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EXHIBIT 1.1
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CHART INDUSTRIES, INC.
2,800,000 Shares
Common Stock,
(Par Value $.01 Per Share)
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UNDERWRITING AGREEMENT
New York, New York
_____________, 1997
SCHRODER & CO. INC.
McDONALD & COMPANY SECURITIES, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Schroder & Co. Inc.
Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
Dear Sirs:
Chart Industries, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 1,300,000 shares of Common Stock, par value $.01 per share (the
"Common Stock"), and the persons named in Schedule II hereto (the "Selling
Stockholders"), propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 1,500,000 shares of Common Stock. The
2,800,000 shares of Common Stock to be sold by the Company and the Selling
Stockholders are herein referred to as the "Firm Securities." In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 420,000 shares of Common Stock (the "Option Securities"), on the
terms and for the purposes set forth in Section 2 hereof. The Firm Securities
and the Option Securities are herein collectively referred to as the
"Securities." Except as may be expressly set forth below, any reference to you
in this Agreement shall be solely in your capacity as the Representatives.
1A. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
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(a) A registration statement on Form S-3 (File No. 333-35321)
(the "Initial Registration Statement"), and as a part thereof a
preliminary prospectus, in respect of the Securities, has been filed
with the Securities and Exchange Commission (the "Commission") in the
form heretofore delivered to you and, with the exception of exhibits to
the Initial Registration Statement, to you for each of the other
Underwriters; if the Initial Registration Statement has not become
effective, an amendment (the "Final Amendment") to the Initial
Registration Statement, including a form of final prospectus, necessary
to permit the Initial Registration Statement to become effective, will
promptly be filed by the Company with the Commission; if the Initial
Registration Statement has become effective and any post-effective
amendment to the Initial Registration Statement has been filed with the
Commission prior to the execution and delivery of this Agreement, which
amendment or amendments shall be in form acceptable to you, the most
recent such amendment has been declared effective by the Commission; if
the Initial Registration Statement has become effective, a final
prospectus (the "Rule 430A Prospectus") relating to the Securities
containing information permitted to be omitted at the time of
effectiveness by Rule 430A of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"),
will promptly be filed by the Company pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Act and, if
applicable, a new registration statement increasing the size of the
offering pursuant to Rule 462(b) of the rules and regulations of the
Commission under the Act (the "Rule 462(b) Registration Statement")
will promptly be filed by the Company pursuant to Rules 462(b) and
232.13(a)(3) of the rules and regulations of the Commission under the
Act (any preliminary prospectus filed as part of the Initial
Registration Statement being herein called a "Preliminary Prospectus,"
the Initial Registration Statement as amended at the time that it
becomes or became effective, or, if applicable, as amended at the time
the most recent post-effective amendment to such registration statement
filed with the Commission prior to the execution and delivery of this
Agreement became effective (the "Effective Date"), including all
exhibits thereto and all information deemed to be a part thereof at
such time pursuant to Rule 430A of the rules and regulations of the
Commission under the Act, together with all parts of the Rule 462(b)
Registration Statement and all exhibits thereto, being herein called
the "Registration Statement," and the final prospectus relating to the
Securities in the form first filed pursuant to Rule 424(b) of the rules
and regulations of the Commission under the Act or, if no such filing
is required, the form of final prospectus included in the Registration
Statement, being herein called the "Prospectus"); any reference herein
to any Preliminary Prospectus or the Prospectus or the Registration
Statement shall be deemed to include any information incorporated by
reference therein, as of the date of such Preliminary Prospectus, the
Prospectus or the Registration Statement, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus,
the Prospectus or the Registration Statement shall be deemed to refer
to any documents filed after such date under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder and so incorporated by
reference;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing
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thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein;
(c) On the Effective Date and the date the Prospectus is filed
with the Commission, and when any further amendment or supplements
thereto become effective or are filed with the Commission, as the case
may be, the Registration Statement, the Prospectus and such amendment
or supplements did and will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through you expressly for use therein;
(d) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein, in light of the
circumstances under which they were made, or necessary to make the
statements therein not misleading;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with all requisite power and authority (corporate and
other) to own its properties and to conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification (except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the business
affairs or prospects of the Company and its subsidiaries, taken as a
whole); and each of the Company's direct and indirect corporate
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with all requisite power and authority (corporate and
other) to own its properties and to conduct its business as described
in the Prospectus, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification (except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the business
affairs or prospects of the Company
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and its subsidiaries, taken as a whole); ALTEC International Limited
Partnership ("ALTEC") is a limited partnership duly formed under the
laws of the State of Delaware and is validly existing as a limited
partnership and in good standing under the laws of the State of
Delaware with power and authority to own its properties and to conduct
its business as described in the Prospectus and has been duly
registered as a foreign limited partnership for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases property, or conducts any
business, so as to require such qualification (except where the failure
to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the business affairs or prospects
of the Company and its subsidiaries taken as a whole); and references
in this Agreement to subsidiaries of the Company shall include direct
and indirect corporate subsidiaries and ALTEC;
(f) All the issued shares of capital stock of each corporate
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned by the Company
free and clear of all liens, encumbrances, equities, security
interests, or claims; and there are no outstanding options, warrants or
other rights calling for the issuance of, and there are no commitments,
plans or arrangements to issue, any shares of capital stock of any
subsidiary or any security convertible or exchangeable or exercisable
for capital stock of any subsidiary; except for the interests in ALTEC
owned by the Company and the shares of stock of each corporate
subsidiary owned by the Company or by a subsidiary of the Company,
neither the Company nor any subsidiary owns, directly or indirectly,
any shares of capital stock of any corporation or has any equity
interest in any firm, partnership, joint venture, association or other
entity; all of the general partner interests in ALTEC are owned by
Chart Management Co. Inc., an Ohio corporation, and all of the limited
partner interests in ALTEC are owned by ALTEC, Inc., a wholly owned
direct subsidiary of the Company in each case free and clear of all
liens, encumbrances, equities, security interests, or claims and there
are no outstanding options, warrants or other rights calling for the
issuance of, and there are no commitments, plans or arrangements to
issue any interests in ALTEC or any security convertible or
exchangeable or exercisable for interests in ALTEC;
(g) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement; the
execution and delivery of this Agreement and performance by the Company
of its obligations under this Agreement have been duly and validly
authorized by all requisite corporate action of the Company; and this
Agreement constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms
except to the extent that the indemnification provisions set forth in
Section 8 of this Agreement may be limited by Federal or state
securities laws or the public policy underlying such laws;
(h) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, which
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loss or interference is material to the Company and its subsidiaries,
taken as a whole; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been, and prior to the Time of Delivery (as defined in
Section 4 hereof) there will not be, any change in the capital stock
(other than shares issued pursuant to exercise of employee stock
options and non-employee director stock options that the Prospectus
indicates are outstanding (the "Stock Option Shares") or pursuant to
the terms of warrants of the Company that the Prospectus indicates are
outstanding on the date hereof) or short-term debt or long-term debt of
the Company or any of its subsidiaries, any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company, or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the, management, financial
condition, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(i) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described or
contemplated by the Prospectus, or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries or do not have a material adverse effect on the condition,
financial or otherwise, or the business affairs or prospects of the
Company and its subsidiaries taken as a whole, and any real property
and buildings held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such real property and
buildings by the Company and its subsidiaries or do not have a material
adverse effect on the condition, financial or otherwise, or the
business affairs or prospects of the Company and its subsidiaries taken
as a whole;
(j) The Company has an authorized, issued and outstanding
capitalization as set forth in the Registration Statement, and all the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable, are
free of any preemptive rights, rights of first refusal or similar
rights, were issued and sold in compliance with the applicable Federal
and state securities laws and conform in all material respects to the
description in the Prospectus; except as described in the Prospectus,
there are no outstanding options, warrants or other rights calling for
the issuance of, and there are no commitments, plans or arrangements to
issue, any shares of capital stock of the Company or any security
convertible or exchangeable or exercisable for capital stock of the
Company; the Company has no preferred stock issued or outstanding as of
the date hereof; there are no holders of securities of the Company who,
by reason of the filing of the Registration Statement have the right
(and have not waived such right) to request the Company to include in
the Registration Statement securities owned by them;
(k) The Securities to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-
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assessable, and will conform in all material respects to the
description thereof in the Prospectus (whether set forth therein or
incorporated by reference) and will be listed on the New York Stock
Exchange as of the Effective Date;
(l) The execution and delivery of this Agreement, the
performance of the obligations of the Company under this Agreement, the
consummation of the transactions herein contemplated and the issue and
sale of the Securities and the compliance by the Company with all the
provisions of this Agreement do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge, claim, or encumbrance upon, any of the property or
assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor do or will any such actions result in any
violation of the provisions of the Certificate of Incorporation or the
By-laws, in each case as amended to the date hereof, of the Company or
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, filing, order, registration or
qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation
of the other transactions contemplated by this Agreement, except the
registration under the Act of the Securities, and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
(m) Except as included in the Prospectus or incorporated by
reference therein, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries or any of their
respective officers or directors is a party or of which any property of
the Company or any of its subsidiaries is the subject that could
prevent consummation of the transactions contemplated by this Agreement
or that is required to be disclosed in the Registration Statement or
the Prospectus or any other such proceedings, other than litigation or
proceedings incident to the business conducted by the Company and its
subsidiaries that will not individually or in the aggregate have a
material adverse effect on the current or future financial condition,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened or contemplated by others; and neither the
Company nor any of its subsidiaries is involved in any labor dispute,
nor, to the Company's knowledge, is any labor dispute threatened;
(n) The Company and its subsidiaries have all material
licenses, permits and other approvals or authorizations of and from
governmental or regulatory authorities ("Permits") as are necessary
under applicable law to own or lease their respective properties and to
conduct their respective businesses in the manner now being conducted
and as
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described in the Prospectus; and the Company and its subsidiaries have
fulfilled and performed all of their respective obligations with
respect to such Permits, and no event has occurred which allows, or
after notice or lapse of time or both would allow, revocation or
termination thereof or result in any other material impairment of the
rights of the holder of any such Permits;
(o) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and have
certified certain financial statements of Cryenco Sciences, Inc.
("Cryenco") and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements
and schedules included in the Registration Statement and the
Prospectus, are independent public accountants as required by the Act
and the rules and regulations of the Commission applicable to such
financial statements and Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants and its
interpretations and rulings;
(p) The consolidated financial statements and schedules of the
Company and its subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
financial condition, the results of operations and the cash flows of
the Company and its subsidiaries as of the dates and for the periods
therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved, except
as otherwise stated therein; the consolidated financial statements of
Cryenco and its subsidiaries incorporated by reference in the
Registration Statement and the Prospectus present fairly the financial
condition, the results of operations and the cash flows of Cryenco and
its subsidiaries as of the dates and for the periods therein specified
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
otherwise stated therein; the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus are accurately presented and, to the extent such information
and data are derived from the financial statements and books and
records of the Company and its subsidiaries, are prepared on a basis
consistent with such financial statements and the books and records of
the Company and its subsidiaries; the pro forma financial information
included in the Registration Statement and the Prospectus has been
properly compiled and complies in all material respects with the
applicable accounting requirements of Rule 11-01 and Rule 11-02 of
Regulation S-X of the Commission; and no other financial statements or
schedules are required to be included in the Registration Statement and
the Prospectus;
(q) There are no statutes or governmental regulations, or any
contracts or other documents that are required to be described in or
filed as exhibits to the Registration Statement which are not described
therein accurately in all material respects or filed as exhibits
thereto; and all such contracts to which the Company or any subsidiary
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 the Company
or subsidiary in accordance with the terms thereof;
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(r) The Company and its subsidiaries own or possess adequate
patent rights or licenses or other rights to use patent rights,
inventions, trademarks, service marks, trade names, copyrights,
technology and know-how necessary to conduct the general business now
or proposed to be operated by them as described in the Prospectus;
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any patent, patent rights, inventions, trademarks, service
marks, trade names, copyrights, technology or know-how which, singly or
in the aggregate, could materially adversely affect the business,
operations, financial condition, income or business prospects of the
Company and its subsidiaries considered as a whole; and, the
discoveries, inventions, products or processes of the Company and its
subsidiaries referred to in the Prospectus do not, to the Company's
knowledge, infringe or conflict with any patent or right of any third
party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company;
(s) Neither the Company nor any of its subsidiaries is in
violation of any term or provision of their respective Certificate of
Incorporation or By-Laws (or similar corporate constituent documents
or, in the case of ALTEC, its Certificate of Limited Partnership or
partnership agreement), in each case as amended to the date hereof, or
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of its subsidiaries, or of any decree
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries where the consequences of such
violation would have a material adverse effect on the condition,
financial or otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole;
(t) No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, bank loan or credit agreement,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them or their respective
properties is bound or may be affected, where such default would have a
material adverse effect on the condition, financial or otherwise, or
the business affairs or prospects of the Company and its subsidiaries,
taken as a whole;
(u) The Company and its subsidiaries have timely filed all
necessary tax returns and notices and have paid all federal, state,
county, local and foreign taxes of any nature whatsoever for all tax
years through December 31, 1996, to the extent such taxes have become
due. The Company has no knowledge, or any reasonable grounds to know,
of any tax deficiencies which would have a material adverse effect on
the Company or any of its subsidiaries; the Company and its
subsidiaries have paid all taxes which have become due, whether
pursuant to any assessments or otherwise, and there is no further
liability (whether or not disclosed on such returns) or assessments for
any such taxes, and no interest or penalties accrued or accruing with
respect thereto, except as may be set forth or adequately reserved for
in the financial statements included in the Registration Statement; the
amounts currently set up as provisions for taxes or otherwise by the
Company and its subsidiaries on
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their books and records are sufficient for the payment of all their
unpaid federal, foreign, state, county and local taxes accrued through
the dates as of which they speak, and for which the Company and its
subsidiaries may be liable in their own right, or as a transferee of
the assets of, or as successor to any other corporation, association,
partnership, joint venture or other entity;
(v) The Company will not, during the period of 180 days after
the date hereof except pursuant to this Agreement, offer, sell,
contract to sell or otherwise dispose of any capital stock of the
Company (or securities convertible into, or exchangeable for, capital
stock of the Company), directly or indirectly, without the prior
written consent of Schroder & Co. Inc., except for grants or exercises
of stock options under the Company's stock option plans or pursuant to
the terms of warrants of the Company described in the Prospectus as
outstanding on the date hereof;
(w) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(x) Neither the Company nor any of its subsidiaries is in
violation of any foreign, federal, state or local law or regulation
relating to discrimination in the hiring, promotion or compensation of
employees nor any applicable federal or state wages and hours laws, nor
any provisions of the Employee Retirement Income Security Act of 1974,
as amended, or the rules and regulations promulgated thereunder, where
such violation would have a material adverse effect on the Company and
its subsidiaries, taken as a whole; the Company (A) is in compliance
with any and all applicable federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or waste, pollutants or
contaminants ("Environmental Laws"), (B) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with
all terms and conditions of any such permit, license or approval,
except for such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals that would not, singularly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole; there has been no storage, disposal, generation, transportation,
handling or treatment of hazardous substances or solid wastes by the
Company or any of its subsidiaries (or to the knowledge of the Company,
any of their respective predecessors in interest) at, upon or from any
of the property now or previously owned or leased by the Company or any
of its subsidiaries in violation of any applicable law, ordinance, rule
regulation, order, judgment, decree or permit or which would require
remedial action by the Company or any of its subsidiaries
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under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which
would not result in, or which would not be reasonably likely to result
in, singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the Company and its
subsidiaries, taken as a whole; there has been no spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto
such property or into the environment surrounding such property of any
solid wastes or hazardous substances due to or caused by the Company or
any of its subsidiaries except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not result
in or would not be reasonably likely to result in, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a material adverse effect
on the Company and its subsidiaries, taken as a whole; and the terms
"hazardous substances" and "solid wastes" shall have the meanings
specified in any applicable local, state and federal laws or
regulations with respect to environmental protection;
(y) To the best of the Company's knowledge, none of the
Company or its subsidiaries, or its or their officers, directors,
employees or agents, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity, or made any unlawful payment of funds of the
Company or any subsidiary or received or retained any funds in
violation of any law, rule or regulation;
(z) None of the Company or its subsidiaries, or its or their
officers, directors, employees or agents, have taken or will take,
directly or indirectly, any action designed to or which has constituted
or that might be reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company;
(aa) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied in the case of the
Registration Statement;
(bb) Other than with respect to the Underwriters, the Company
has not incurred any liability for finder's or broker's fees or agent's
commission in connection with the execution, delivery or performance of
this Agreement, the offer and sale of the Securities or the transaction
contemplated hereby;
(cc) The Company has furnished you letters from each of the
executive officers and directors of the Company pursuant to which such
persons have agreed that for a period of 180 days after the date
hereof, except pursuant to this Agreement, such persons will not offer,
sell, contract to sell, or otherwise dispose of, any shares of capital
stock of the Company (or securities convertible into or exchangeable
for, capital stock of the Company), directly or indirectly, without the
prior written consent of Schroder & Co. Inc.;
(dd) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of
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1940, as amended; and
(ee) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and except as described in the Prospectus neither the Company nor
any such subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the condition, financial or otherwise, or
the business affairs or prospects of the Company and its subsidiaries,
taken as a whole.
1B. Each Selling Stockholder, severally and not jointly, represents and
warrants to, and agrees with, each of the Underwriters that:
(a) Such Selling Stockholder has, and at the Time of Delivery
(as defined in Section 4 hereof) will have, good and valid title to the
Securities to be sold by such Selling Stockholder hereunder, free and
clear of any liens, encumbrances, equities, security interests, claims
and other restrictions of any nature whatsoever, and such Selling
Stockholder has the full legal right, power and authority, and any
approval required by law, to enter into this Agreement and to sell,
assign, transfer and deliver the Securities being sold by it hereunder
and to make the representations, warranties, covenants and agreements
made by such Selling Stockholders in this Agreement; and upon the
delivery of and payment for such Securities as herein provided, the
several Underwriters will acquire good and valid title thereto, free
and clear of all liens, encumbrances, equities, security interests,
claims and other restrictions of any nature whatsoever;
(b) Such Selling Stockholder has duly executed and delivered
an agreement and power of attorney (with respect to such Selling
Stockholder, the "Agreement and Power-of-Attorney", in the form
heretofore delivered to the Representatives, appointing [INSERT NAME OF
ATTORNEY-IN-FACT] as such Selling Stockholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Stockholder and appointing [INSERT
NAME OF CUSTODIAN], as custodian thereunder (the "Custodian").
Certificates in negotiable form, endorsed in blank or accompanied by
blank stock powers duly executed, with signatures appropriately
guaranteed, representing the Securities to be sold by such Selling
Stockholder hereunder have been deposited with the Custodian pursuant
to the Agreement and Power-of-Attorney for the purpose of delivery
pursuant to this Agreement. Such Selling Stockholder has full power and
authority to enter into the Agreement and Power-of-Attorney and to
perform its obligations thereunder. The Agreement and the
Power-of-Attorney have been duly executed and delivered by such Selling
Stockholder and, assuming due authorization, execution and delivery by
the Custodian, are the legal, valid, binding and enforceable
instruments of such Selling Stockholder. Such Selling Stockholder
agrees that each of the Securities represented by the certificates on
deposit with the Custodian is subject to the
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interests of the Underwriters, the Company and the other Selling
Stockholders hereunder, that the arrangements made for such custody,
the appointment of the Attorney-in-Fact and the right, power and
authority of the Attorney-in-Fact to execute and deliver this Agreement
and to carry out the terms of this Agreement are to that extent
irrevocable and that the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement
or the Agreement and Power-of-Attorney, by any act of such Selling
Stockholder, by operation of law, or otherwise, whether in the case of
any individual Selling Stockholder by the death or incapacity of such
Selling Stockholder, or in the case of a trust by its revocation or
other termination or by the occurrence of any other event. If any
individual Selling Stockholder should die or become incapacitated, or
instrument governing a Selling Stockholder that is a trust shall have
been revoked or any trustee shall have ceased to serve as such, or if
any other event should occur, before the delivery of such Securities
hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof;
(c) Such Selling Stockholder will not, during the period of
180 days after the date hereof, except pursuant to this Agreement,
offer, sell, contract to sell, or otherwise dispose of any capital
stock of the Company (or securities convertible into, or exchangeable
for, capital stock of the Company), directly or indirectly, without the
prior written consent of Schroder & Co. Inc., other than pursuant to
bona fide gifts to persons or entities who agree in writing with you to
be bound by the restrictions set forth in this paragraph;
(d) Neither the execution and delivery or performance of this
Agreement or the Agreement and Power-of-Attorney or the consummation of
the transactions herein or therein contemplated nor the compliance with
the terms hereof or thereof by such Selling Stockholder will conflict
with, or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge, claim or encumbrance on any property
of the Company or any of its subsidiaries, under any indenture,
mortgage, deed of trust, lease or other agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder's property is bound, or the instruments governing any
Selling Stockholder that is a trust or any statute, ruling, judgment,
decree, order, or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling Stockholder; and
no consent, approval, authorization, order, registration or
qualification of or with any governmental authority, except such as
have been obtained, such as may be required under state or foreign
securities or Blue Sky laws or by the by-laws and rules of the National
Association of Securities Dealers, Inc. and, if the registration
statement filed with respect to the Securities is not effective under
the Act as of the time of execution hereof, such as may be required
(and shall be obtained as provided in this Agreement) under the Act;
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to cause or result in, or
that has constituted or which might
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reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company;
(f) The sale by such Selling Stockholder of Securities
pursuant hereto is not prompted by any adverse information concerning
the Company that is not set forth in the Registration Statement or the
Prospectus;
(g) Such Selling Stockholder has reviewed the Prospectus and
the Registration Statement, and the information regarding such Selling
Stockholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate;
(h) At the Time of Delivery, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection
with the sale and transfer of the Securities 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;
(i) The Selling Stockholder has not distributed and, prior to
the last to occur of (i) the Time of Delivery, (ii) the Option
Securities Delivery Date or (iii) completion of the distribution of the
Securities, will not distribute without your prior written consent any
offering material directly or indirectly in connection with the
offering and sale of the Securities; and
(j) Such Selling Stockholder (other than the Christine H.
Holmes Trust) does not have any knowledge or any reason to believe that
the Registration Statement or the Prospectus (or any amendment or
supplement thereto) contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the several Underwriters an aggregate of 1,300,000
Firm Securities, each Selling Stockholder agrees to sell to the several
Underwriters the number of Firm Securities set forth on Schedule II opposite the
name of such Selling Stockholder and each of the Underwriters agrees to purchase
from the Company and the Selling Stockholders, at a purchase price of
$__________ per share, the respective aggregate number of Firm Securities
determined in the manner set forth below. The obligation of each Underwriter to
the Company and each of the Selling Stockholders, respectively, shall be to
purchase that portion of the number of shares of Common Stock to be sold by the
Company or such Selling Stockholder pursuant to this Agreement as the number of
Firm Securities set forth opposite the name of such Underwriter on Schedule I
bears to the total number of Firm Securities to be purchased by the Underwriters
pursuant to this Agreement, in each case adjusted by you such that no
Underwriter shall be obligated to purchase Firm Securities other than in 100
share amounts. In making this Agreement, each Underwriter is contracting
severally and not jointly.
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In addition, subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters, as required (for the sole
purpose of covering over-allotments in the sale of the Firm Securities), up to
420,000 Option Securities at the purchase price per share of the Firm Securities
being sold by the Company as stated in the preceding paragraph. The right to
purchase the Option Securities may be exercised by your giving 48 hours' prior
written or telephonic notice (subsequently confirmed in writing) to the Company
of your determination to purchase all or a portion of the Option Securities.
Such notice may be given at any time within a period of 30 days following the
date of this Agreement. Option Securities shall be purchased severally for the
account of each Underwriter in proportion to the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule I hereto. No Option
Securities shall be delivered to or for the accounts of the Underwriters unless
the Firm Securities shall be simultaneously delivered or shall theretofore have
been delivered as herein provided. The respective purchase obligations of each
Underwriter shall be adjusted by you so that no Underwriter shall be obligated
to purchase Option Securities other than in 100 share amounts. The Underwriters
may cancel any purchase of Option Securities at any time prior to the Option
Securities Delivery Date (as defined in Section 4 hereof) by giving written
notice of such cancellation to the Company.
3. The Underwriters propose to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. Certificates in definitive form for the Firm Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company and the Selling Stockholders to you for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks, payable
in New York Clearing House funds, to the order of the Company, for the purchase
price of the Firm Securities being sold by the Company, and to the order of the
respective Selling Stockholders for the purchase price of the Firm Securities
being sold by the Selling Stockholders, at the office of Schroder & Co. Inc.,
Equitable Center, 787 Seventh Avenue, New York, New York, at 9:30 A.M., New York
City time, on __________ __, 1997, or at such other time, date and place as you
and the Company may agree upon in writing, such time and date being herein
called the "Time of Delivery."
Certificates in definitive form for the Option Securities to be
purchased by each Underwriter hereunder shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price thereof by certified or
official bank check or checks, payable in New York Clearing House funds, to the
order of the Company, for the purchase price of the Option Securities, in New
York, New York, at such time and on such date (not earlier than the Time of
Delivery nor later than ten business days after giving of the notice delivered
by you to the Company with reference thereto) and in such denominations and
registered in such names as shall be specified in the notice delivered by you to
the Company with respect to the purchase of such Option Securities. The date and
time of such delivery and payment are herein sometimes referred to as the
"Option Securities Delivery Date." The obligations of the Underwriters shall be
subject, in their discretion, to the condition that there shall be delivered to
the Underwriters on the Option Securities Delivery Date opinions and
certificates, dated such Option Securities Delivery Date, referring to the
Option Securities, instead
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of the Firm Securities, but otherwise to the same effect as those required to be
delivered at the Time of Delivery pursuant to Section 7(d), 7(e), 7(f), 7(g) and
7(j).
Certificates for the Firm Securities and the Option Securities so to be
delivered will be in good delivery form, and in such denominations and
registered in such names as you may request not less than 48 hours prior to the
Time of Delivery and the Option Securities Delivery Date, respectively. Such
certificates will be made available for checking and packaging in New York, New
York, at least 24 hours prior to the Time of Delivery and Option Securities
Delivery Date.
In lieu of delivering certificates in definitive form for the
Securities to be delivered by the Company hereunder, the Company may make
electronic delivery of such Securities through the facilities of The Depository
Trust Company under arrangements satisfactory to the Company, the transfer agent
for the Securities, and you.
5. (a) The Company covenants and agrees with each of the
Underwriters:
(i) If the Registration Statement has not become
effective, to file promptly the Final Amendment with the
Commission and use its best efforts to cause the Registration
Statement to become effective; if the Registration Statement
has become effective, to file promptly the Rule 430A
Prospectus with the Commission; to make no further amendment
or any supplement to the Registration Statement or Prospectus
which shall be disapproved by you after reasonable notice
thereof; to advise you, promptly after it receives notice
thereof of the time when the Registration Statement, or any
amendment thereto, or any amended Registration Statement has
become effective or any supplement to the Prospectus or any
amended Prospectus has been filed, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus
or for additional information; and in the event of the
issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain withdrawal of such order;
(ii) Promptly from time to time to take such action
as you may request to qualify the Securities for offering and
sale under the securities laws of such jurisdictions as you
may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution, provided that in connection therewith the
Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process
in any jurisdiction;
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(iii) To furnish each of the Representatives and
counsel for the Underwriters, without charge, signed copies of
the registration statement originally filed with respect to
the Securities and each amendment thereto (in each case
including all exhibits thereto) and to each other Underwriter,
without charge, a conformed copy of such registration
statement and each amendment thereto (in each case without
exhibits thereto) and, so long as a prospectus relating to the
Securities is required to be delivered under the Act, as many
copies of each Preliminary Prospectus, the Prospectus and all
amendments or supplements thereto as you may from time to time
reasonably request. If at any time when the delivery of a
prospectus is required under the Act an event shall have
occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make statements therein, in the light of the
circumstances under which they were made when such Prospectus
is delivered, not misleading, or if for any other reason it
shall be necessary to amend or supplement the Prospectus in
order to comply with the Act, the Company will forthwith
prepare and, subject to the provisions of Section 5(a)(i)
hereof, file with the Commission an appropriate supplement or
amendment thereto, and will furnish to each Underwriter and to
any dealer in securities, without charge, as many copies as
you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus or make an
appropriate filing under Section 13, 14 or 15(d) of the
Exchange Act which will correct such statement or omission or
effect such compliance in accordance with the requirements of
Section 10 of the Act.
(iv) To make generally available to its stockholders
as soon as practicable, but in any event not later than 45
days after the close of the period covered thereby, an
earnings statement in form complying with the provisions of
Section 11(a) of the Act covering a period of 12 consecutive
months beginning not later than the first day of the Company's
fiscal quarter next following the Effective Date;
(v) To file promptly all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d)
of the Exchange Act subsequent to the Effective Date and
during any period when the Prospectus is required to be
delivered;
(vi) For a period of five years from the Effective
Date, to furnish to its stockholders after the end of each
fiscal year an annual report (including consolidated balance
sheets and statements of operations, cash flow and
shareholders' equity of the Company and its subsidiaries
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), consolidated summary financial
information of the Company and its subsidiaries for such
quarter in reasonable detail;
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(vii) During a period of five years from the
Effective Date, to furnish to you copies of all reports or
other communications (financial or other) furnished to its
stockholders, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company
as you may from time to time reasonably request in connection
with your obligations hereunder;
(viii) To apply the net proceeds from the sale of the
Securities in the manner set forth in the Prospectus under the
caption "Use of Proceeds";
(ix) That it will not, and will cause its
subsidiaries, officers, directors, employees, agents and
affiliates not to, take, directly or indirectly, any action
designed to cause or result in, or that might reasonably be
expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the
sale or resale of the Securities;
(x) That prior to the Time of Delivery there will not
be any change in the capital stock or material change in the
short-term debt or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial
condition, shareholders' equity or results of operations of
the Company or any of its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus or other than shares
issued pursuant to exercise of employee stock options and
non-employee director stock options that the Prospectus
indicates are outstanding;
(xi) That it will not, during the period of 180 days
after the date hereof (other than pursuant to this Agreement),
offer, sell, contract to sell or otherwise dispose of any
capital stock of the Company (or securities convertible into,
or exchangeable for, capital stock of the Company), directly
or indirectly, without the prior written consent of Schroder &
Co. Inc., except for grants or exercise of stock options under
the Company's stock option plans or pursuant to the terms of
warrants of the Company described in the Prospectus as
outstanding on the date hereof; and
(xii) That it will cause the Securities to be listed
on the New York Stock Exchange at all times from the Effective
Date until such time as you notify the Company that the
distribution of the Securities has been completed.
(b) Each Selling Stockholder, severally and not jointly,
covenants and agrees with each of the Underwriters that:
(i) Such Selling Stockholder will not, during the
period of 180 days after the date hereof, except pursuant to
this Agreement, offer, sell, contract to sell,
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or otherwise dispose of any capital stock of the Company (or
securities convertible into, or exchangeable for, capital
stock of the Company), directly or indirectly, without the
prior written consent of Schroder & Co. Inc.;
(ii) Such Selling Stockholder will not, directly or
indirectly, take any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Securities;
(iii) As soon as any Selling Stockholder is advised
thereof, such Selling Stockholder will advise the
Representatives and confirm such advice in writing, (i) of
receipt by the Selling Stockholder or by any representative or
agent of such Selling Stockholder, of any communication from
the Commission relating to the Registration Statement, the
Prospectus or any Preliminary Prospectus, or any notice or
order of the Commission relating to the Company or any of the
Selling Stockholders in connection with the transactions
contemplated by this Agreement and (ii) of the happening of
any event which makes or may make any statement made in the
Registration Statement, the Prospectus or any Preliminary
Prospectus untrue or that requires the making of any change in
the Registration Statement, Prospectus or Preliminary
Prospectus, as the case may be, in order to make such
statement (with regard to the Prospectus or Preliminary
Prospectus, in light of the circumstances in which it was
made) not misleading; and
(iv) Such Selling Stockholder will deliver to the
Representatives prior to the Time of Delivery a properly
completed and executed United States Treasury Department Form
W-9 or Substitute Form W-9.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid: (i) the fees, disbursements and
expenses of counsel and accountants for the Company and the Selling
Stockholders, and all other expenses, in connection with the preparation,
printing and filing of the Registration Statement and the Prospectus and
amendments and supplements thereto and the furnishing of copies thereof,
including charges for mailing, air freight and delivery and counting and
packaging thereof and of any Preliminary Prospectus and related offering
documents to the Underwriters and dealers; (ii) the cost of printing this
Agreement, the Agreement Among Underwriters, the Selling Agreement,
communications with the Underwriters and selling group and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under securities laws as provided in Section 5(a)(ii) hereof,
including filing and registration fees and the fees, disbursements and expenses
for counsel for the Underwriters in connection with such qualification and in
connection with Blue Sky surveys or similar advice with respect to sales; (iv)
the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) all fees and expenses in connection with the additional listing
of the Securities on the New York Stock Exchange; (vi) all costs and expenses of
the Attorneys-in-Fact and the Custodian, and (vii) all other
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costs and expenses incident to the performance of their obligations hereunder
which are not otherwise specifically provided for in this Section 6, including
the fees of the Company's Transfer Agent and Registrar, the cost of any stock
issue or transfer taxes on sale of the Securities to the Underwriters, the cost
of the Company's personnel and other internal costs, the cost of printing and
engraving the certificates representing the Securities and all expenses and
transfer taxes incident to the sale and delivery of the Securities to be sold by
the Company and the Selling Stockholders to the Underwriters hereunder. Each
Selling Stockholder will reimburse the Company for his pro rata portion of the
Commission registration fee and the National Association of Securities Dealers,
Inc. filing fee applicable to the Securities being sold by such Selling
Stockholder.
It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company and the Selling Stockholders herein are, at and
as of the Time of Delivery, true and correct, the condition that the Company and
the Selling Stockholders shall have performed all its and their obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Registration Statement shall have become effective,
and you shall have received notice thereof not later than 10:00 P.M.,
New York City time, on the date of execution of this Agreement, or at
such other time as you and the Company may agree; if required, the
Prospectus shall have been filed with the Commission in the manner and
within the time period required by Rule 424(b); if you and the Company
have elected to rely upon Rule 430A, the price of the Securities and
any price related or other information previously omitted form the
Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed time period, and on or prior to the Time of Delivery the
Company shall have provided evidence satisfactory to you of such timely
filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A; no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of
the Commission shall have been complied with to your reasonable
satisfaction;
(b) All corporate proceedings and related legal and other
matters in connection with the organization of the Company and the
registration, authorization, issue, sale and delivery of the Securities
shall have been reasonably satisfactory to Arter & Hadden, counsel to
the Underwriters, and Arter & Hadden shall have been timely furnished
with such papers and information as they may reasonably have requested
to enable them to pass upon the matters referred to in this subsection;
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(c) You shall not have advised the Company or any Selling
Stockholder that the Registration Statement or Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact
or omits to state a fact which in your judgment is in either case
material and in the case of an omission is required to be stated
therein or is necessary to make the statements therein (with regard to
the Prospectus, in light of the circumstances under which they were
made) not misleading;
(d) Calfee, Halter & Griswold LLP, as counsel to the Company
("Company Counsel"), shall have furnished to you their written opinion,
dated the Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, and is qualified to do business
and is in good standing in each jurisdiction in which its
ownership or leasing of properties requires such qualification
or the conduct of its business requires such qualification
(except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, of the Company and its subsidiaries, taken as a
whole); and the Company has all necessary corporate power and
all material governmental authorizations, permits and
approvals required to own, lease and operate its properties
and conduct its business as described in the Prospectus;
(ii) Each of the Company's corporate subsidiaries has
been duly and validly incorporated and is validly existing as
a corporation in good standing under the laws of the
jurisdiction of its incorporation, and is qualified to do
business and is in good standing in each jurisdiction in which
its ownership or leasing of properties requires such
qualification or the conduct of its business requires such
qualification (except where the failure to so qualify would
not have a material adverse effect on the condition, financial
or otherwise, or the business affairs or prospects of the
Company and its subsidiaries, taken as a whole); and each such
corporate subsidiary has all necessary corporate power and all
material governmental authorizations, permits and approvals
required to own, lease and operate its properties and to
conduct its business as described in the Prospectus;
(iii) All the outstanding shares of capital stock of
each of the Company's corporate subsidiaries have been duly
authorized and are validly issued and outstanding, are fully
paid and non-assessable and are owned by the Company of record
and, to the best knowledge of such counsel, (A) beneficially
and (B) free and clear of all liens, encumbrances, equities,
security interests or claims of any nature whatsoever; and
neither the Company nor any of its subsidiaries has granted
any outstanding options, warrants or commitments with respect
to any shares of its capital stock, whether issued or
unissued, except as otherwise described in the Prospectus;
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(iv) ALTEC has been duly formed and is validly
existing as a limited partnership in good standing under the
laws of the State of Delaware, and is registered as a foreign
limited partnership and is in good standing in each
jurisdiction in which its ownership or leasing of properties
requires such registration or the conduct of its business
requires such registration (except where the failure to so
register would not have a material adverse effect on the
condition, financial or otherwise, of the Company and its
subsidiaries, taken as a whole); and ALTEC has all necessary
power and all material governmental authorizations, permits
and approvals required to own, lease and operate its
properties and to conduct its business as described in the
Prospectus;
(v) All the outstanding partner interests in ALTEC
have been duly authorized and are validly issued and
outstanding, are fully paid and except for the general partner
interest, non-assessable and are owned of record as
represented in Section 1A(f) of this Agreement and, to the
best knowledge of such counsel, (A) are so owned beneficially
and (B) free and clear of all liens, encumbrances, equities,
security interests or claims of any nature whatsoever; and
neither the Company nor any of its subsidiaries has granted
any outstanding options, warrants or commitments with respect
to any interest in ALTEC.
(vi) The Company has an authorized capitalization as
set forth in the Registration Statement and all the issued
shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and
non-assessable; are free of any preemptive rights, and were
issued and sold in compliance with all applicable Federal and
state securities laws; except as described in the Prospectus,
to the knowledge of such counsel, there are no outstanding
options, warrants or other rights calling for the issuance of,
and there are no commitments, plans or arrangements to issue,
any shares of capital stock of the Company; the Securities
being sold by the Company have been duly and validly
authorized and, when duly countersigned by the Company's
Transfer Agent and Registrar and issued, delivered and paid
for in accordance with the provisions of the Registration
Statement and this Agreement, will be duly and validly issued,
fully paid and non-assessable; the Securities conform to the
description thereof in the Prospectus; the Securities have
been duly authorized for listing on the New York Stock
Exchange, as of the Effective Date; and the certificates to be
delivered to the Underwriters hereunder are in valid and
sufficient form;
(vii) To the best of such counsel's knowledge, except
as set forth in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries or any of their respective
officers or directors is a party or of which any property of
the Company or any of its subsidiaries is the subject which,
if resolved against the Company or any of its subsidiaries or
any of their respective officers or directors, individually,
or to the extent involving related claims or issues, in the
aggregate, is of a character required to be disclosed in the
Prospectus which has not been properly disclosed therein;
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(viii) This Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable in accordance
with its terms, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally
and except as enforceability of those provisions relating to
indemnity may be limited by the Federal securities laws and
principles of public policy;
(ix) The Company has full corporate power and
authority to execute, deliver and perform this Agreement, and
the execution, delivery and performance of this Agreement, the
consummation of the transactions herein contemplated and the
issue and sale of the Securities and the compliance by the
Company with all the provisions of this Agreement will not
conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, claim or
encumbrance upon, any of the property or assets of the Company
or any of its subsidiaries pursuant to, the terms of any
indenture, mortgage, deed of trust, loan agreement 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 is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of
Incorporation or the By-Laws, in each case as amended, of the
Company or the Certificate of Incorporation, Bylaws,
certificate of limited partnership or partnership agreement,
of any of its subsidiaries, or any statute or any order, rule
or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(x) No consent, approval, authorization, order,
registration or qualification of or with any court or any
regulatory authority or other governmental body is required
for the issue and sale of the Securities or the consummation
of the other transactions contemplated by this Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(xi) To the best of such counsel's knowledge, neither
the Company nor any of its subsidiaries is currently in
violation of its Certificate of Incorporation, By-laws,
certificate of limited partnership or partnership agreement,
or in default under, any indenture, mortgage, deed of trust,
lease, bank loan or credit agreement or any other agreement or
instrument of which such counsel has knowledge to which the
Company or any of its subsidiaries is a party or by which any
of them or any of their property may be bound or affected (in
any respect that is material in
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light of the financial condition of the Company and its
subsidiaries, taken as a whole);
(xii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Securities pursuant to the
Company's Certificate of Incorporation or By-Laws, in each
case as amended to the date hereof, or any agreement or other
instrument known to such counsel; and no holders of securities
of the Company have rights to the registration thereof under
the Registration Statement or, if any such holders have such
rights, such holders have waived such rights;
(xiii) To the extent summarized therein, all
contracts and agreements summarized in the Registration
Statement and the Prospectus are fairly summarized therein,
conform in all material respects to the descriptions thereof
contained therein, and, to the extent such contracts or
agreements or any other material agreements are required under
the Act or the rules and regulations thereunder to be filed or
incorporated by reference therein, as exhibits to the
Registration Statement, they are so filed or incorporated by
reference; and such counsel does not know of any contracts or
other documents required to be summarized or disclosed in the
Prospectus or to be so filed or incorporated by reference as
an exhibit to the Registration Statement, which have not been
so summarized or disclosed, or so filed or incorporated by
reference;
(xiv) All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings are fair
summaries thereof and fairly present the information required
to be shown with respect to such matters;
(xv) Nothing has come to such counsel's attention to
give such counsel reason to believe that any of the
representations and warranties of the Company contained in
this Agreement or in any certificate or document contemplated
under this Agreement to be delivered are not true or correct
or that any of the covenants and agreements herein contained
to be performed on the part of the Company or any of the
conditions herein contained, or set forth in the Registration
Statement and the Prospectus, to be fulfilled or complied with
by the Company have not been or will not be duly and timely
performed, fulfilled or complied with; and
(xvi) The Registration Statement has become effective
under the Act, the Prospectus has been filed in accordance
with Rule 424(b) of the rules and regulations of the
Commission under the Act, including the applicable time
periods set forth therein, or such filing is not required and,
to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act; the
Registration Statement, the Prospectus and each amendment or
supplement thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act
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the rules and regulations thereunder and the requirements of
Form S-3; the documents incorporated by reference in the
Prospectus comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
of the Commission thereunder; it being understood that such
counsel need express no opinion as to the financial statements
and schedules or other financial or statistical data contained
or incorporated by reference in the Registration Statement or
the Prospectus; and the conditions for use of Form S-3 set
forth in the General Instructions thereto have been satisfied
in the case of the Registration Statement.
Such counsel shall also state that they have participated in the
preparation of the Registration Statement and the Prospectus as counsel to the
Company and during the preparation of the Registration Statement and the
Prospectus, they participated in conferences with representatives of the
independent public and internal accounts for, and other representatives of, the
Company and its subsidiaries, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, while they have not confirmed the accuracy or completeness of or otherwise
verified the information contained in the Registration Statement or the
Prospectus, based upon such preparation and conferences and a review of
documents deemed relevant for the purpose of rendering their opinion, nothing
has come to their attention that would lead them to believe that (i) the
Registration Statement, as of the time it became effective under the Act,
contained or contains as of the date of such opinion any untrue statement of a
material fact or omitted or omits as of the date of such opinion to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus and any amendments thereof or
supplements thereto (other than numerical, financial data, statistical data,
ratios, financial statements and notes thereto and related schedules therein, as
to which such counsel need express no belief), as of this date, contained or
contains as of the date of such opinion any untrue statement of material fact or
omitted or omits as of the date of such opinion to state any material fact
required to be stated therein or necessary to make the statement therein, in
light of the circumstances under which they were made, not misleading; provided,
however, such counsel need express no comment as to (i) the information in the
Prospectus under the caption "Underwriting," and (ii) the financial statements,
schedules and other numerical, financial, statistical data, or ratios contained
in the Registration Statement or the Prospectus.
In rendering their opinions set forth in Section 7(d) above, such
counsel may rely, to the extent deemed advisable by such counsel, (a) as to
factual matters, upon certificates of public officials and officers of the
Company that have been provided to counsel for Underwriters, and (b) as to the
laws of any jurisdiction other than the United States and jurisdictions in which
they are admitted, on opinions of counsel (provided, however, that you shall
have received a copy of each of such opinions which shall be dated the Time of
Delivery, addressed to you or otherwise authorizing you to rely thereon, and
Company Counsel in its opinion to you delivered pursuant to this subsection,
shall state that such counsel are satisfactory to them and Company Counsel has
no reason to believe that the Underwriters and they are not justified to so
rely);
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(e) With respect to each of the Selling Stockholders, Calfee,
Halter & Griswold LLP, as counsel for the Selling Stockholders, shall
have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you and to Arter &
Hadden to the effect that:
(i) each Selling Stockholder has full legal right,
power and authority to enter into this Agreement and the
Agreement and Power-of-Attorney and to sell, transfer and
deliver the Securities being sold by such Selling Stockholder
hereunder in the manner provided in this Agreement and to
perform its obligations under the Agreement and
Power-of-Attorney; the execution and delivery of this
Agreement, and the Agreement and Power-of-Attorney have been
duly authorized by all necessary corporate action of each
Selling Stockholder; this Agreement and the Agreement and
Power-of-Attorney have been duly executed and delivered by
each Selling Stockholder; assuming due authorization,
execution and delivery by the Custodian, this Agreement and
the Agreement and Power-of-Attorney are legal, valid and
binding agreements of each Selling Stockholder, enforceable in
accordance with their terms, except as enforcement of the same
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law);
(ii) upon delivery of and payment for the Securities
being sold by each Selling Stockholder, the several
Underwriters will receive good and valid title to such
Securities, free and clear of all liens, encumbrances,
equities, security interests, claims or other defects;
(iii) the sale of the Securities to the Underwriters
by the Selling Stockholders pursuant to this Agreement, the
compliance by the Selling Stockholders with the other
provisions of this Agreement and the Agreement and
Power-of-Attorney and the consummation of the other
transactions herein contemplated do not and will not (i)
conflict with, or result in a breach or violation of any of
the terms and provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge,
claim or encumbrance on any property of any Selling
Stockholder under, any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder or
any of the Selling Stockholders' property is bound, or any
instrument governing a trust that is a Selling Stockholder or
any statute or any judgment, decree, order, rule or regulation
of any court or other governmental authority or any arbitrator
applicable to any Selling Stockholder, or (ii) require the
consent, approval, authorization, order, registration or
qualification of or with any governmental authority, except
such as have been obtained and such as may be required under
state or foreign securities or Blue Sky laws; and
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(iv) there are no transfer or other taxes (other than
income taxes) known to such counsel payable in connection with
the sale and delivery of the Securities by the Selling
Stockholders to the several Underwriters or all such taxes
have been fully paid in connection with such sale and
delivery.
In rendering such opinion, such counsel may rely, to the extent deemed
advisable by such counsel, as to factual matters, upon certificates of public
officials and the Selling Stockholders that have been provided to counsel to the
Underwriters.
(f) Arter & Hadden, counsel to the Underwriters, shall have
furnished to you their written opinion or opinions, dated the Time of
Delivery, in form and substance satisfactory to you, with respect to
the incorporation of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(g) At the time this Agreement is executed and also at the
Time of Delivery, Ernst & Young LLP shall have furnished to you a
letter or letters, dated the date of this Agreement and the Time of
Delivery, in form and substance satisfactory to you, to the effect,
that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations of the
Commission applicable to such financial statements;
(ii) In their opinion the consolidated financial
statements of the Company and its subsidiaries (including the
related schedules and notes) and the consolidated financial
statements of Cryenco and its subsidiaries included or
incorporated by reference in the Registration Statement and
Prospectus and covered by their reports included or
incorporated by reference therein comply as to form in all
material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the
published rules and regulations thereunder;
(iii) On the basis of specified procedures as of a
specified date not more than five days prior to the date of
their letter (which procedures do not constitute an
examination made in accordance with generally accepted
auditing standards), consisting of a reading of the latest
available unaudited interim consolidated financial statements
of the Company and its subsidiaries, a reading of the latest
available minutes of any meeting of the Board of Directors and
stockholders of the Company and its subsidiaries since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries who have
responsibility for financial and accounting matters, and such
other procedures or inquiries as are specified in such letter,
nothing came to their attention that caused them to believe
that:
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(A) The unaudited consolidated condensed
financial statements of the Company and its
subsidiaries included in the Prospectus do not comply
in form in all material respects with the applicable
accounting requirements of the Act and the rules and
regulations promulgated thereunder or are not
presented in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) as of a specified date not more than
five days prior to the date of their letter, there
was any change in the capital stock, or the long-term
debt or short-term debt of the Company and its
subsidiaries on a consolidated basis, or any decrease
in total assets, net current assets, or shareholders'
equity or other items specified by the
Representatives, of the Company and its subsidiaries
on a consolidated basis, each as compared with the
amounts shown on the balance sheet as of June 30,
1997 included in the Registration Statement and the
Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses
have occurred or may occur or such other changes,
decreases or increases which are described in their
letter and which do not, in the sole judgment of the
Representatives, make it impractical or inadvisable
to proceed with the purchase and delivery of the
Securities as contemplated by the Registration
Statement; and
(C) for the period from July 1, 1997 to a
specified date not more than five days prior to the
date of such letter, there was any decrease, as
compared with the corresponding period of the
preceding fiscal year, in the following consolidated
amounts: sales, income from operations, income before
provision for income taxes, net income or net income
per share of the Company and its subsidiaries, except
in all instances for decreases which the Registration
Statement discloses have occurred or may occur; or
such other decreases which are described in their
letter and which do not, in the sole judgment of the
Representatives, make it impractical or inadvisable
to proceed with the purchase and delivery of the
Securities as contemplated by the Registration
Statement, and
(iv) in addition to the examination referred to in
their reports included in the Registration Statement and the
Prospectus and the limited procedures referred to in clause
(iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information specified by
the Representatives, which are derived from the general
accounting records of the Company and its subsidiaries which
appear in the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement, (b) the Company's
Annual Report on Form 10-K for the year ended December 31,
1996, under Items 1, 6 and 7, (c) the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31 and June
30, 1997 under Items 1 and 2
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of Part I, and (d) the Company's Current Reports on Form 8-K
dated July 31, 1997 under Items 2 and 7, and have compared
such amounts and financial information with the accounting
records of the Company and its subsidiaries, and have found
them to be in agreement and have proved the mathematical
accuracy of certain specified percentages.
(v) On the basis of a reading of the pro forma
consolidated financial statements included in the Registration
Statement and the Prospectus, carrying out certain specified
procedures that would not necessarily reveal matters of
significance with respect to the comments set forth in this
clause (v), inquiries of certain officials of the Company and
its consolidated subsidiaries and Cryenco who have
responsibility for financial and accounting matters and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
consolidated financial statements, nothing came to their
attention that caused them to believe that the pro forma
consolidated financial statements do not comply in form in all
material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree; and since the
respective dates as of which information is given in the Prospectus,
there shall not have been any change in the capital stock (other than
shares issued pursuant to the exercise of Stock Option Shares or
pursuant to the terms of warrants of the Company described in the
Prospectus as outstanding on the date hereof) or short-term debt or
long-term debt of the Company or any of its subsidiaries nor any change
or any development involving a prospective change, in or affecting the
general affairs, management, financial condition, shareholders' equity
or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
(i) Between the date hereof and the Time of Delivery there
shall have been no declaration of war by the Government of the United
States; at the Time of Delivery there shall not have occurred any
material adverse change in the financial or securities markets in the
United States or in political, financial or economic conditions in the
United States or any outbreak or material escalation of hostilities or
other calamity or crisis, the effect of which is such as to make it, in
the judgment of the Representatives, impracticable to market the
Securities or to enforce contracts for the resale of Securities and no
event shall have occurred resulting in (i) trading in securities
generally on the New York Stock Exchange or in the Common Stock on the
New York Stock Exchange being suspended or limited or minimum or
maximum prices being generally established on such exchange, or (ii)
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additional material restrictions, not in force on the date of this
Agreement, being imposed upon trading in securities generally (or the
Common Stock specifically) by the New York Stock Exchange or by order
of the Commission or any court or other governmental authority, or
(iii) a general banking moratorium being declared by either Federal or
New York authorities;
(j) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at the Time of Delivery
certificates signed by the chief executive officer and the chief
financial officer, on behalf of the Company, and by each Selling
Stockholder satisfactory to you as to such matters as you may
reasonably request and as to (i) the accuracy of its and their
respective representations and warranties herein at and as of the Time
of Delivery and (ii) the performance by the Company and each Selling
Stockholder of all their respective obligations hereunder to be
performed at or prior to the Time of Delivery; the Company and the
Selling Stockholders shall have furnished or caused to be furnished to
you at the Time of Delivery certificates signed by the chief executive
officer and the chief financial officer, on behalf of the Company, and
by each Selling Stockholder as to (i) the fact that they have carefully
examined the Registration Statement and Prospectus and, (a) as of the
Effective Date, the statements contained or incorporated by reference
in the Registration Statement and the Prospectus were true and correct
and neither the Registration Statement nor the Prospectus omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that each Selling
Stockholder shall be responsible only for information relating to it or
required to be disclosed by it) and (b) since the Effective Date, no
event has occurred that is required by the Act or the rules and
regulations of the Commission thereunder to be set forth in an
amendment of, or a supplement to, the Prospectus that has not been set
forth in such an amendment or supplement; and (ii) the matters set
forth in subsection (a) of this Section 7;
(k) Each director and executive officer of the Company and
each Selling Stockholder shall have delivered to you an agreement not
to offer, sell, contract to sell or otherwise dispose of any shares of
capital stock of the Company (or securities convertible into, or
exchangeable for, capital stock of the Company), directly or
indirectly, for a period of 180 days after the date of this Agreement,
without the prior written consent of Schroder & Co. Inc.;
(l) The Company shall have delivered to you evidence that the
Securities have been authorized for additional listing on the New York
Stock Exchange as of the Effective Date; and
(m) The Company shall have delivered to you evidence,
satisfactory to you and your counsel, that the New Credit Facility (as
defined in the Prospectus) has been modified or amended (i) to permit
the offer and sale of the Securities as contemplated hereby; (ii) to
permit a maximum aggregate $6.0 million of dividends to be authorized
and paid each year by the Company in accordance with the terms and
conditions of the New Credit Facility; and (iii) to require Charles S.
Holmes and Arthur S. Holmes to own, together in the aggregate, not less
than 20% of the Company's equity securities on a fully diluted basis.
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8. (a) The Company will indemnify, defend and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained or incorporated by
reference in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or in any Blue Sky
application or other document executed by the Company specifically for that
purpose or based upon information furnished by the Company filed in any state or
other jurisdiction in order to qualify any or all of the Securities under the
securities laws thereof or filed with the Commission or any securities
association or securities exchange (each, an "Application"), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made or incorporated by reference therein
not misleading, or (ii) any untrue statement or alleged untrue statement made by
the Company in Section 1A of this Agreement, or (iii) the employment by the
Company of any device, scheme or artifice to defraud, or the engaging by the
Company in any act, practice or course of business which operates or would
operate as a fraud or deceit, or any conspiracy with respect thereto, in which
the Company shall participate, in connection with the issuance and sale of any
of the Securities, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission relating to an
Underwriter made in any Preliminary Prospectus, the Registration Statement, the
Prospectus or such amendment or supplement or any Application in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein, provided, further, that the
indemnity agreement contained in this Section 8(a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
persons controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented or amended, to such person, within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(a)(iii) hereof.
(b) Each Selling Stockholder, severally and not jointly, will
indemnify, defend and hold harmless each Underwriter, the Company and the other
Selling Stockholders against any losses, claims, damages or liabilities to which
such Underwriter, the Company or such other Selling Stockholders may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained or
incorporated by reference in the Preliminary Prospectus, the Registration
Statement, or the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made or incorporated by
reference therein not
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misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Preliminary Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement in reliance upon and in conformity with information
furnished to such Underwriter or the Company by such Selling Stockholder in
writing expressly for use therein, or (ii) any untrue statement or alleged
untrue statement made by such Selling Stockholder in Section 1B of this
Agreement, and will reimburse such Underwriter, the Company or such other
Selling Stockholders for any legal or other expenses incurred by such
Underwriter, the Company or such other Selling Stockholders in connection with
investigating, preparing to defend, defending or appearing as a third-party
witness in connection with any such action or claim; provided, however, that the
indemnity agreement contained in this Section 8(b) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any
persons controlling such Underwriter) on account of any losses, claims, damages,
liabilities or litigation arising from the sale of Securities to any person, if
such Underwriter fails to send or give a copy of the Prospectus, as the same may
be then supplemented or amended, to such person within the time required by the
Act and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus, unless such failure is the result of noncompliance
by the Company with Section 5(a)(iii) hereof; provided, further, no Seller
Stockholder against whom a claim for indemnity is made on the basis of the
provisions of this Section 8(b) shall be required to indemnify, hold harmless or
reimburse the Company or Underwriters in an aggregate amount in excess of the
proceeds received by the Selling Stockholder in connection herewith.
(c) In addition to any obligations of the Company and each of
the Selling Stockholders under Section 8(a) and 8(b), the Company and each of
the Selling Stockholders agree that they shall perform their indemnification
obligations under Section 8(a) and Section 8(b) with respect to counsel fees and
expenses and other expenses reasonably incurred by making payments within 45
days to the Underwriter in the amount of the statements of the Underwriter's
counsel or other statements which shall be forwarded by the Underwriter, and
that it shall make such payments notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligation to
reimburse the Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court until such time as
a court orders return of such payments.
The indemnity agreement in Section 8(a) and Section 8(b) shall extend
upon the same terms and conditions to each person, if any, who controls any
Underwriter within the meaning of the Act or the Exchange Act.
(d) Each Underwriter will indemnify and hold harmless the
Company and the Selling Stockholders against any losses, claims, damages or
liabilities to which the Company or such Selling Stockholder may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
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 thereto, or any Application, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
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misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, the Registration Statement, the Prospectus or
such amendment or supplement or any Application in reliance upon and in
conformity with written information furnished to the Company or such Selling
Stockholder by such Underwriter relating to such Underwriter through you
expressly for use therein, and will reimburse the Company or such Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim.
The indemnity agreement in this Section 8(d) shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or of any Selling Stockholder and to each person, if any, who controls
the Company or any Selling Stockholder within the meaning of the Act or the
Exchange Act.
(e) Promptly after receipt by an indemnified party under
Section 8(a), 8(b) or 8(d) of notice of the commencement of any action
(including any governmental investigation), such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party under Section
8(a), 8(b) or 8(d) except to the extent it was unaware of such action and has
been prejudiced in any material respect by such failure or from any liability
which it may have to any indemnified party otherwise than under such Section
8(a), 8(b) or 8(d). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. If, however, (i) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party or (ii) an indemnified party shall have reasonably concluded
that representation of such indemnified party and the indemnifying party by the
same counsel would be inappropriate under applicable standards of professional
conduct due to actual or potential differing interests between them and the
indemnified party so notifies the indemnifying party, then the indemnified party
shall be entitled to employ counsel different from counsel for the indemnifying
party at the expense of the indemnifying party and the indemnifying party shall
not have the right to assume the defense of such indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to local counsel) for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same set of allegations or circumstances. The
counsel with respect to which fees and expenses shall be so reimbursed shall be
designated in writing by Schroder & Co. Inc. in the case of parties indemnified
pursuant to Section 8(a) and Section 8(b) and by the Company in the case of
parties indemnified pursuant to Section 8(d).
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If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(c), the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(f) In order to provide for just and equitable contribution
under the Act in any case in which (i) any Underwriter (or any person who
controls any Underwriter within the meaning of the Act or the Exchange Act)
makes claim for indemnification pursuant to Section 8(a) or Section 8(b) hereof,
but is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that Section 8(a) or Section 8(b)
provides for indemnification in such case or (ii) contribution under the Act may
be required on the part of any Underwriter or any such controlling person in
circumstances for which indemnification is provided under Section 8(d), then,
and in each such case, each indemnifying party shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject as an
indemnifying party hereunder (after contribution from others) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other from
the offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 8(e) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company and the Selling Stockholders bear to
the total underwriting discounts and commissions received by the Underwriters
with respect to the Securities purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just
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and equitable if contributions pursuant to this Section 8(f) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8(f). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 8(f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(f), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 8(f) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(g) Promptly after receipt by any party to this Agreement of
notice of the commencement of any action, suit or proceeding, such party will,
if a claim for contribution in respect thereof is to be made against another
party (the "contributing party"), notify the contributing party of the
commencement thereof; but the omission so to notify the contributing party will
not relieve it from any liability which it may have to any other party for
contribution under the Act except to the extent it was unaware of such action
and has been prejudiced in any material respect by such failure or from any
liability which it may have to any other party other than for contribution under
the Act. In case any such action, suit or proceeding is brought against any
party, and such party notifies a contributing party of the commencement thereof,
the contributing party will be entitled to participate therein with the
notifying party and any other contributing party similarly notified.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Firm Securities on the terms contained herein. If the aggregate number of Firm
Securities as to which Underwriters default is more than one-eleventh of the
aggregate number of all the Firm Securities and within 36 hours after such
default by any Underwriter you do not arrange for the purchase of such Firm
Securities, then the Company and the Selling Stockholders shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to you to purchase such Firm Securities on such terms. In
the event that, within the respective prescribed periods, you notify the Company
and the Selling Stockholders that you have so arranged for the purchase of such
Firm Securities, or the Company and the Selling Stockholders notify you that
they have so arranged for the purchase of such Firm Securities, you or the
Company shall have the right to postpone the Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this
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Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Firm Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Securities of such defaulting Underwriter or Underwriters
by you or the Company and the Selling Stockholders or both as provided in
subsection (a) above, the aggregate number of such Firm Securities which remain
unpurchased does not exceed one-eleventh of the aggregate number of all the Firm
Securities, then the Company and the Selling Stockholders shall have the right
to require each non-defaulting Underwriter to purchase the number of the Firm
Securities which such Underwriter agreed to purchase hereunder and, in addition,
to require each non-defaulting Underwriter to purchase its pro rata share (based
on the number of Firm Securities which such Underwriter agreed to purchase
hereunder) of the Firm Securities of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities of a defaulting Underwriter or Underwriters by
you or the Company and the Selling Stockholders as provided in subsection (a)
above, the aggregate number of such Firm Securities which remain unpurchased
exceeds one-eleventh of the aggregate number of all the Firm Securities, or if
the Company and the Selling Stockholders shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase Firm
Securities of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate without liability on the part of any non-defaulting
Underwriter, the Company or any Selling Stockholder, except for the expenses to
be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 6 hereof and the indemnity agreement in Section 8 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, each of the Selling Stockholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or an officer or director or controlling person
of the Company, or any of the Selling Stockholders, or any controlling person of
any of the Selling Stockholders, and shall survive delivery of and payment for
the Securities.
11. This Agreement shall become effective (a) if the Registration
Statement has not heretofore become effective, at the earlier of 12:00 Noon, New
York City time, on the first full business day after the Registration Statement
becomes effective, or at such time after the Registration Statement becomes
effective as you may authorize the sale of the Securities to the public by
Underwriters or other securities dealers, or (b) if the Registration Statement
has heretofore become effective, at the earlier of 24 hours after the filing of
the Prospectus with the Commission or at such time as you may authorize the sale
of the Securities to the public by Underwriters or securities dealers, unless,
prior to any such time you shall have received notice from the Company that it
elects that this Agreement shall not become effective, or you, or through
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you such of the Underwriters as have agreed to purchase in the aggregate fifty
percent or more of the Firm Securities hereunder, shall have given notice to the
Company that you or such Underwriters elect that this Agreement shall not become
effective; provided, however, that the provisions of this Section and Section 6
and Section 8 hereof shall at all times be effective.
If this Agreement shall be terminated pursuant to Section 9 hereof, or
if this Agreement, by election of you or the Underwriters, shall not become
effective pursuant to the provisions of this Section, the Company and the
Selling Stockholders shall not then be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof, but if this Agreement
becomes effective and is not so terminated but the Securities are not delivered
by or on behalf of the Company or any of the Selling Stockholders as provided
herein because the Company or any of the Selling Stockholders has been unable
for any reason beyond its control and not due to any default by it to comply
with the terms and conditions hereof, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company and the Selling Stockholders shall then be under no
further liability to any Underwriter except as provided in Section 6 and Section
8 hereof.
12. The statements set forth in the last paragraph on the front cover
page of the Prospectus, the paragraph on the inside front cover of the
Prospectus containing stabilization language and the second and seventh
paragraphs under the caption "Underwriting" in the Prospectus constitute the
only information furnished by any Underwriter through the Representatives to the
Company for purposes of Sections 1A(b), 1A(c) and 8 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Schroder & Co. Inc. on behalf of you as the
Representatives, and in all dealings with the Selling Stockholders hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement furnished in writing by or on behalf of such
Selling Stockholder or made or given by the Attorney-in-Fact for such Selling
Stockholder.
All statements, requests, notices and agreements hereunder, unless
otherwise specified in this Agreement, shall be in writing and, if to the
Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission (subsequently confirmed by delivery or by letter sent by mail) to
you as the Representatives in care of Schroder & Co. Inc., Equitable Center, 787
Seventh Avenue, New York, New York 10019, Attention: Syndicate Department; and
if to the Company or the Selling Stockholders, shall be delivered or sent by
letter sent by mail, telex or facsimile transmission (subsequently confirmed by
delivery or by letter sent by mail) to the address of the Company set forth in
the Registration Statement, Attention: Chief Executive Officer; PROVIDED,
HOWEVER, that any notice to any Underwriter pursuant to Section 8(d) hereof
shall be delivered or sent by mail, telex or facsimile transmission
(subsequently confirmed by delivery or by letter sent by mail) to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting
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such Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and each of the Selling Stockholders
and, to the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and each person who controls the Company, any Selling
Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement Among Underwriters, manually or facsimile
executed counterparts of which, to the extent practicable and upon request,
shall be submitted to the Company for examination, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
CHART INDUSTRIES, INC.
By: _________________________________
Name:
Title:
SELLING STOCKHOLDERS
By: _________________________________
As Attorney-in-Fact for each of the
Selling Stockholders listed in
Schedule II
Accepted as of the date hereof:
SCHRODER & CO. INC.
McDONALD & COMPANY SECURITIES, INC.
as Representatives of the several Underwriters
By: SCHRODER & CO. INC.
By: __________________________________
Managing Director
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SCHEDULE I
Underwriter Number of Firm Securities
----------- -------------------------
Schroder & Co. Inc. ..................................
McDonald & Company Securities, Inc. ..................
-----------
Total................................................. 2,800,000
===========
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SCHEDULE II
Number of Firm
Selling Stockholder Securities to be Sold
------------------- ---------------------
Arthur S. Holmes, as Trustee under the Arthur S.
Holmes Trust
37,500
Christine H. Holmes, as Trustee under the Christine
H. Holmes Trust 37,500
Charles S. Holmes 1,425,000
---------
Total........................................................................... 1,500,000
=========
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