FUEL SYSTEMS SOLUTIONS,
INC.
Common Stock, par value $0.001
per share
PLACEMENT AGENCY
AGREEMENT
Needham & Company,
LLC
445 Park Avenue
New York, NY 10022
Fuel Systems
Solutions, Inc., a Delaware corporation (the “ Company
”), proposes to issue and sell to the purchasers, pursuant to
the terms of this Placement Agency Agreement (this “
Agreement ”) and the Subscription Agreements in the
form of Exhibit A attached hereto (the “
Subscription Agreements ”) entered into with the
purchasers identified therein (each a “ Purchaser
” and collectively, the “ Purchasers ”),
up to an aggregate of 1,500,000 shares of common stock, $0.001 par
value per share (the “ Common Stock ”) of the
Company. The aggregate of 1,500,000 shares so proposed to be sold
is hereinafter referred to as the “ Shares .”
The Company hereby confirms its agreement with Needham &
Company, LLC to act as Placement Agent (“ Needham
”, or the “ Placement Agent ”) in
accordance with the terms and conditions hereof.
1.
Agreement to Act as Placement Agent.
On the basis of
the representations, warranties and agreements of the Company
herein contained, and subject to all the terms and conditions of
this Agreement:
(a) The Company
hereby authorizes the Placement Agent to act as its sole agent to
solicit offers for the purchase of all or part of the Shares from
the Company in connection with the proposed offering of the Shares
(the “ Offering ”). Until the Closing Date (as
defined in Section 3 hereof), the Company shall not,
without the prior written consent of the Placement Agent, solicit
or accept offers to purchase Shares otherwise than through the
Placement Agent.
(b) The Company
hereby acknowledges that the Placement Agent has agreed, as agent
of the Company, to use its commercially reasonable best efforts to
solicit offers to purchase the Shares from the Company on the terms
and subject to the conditions set forth in the Prospectus (as
defined below). The Placement Agent shall use commercially
reasonable best efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase Shares has
been solicited by the Placement Agent and accepted by the Company,
but the Placement Agent shall not, except as otherwise provided in
this Agreement, be obligated to disclose the identity of any
potential purchaser or have any liability to the Company in the
event any such purchase is not consummated for any reason. Under no
circumstances will the Placement Agent be obligated to underwrite
or
purchase any
Shares for its own account and, in soliciting purchases of Shares,
the Placement Agent shall act solely as the Company’s agent
and not as principal. Notwithstanding the foregoing and except as
otherwise provided in Section 2(c) , it is understood
and agreed that the Placement Agent (or its affiliates) may, solely
at its discretion and without any obligation to do so, purchase
Shares as principal.
(c) Subject to the
provisions of this Section 1 , offers for the purchase
of Shares may be solicited by the Placement Agent as agent for the
Company at such times and in such amounts as the Placement Agent
deems advisable. The Placement Agent shall communicate to the
Company orally or in writing, each reasonable offer (including the
identity of the potential purchaser) to purchase Shares received by
it as agent of the Company. The Company shall have the sole right
to accept offers to purchase the Shares and may reject any such
offer, in whole or in part. The Placement Agent shall have the
right, in its discretion reasonably exercised, without notice to
the Company, to reject any offer to purchase Shares received by it,
in whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein.
(d) The Shares are
being sold to the Purchasers at a price of $20.00 per share. The
purchases of the Shares by the Purchasers shall be evidenced by the
execution of a Subscription Agreement by each of the Purchasers and
the Company.
(e) As
compensation for services rendered, on the Closing Date (as defined
in Section 3 hereof), the Company shall pay to the
Placement Agent by wire transfer of immediately available funds to
an account or accounts designated by the Placement Agent, an
aggregate amount equal to six percent (6.0%) of the gross proceeds
received by the Company from the sale of the Shares on such Closing
Date (the “ Placement Fee ”).
(f) No Shares
which the Company has agreed to sell pursuant to this Agreement and
the Subscription Agreements shall be deemed to have been purchased
and paid for, or sold by the Company, until such Shares shall have
been delivered to the Purchaser thereof against payment in full by
such Purchaser. If the Company shall default in its obligations to
deliver Shares to a Purchaser whose offer it has accepted, the
Company shall indemnify and hold the Placement Agent harmless
against any loss, claim, damage or expense arising from or as a
result of such default by the Company in accordance with the
procedures set forth in Section 7(c) herein.
2.
Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Placement Agent
and the Purchasers that:
(a) The Company
meets the requirements for the use of Form S-3. A registration
statement (Registration No. 333-159624) on Form S-3
relating to the Shares, including a base prospectus relating to the
Shares (the “ Base Prospectus ”) and such
amendments thereto as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of
the Securities Act of 1933, as amended (the “ Securities
Act ”), and the rules and regulations (collectively
referred to as the
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“
Rules and Regulations ”) of the Securities and
Exchange Commission (the “ Commission ”)
thereunder, and has been filed with and has been declared effective
by the Commission, and the offering of the Shares complies with
Rule 415 under the Securities Act. A final prospectus
supplement to the Base Prospectus relating to the Shares and the
offering thereof will be filed promptly by the Company with the
Commission in accordance with Rule 424(b) of the Rules and
Regulations (such final prospectus supplement, as so filed, the
“ Prospectus Supplement ”). Such registration
statement at any given time, including the amendments thereto to
such time, the exhibits and any schedules thereto at such time, the
documents otherwise deemed to be a part thereof or included therein
by the Rules and Regulations (including Rule 430B thereof),
and any registration statement relating to the offering
contemplated by this Agreement and filed pursuant to Rule 462(b) of
the Rules and Regulations (“ Rule 462(b)
”), is herein called the “ Registration
Statement .” The term “ preliminary
prospectus ” means the any preliminary prospectus
(including any preliminary prospectus supplement) relating to the
Shares and the offering thereof as first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations (“
Rule 424(b) ”). The term “
Prospectus ” means the Base Prospectus together with
the Prospectus Supplement, except that if such Base Prospectus is
amended or supplemented on or prior to the date on which the
Prospectus Supplement was first filed pursuant to Rule 424(b),
the term “Prospectus” shall mean the Base Prospectus as
so amended or supplemented and as supplemented by the Prospectus
Supplement. Any reference herein to the Registration Statement, the
Base Prospectus, a preliminary prospectus, the Prospectus
Supplement, or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, the Base Prospectus, a preliminary
prospectus, the Prospectus Supplement, or the Prospectus shall be
deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), after the time the Registration
Statement initially became effective (the “ Effective
Date ”), the date of the Base Prospectus, any preliminary
prospectus, the Prospectus Supplement, or the Prospectus, as the
case may be, and deemed to be incorporated therein by reference.
The term “ Issuer Free Writing Prospectus ”
means any “issuer free writing prospectus,” as defined
in Rule 433 of the Rules and Regulations (“
Rule 433 ”), relating to the Shares that
(i) is required to be filed with the Commission by the Company
or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i)
because it contains a description of the Shares or of the offering
that does not reflect the final terms, in each case in the form
filed or required to be filed with the Commission or, if not
required to be filed , in the form retained in the Company’s
records pursuant to Rule 433(g).
No order
preventing or suspending the use of the Base Prospectus, any
preliminary prospectus, the Prospectus Supplement, the Prospectus
or any Issuer Free Writing Prospectus has been issued by the
Commission, and no stop order suspending the effectiveness of the
Registration Statement (including any related registration
statement filed pursuant to Rule 462(b)) or any post-effective
amendment thereto has been issued, and no proceeding for that
purpose has been initiated or threatened by the Commission. On the
Effective Date, on the date the Base Prospectus, any preliminary
prospectus, the Prospectus Supplement, or the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at
all times during the period through and including the
Closing
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Date and when
any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed
with the Commission, the Registration Statement and the Prospectus
(as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the
financial statements included or incorporated by reference in the
Prospectus, did and will comply with all applicable provisions of
the Securities Act, the Exchange Act, the rules and regulations of
the Commission under the Exchange Act (the “ Exchange Act
Rules and Regulations ”), and the Rules and Regulations
and will contain all statements required to be stated therein in
accordance with the Securities Act, the Exchange Act, the Exchange
Act Rules and Regulations, and the Rules and Regulations. As of the
applicable effective date as to each part of the Registration
Statement, no part of the Registration Statement, the Prospectus or
any such amendment or supplement thereto did or will contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading. At the Effective Date, the
date the Base Prospectus or any amendment or supplement to the Base
Prospectus, including any preliminary prospectus or the Prospectus
Supplement, is filed with the Commission, the date of first use of
any preliminary prospectus or the Prospectus Supplement, and at the
Closing Date and, if later, the Option Closing Date, the Prospectus
did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
As of the
Applicable Time, neither (x) any General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the
Applicable Time (as defined below), the Pricing Prospectus (as
defined below) and the documents listed on Schedule I
hereto, each as applicable, all considered together (collectively,
the “ General Disclosure Package ”), nor
(y) any individual Limited Use Free Writing Prospectus, when
considered together with the General Disclosure Package, included
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
As used in this
subsection and elsewhere in this Agreement:
“
Applicable Time ” means 5:00 pm (Eastern time) on the
date of this Agreement or such other time as agreed by the Company
and the Placement Agent.
“ General
Use Free Writing Prospectus ” means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being specified in
Schedule I hereto.
“ Issuer
Free Writing Prospectus ” means any Issuer Free Writing
Prospectus that is not an General Use Free Writing
Prospectus.
“ Limited
Use Free Writing Prospectus ” means any Issuer Free
Writing Prospectus that is not a General Use Free Writing
Prospectus.
“ Pricing
Prospectus ” means the Base Prospectus, as amended or
supplemented immediately prior to the Applicable Time, including
any document incorporated by
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reference
therein and any prospectus supplement deemed to be a part thereof.
For purposes of this definition, information contained in a form of
prospectus that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430B shall be
considered to be included in the Pricing Prospectus only if the
actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b) is prior to the Applicable Time.
Each Issuer Free
Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the
Shares or until any earlier date that the issuer notified or
notifies the Placement Agent as described in the next sentence, did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document
incorporated by reference therein that has not been superseded or
modified. If there occurs an event or development as a result of
which the General Disclosure Package would include an untrue
statement of a material fact or would omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances then prevailing, not misleading, the Company will
promptly notify the Placement Agent so that any use of the General
Disclosure Package may cease until it is amended or supplemented to
correct untrue statement or omission.
The foregoing
representations and warranties in this Section 2(a) do
not apply to any statements or omissions made in reliance on and in
conformity with information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent
specifically for inclusion in the Registration Statement, the
Prospectus Supplement, the Pricing Prospectus, the Prospectus or
any Issuer Free Writing Prospectus or any amendment or supplement
thereto. The Company acknowledges that (i) the statements set
forth in the last paragraph on the front cover page concerning the
terms of the offering by the Placement Agent and (ii) the
statements concerning the Placement Agent contained in the first
paragraph under the heading “Plan of Distribution” (the
“ Placement Agent’s Information ”) in the
Prospectus Supplement and the Pricing Prospectus and the Prospectus
constitute the only information relating to the Placement Agent
furnished in writing to the Company by the Placement Agent
specifically for inclusion in the Registration Statement, the
Prospectus Supplement, the Pricing Prospectus, the Prospectus and
any Issuer Free Writing Prospectus or any amendment or supplement
thereto.
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(b) The documents
that are incorporated by reference in the Base Prospectus, any
preliminary prospectus, the Pricing Prospectus, and the Prospectus
or from which information is so incorporated by reference, when
they became or become effective or were or are filed with the
Commission, as the case may be, complied or will comply in all
material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the Rules and Regulations or
the Exchange Act Rules and Regulations, as applicable; and any
documents so filed and incorporated by reference subsequent to the
Effective Date shall, when they are filed with the Commission,
comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules
and Regulations or the Exchange Act Rules and Regulations, as
applicable.
(c) Each Issuer
Free Writing Prospectus, if any, as of its issue date and at all
subsequent times through the completion of the public offer and
sale of the Shares or until any earlier date that the Company
notified or notifies the Placement Agent as described in
Section 4(e) , did not, does not and will not include
any information that conflicted, conflicts or will conflict in any
material respect with the information contained in the Registration
Statement, Pricing Prospectus or the Prospectus, including any
document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded
or modified, or includes an untrue statement of a material fact or
omitted or would omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances prevailing at the
subsequent time, not misleading. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent
specifically for inclusion therein, which information the parties
hereto agree is limited to the Placement Agent’s
Information.
(d) The documents
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder and none of such
documents contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with
the Commission , as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading.
(e) The Company is
not an “ineligible issuer” in connection with the
offering pursuant to Rules 164, 405 and 433 under the
Securities Act. The Company has not, directly or indirectly,
distributed and will not distribute any offering material in
connection with the Offering other than any Preliminary Prospectus,
the Prospectus and other materials, if any, permitted under the
Securities Act and consistent with Section
6
4(b) below. The Company will file with the Commission
all Issuer Free Writing Prospectuses (other than a “road
show,” as defined in Rule 433(d)(8) of the Rules and
Regulations), if any, in the time and manner required under
Rules 163(b)(2) and 433(d) of the Rules and
Regulations.
(f) The Company
and each of its subsidiaries (as defined in Section 14
) have been duly organized and are validly existing as corporations
or other legal entities in good standing (or the foreign equivalent
thereof) under the laws of their respective jurisdictions of
organization. The Company and each of its subsidiaries are duly
qualified to do business and are in good standing as foreign
corporations or other legal entities in each jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses require such qualification and have all
power and authority (corporate or other) necessary to own or hold
their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have
such power or authority (i) would not have, singularly or in
the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, assets, business
or prospects of the Company and its subsidiaries taken as a whole,
or (ii) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or the
Subscription Agreements or to consummate any transactions
contemplated by this Agreement, the Subscription Agreements, the
General Disclosure Package or the Prospectus (any such effect as
described in clauses (i) or (ii), a “ Material
Adverse Effect ”). The Company owns or controls, directly
or indirectly, only the corporations, partnerships, limited
liability partnerships, limited liability companies, associations
or other entities set forth in Schedule C , annexed
hereto.
(g) The Company
has the full right, power and authority to enter into this
Agreement, each of the Subscription Agreements and that certain
Escrow Agreement (the “ Escrow Agreement ”)
dated as of the date hereof by and among the Company, the Placement
Agent and the escrow agent named therein, and to perform and to
discharge its obligations hereunder and thereunder; and each of
this Agreement, each of the Subscription Agreements and the Escrow
Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings
in equity or at law), and except insofar as the indemnification
provisions hereof may be limited by considerations of public
policy.
(h) The Shares to
be issued and sold by the Company to the Purchasers hereunder and
under the Subscription Agreements have been duly and validly
authorized and, when issued and delivered against payment therefor
as provided herein and the Subscription Agreements, will be duly
and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform in all material
respects to the description thereof contained in the General
Disclosure Package and the Prospectus.
7
(i) The Company
has an authorized capitalization as set forth in the Pricing
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with
federal and state securities laws, and conform in all material
respects to the description thereof contained in the General
Disclosure Package and the Prospectus. As of April 30, 2009,
there were 16,074,276 shares of Common Stock issued and outstanding
and no shares of Preferred Stock, par value $0.001 of the Company
issued and outstanding, excluding treasury shares, and 30,165
shares of Common Stock issuable upon the vesting of restricted
stock and 90,100 shares issuable upon the exercise of all options,
warrants and convertible securities outstanding as of such date.
Since such date, the Company has not issued any securities, other
than Common Stock of the Company issued pursuant to the exercise of
stock options previously outstanding under the Company’s
stock option plans or the issuance of restricted Common Stock
pursuant to employee benefit plans. All of the Company’s
options, warrants and other rights to purchase or exchange any
securities for shares of the Company’s capital stock have
been duly authorized and validly issued and were issued in
compliance with US federal and state securities laws. None of the
outstanding shares of Common Stock was issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. There are
no authorized or outstanding shares of capital stock, options,
warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into
or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those described above
or accurately described in the General Disclosure Package. The
description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights
granted thereunder, as described in the General Disclosure Package
and the Prospectus, accurately and fairly present the information
required to be shown with respect to such plans, arrangements,
options and rights.
(j) All the
outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
General Disclosure Package or the Prospectus, are owned by the
Company directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other
claim of any third party.
(k) The execution,
delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement by the Company, the issue and
sale of the Shares by the Company and the consummation of the
transactions contemplated hereby and thereby will not (with or
without notice or lapse of time or both) conflict with or result in
a breach or violation of any of the terms or provisions of,
constitute a default or Debt Repayment Triggering Event (as defined
below) under, give rise to any right of termination or other right
or the cancellation or acceleration of any right or obligation or
loss of a benefit under, or give rise to the creation or imposition
of any lien, encumbrance, security interest, claim or charge upon
any property or assets of the Company or any subsidiary pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of
its
8
subsidiaries is
a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of
its subsidiaries is subject, or result in any violations of any
law, statute, rule, regulation, judgment, order or decree of any
court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets, nor will such actions result in any
violation of the provisions of the charter or by-laws (or analogous
governing instruments, as applicable) of the Company or any of its
subsidiaries, except for such conflicts, breaches, violations that
would not singularly or in the aggregate cause a Material Adverse
Effect. A “ Debt Repayment Triggering Event ”
means any event or condition that gives, or with the giving of
notice or lapse of time would give the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(l) Except for the
registration of the Shares under the Securities Act and such
consents, approvals, authorizations, filings, registrations or
qualifications as may be required under the Exchange Act and
applicable state or foreign securities laws, the Financial Industry
Regulatory Authority, Inc. (“ FINRA ”) and the
Nasdaq Global Market in connection with the offering and sale of
the Shares by the Company, no consent, approval, authorization or
order of, or filing, qualification or registration with, any court
or governmental agency or body, foreign or domestic, which has not
been made, obtained or taken and is not in full force and effect,
is required for the execution, delivery and performance of this
Agreement, the Subscription Agreements and the Escrow Agreement by
the Company, the offer or sale of the Shares or the consummation of
the transactions contemplated hereby or thereby.
(m) BDO Seidman,
LLP, who have certified certain financial statements and related
schedules included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus, and
have audited the Company’s internal control over financial
reporting and management’s assessment thereof, is an
independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the Public Company
Accounting Oversight Board (United States) (the “
PCAOB ”). Except as disclosed in the Registration
Statement and as pre-approved in accordance with the requirements
set forth in Section 10A of the Exchange Act, neither BDO
Seidman, LLP nor PricewaterhouseCoopers LLP (the Company’s
current independent registered accounting firm) has been engaged by
the Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act).
(n) The financial
statements, together with the related notes and schedules, included
or incorporated by reference in the General Disclosure Package, the
Prospectus and in the Registration Statement fairly present in all
material respects the financial position and the results of
operations and changes in financial position of the Company and its
consolidated subsidiaries and other consolidated entities at the
respective dates or for the respective periods therein specified.
Such statements and related notes and schedules have been prepared
in accordance with the generally accepted accounting principles in
the United States (“ GAAP ”) applied on a
consistent basis throughout the
9
periods
involved except as may be set forth in the related notes included
or incorporated by reference in the General Disclosure Package. The
financial statements, together with the related notes and
schedules, included or incorporated by reference in the General
Disclosure Package and the Prospectus comply in all material
respects with the Securities Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations. No other
financial statements or supporting schedules or exhibits are
required by the Securities Act or the Rules and Regulations to be
described, or included or incorporated by reference in the
Registration Statement, the General Disclosure Package or the
Prospectus. There is no pro forma or as adjusted financial
information which is required to be included in the Registration
Statement, the General Disclosure Package, or and the Prospectus or
a document incorporated by reference therein in accordance with the
Securities Act and the Rules and Regulations which has not been
included or incorporated as so required.
(o) Neither the
Company nor any of its subsidiaries has sustained, since the date
of the latest audited financial statements included or incorporated
by reference in the General Disclosure Package, any material loss
or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the General
Disclosure Package; and, since such date, there has not been any
material change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or any material adverse
changes, or any development involving a prospective material
adverse change, in or affecting the business, assets, general
affairs, management, financial position, prospects,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the General Disclosure Package.
(p) Except as set
forth in the General Disclosure Package, there is no legal or
governmental action, suit, claim or proceeding pending to which the
Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which is required to be described in the Registration
Statement, the General Disclosure Package or the Prospectus or a
document incorporated by reference therein and is not described
therein, or which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, is reasonably
likely to have a Material Adverse Effect; and to the best of the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(q) Neither the
Company nor any of its subsidiaries is in (i) violation of its
charter or by-laws (or analogous governing instrument, as
applicable), (ii) default in any respect, and no event has
occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or
(iii) violation in any respect of any law, ordinance,
governmental rule, regulation or court order, decree or judgment to
which it or its property or assets may be subject except, in the
case of clauses (ii) and (iii) of this
10
paragraph (q),
for any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(r) The Company
and each of its subsidiaries possess all licenses, certificates,
authorizations and permits issued by, and have made all
declarations and filings with, the appropriate local, state,
federal or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective
properties or the conduct of their respective businesses as
described in the General Disclosure Package and the Prospectus
(collectively, the “ Governmental Permits ”)
except where any failures to possess or make the same, singularly
or in the aggregate, would not have a Material Adverse Effect. The
Company and its subsidiaries are in material compliance with all
such Governmental Permits; all such Governmental Permits are valid
and in full force and effect, except where the validity or failure
to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect. All such Governmental
Permits are free and clear of any restriction or condition that are
in addition to, or materially different from those normally
applicable to similar licenses, certificates, authorizations and
permits. Neither the Company nor any subsidiary has received
notification of any revocation or modification (or proceedings
related thereto) of any such Governmental Permit and the Company
has no reason to believe that any such Governmental Permit will not
be renewed.
(s) Neither the
Company nor any of its subsidiaries is or, after giving effect to
the offering of the Shares and the application of the proceeds
thereof as described in the General Disclosure Package and the
Prospectus, will become an “investment company” within
the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission thereunder.
(t) Neither the
Company, its subsidiaries nor, to the Company’s knowledge,
any of the Company’s or its subsidiaries’ officers,
directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or
manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of
the price of any security of the Company.
(u) The Company
and its subsidiaries own or possess the right to use all patents,
trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions,
software, databases, know-how, Internet domain names, trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, and other
intellectual property (collectively, “ Intellectual
Property ”) necessary to carry on their respective
businesses as currently conducted, and as proposed to be conducted
and described in the General Disclosure Package and the Prospectus,
and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and its
subsidiaries with respect to the foregoing except for those that
could not have a Material Adverse Effect. The Intellectual Property
licenses described in the General Disclosure Package and the
Prospectus are valid, binding upon, and enforceable by or against
the parties thereto in accordance to its terms. The Company and
each of its subsidiaries have
11
complied in all
material respects with, and are not in breach nor have received any
asserted or threatened claim of breach of, any Intellectual
Property license, and the Company has no knowledge of any breach or
anticipated breach by any other person to any Intellectual Property
license. The Company’s and each of its subsidiaries’
businesses as now conducted and as proposed to be conducted do not
and will not infringe or conflict with any patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or
other Intellectual Property or franchise right of any person. No
claim has been made against the Company or any of its subsidiaries
alleging the infringement by the Company or any of its subsidiaries
of any patent, trademark, service mark, trade name, copyright,
trade secret, license in or other intellectual property right or
franchise right of any person. The Company and each of its
subsidiaries have taken all reasonable steps to protect, maintain
and safeguard their rights in all Intellectual Property, including
the execution of appropriate nondisclosure and confidentiality
agreements. The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the
consent of any other person in respect of, the Company’s or
any of its subsidiaries’ right to own, use or hold for use
any of the Intellectual Property as owned, used or held for use in
the conduct of the businesses as currently conducted. With respect
to the use of the software in the Company’s or any of its
subsidiaries’ businesses as they are currently conducted,
neither the Company nor any of its subsidiaries has experienced any
material defects in such software including any material error or
omission in the processing of any transactions other than defects
which have been corrected, and to the knowledge of the Company, no
such software contains any device or feature designed to disrupt,
disable, or otherwise impair the functioning of any software or is
subject to the terms of any “open source” or other
similar license that provides for the source code of the software
to be publicly distributed or dedicated to the public. The Company
and each of its subsidiaries have at all times complied with all
applicable laws relating to privacy, data protection, and the
collection and use of personal information collected, used, or held
for use by the Company and any of its subsidiaries in the conduct
of the Company’s and its subsidiaries’ businesses. No
claims have been asserted or threatened against the Company or any
of its subsidiaries alleging a violation of any person’s
privacy or personal information or data rights and the consummation
of the transactions contemplated hereby will not breach or
otherwise cause any violation of any law related to privacy, data
protection, or the collection and use of personal information
collected, used, or held for use by the Company or any of its
subsidiaries in the conduct of the Company’s or any of its
subsidiaries’ businesses. The Company and each of its
subsidiaries take reasonable measures to ensure that such
information is protected against unauthorized access, use,
modification, or other misuse.
(v) The Company
and each of its subsidiaries have good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all
items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in
each case free and clear of all liens, encumbrances, security
interests, claims and defects that do not, singularly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and
its subsidiaries, considered as one
12
enterprise, and
under which the Company or any of its subsidiaries hold properties
described in the General Disclosure Package and the Prospectus, are
in full force and effect, and neither the Company nor any
subsidiary has received any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or
sublease.
(w) There is no
document, contract, permit or instrument, affiliate transaction or
off-balance sheet transaction (including, without limitation, any
“variable interests” in “variable interest
entities,” as such terms are defined in Financial Accounting
Standards Board Interpretation No. 46) of a character required
to be described in the Registration Statement, the Pricing
Prospectus or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not so described or filed as
required.
(x) No labor
disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s
knowledge, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its or its subsidiaries’ principal suppliers, manufacturers,
customers or contractors, that could reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect.
The Company is not aware that any key employee or significant group
of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
(y) No
“prohibited transaction” (as defined in
Section 406 of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and published
interpretations thereunder (“ ERISA ”), or
Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the “ Code ”)) or
“accumulated funding deficiency” (as defined in
Section 302 of ERISA) or any of the events set forth in
Section 4043(b) of ERISA (other than events with respect to which
the thirty (30)-day notice requirement under Section 4043 of
ERISA has been waived) has occurred or could reasonably be expected
to occur with respect to any employee benefit plan of the Company
or any of its subsidiaries which could, singularly or in the
aggregate, have a Material Adverse Effect. Each employee benefit
plan of the Company or any of its subsidiaries is in compliance in
all material respects with applicable law, including ERISA and the
Code. The Company and its subsidiaries have not incurred and could
not reasonably be expected to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from, any
pension plan (as defined in ERISA). Each pension plan for which the
Company or any of its subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified, and nothing has occurred, whether by action or by
failure to act, which could, singularly or in the aggregate, cause
the loss of such qualification.
(z) The Company
and its subsidiaries are in compliance with all foreign, federal,
state and local rules, laws and regulations relating to the use,
treatment, storage and disposal of hazardous or toxic substances or
waste and protection of health and safety or the environment which
are applicable to their businesses (“ Environmental
Laws ”),
13
except where
the failure to comply would not reasonably likely be expected to,
singularly or in the aggregate, have a Material Adverse Effect.
There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any
kind of toxic or other wastes or other hazardous substances by, due
to, or caused by the Company or any of its subsidiaries (or, to the
Company’s knowledge, any other entity for whose acts or
omissions the Company or any of its subsidiaries is or may
otherwise be liable) upon any of the property now or previously
owned or leased by the Company or any of its subsidiaries, or upon
any other property, in violation of any law, statute, ordinance,
rule, regulation, order, judgment, decree or permit or which would,
under any law, statute, ordinance, rule (including rule of common
law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability which would
not have, singularly or in the aggregate with all such violations
and liabilities, a Material Adverse Effect; and there has been no
disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of
any toxic or other wastes or other hazardous substances with
respect to which the Company or any of its subsidiaries has
knowledge, except for any such disposal, discharge, emission, or
other release of any kind which would not have, singularly or in
the aggregate with all such discharges and other releases, a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries has received any notice from any governmental
authority or third party of an asserted claim under Environmental
Laws. In the ordinary course of business, the Company and its
subsidiaries conduct periodic reviews of the effect of
Environmental Laws on their business and assets, in the course of
which they identify and evaluate 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 Governmental Permits issued
thereunder, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
reviews, the Company and its subsidiaries have reasonably concluded
that such associated costs and liabilities would not have,
singularly or in the aggregate, a Material Adverse
Effect.
(aa) The Company
and each of its subsidiaries (i) have timely filed all
necessary federal, state, local and foreign tax returns, and all
such returns were true, complete and correct, (ii) have paid
all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which they are
liable, including, without limitation, all sales and use taxes and
all taxes which the Company or any of its subsidiaries is obligated
to withhold from amounts owing to employees, creditors and third
parties, and (iii) do not have any tax deficiency or claims
outstanding or assessed or, to the best of their knowledge,
proposed against any of them, except those, in each of the cases
described in clauses (i), (ii) and (iii) of this
paragraph (aa), that would not, singularly or in the aggregate,
have a Material Adverse Effect. The Company and its subsidiaries
each have not engaged in any transaction which is a corporate tax
shelter or which is reasonably likely to be characterized as such
by the Internal Revenue Service or any other taxing authority. The
accruals and reserves on the books and records of the Company and
its subsidiaries in respect of tax liabilities for any taxable
period not yet finally determined are adequate to meet any
assessments and related liabilities for any such period, and since
December 31, 2008 the Company and its subsidiaries each have
not incurred any liability for taxes other than in the ordinary
course.
14
(bb) The Company
and each of its subsidiaries carry, or are covered by, insurance
provided by recognized and reputable institutions with policies in
such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar
businesses in similar industries. The Company has no reason to
believe that it or any subsidiary will not be able (i) to
renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries have been denied any insurance coverage that they have
sought or for which they have applied.
(cc) The Company
and its subsidiaries each maintain a system of internal accounting
and other controls sufficient to provide reasonable assurances 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 GAAP and to maintain
accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization; and (iv) the record
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