<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 19, 1996
REGISTRATION NO. 333-01805
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
AMENDMENT NO. 3
TO
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
GTS DURATEK, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 22-2476180
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
</TABLE>
8955 GUILFORD ROAD, SUITE 200
COLUMBIA, MARYLAND 21046
(410) 312-5100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ROBERT E. PRINCE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
GTS DURATEK, INC.
8955 GUILFORD ROAD, SUITE 200
COLUMBIA, MARYLAND 21046
(410) 312-5100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
* COPIES TO: *
<TABLE>
<S> <C>
Henry D. Kahn, Esquire Thomas J. Murphy, Esquire
Piper & Marbury L.L.P. McDermott, Will & Emery
36 South Charles Street 227 West Monroe Street
Baltimore, Maryland 21201 Chicago, Illinois 60606
(410) 539-2530 (312) 372-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT IS DECLARED EFFECTIVE.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRANT SHALL FILE A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
GTS DURATEK, INC.
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
FORM S-2 ITEM NUMBER AND HEADING LOCATION IN PROSPECTUS
- ---------------------------------------------------------------- -----------------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus...................... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front Cover Page; Outside Back Cover Page
3. Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges........................... Prospectus Summary; Risk Factors
4. Use of Proceeds...................................... Use of Proceeds
5. Determination of Offering Price...................... Not Applicable
6. Dilution............................................. Not Applicable
7. Selling Security Holders............................. Principal and Selling Stockholders
8. Plan of Distribution................................. Outside Front Cover Page; Underwriting
9. Description of Securities to be Registered........... Description of Capital Stock
10. Interests of Named Experts and Counsel............... Not Applicable
11. Information With Respect to the Registrant........... Prospectus Summary; Price Range of Common Stock;
Dividend Policy; Capitalization; Selected
Consolidated Financial Data; Management's Discussion
and Analysis of Results and Operations and Financial
Condition; Business; Management; Principal and
Selling Stockholders; Description of Capital Stock;
Available Information; Financial Statements
12. Incorporation of Certain Information by Reference.... Incorporation of Certain Documents by Reference
13. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... Not Applicable
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the distribution
of the securities being registered, other than underwriting expenses and
commissions. All such expenses are estimated, except for the SEC registration
fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC registration fee.............................................. $ 22,128
NASD filing fee................................................... 6,917
Nasdaq listing fee................................................ 17,500
Accounting fees and expenses...................................... 100,000
Legal fees and expenses........................................... 175,000
Printing.......................................................... 50,000
Transfer agent fees............................................... 5,000
Blue sky fees and expenses (including legal fees)................. 10,000
Miscellaneous..................................................... 13,455
---------
Total......................................................... $ 400,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees), actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted
under similar standards, except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine that despite the adjudication of liability,
such person is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections (a) and (b) of such section or in the
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees), actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and that the corporation may purchase and maintain insurance on behalf
of a director or officer of the corporation against any liability asserted
against him or incurred by him in any such capacity or arising out of his status
as such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 145(d) of the DGCL provides that any indemnification under
subsections (a) and (b) of Section 145 (unless ordered by a court) shall be made
by the corporation only as authorized in the specific case upon
II-1
<PAGE>
a determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth
above. Such determination shall be made by a majority vote of the directors who
are not parties to such action, suit or proceeding, even though less than a
quorum, or if there are no such directors, or if such directors direct, by
independent legal counsel in a written opinion, or by the stockholders.
The Company's Amended and Restated Certificate of Incorporation provides for
indemnification of directors and officers to the fullest extent permitted by
Delaware law. The directors of the Company may not be held liable to the Company
or its stockholders for monetary damages for a breach of his or her fiduciary
duty as a director, except for a breach of the director's duty of loyalty, for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, for willful or negligent violation of sections 160 or
173 of the DGCL respecting unlawful payment of dividends and unlawful stock
purchases and redemptions, or for any transaction from which the director
derived an improper personal benefit.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
*1 Form of Underwriting Agreement (filed herewith).
4.1 Certificate of Designations of the 8% Cumulative Convertible Redeemable
Preferred Stock dated January 23, 1995. Incorporated herein by reference to
Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed on
February 1, 1995 (File No. 0-14292).
4.2 Stock Purchase Agreement among Carlyle Partners II, L.P., Carlyle
International Partners II, L.P., Carlyle International Partners III, L.P.,
C/S International Partners, Carlyle-GTSD Partners, L.P., Carlyle-GTSD
Partners II, L.P. and GTS Duratek, Inc. and National Patent Development
Corporation dated as of January 24, 1995. Incorporated herein by reference
to Exhibit 4.2 of the Registrant's Current Report on Form 8-K filed on
February 1, 1995 (File No. 0-14292).
4.3 Stockholders Agreement by and among GTS Duratek, Inc., Carlyle Partners II,
L.P., Carlyle International Partners II, L.P., Carlyle International
Partners III, L.P., C/S International Partners, Carlyle-GTSD Partners,
L.P., Carlyle-GTSD Partners II, L.P. and GTS Duratek, Inc. and National
Patent Development Corporation dated as of January 24, 1995. Incorporated
herein by reference to Exhibit 4.3 of the Registrant's Current Report on
Form 8-K filed on February 1, 1995 (File No. 0-14292).
4.4 Registration Rights Agreement by and among GTS Duratek, Inc., Carlyle
Partners II, L.P., Carlyle International Partners II, L.P.,
Carlyle-International Partners III, L.P., C/S International Partners,
Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II, L.P. and GTS
Duratek, Inc. and National Patent Development Corporation dated as of
January 24, 1995. Incorporated herein by reference to Exhibit 4.4 of the
Registrant's Current Report on Form 8-K filed on February 1, 1995 (File No.
0-14292).
4.5 Convertible Debenture issued by GTS Duratek, Inc., General Technical
Services, Inc., GTS Instrument Services Incorporated to BNFL Inc. dated
November 7, 1995. Incorporated herein by reference to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1995
(File No. 0-14292).
5.1 Opinion of Piper & Marbury L.L.P. (previously filed).
10.1 1984 Duratek Corporation Stock Option Plan, as Amended. Incorporated herein
by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990 (File No. 0-14292).
10.2 Asset Purchase Agreement dated August 20, 1990 between Chem-Nuclear Systems,
Inc. and Duratek Corporation. Incorporated herein by reference to Exhibit 1
to the Registrant's Current Report on Form 8-K filed on August 20, 1990
(File No. 0-14292).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
10.3 Loan and Security Agreement dated February 9, 1993 between The Bank of
Baltimore and GTS Duratek, Inc., General Technical Service, Inc., and GTS
Instrument Services, Inc. Incorporated herein by reference to Exhibit 10.8
of the Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993 (File No. 0-14292).
10.4 License Agreement dated as of August 17, 1992 between GTS Duratek, Inc. and
Dr. Theodore Aaron Litovitz and Dr. Pedro Buarque de Macedo. Incorporated
herein by reference to Exhibit 10.9 of the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992 (File No. 0-14292).
10.5 Purchase Agreement dated October 15, 1993 between GTS Duratek, Inc. and
Environmental Corporation of America. Incorporated herein by reference to
Exhibit 2 of the Registrant's Current Report on Form 8-K dated October 15,
1993 (File No. 0-14292).
10.6 Warrant Agreement dated October 15, 1993 between GTS Duratek, Inc. and
Environmental Corporation of America. Incorporated herein by reference to
Exhibit 2 of the Registrant's Current Report on Form 8-K dated October 15,
1993 (File No. 0-14292).
10.7 Stock Purchase Agreement dated December 22, 1993 between GTS Duratek, Inc.
and Jack J. Spitzer. Incorporated herein by reference to Exhibit 1 of the
Registrant's Current Report on Form 8-K dated December 22, 1993 (File No.
0-14292).
10.8 Stock Purchase Agreement dated December 22, 1993 between GTS Duratek, Inc.
and Joseph H. Domberger. Incorporated herein by reference to Exhibit 2 of
the Registrant's Current Report on Form 8-K dated December 22, 1993 (File
No. 0-14292).
10.9 Stockholders' Agreement dated December 28, 1993 between GTS Duratek, Inc.
and Vitritek Holdings, L.L.C. Incorporated herein by reference to Exhibit 3
of the Registrant's Current Report on Form 8-K dated December 22, 1993
(File No. 0-14292).
10.10 Agreement dated January 14, 1994 between GTS Duratek, Inc. and Westinghouse
Savannah River Company. Incorporated herein by reference to Exhibit 10.17
of the Registrant's Annual Report on Form 10-K for the year ended December
31, 1993 (File No. 0-14292).
10.11 Agreement dated February 24, 1994 between GTS Duratek, Inc. and the
University of Chicago (Operator of Argonne National Laboratory).
Incorporated herein by reference to Exhibit 10.18 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1993 (File No.
0-14292).
10.12 Agreement dated September 15, 1994 between DuraChem Limited Partnership, a
Maryland limited partnership, by and among CNSI Sub, Inc. and GTSD Sub,
Inc. as the General Partners, and Chemical Waste Management, Inc. and GTS
Duratek, Inc. as the Limited Partners. Incorporated herein by reference to
Exhibit 10.19 of the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994 (File No. 0-14292).
10.13 Teaming Agreement by and between GTS Duratek, Inc. and BNFL, Inc. dated
November 7, 1995. Incorporated herein by reference to Exhibit 10.20 of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995 (File No. 0-14292).
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
10.14 Sublicense Agreement by and between GTS Duratek, Inc. and BNFL dated
November 7, 1995. Incorporated herein by reference to Exhibit 10.21 of the
Registrant's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995 (File No. 0-14292).
10.15 Stock Purchase Agreement by and among Bird Environmental Gulf Coast, Inc.,
Bird Environmental Technologies, Inc., Bird Corporation, GTS Duratek, Inc.
and GTSD Sub II, Inc. dated as of November 29, 1995. Incorporated herein by
reference to Exhibit (c)(2) of the Registrant's Current Report on Form 8-K
filed on December 11, 1995 (File No. 0-14292).
10.16 Stockholders' Agreement by and among Bird Environmental Gulf Coast, Inc.,
GTS Duratek, Inc., GTSD Sub II, Inc., Jim S. Hogan, Mark B. Hogan, Barry K.
Hogan and Sam J. Lucas III dated November 29, 1995. Incorporated herein by
reference to Exhibit (c)(3) of the Registrant's Current Report on Form 8-K
filed on December 11, 1995 (File No. 0-14292).
10.17 Technology License Agreement by and among GTS Duratek, Inc., Bird
Environmental Gulf Coast, Inc. and Jim S. Hogan dated November 29, 1995.
Incorporated herein by reference to Exhibit (c)(4) of the Registrant's
Current Report on Form 8-K filed on December 11, 1995 (File No. 0-14292).
13 Registrant's Annual Report on Form 10-K for the year ended December 31,
1995. Incorporated herein by reference.
23.1 Consents of KPMG Peat Marwick LLP (previously filed).
23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.1).
24 Power of Attorney (located on p. II-6 of the Registration Statement).
27 Financial Data Schedule (previously filed with Registrant; Annual Report on
Form 10-K for the year ended December 31, 1995).
</TABLE>
II-4
<PAGE>
ITEM 17. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions of the Delaware General Corporate Law, the
Amended and Restated Certificate of Incorporation or By-Laws of the registrant
or resolutions of the Board of Directors of the registrant adopted pursuant
thereto, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430(a) and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment No. 3 to
Registration Statement on Form S-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Columbia, State of
Maryland, on April 19, 1996.
GTS DURATEK, INC.
By: /s/ ROBERT E. PRINCE
-----------------------------------
Robert E. Prince
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to Registration Statement has been signed by the following persons in the
capacities indicated on April 19, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE AND CAPACITY
- --------------------------------------------------------- ---------------------------
<C> <S> <C>
/s/ ROBERT E. PRINCE President and Chief
------------------------------------------- Executive
Robert E. Prince Officer and Director
Executive Vice President
/s/ ROBERT F. SHAWVER and Chief Financial
------------------------------------------- Officer (Principal
Robert F. Shawver Financial Officer)
/s/ CRAIG T. BARTLETT Controller (Principal
------------------------------------------- Accounting Officer)
Craig T. Bartlett
</TABLE>
MAJORITY OF THE BOARD OF DIRECTORS:
Daniel A. D'Aniello, William E. Conway, Jr., Steven J. Gilbert, Earle C.
Williams, Jerome I. Feldman and Martin M. Pollak.
<TABLE>
<C> <S> <C>
By: /s/ ROBERT F. SHAWVER Attorney-in-Fact
------------------------------------------
Robert F. Shawver
</TABLE>
II-6
<PAGE>
INDEX OF EXHIBITS
FILED WITH THIS REGISTRATION STATEMENT
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT DOCUMENT NUMBERED PAGE
- ----------- ---------------------------------------------------------------------------------------- --------------
<S> <C> <C>
1 Form of Underwriting Agreement (filed herewith).........................................
5.1 Opinion of Piper & Marbury L.L.P. (previously filed)....................................
23.1 Consents of KPMG Peat Marwick LLP. (previously filed)...................................
23.2 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.2).............................
24 Powers of Attorney (previously filed)...................................................
27 Financial Data Schedule (previously filed).
</TABLE>
II-7
<PAGE>
3,600,000 SHARES
GTS DURATEK, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
April , 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
DEUTSCHE MORGAN GRENFELL/C.J. LAWRENCE INC.
GRUNTAL & CO., INCORPORATED
As representatives of the
several underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
Dear Sirs:
GTS Duratek, Inc., a Delaware corporation (the "Company"), and the
stockholders of the Company named in Schedule II hereto, (collectively, the
"Selling Stockholders"), severally propose to sell an aggregate of 3,600,000
shares of Common Stock, $.01 par value, of the Company (the "Firm Shares"), to
the several underwriters named in Schedule I hereto (the "Underwriters") for
whom you are acting as representatives (the "Representatives"). The Firm Shares
consist of 2,500,000 shares to be issued and sold by the Company and 1,100,000
outstanding shares to be sold by the Selling Stockholders. The Company also
proposes to issue and sell to the several Underwriters not more than 540,000
additional shares of Common Stock, $.01 par value, of the Company (the
"Additional Shares"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are herein collectively called
the "Shares." The shares of common stock of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock." The Company and the Selling Stockholders are hereinafter
collectively called the "Sellers".
As the Representatives, you have advised the Company and the Selling
Stockholders (a) that you are authorized to enter into this Agreement on behalf
of the Underwriters and (b) that the several Underwriters are willing, acting
severally and not jointly, to purchase the number of Firm Shares set forth
opposite their respective names in Schedule I hereto, plus their pro rata
portion of the Additional Shares if you elect to exercise the overallotment
option in whole or in part for the accounts of the several Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-2 (Registration No. 333-01805),
including a preliminary prospectus relating to the Shares, which may be amended.
The registration statement as amended on the date it became effective, on the
one hand, and the prospectus constituting a part thereof in the form first used
to confirm sales of Shares, on the other hand (including (a) the information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Act, and (b) any
documents or information incorporated or deemed to be incorporated by reference
into such registration statement or prospectus), are hereinafter referred to as
the "Registration Statement" and the "Prospectus", respectively. Any
registration statement (including any amendment or supplement thereto or
information which is deemed to be a part thereof) filed by the Company under
Rule 462(b) of the Act (a "Rule 462(b) Registration Statement") shall be deemed
to be a part of the Registration Statement. If the Company elects to rely on
Rule 434 under the Act, all references to the Prospectus shall be deemed to also
include, without limitation, the form of prospectus and term sheet (a "Term
Sheet"), taken together,
<PAGE>
provided to the Underwriters by the Company in reliance on Rule 434 under the
Act (the "Rule 434 Prospectus"). All references in this Agreement to financial
statements and schedules and other information which is "contained," "included,"
"described" or "stated" in the Registration Statement or the Prospectus (and all
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are or are deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed to
mean and include, without limitation, even though not specifically stated, any
document filed under the Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (the "Exchange Act") which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell 2,500,000 Firm Shares, (ii)
each Selling Stockholder agrees, severally and not jointly, to sell the number
of Firm Shares set forth opposite such Selling Stockholder's name in Schedule II
hereto and (iii) each Underwriter agrees, severally and not jointly, to purchase
from each Seller at a price per share of $ (the "Purchase Price") the
number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) which bears the same proportion to the total number
of Firm Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares. The obligations of the Company and each of the Selling
Stockholders pursuant to this Section 2 shall be several and not joint.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to 540,000 Additional Shares and (ii) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate
540,000 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof. The date specified in any such notice shall be a business day
(i) no earlier than the Closing Date (as hereinafter defined), (ii) no later
than ten business days after such notice has been given and (iii) no earlier
than two business days after such notice has been given. If any Additional
Shares are to be purchased, each Underwriter, severally and not jointly, agrees
to purchase from the Company the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm Shares.
The Sellers hereby agree, severally and not jointly, and the Company shall,
concurrently with the execution of this Agreement, deliver an agreement executed
by (i) each of the directors and officers of the Company and (ii) each
stockholder listed on Annex I hereto, pursuant to which each such person agrees,
not to offer, sell, contract to sell, grant any option to purchase, or otherwise
dispose of any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of any such common stock, except to the Underwriters pursuant to this
Agreement, for a period of 120 days after the date of the Prospectus without the
prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Notwithstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plans and (ii) the
Company may issue shares of its common stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof.
2
<PAGE>
3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and payment for
the Firm Shares shall be made at 10:00 A.M., New York City time, on the fourth
business day (or the third business day if required under Rule 15c6-1 of the
Exchange Act) following the date the Registration Statement becomes effective
(or, if the Company has elected to rely upon Rule 430A of the Act, the fourth
business day (or the third business day if required under rule 15c6-1 of the
Exchange Act) after the determination of the Purchase Price), or such other time
not later than ten business days after such date as shall be agreed upon by you
and the Company (such time and date of payment and delivery being herein called
the "Closing Date") at the offices of Piper & Marbury L.L.P., 36 South Charles
Street, Baltimore, Maryland 21201 or at such other place as you shall designate.
The Closing Date and the location of delivery of and the form of payment for the
Firm Shares may be varied by agreement between you and the Sellers.
Delivery to the Underwriters of and payment for any Additional Shares to be
purchased by the Underwriters shall be made at such place as you shall designate
at 10:00 A.M., New York City time, on the date specified in the applicable
exercise notice given by you pursuant to Section 2 (an "Option Closing Date").
Any such Option Closing Date and the location of delivery of and the form of
payment for such Additional Shares may be varied by agreement between you and
the Company.
Certificates for the Shares shall be registered in such names and issued in
such denominations as you shall request in writing not later than two full
business days prior to the Closing Date or an Option Closing Date, as the case
may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by
certified or official bank checks payable in federal funds to the order of the
applicable Sellers.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of the
receipt of comments from the Commission relating to the Registration
Statement, (iii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, and (v)
of the happening of any event during the period referred to in paragraph (e)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, four signed copies of the
Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
3
<PAGE>
(d) Not to (i) file any 462(b) Registration Statement, (ii) file any
amendment or supplement to the Registration Statement, (iii) file any
document under the Exchange Act which shall be deemed to be incorporated by
reference into the Prospectus, or (iv) make any amendment or supplement to
the Prospectus (including the issuance or filing of any Term Sheet); of
which you shall not previously have been advised or to which you shall
reasonably object; and to prepare and file with the Commission, promptly
upon your reasonable request, any 462(b) Registration Statement, Term Sheet
or amendment or supplement to the Registration Statement or the Prospectus
which may be necessary or advisable in connection with the distribution of
the Shares by you, and to use its best efforts to cause the same to become
promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish to each
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer may
reasonably request, provided that all such requests shall be made to the
Company through Donaldson, Lufkin & Jenrette Securities Corporation.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus, as
so amended or supplemented, will not in the light of the circumstances when
it is so delivered, be misleading, or so that the Prospectus will comply
with law, and to furnish to each Underwriter and to such dealers as you
shall specify, such number of copies thereof as such Underwriter or dealers
may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such qualification in effect
so long as required for distribution of the Shares and to file such consents
to service of process or other documents as may be necessary in order to
effect such registration or qualification, provided that the Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent.
(h) To mail and make generally available to its stockholders as soon as
reasonably practicable an earnings statement covering a period of at least
twelve months after the effective date of the Registration Statement (but in
no event shall such twelve-month period commence later than 90 days after
such date) which shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of three years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Common Stock a financial report of the
Company and its subsidiaries on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of stockholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for
the preceding year, certified by independent certified public accountants,
and (ii) to make generally available as soon as practicable after the end of
each quarterly period (except for the last quarterly period of each fiscal
year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and
similar financial reports of all unconsolidated subsidiaries, if any) as of
the end of and for such period, and for the period from the beginning of
such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
4
<PAGE>
(j) During the period referred to in paragraph (i), to furnish to you as
soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed
with the Commission and such other publicly available information concerning
the Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the
Registration Statement (including financial statements and exhibits), each
preliminary prospectus and all amendments and supplements to any of them
prior to or during the period specified in paragraph (e), (ii) the printing
and delivery of the Prospectus and all amendments or supplements to it
during the period specified in paragraph (e), (iii) the printing and
delivery of this Agreement, the Preliminary and Supplemental Blue Sky
Memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection with the offering of the
Shares (including in each case any disbursements of counsel for the
Underwriters relating to such printing and delivery), (iv) the registration
or qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the several states (including in each case the fees and
disbursements of counsel for the Underwriters relating to such registration
or qualification and memoranda relating thereto), (v) the filing fees and
the fees and disbursements of counsel incurred in connection with filings
and clearance with the National Association of Securities Dealers, Inc. in
connection with the offering, (vi) the listing of the Shares on the Nasdaq
National Market, (vii) furnishing such copies of the Registration Statement,
the Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Shares by
the Underwriters or by dealers to whom Shares may be sold and (viii) the
performance by the Sellers of their other obligations under this Agreement.
(l) To use its best efforts to list, subject to notice of issuance, the
Shares on the Nasdaq National Market.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior
to the Closing Date or any Option Closing Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Shares.
(n) To use the net proceeds received by it from the sale of Shares
substantially in the manner specified in the Prospectus under "Use of
Proceeds."
(o) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule 430A
of the Act, then immediately following the determination of the Purchase
Price, to prepare, and file or transmit for filing with the Commission in
accordance with Rule 430A and Rule 424(b) of the Act, copies of an amended
Prospectus, or, if required by such Rule 430A, a post-effective amendment to
the Registration Statement (including an amended Prospectus), containing all
information so omitted.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-2; the
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or threatened by the Commission.
(b) At the time the Registration Statement, any 462(b) Registration
Statement or any post-effective amendment to the Registration Statement
became or becomes effective, on the date that any amendment or supplement to
the Prospectus is filed with the Commission, and at the Closing Date, and if
later, the Option Closing Date, (i) each part of the Registration Statement,
when such part became effective, did not contain and each such part, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Act and (iii) the Prospectus did not and does not contain and, as amended or
5
<PAGE>
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this paragraph (b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to
any Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) Any Term Sheet or prospectus subject to completion provided by the
Company to the Underwriters for use in connection with the offering and sale
of the Shares pursuant to Rule 434 under the Act together are not materially
different from the prospectus included in the Registration Statement
(exclusive of any information deemed a part thereof by virtue of Rule 434(d)
under the Act). The documents incorporated or deemed to be incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-2 under the Act,
at the time they were, or hereafter are, filed with the Commission, complied
and will comply in all material respects with the requirements of the
Exchange Act, and, when read together with other information in the
Prospectus, at the time the Registration Statement became effective and as
of the Closing Date and, if later, the Option Closing Date, and during the
period specified in Section 5(e) hereof, 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,
in the light of the circumstances under which they were made, not
misleading.
(d) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act; and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(e) The Company and each of its subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as it is currently being conducted and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing
of property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(f) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, except as reflected in the Registration Statement,
including the financial statements and notes thereto, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature, except such security interests, claims, liens, encumbrances, or
adverse interests arising under the Company's bank credit agreement
incorporated by reference into the Registration Statement as Exhibit 10.3
(the "Credit Agreement").
(g) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been duly
authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and the Shares to be issued and
sold by the Company hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as provided by this
Agreement, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or similar
rights. Upon payment of the Purchase Price and delivery of certificates
representing the Shares, each of the Underwriters will receive the Shares
free and clear of all liens, security interests or encumbrances.
(h) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in
the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement or condition contained in any bond,
6
<PAGE>
debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business
of the Company and its subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except such as may
be required under the securities or Blue Sky laws of the various states) and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or
any of its subsidiaries or any agreement, indenture or other instrument to
which it or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective property is bound, (except in the case of
agreements or other instruments but not in the case of the charter, by-laws
or any indenture, conflicts, breaches or defaults which would not
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries, taken as a whole) or violate or conflict with
any laws, administrative regulations or rulings or court decrees applicable
to the Company, any of its subsidiaries or their respective property.
(k) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings (including compliance audits and
investigations) pending to which the Company or any of its subsidiaries is a
party or of which any of their respective property is the subject, and, to
the best of the Company's knowledge, except as otherwise set forth in the
Prospectus, no such proceedings are threatened or contemplated. No contract
or document of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement is not so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), nor
any federal or state law relating to discrimination in the hiring, promotion
or pay of employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case is
reasonably likely to result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and
its subsidiaries, taken as a whole.
(m) The Company and each of its subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business as currently being
conducted; the Company and each of its subsidiaries has fulfilled and
performed all of its material obligations with respect to such permits and
no event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries.
(n) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, except to the extent
properly accrued for in the Company's financial statements, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
7
<PAGE>
(o) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, the
Company and each of its subsidiaries has good and marketable title, free and
clear of all liens, claims, encumbrances and restrictions except liens for
taxes not yet due and payable and liens, claims, encumbrances and
restrictions arising under the Credit Agreement, to all property and assets
described in the Registration Statement as being owned by it. All leases to
which the Company or any of its subsidiaries is a party are valid and
binding and no default has occurred or is continuing thereunder that might
result in any material adverse change in the business, prospects, financial
condition or results of operations of the Company and its subsidiaries taken
as a whole, and the Company and its subsidiaries enjoy peaceful and
undisturbed possession under all such leases to which any of them is a party
as lessee with such exceptions as do not materially interfere with the use
made by the Company or such subsidiary.
(p) The Company and each of its subsidiaries maintains adequate
insurance.
(q) KPMG Peat Marwick LLP are independent public accountants with
respect to the Company as required by the Act.
(r) The financial statements, together with related schedules and notes,
included in the Registration Statement and the Prospectus (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of the Company and
its subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) is,
in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Company. No other financial statements or schedules are required by the Act
or the Exchange Act to be included in the Registration Statement or the
Prospectus.
(s) The Company is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(t) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the Registration Statement, which has not been
waived.
(u) The Shares are duly authorized for listing on the Nasdaq National
Market, subject to official notice of issuance.
(v) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens related to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of, or other ownership interest in, the Company or any
subsidiary thereof except as otherwise disclosed in the Registration
Statement.
(w) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(x) All material tax returns required to be filed by the Company and
each of its subsidiaries in any jurisdiction have been filed, or appropriate
extensions have been obtained therefor, other than those filings being
contested in good faith, and all material taxes, including withholding
taxes, penalties and
8
<PAGE>
interest, assessments, fees and other charges due pursuant to such returns
or pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good faith
and for which adequate reserves have been provided.
(y) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing
Date, or if later, the Option Closing Date (i) there has not been and will
not have been, except as set forth in or as contemplated by the Registration
Statement and the Prospectus any change in the capitalization, long term or
short term debt or in the capital stock or equity of the Company or any of
its subsidiaries, (ii) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, nor
has it entered into any material transactions other than pursuant to this
Agreement, and the transactions referred to herein, or as contemplated in
the Prospectus, or in the ordinary course of business, and (iii) there has
not been any material adverse effect, or any development reasonably likely
to have a material adverse effect, on or affecting the general affairs,
management, financial position, stockholders' equity, or results of
operations of the Company and its subsidiaries, taken as a whole.
(z) The Company and its affiliates have not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Shares pursuant to the distribution contemplated by this Agreement, and,
other than as permitted by the Act, the Company has not distributed and will
not distribute any prospectus or other offering material in connection with
the offering and sale of the Shares.
Any certificate or other document signed by any officer or authorized
representative of the Company or any Selling Shareholder and delivered to the
Representatives or to counsel for the Underwriters required by this Agreement in
conjunction with the consummation of the transactions contemplated hereby shall
be deemed a representation and warranty by such entity or person, as the case
may be, to each Underwriter as to the matter covered thereby.
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder severally represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on
the Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests and claims
whatsoever, other than those created or imposed by the Underwriters.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens, encumbrances,
security interests and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority to enter into this Agreement and the
Custody Agreement between the Selling Stockholders and Harris Trust Company
of New York, as Custodian (the "Custody Agreement") and to sell, assign,
transfer and deliver such Shares in the manner provided herein and therein,
and this Agreement and the Custody Agreement have been duly authorized,
executed and delivered by such Selling Stockholder and each of this
Agreement and the Custody Agreement is a valid and binding agreement of such
Selling Stockholder enforceable in accordance with its terms, except as
rights to indemnity and contribution hereunder may be limited by applicable
law.
(d) The power of attorney signed by such Selling Stockholder appointing
and , or either one of them, as such
Selling Stockholder's attorney-in-fact to the extent set forth therein with
regard to the transactions contemplated hereby and by the Registration
Statement and the Custody Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder and is a valid and
binding instrument of such Selling Stockholder enforceable in accordance
with its terms, and, pursuant to such power of attorney, such Selling
Stockholder has authorized and ,
9
<PAGE>
or either one of them, to execute and deliver on such Selling Stockholder's
behalf this Agreement and any other document necessary or desirable in
connection with transactions contemplated hereby and to deliver the Shares
to be sold by such Selling Stockholder pursuant to this Agreement.
(e) Such Selling Stockholder has not taken, and will not take, directly
or indirectly, any action designed to, or which might reasonably be expected
to, cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than
as permitted by the Act, the Selling Stockholder has not distributed and
will not distribute any prospectus or other offering material in connection
with the offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act, state securities laws or
Blue Sky laws) and will not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, organizational documents of
such Selling Stockholder, if not an individual, or any agreement, indenture
or other instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder or property of such Selling Stockholder is bound,
or violate or conflict with any laws, administrative regulation or ruling or
court decree applicable to such Selling Stockholder or property of such
Selling Stockholder.
(g) Such parts of the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relate to such
Selling Stockholder do not, and will not on the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of circumstances under which they were made, not misleading.
(h) At any time during the period described in paragraph 5(e) hereof, if
there is any change in the information referred to in paragraph 7(g) above,
the Selling Stockholders will promptly notify you of such change.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities and judgments caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished in writing to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that the foregoing indemnity shall not inure to the benefit of any
Underwriter from whom the person asserting such losses, claims, damages,
liabilities and judgments purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (including any amendment or
supplement thereto) was not sent or given by or on behalf of such
Underwriter to such person at or prior to the written confirmation of the
sale of the Shares to such person, and if the Prospectus (including any
amendment or supplement thereto) would have cured the defect giving rise to
such losses, claims, damages, liabilities or judgments, unless such failure
to deliver a copy of the Prospectus was the result of the failure of the
Company to provide the number of copies of such Prospectus reasonably
requested by such Underwriter in a timely manner. Each Selling Stockholder,
jointly and severally, agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all
10
<PAGE>
losses, claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in the
information pertaining to such Selling Stockholder under the caption
"Principal and Selling Stockholders" in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) or any preliminary prospectus, or
caused by any omission or alleged omission to state therein under the
caption "Principal and Selling Stockholders," a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, the aggregate liability of any Selling
Stockholder pursuant to the provisions of this paragraph shall be limited to
an amount equal to the aggregate purchase price received by such Selling
Stockholder from the sale of such Selling Stockholder's Shares hereunder.
(b) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus,
the Registration Statement or the Prospectus or any amendment or supplement
thereto and with respect to which indemnity may be sought against the
Company and the Selling Stockholders, such Underwriter shall promptly notify
the Company and the Selling Stockholders in writing. Upon notification of
any such action the Company and the Selling Stockholders shall be entitled
to participate in such action and, to the extent that they shall wish,
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
If any Underwriter or any person controlling such Underwriter shall fail to
give such notice and the party to whom notice was to be given was unaware of
the proceeding to which such notice would have related no indemnification
provided for in Section 8(a) shall be available to the Underwriter or any
person controlling the Underwriter to the extent that indemnifying such
party was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of the provisions of
Section 8(a). Any Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
employment of such counsel has been specifically authorized in writing by
the Company, (ii) the Company and the Selling Stockholders shall have failed
to assume the defense and employ counsel within a reasonable period of time
after notice of commencement of the action or (iii) the named parties to any
such action (including any impleaded parties) include both such Underwriter
or such controlling person and the Company or any Selling Stockholder, as
the case may be, and representation of the named parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them (in which case the Company and the Selling Stockholders shall
not have the right to assume the defense of such action on behalf of such
Underwriter or such controlling person, it being understood, however, that
the Company and the Selling Stockholders shall not, in connection with any
one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all
such Underwriters and controlling persons, which firm shall be designated in
writing by Donaldson, Lufkin & Jenrette Securities Corporation and that all
such reasonable fees and expenses shall be reimbursed within a reasonable
time after they are incurred). A Seller shall not be liable for any
settlement of any such action effected without the written consent of such
Seller but if settled with the written consent of such Seller, such Seller
agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement. Notwithstanding the immediately preceding sentence, if in any
case where the fees and expenses of counsel are at the expense of the
indemnifying party and an indemnified party shall have requested the
indemnifying party to reimburse the indemnified party for such reasonable
fees and expenses of counsel within a reasonable time after they are
incurred, such indemnifying party agrees that it shall be liable for any
settlement of any action effected without its written consent if (i) such
settlement is entered into more than thirty business days after the receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of
11
<PAGE>
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 arising out of such claims.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
Selling Stockholder and each person, if any, controlling such Selling
Stockholder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Sellers
to each Underwriter but only with reference to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter through
you expressly for use in the Registration Statement, the Prospectus or any
preliminary prospectus. In case any action shall be brought against the
Company, any of its directors, any such officer or any person controlling
the Company or any Selling Stockholder or any person controlling such
Selling Stockholder based on the Registration Statement, the Prospectus or
any preliminary prospectus and in respect of which indemnity may be sought
against any Underwriter, the Underwriter shall have the rights and duties
given to the Sellers (except that if any Seller shall have assumed the
defense thereof, such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and any
person controlling the Company and the Selling Stockholders and any person
controlling such Selling Stockholders shall have the rights and duties given
to an Underwriter or any person controlling an Underwriter, by Section 8(b)
hereof.
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party,
in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Sellers and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers and the
Underwriters shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Sellers and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares
12
<PAGE>
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8(d) are
several in proportion to the respective number of Shares purchased by each of
the Underwriters hereunder and not joint.
(e) Each Seller hereby designates Corporation Trust Company, (a Delaware
corporation) as its authorized agent, upon which process may be served in
any action, suit or proceeding which may be instituted in any state or
federal court in the State of New York by any Underwriter or person
controlling an Underwriter asserting a claim for indemnification or
contribution under or pursuant to this Section 8, and each Seller will
accept the jurisdiction of such court in such action, and waives, to the
fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 13
hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of the
Underwriters under this Agreement are subject to the satisfaction of each of the
following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date and the Option
Closing Date with the same force and effect as if made on and as of the
Closing Date or the Option Closing Date, as the case may be.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M., (and in the case of a Registration Statement filed under
462(b) of the Act, not later than 10:00 p.m.) New York City time, on the
date of this Agreement or at such later date and time as you may approve in
writing, and at the Closing Date and the Option Closing Date, as the case
be, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the Commission.
(c) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development reasonably likely to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole, other than those reflected
in the Registration Statement and the Prospectus and (iv) on the Closing
Date and the Option Closing Date you shall have received a certificate dated
the Closing Date, and the Option Closing Date, as the case may be, signed by
Robert E. Prince and Robert F. Shawver, in their capacities as the Chief
Executive Officer and Chief Financial Officer of the Company, confirming the
matters set forth in paragraphs (a), (b), and (c) of this Section 9.
(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date
with the same force and effect as if made on and as of the Closing Date and
you shall have received a certificate to such effect, dated the Closing
Date, from each Selling Stockholder.
13
<PAGE>
(e) You shall have received on the Closing Date and the Option Closing
Date an opinion (satisfactory to you and counsel for the Underwriters),
dated the Closing Date and the Option Closing Date, respectively, of Piper &
Marbury L.L.P., counsel for the Company, to the effect that:
(i) the Company and each of its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power
and authority required to carry on its business as it is currently being
conducted and to own, lease and operate its properties;
(ii) the Company and each of its subsidiaries is duly qualified and
is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
and validly authorized and issued and are fully paid and non-assessable,
and are owned by the Company, except as reflected in the Registration
Statement, including the financial statements and notes thereto, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, except such security interests, claims, liens,
encumbrances, or adverse interests arising under the Credit Agreement;
(iv) all the issued and outstanding shares of Common Stock have been
duly and validly issued and are fully paid and, non-assessable and were
not issued in violation of or subject to any preemptive rights;
(v) the Shares to be issued and sold by the Company hereunder have
been duly authorized, and when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will have been
validly issued and will be fully paid and non-assessable, and the
issuance of such Shares is not subject to any preemptive or similar
rights;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms (except as rights to indemnity
and contribution hereunder may be limited by applicable law);
(vii) the authorized capital stock of the Company, including the
Common Stock, conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus;
(viii) the Registration Statement has become effective under the Act,
no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the knowledge of such counsel,
pending before or contemplated by the Commission;
(ix) the statements under the captions "Business -- Environmental
Matters, and -- Patents and Other Intellectual Property Rights" and
"Description of Capital Stock", in the Prospectus and Item 15 of Part II
of the Registration Statement insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to therein,
fairly present, in all material respects, the information called for with
respect to such legal matters, documents and proceedings;
(x) neither the Company nor any ofc its subsidiaries is in violation
of its respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor any of its
subsidiaries is in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument material to the conduct of the business of the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or
their respective property is bound;
(xi) the execution, delivery and performance of this Agreement by the
Company and, compliance by the Company with all the provisions hereof and
the consummation of the transactions
14
<PAGE>
contemplated hereby will not require any consent, approval, authorization
or other order of any court, regulatory body, administrative agency or
other governmental body (except such as may be required under the Act or
other securities or Blue Sky laws) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its subsidiaries,
or any agreement, indenture or other instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company or any of its subsidiaries or their
respective properties;
(xii) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or any
of its subsidiaries is a party or to which any of their respective
property is subject which is required to be described in the Registration
Statement or the Prospectus and is not so described, or of any contract
or other document which is required to be described in the Registration
Statement or the Prospectus or is required to be filed as an exhibit to
the Registration Statement which is not described or filed as required;
(xiii) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xiv) to the best of such counsel's knowledge, after due inquiry, no
holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the
Company as a result of filing the Registration Statement, which have not
been waived; and
(xv) the Registration Statement, the Prospectus, any supplement or
amendment thereto and each document filed pursuant to the Exchange Act
and incorporated or deemed to be incorporated by reference in the
Prospectus (except for financial statements, statistical data and related
schedules therein as to which no opinion need be expressed) comply as to
form in all material respects with the Act.
In addition to the matters set forth above, such opinion shall also include
a statement to the effect that nothing has come to the attention of such counsel
which leads them to believe that (i) the Registration Statement, at the time it
became effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) and as of the Closing
Date or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Act and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements, in the light of
the circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Piper &
Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.
In giving their opinion, Piper & Marbury L.L.P. may rely as to factual
matters on information set forth in certificates of the Sellers, the Company or
public officials. The opinion of Piper & Marbury L.L.P. described in paragraph
(e) above shall be rendered to you at the request of the Company, and shall so
state therein.
(f) You shall have received on the Closing Date an opinion (satisfactory
to you and counsel for the Underwriters), dated the Closing Date, of
Lawrence M. Gordon, General Counsel of National Patent Development
Corporation, who is counsel to the Selling Stockholders, to the effect that:
(i) this Agreement has been duly authorized, executed and delivered
by each of the Selling Stockholders and is a valid and binding agreement
of each Selling Stockholder enforceable in accordance with its terms
(except as rights to indemnity and contribution hereunder may be limited
by applicable law);
15
<PAGE>
(ii) the execution, delivery and performance of this Agreement by
each Selling Stockholder, compliance by each Selling Stockholder with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not require any consent, approval, authorization
or other order of any court, regulatory body, administrative agency or
other governmental body (except such as may be required under the Act or
other securities or Blue Sky laws) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the organizational documents of any Selling Stockholder that is
not an individual or any agreement, indenture or other instrument to
which any Selling Stockholder is a party or by which any Selling
Stockholder or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to any Selling Stockholder or their respective
properties;
(iii) the Custody Agreement has been duly authorized, executed and
delivered by each Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder enforceable in accordance with its
terms;
(iv) each Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws) to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder in the manner provided in this Agreement and the Custody
Agreement;
(v) each Selling Stockholder has good and clear title to the
certificates for the Shares to be sold by such Selling Stockholder and
upon delivery thereof, pursuant hereto and payment therefor, good and
clear title will pass to the Underwriters, severally, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever, other than those created or imposed by the
Underwriters; and
(vi) the power of attorney signed by each Selling Stockholder
appointing and , or either of
them, as such Selling Stockholder's attorney-in-fact to the extent set
forth therein with regard to the transactions contemplated hereby and by
the Registration Statement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and are valid and
binding instruments of such Selling Stockholder enforceable in accordance
with its terms, and pursuant to such power of attorney, each of the
Selling Stockholders has authorized and
, or either of them, to execute and deliver on their behalf this
Agreement and any other document necessary or desirable in connection
with transactions contemplated hereby and to deliver the Shares to be
sold by them pursuant to this Agreement.
(g) You shall have received on the Closing Date and the Option Closing
Date an opinion, dated the Closing Date or the Option Closing Date, as the
case may be, of McDermott, Will & Emery, counsel for the Underwriters, in
form and substance satisfactory to you.
(h) You shall have received a letter on and as of the Closing Date and
the Option Closing Date, in form and substance satisfactory to you, from
KPMG Peat Marwick LLP, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in the form and
substance of the letter delivered to you by such firm on the date of this
Agreement.
(i) The Company and the Selling Stockholders shall not have failed at or
prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the
Company at or prior to the Closing Date or the Option Closing Date as the
case may be.
(j) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person to the effect that such Selling
Stockholder is not a U.S. Person (as defined under
16
<PAGE>
applicable U.S. federal tax legislation), which certificate may be in the
form of a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION. This Agreement shall
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date by
you by written notice to the Sellers if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or development
reasonably likely to result in a material adverse change in the condition,
financial or otherwise, of the Company or any of its subsidiaries or the
earnings, affairs, or business prospects of the Company or any of its
subsidiaries, whether or not arising in the ordinary course of business, which
would, in your judgment, make it impracticable to market the Shares on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or elsewhere that, in your judgment, is material and adverse and would,
in your judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market or limitation on prices for
securities on any such exchange or quotation system, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your opinion materially and adversely affects, or will materially and adversely
affect, the business or operations of the Company or any Subsidiary, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase the Firm Shares
or Additional Shares, as the case may be, which it or they have agreed to
purchase hereunder on such date and the aggregate number of Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase is
not more than one-tenth of the total number of Shares to be purchased on such
date by all Underwriters, each non-defaulting Underwriter shall be obligated
severally, in the proportion which the number of Firm Shares set forth opposite
its name in Schedule I bears to the total number of Firm Shares which all the
non-defaulting Underwriters, as the case may be, have agreed to purchase, or in
such other proportion as you may specify, to purchase the Firm Shares or
Additional Shares, as the case may be, which such defaulting Underwriter or
Underwriters, as the case may be, agreed but failed or refused to purchase on
such date; PROVIDED that in no event shall the number of Firm Shares or
Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
17
<PAGE>
11. AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling Stockholder
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to the
Shares to be sold by such Selling Stockholder; and
(b) To do and perform all things to be done and performed under this
Agreement prior to the Closing Date and to satisfy all conditions precedent
to the delivery of the Shares pursuant to this Agreement.
12. MISCELLANEOUS. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to GTS Duratek,
Inc., 8955 Guilford Road, Suite 200, Columbia, Maryland 21046, (b) if to the
Selling Stockholders, to c/o and (c) if
to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 140 Broadway, New York, New York 10005, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Shares, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter or by or on behalf of the Sellers, the officers or directors of
the Company or any controlling person of the Sellers, (ii) acceptance of the
Shares and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for reasonable out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder up to a maximum of
$ ; but the Sellers shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
Except as otherwise provided, this Agreement has been and is made solely for
the benefit of and shall be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of the Shares
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York without regard to conflicts of laws principles.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
18
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement between
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
GTS DURATEK, INC.
By ___________________________________
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE II HERETO
By ___________________________________
Attorney-in-fact
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
DEUTSCHE MORGAN GRENFELL/C.J. LAWRENCE INC.
GRUNTAL & CO., INCORPORATED
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By ___________________________________
19
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
- ------------------------------------------------------------------------------------------ ----------------------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation.......................................
Deutsche Morgan Grenfell/C.J. Lawrence Inc................................................
Gruntal & Co., Incorporated...............................................................
----------
Total................................................................................. 3,600,000
----------
----------
</TABLE>
<PAGE>
SCHEDULE II
SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
NUMBER OF FIRM
NAME SHARES BEING SOLD
- ----------------------------------------------------------------------------------------------- -----------------
<S> <C>
National Patent Development Corporation........................................................ 1,000,000
Jerome I. Feldman.............................................................................. 50,000
Martin M. Pollak............................................................................... 50,000
-----------------
Total...................................................................................... 1,100,000
-----------------
-----------------
</TABLE>
<PAGE>
ANNEX I
REQUIRED STOCKHOLDER LOCK-UPS
The Carlyle Group (including all investment partnerships referenced in footnote
(1) to the table under the caption "Principal and Selling Stockholders" in the
Prospectus)
Soros Capital Offshore Partners LDC
