided that in each case the transferee
enters into a lock-up agreement in substantially the form hereof covering the
remainder of the Lock-Up Period under this Agreement.
30
The undersigned confirms that he, she or it understands that the
Underwriters and the Company will rely upon the representations set forth in
this Agreement in proceeding with the offering. The undersigned further confirms
that this Agreement is irrevocable and shall be binding upon the undersigned and
his, her or its respective heirs, personal representatives, successors and
assigns. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
Securities held by the undersigned except in compliance with this Agreement.
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(Securities Holder's Name)
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(Signature)
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(Name of Person Signing)
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(Title)
