Exhibit 1.1
EXECUTION COPY
4,000,000 Shares of Common Stock
ALBEMARLE CORPORATION
UNDERWRITING AGREEMENT
January 13, 2005
BEAR, STEARNS & CO. INC.
UBS SECURITIES LLC
BANC OF AMERICA SECURITIES LLC
As Representatives of the
several Underwriters named
in
Schedule I attached
hereto
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
c/o Banc of America Securities LLC
9 West 57 th Street
New York, New York 10019
Ladies/Gentlemen:
Albemarle Corporation, a corporation
organized and existing under the laws of the Commonwealth of
Virginia (the “Company”), proposes, subject to the
terms and conditions stated herein, to issue and sell to the
several underwriters named in Schedule I hereto (the
“Underwriters”) an aggregate of 4,000,000 shares (the
“Company Shares”) of its common stock, par value $.01
per share (the “Common Stock”). The shareholders of the
Company listed on Schedule II hereto (the “Selling
Shareholders”) severally propose to sell to the Underwriters
an aggregate of 488,420 shares of Common Stock (the “Selling
Shareholders’ Shares” and together with the Company
Shares, the “Firm Shares”). For the sole purpose of
covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, the Company also
proposes to issue and sell to the Underwriters up to an additional
673,000 shares of Common Stock (the “Additional
Shares”). The Firm Shares and any Additional
Shares
purchased by the Underwriters are referred to
herein as the “Shares”. The Shares are more fully
described in the Registration Statement and Prospectus referred to
below. Bear, Stearns & Co. Inc. (“Bear Stearns”),
UBS Securities LLC and Banc of America Securities LLC are acting as
representatives (together, the “Representatives”), in
connection with the offering and sale of the Shares contemplated
herein (the “Offering”).
1. Representations and Warranties
of the Company . The Company represents and warrants to, and
agrees with, each of the Underwriters that:
(a) The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-119723), and amendments
thereto, and related preliminary prospectuses, under the Securities
Act of 1933, as amended (the “Securities Act”),
relating to the registration of certain securities (the
“Shelf Securities”) of the Company to be sold from time
to time by the Company. Such registration statement, as so amended
(including post-effective amendments, if any), has been declared
effective by the Commission and copies of which have heretofore
been delivered to the Underwriters. The registration statement, as
amended at the time it became effective, is hereinafter referred to
as the “Registration Statement.” If the Company has
filed or is required pursuant to the terms hereof to file a
registration statement pursuant to Rule 462(b) under the Securities
Act registering additional shares of Common Stock (a “Rule
462(b) Registration Statement”), then, unless otherwise
specified, any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration
Statement, which, if filed, becomes effective upon filing, no other
document with respect to the Registration Statement has heretofore
been filed with the Commission. All of the Shares have been
registered under the Securities Act pursuant to the Registration
Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of
such Rule 462(b) Registration Statement. Based on communications
from the Commission, no stop order suspending the effectiveness of
either the Registration Statement or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission. The
Company, if required by the Securities Act and the rules and
regulations of the Commission thereunder (including the rules and
regulations of the Commission under the Exchange Act (defined
below), the “Rules and Regulations”), proposes to file
a prospectus supplement with the Commission pursuant to Rule 424(b)
under the Securities Act (“Rule 424(b)”). The
prospectus supplement specifically relating to the Shares, in the
form in which it is to be filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations (the “Prospectus
Supplement”), along with the base prospectus included in the
Registration Statement at the time the Registration Statement
became effective (the “Base Prospectus”), is
hereinafter referred to as the “Prospectus,” except
that if any revised prospectus or prospectus supplement shall be
provided to the Underwriters by the Company for use in connection
with the Offering which differs from the Prospectus (whether or not
such revised prospectus or prospectus supplement is required to be
filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations), the term “Prospectus” shall also refer to
such revised prospectus or prospectus supplement, as the case may
be, from and after the time it is first provided to the
Underwriters for such use. Any preliminary prospectus supplement or
prospectus supplement subject to completion included in the
Registration Statement or filed with the Commission pursuant to
Rule 424 under the Securities Act specifically relating to the
Shares together with the Base Prospectus is hereafter called a
“Preliminary Prospectus.” Any reference
2
herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, and any reference herein to the
terms “amend”, “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document under
the Exchange Act after the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, which is incorporated therein
by reference and (ii) any such document so filed. All references in
this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus and the
Prospectus, or any amendments or supplements to any of the
foregoing shall be deemed to include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval System (“EDGAR”).
(b) At the time of the effectiveness
of the Registration Statement or any Rule 462(b) Registration
Statement or the effectiveness of any post-effective amendment to
the Registration Statement, when the Prospectus is first filed with
the Commission pursuant to Rule 424(b) of the Rules and
Regulations, when any supplement to or amendment of the Prospectus
is filed with the Commission, when any document filed under the
Exchange Act was or is filed and at the Closing Date and the
Additional Closing Date, if any (as hereinafter respectively
defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto complied or will comply
in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the Rules and Regulations and
did not and will not contain an untrue statement of a material fact
and did not and will not omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not
misleading and (ii) in the case of the Prospectus or any related
Preliminary Prospectus in light of the circumstances under which
they were made, not misleading. When any related Preliminary
Prospectus was first filed with the Commission (whether filed as
part of the registration statement for the registration of the
Shares or any amendment or supplement thereto or pursuant to Rule
424 under the Securities Act) and when any amendment thereof or
supplement thereto was first filed with the Commission, such
Preliminary Prospectus and any amendments thereof and supplements
thereto complied in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the Rules
and Regulations and did not contain an untrue statement of a
material fact and did not omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading. No representation and warranty is made in this
subsection (b), however, with respect to any information contained
in or omitted from the Registration Statement or the Prospectus or
Preliminary Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for use
therein. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the
material included in the last paragraph on the cover page of the
Prospectus and in paragraphs 3, 12, 13, 14 and 18 (third and fourth
sentences only) under the caption “Underwriting” in the
Prospectus.
3
(c) PricewaterhouseCoopers LLP whose
reports appear or are incorporated by reference in the Registration
Statement and the Prospectus, who have certified the financial
statements and supporting schedules and information of the Company
and its subsidiaries that are included or incorporated by reference
in the Registration Statement and the Prospectus, and KPMG
Accountants N.V. whose reports appear or are incorporated by
reference in the Registration Statement and the Prospectus, who
have certified certain other financial statements and supporting
schedules and information of the refinery catalysts business of
Akzo Nobel N.V. (“Akzo Nobel Refinery Catalysts”) that
are included or incorporated by reference in the Registration
Statement and the Prospectus, each are registered public
accountants as required by the Securities Act, the Exchange Act,
and the Rules and Regulations.
(d) Subsequent to the respective
dates as of which information is given in the Registration
Statement and the Prospectus, except as disclosed in the
Registration Statement and the Prospectus, the Company has not
declared, paid or made any dividends or other distributions of any
kind on or in respect of its capital stock and there has been no
material adverse change or any development involving a prospective
material adverse change, whether or not arising from transactions
in the ordinary course of business, in or affecting (i) the
business, condition (financial or otherwise), results of
operations, properties or prospects of the Company and each
subsidiary of the Company, taken as a whole; or (ii) the Offering
or any other transaction contemplated by this Agreement, the
Registration Statement or the Prospectus (a “Material Adverse
Effect”). Since the date of the latest balance sheet
presented, or incorporated by reference, in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred or undertaken any liabilities or
obligations, which are material to the Company and its subsidiaries
taken as a whole, except for liabilities, obligations and
transactions which are disclosed in the Registration Statement and
the Prospectus.
(e) The authorized, issued and
outstanding capital stock of the Company (i) was, as of September
30, 2004, as set forth in the Prospectus in the column headed
“Actual” under the caption “Capitalization”
and (ii) after giving effect to the Offering and the other
transactions contemplated by this Agreement, the Registration
Statement and the Prospectus, will be as set forth in the column
headed “As Adjusted for Common Stock Offering” under
the caption “Capitalization”, except for any immaterial
changes resulting from the issuance of Common Stock pursuant to
employee benefit plans, stock option plans or other employee
compensation plans existing on the date hereof. All of the issued
and outstanding shares of capital stock of the Company are fully
paid and non-assessable and have been duly and validly authorized
and issued, in compliance with all applicable state and federal
securities laws and not in violation of or subject to any
preemptive or similar right that does or will entitle any person,
upon the issuance or sale of any security, to acquire from the
Company or any Subsidiary any Common Stock or other equity security
of the Company or any Subsidiary or any security convertible into,
or exercisable or exchangeable for, Common Stock or any other such
security (any “Relevant Security”), except for such
rights as may have been fully satisfied or waived prior to the
effectiveness of the Registration Statement. The Shares to be
delivered on the Closing Date and the Additional Closing Date, if
any (as hereinafter respectively defined), have been duly and
validly authorized and the Selling Shareholders’ Shares are,
and the Company Shares and the Additional Shares, when delivered in
accordance with this Agreement, will be, duly and validly issued,
fully paid and non-assessable, have been, or will have been, as the
case may be, issued in compliance with all applicable state and
federal securities laws and will not have been
4
issued in violation of or subject to any
preemptive or similar right that does or will entitle any person to
acquire any Relevant Security from the Company or any Subsidiary
upon issuance or sale of Shares in the Offering. The Common Stock
and the Shares conform to the descriptions thereof contained in the
Registration Statement and the Prospectus. Except as disclosed in
the Registration Statement and the Prospectus, neither the Company
nor any Subsidiary has outstanding warrants, options to purchase,
or any preemptive rights or other rights to subscribe for or to
purchase, or any contracts or commitments to issue or sell, any
Relevant Security.
(f) The subsidiaries listed on
Exhibit A hereto are the only “subsidiaries” (the
“Subsidiaries”) of the Company within the meaning of
Rule 405 under the Securities Act. Except for the Subsidiaries and
as otherwise listed on Exhibit B hereto or as disclosed in the
Registration Statement and the Prospectus, the Company holds no
ownership or other interest, nominal or beneficial, direct or
indirect, in any corporation, partnership, joint venture or other
business entity.
(g) The Company has no
“significant subsidiaries” within the meaning of Rule
405 under the Securities Act, other than Albemarle International
Corporation. The Subsidiaries listed on Exhibit C hereto (the
“Material Subsidiaries”) are all the Subsidiaries that
are material to the business and operations of the Company. All of
the issued shares of capital stock of or other ownership interests
in each of the Material Subsidiaries have been duly and validly
authorized and issued and are fully paid and, to the extent
applicable in the jurisdiction of organization, are non-assessable
and (except as otherwise set forth in the Prospectus) are owned
directly or indirectly by the Company free and clear of any lien,
charge, mortgage, pledge, security interest, claim, equity, trust
or other encumbrance, preferential arrangement, defect or
restriction of any kind whatsoever (any “Lien”). Each
of the Company and the Material Subsidiaries has been duly
organized and validly exists as a corporation, partnership or
limited liability company and is in good standing (to the extent
applicable in the jurisdiction of organization) under the laws of
its jurisdiction of organization. Each of the Company and the
Material Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation, partnership or limited
liability company in each jurisdiction (to the extent applicable in
the relevant jurisdiction), in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except in such
jurisdictions in which the failure to be so qualified or in good
standing (individually and in the aggregate) could not reasonably
be expected to have a Material Adverse Effect.
(h) Each of Fábrica Carioca de
Catalisadores S.A., Nippon Ketjen Co., Ltd., Eurecat S.A., Eurecat
U.S. Incorporated and Jordan Bromine Company Ltd. (collectively,
the “Joint Ventures”) has been duly organized, validly
exists as a corporation, sociedade anônima, société
anonyme or limited company and is in good standing (to the extent
applicable in the jurisdiction of organization) under the laws of
its jurisdiction of organization. Each of the Joint Ventures is
duly qualified to do business and is in good standing as a foreign
corporation, sociedade anônima, société anonyme or
limited company in each jurisdiction (to the extent applicable in
the relevant jurisdiction), in which the character or location of
its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except in such
jurisdictions in which the failure to be so qualified or in good
standing (individually and in the aggregate) could not reasonably
be expected to have a Material Adverse Effect.
5
(i) Each of the Company, the
Subsidiaries and the Joint Ventures has all requisite power and
authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses, filings and
permits of, with and from all judicial, regulatory and other legal
or governmental agencies and bodies and all third parties, foreign
and domestic (collectively, the “Consents”), to own,
lease and operate its properties and conduct its business as it is
now being conducted and as disclosed in the Registration Statement
and the Prospectus, and each such Consent is valid and in full
force and effect, except where the failure to be valid and in full
force and effect would not (individually or in the aggregate) have
a Material Adverse Effect, and neither the Company, any Subsidiary,
or any Joint Venture has received notice of any investigation or
proceedings which could reasonably be expected to result in the
revocation of, or imposition of a restriction on, any such Consent
which (individually or in the aggregate) could have a Material
Adverse Effect. No Consent contains a materially burdensome
restriction not adequately disclosed in the Registration Statement
and the Prospectus.
(j) The Company has full right,
power and authority to execute and deliver this Agreement, the
Company Shares and the Additional Shares, to perform its
obligations hereunder and to consummate the transactions
contemplated by this Agreement, the Registration Statement and the
Prospectus. This Agreement and the transactions contemplated by
this Agreement, the Registration Statement and the Prospectus have
been duly and validly authorized by the Company. This Agreement has
been duly and validly executed and delivered by the Company and
constitutes the legal, 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
creditors’ rights generally and except as enforceability may
be subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
(k) The execution, delivery, and
performance of this Agreement and consummation of the transactions
contemplated by this Agreement, the Registration Statement and the
Prospectus do not and will not (i) conflict with, require consent
under or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other
agreement, instrument, franchise, license or permit to which the
Company or any Subsidiary is a party or by which the Company or any
Subsidiary or their respective properties, operations or assets may
be bound or (ii) violate or conflict with any provision of the
certificate or articles of incorporation, bylaws, certificate of
formation, limited liability company agreement, partnership
agreement or other organizational documents of the Company or any
Material Subsidiary, or (iii) violate or conflict in any material
respect with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other
legal or governmental agency or body, domestic or foreign,
applicable to the Company or any Material Subsidiary, except in the
case of clause (i) above, as would not (individually or in the
aggregate) have a Material Adverse Effect.
(l) No Consent of, with or from any
judicial, regulatory or other legal or governmental agency or body
or any third party, foreign or domestic, is required for the
execution, delivery and performance of this Agreement or
consummation of the Offering and the
6
other transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, including
the issuance, sale and delivery of the Shares to be issued, sold
and delivered hereunder, except the registration under the
Securities Act of the Shares pursuant to the Registration
Statement, which has become effective, and such Consents as may be
required under state securities or blue sky laws or the bylaws and
rules of the National Association of Securities Dealers, Inc. (the
“NASD”) or NASD Regulation, Inc. (“NASDR”)
in connection with the purchase and distribution of the Shares by
the Underwriters.
(m) Except as disclosed in the
Registration Statement and the Prospectus, there is no judicial,
regulatory, arbitral or other legal or governmental proceeding or
other litigation or arbitration, domestic or foreign, pending to
which the Company or any Subsidiary is a party or of which any
property, operations or assets of the Company or any Subsidiary is
the subject which, individually or in the aggregate, if determined
adversely to the Company or any Subsidiary, would have a Material
Adverse Effect; to the Company’s knowledge, no such
proceeding, litigation or arbitration is threatened or
contemplated; and the defense of all such proceedings, litigation
and arbitration against or involving the Company or any Subsidiary
would not have a Material Adverse Effect.
(n) The acquisition of Akzo Nobel
Refinery Catalysts was consummated in accordance with the terms of
the International Share and Business Sale Agreement, dated as of
July 16, 2004, by and between Akzo Nobel N.V. and Albemarle
Catalysts International, L.L.C. and the Company, as amended and
supplemented, without any waiver thereto or modification
thereof.
(o) Akzo Nobel Refinery Catalysts is
a Foreign Business within the meaning of Rule 1-02 of Regulation
S-X of the Rules and Regulations.
(p) The financial statements,
including the notes thereto, and the supporting schedules included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position as of the dates
indicated and the cash flows and results of operations for the
periods specified of each of (i) the Company and its consolidated
subsidiaries (the “Company Financial Statements”) and
(ii) Akzo Nobel Refinery Catalysts and its combined subsidiaries
(the “Akzo Financial Statements”); except as otherwise
stated in the Registration Statement and the Prospectus, the
Company Financial Statements have been prepared in conformity with
United States generally accepted accounting principles applied on a
consistent basis throughout the periods involved and the Akzo
Financial Statements have been prepared in conformity with
accounting principles generally accepted in the Netherlands applied
on a consistent basis throughout the periods involved; and the
supporting schedules included in the Registration Statement and the
Prospectus present fairly the information required to be stated
therein. Each of the Company Financial Statements and the Akzo
Financial Statements has been prepared in accordance with the
applicable requirements of the Securities Act, the Exchange Act and
the Rules and Regulations. No other financial statements or
supporting schedules are required to be included in the
Registration Statement or the Prospectus. The other financial and
statistical information and data included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information included therein and have been prepared on a
basis consistent with that of the financial statements that are
included or
7
incorporated by reference in the Registration
Statement and the Prospectus and the books and records of the
respective entities presented therein.
(q) There are no pro forma financial
statements which are required to be included or incorporated by
reference in the Registration Statement and Prospectus in
accordance with Regulation S-X of the Rules and Regulations which
have not been included as so required. The assumptions used in
preparing the pro forma financial information included in the
Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable
to the transactions or events described therein; the related
adjustments made in the preparation of such pro forma financial
information give appropriate effect to those assumptions; and such
pro forma financial information reflects the proper application of
those adjustments to the corresponding historical financial
statement amounts. The pro forma financial information and
statements, as applicable, included in the Registration Statement
and the Prospectus has been properly compiled and prepared in
accordance with the applicable requirements of the Securities Act,
the Exchange Act and the Rules and Regulations and includes all
adjustments necessary to present fairly in accordance with United
States generally accepted accounting principles the pro forma
financial position of the respective entity or entities presented
therein at the respective dates indicated and their cash flows and
the results of operations for the respective periods
specified.
(r) The statistical,
industry-related and market-related data included in the
Registration Statement and the Prospectus are based on or derived
from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the
sources from which they are derived.
(s) The Company is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act
and files reports with the Commission on EDGAR. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and the
outstanding shares of Common Stock are listed on the NYSE (as
defined in Section 13(b) below) and the Company has taken no action
designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the NYSE, nor has the Company
received any notification that the Commission or the NYSE is
contemplating terminating such registration or listing.
(t) The Company and its Subsidiaries
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 United States generally accepted accounting
principles and to maintain accountability for assets, (iii) access
to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accounting
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
(u) Neither the Company nor any of
its affiliates (within the meaning of Rule 144 under the Securities
Act) has taken, directly or indirectly, any action which
constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or
8
result in, the stabilization or manipulation of
the price of any security to facilitate the sale or resale of the
Shares.
(v) Neither the Company nor any of
its affiliates has, prior to the date hereof, made any offer or
sale of any securities which could be “integrated” for
purposes of the Securities Act or the Rules and Regulations with
the offer and sale of the Shares pursuant to the Registration
Statement. Except as disclosed in the Registration Statement and
the Prospectus, neither the Company nor any of its affiliates has
sold or issued any Relevant Security during the six-month period
preceding the date of the Prospectus, including but not limited to
any sales pursuant to Rule 144A or Regulation D or S under the
Securities Act, other than shares of Common Stock issued pursuant
to employee benefit plans, qualified stock option plans or the
employee compensation plans or pursuant to outstanding options,
rights or warrants as described in the Registration Statement and
the Prospectus.
(w) Except as disclosed in the
Registration Statement and the Prospectus, no holder of any
Relevant Security has any rights to require registration of any
Relevant Security as part or on account of, or otherwise in
connection with, the offer and sale of the Shares contemplated
hereby, and any such rights so disclosed have either been fully
complied with by the Company or effectively waived by the holders
thereof, and any such waivers remain in full force and
effect.
(x) The conditions for use of Form
S-3 to register the Offering under the Securities Act, as set forth
in the General Instructions to such Form, have been
satisfied.
(y) The documents incorporated or
deemed to be incorporated by reference in the Prospectus, 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 Securities Act, the Exchange Act and the Rules and
Regulations.
(z) Each of the Company and the
Material Subsidiaries is not now and, at all times up to and
including consummation of the transactions contemplated by this
Agreement, the Registration Statement and the Prospectus, and after
giving effect to application of the net proceeds of the Offering,
will not be, subject to registration as an “investment
company” under the Investment Company Act of 1940, as
amended, and is not and will not be an entity
“controlled” by an “investment company”
within the meaning of such act.
(aa) There are no contracts or other
documents (including, without limitation, any voting agreement),
which are required to be described in the Registration Statement
and the Prospectus or filed as exhibits to the Registration
Statement or as exhibits to any document incorporated by reference
or deemed to be incorporated by reference in the Registration
Statement by the Securities Act, the Exchange Act or the Rules and
Regulations and which have not been so described or
filed.
(bb) No relationship, direct or
indirect, exists between or among any of the Company or any
affiliate of the Company, on the one hand, and any director,
officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by
the Securities Act, the Exchange Act or the Rules and Regulations
to
9
be described in the Registration Statement or
the Prospectus which is not so described and described as required.
There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of their
respective family members, except as disclosed in the Registration
Statement and the Prospectus. The Company has not, in violation of
the Sarbanes-Oxley Act of 2002, directly or indirectly, including
through a Subsidiary, extended or maintained credit, arranged for
the extension of credit, or renewed or amended an extension of
credit, in the form of a personal loan to or for any director or
executive officer of the Company.
(cc) Except as disclosed in the
Registration Statement and the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder’s fee or other
like payment in connection with the transactions contemplated by
this Agreement, the Registration Statement and the Prospectus or,
to the Company’s knowledge, any arrangements, agreements,
understandings, payments or issuance with respect to the Company or
any of its officers, directors, shareholders, partners, employees,
Subsidiaries or affiliates that may affect the Underwriters’
compensation as determined by the NASD.
(dd) The Company and each Material
Subsidiary own or lease all such properties as are necessary to the
conduct of their respective business as presently operated and as
proposed to be operated as described in the Registration Statement
and the Prospectus. The Company and the Material Subsidiaries have
good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by them,
in each case free and clear of all Liens except such as are
described in the Registration Statement and the Prospectus or such
as do not (individually or in the aggregate) materially affect the
value of such property or interfere with the use made or proposed
to be made of such property by the Company and the Material
Subsidiaries; and any real property and buildings held under lease
or sublease by the Company and the Material Subsidiaries are held
by them under valid, subsisting and enforceable leases with such
exceptions as are not material to, and do not interfere with, the
use made and proposed to be made of such property and buildings by
the Company and the Material Subsidiaries. Neither the Company nor
any Subsidiary has received any notice of any claim adverse to its
ownership of any real or personal property or of any claim against
the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any Subsidiary which
would (individually or in the aggregate) result in a Material
Adverse Effect.
(ee) The Company and each Subsidiary
(i) own or possess adequate right to use all patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses,
formulae, customer lists, and know-how and other intellectual
property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures, “Intellectual Property”) necessary for the
conduct of their respective businesses as being conducted and as
described in the Registration Statement and Prospectus, except
where the failure to own or possess such rights, either singly or
in the aggregate, would not have a Material Adverse Effect; and
(ii) have no reason to believe that the conduct of their respective
businesses does or will conflict with, and have not received any
notice of any claim of conflict with, any such right of
10
others, except for any such conflicts, either
singly or in the aggregate, that would not result in a Material
Adverse Effect. To the Company’s knowledge, all material
technical information developed by and belonging to the Company or
any Subsidiary which has not been patented has been kept
confidential. To the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property;
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the Company’s or any Subsidiary’s rights in or to any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; and there
is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any
Subsidiary infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any other fact which would form a
reasonable basis for any such claim, except for such actions,
suits, proceedings or claims that would not (either individually or
in the aggregate) result in a Material Adverse Effect.
(ff) The Company maintains insurance
in such amounts and covering such risks as the Company reasonably
considers adequate for the conduct by the Company and the
Subsidiaries of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries, all of which insurance is
in full force and effect, except where the failure to maintain such
insurance could not reasonably be expected to have a Material
Adverse Effect. There are no material claims by the Company or any
Subsidiary under any such policy or instrument as to which any
insurance company is denying liability, has indicated that it
intends to deny liability or is defending under a reservation of
rights clause. The Company reasonably believes that it will be able
to renew its existing insurance as and when such coverage expires
or will be able to obtain replacement insurance adequate for the
conduct of its business and the value of its properties at a cost
that could not reasonably be expected to have a Material Adverse
Effect.
(gg) The certificates for the shares
of Common Stock, including the Shares, conform to the requirements
of the NYSE and the laws of the Commonwealth of
Virginia.
(hh) Except as disclosed in the
Registration Statement and the Prospectus, each of the Company and
the Subsidiaries has accurately prepared and timely filed all
federal, state, foreign and other tax returns that are required to
be filed by it and has paid or made provision for the payment of
all taxes, assessments, governmental or other similar charges,
including without limitation, all sales and use taxes and all taxes
which the Company or any Subsidiary is obligated to withhold from
amounts owing to employees, creditors and third parties, with
respect to the periods covered by such tax returns (whether or not
such amounts are shown as due on any tax return), except, in all
cases, for any such taxes, assessments, governmental or other
similar charges, that are being contested in good faith. No
deficiency assessment with respect to a proposed adjustment of the
Company’s or any Subsidiary’s federal, state, local or
foreign taxes is pending or, to the Company’s knowledge,
threatened. The accruals and reserves on the books and records of
the Company and the Subsidiaries in respect of tax liabilities for
any taxable period not finally determined are adequate to meet any
assessments and related liabilities for any such period and, since
December 31, 2003, the Company and the Subsidiaries have not
incurred any liability for taxes other than in the ordinary course
of its business. There is no tax lien, whether imposed by any
federal, state, foreign or other taxing authority, outstanding
against the
11
assets, properties or business of the Company or
any Subsidiary, except such tax liens that (either individually or
in the aggregate) would not result in a Material Adverse
Effect.
(ii) No labor disturbance by the
employees of the Company or any Subsidiary exists or, to the
Company’s knowledge, is imminent and the Company is not aware
of any existing or imminent labor disturbances by the employees of
any of its or any Subsidiary’s principal suppliers,
manufacturers, customers or contractors, which, in either case
(individually or in the aggregate), could reasonably be expected to
have a Material Adverse Effect.
(jj) No “prohibited
transaction” (as defined in either 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”)),
“accumulated funding deficiency” (as defined in Section
302 of ERISA) or other event of the kind described in Section
4043(b) of ERISA (other than events with respect to which the
30-day notice requirement under Section 4043 of ERISA has been
waived) has occurred with respect to any employee benefit plan for
which the Company or any Subsidiary would have any liability which
could (individually or in the aggregate) reasonably be expected to
have a Material Adverse Effect; each employee benefit plan for
which the Company or any Subsidiary would have any liability is in
compliance in all material respects with applicable law, including
(without limitation) ERISA and the Code; the Company has not
incurred and does not expect to incur liability under Title IV of
ERISA with respect to the termination of, or withdrawal from any
“pension plan”; and each plan for which the Company
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 cause
the loss of such qualification.
(kk) Except as otherwise disclosed
in the Registration Statement and the Prospectus, (i) there is not
any and 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
(“Hazardous Substances”) by, due to, or caused by the
Company or any Subsidiary (or any other entity for whose acts or
omissions the Company is or may be liable) upon any property now or
previously owned or leased by the Company or any Subsidiary, or
upon any other property, except in compliance with any applicable
Environmental Laws (defined below), and (ii) Hazardous Substances
are not otherwise present at any property now or previously owned
or leased by the Company or any Subsidiary, which in either case
(i) or (ii) would be a material violation of or give rise to any
material liability under any applicable law, rule, regulation,
order, judgment, decree or permit relating to pollution or
protection of human health and the environment
(“Environmental Law”). Except as otherwise disclosed in
the Registration Statement and the Prospectus, neither the Company
nor any Subsidiary has agreed to assume, undertake or provide
indemnification for any liability of any other person under any
Environmental Law, including any obligation for cleanup or remedial
action, except any such assumption, undertaking or provision that
(individually or in the aggregate) would not result in a Material
Adverse Effect. Except as otherwise disclosed in the Registration
Statement and the Prospectus, there is no pending or, to the
Company’s knowledge, threatened administrative, regulatory or
judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law
against the Company or any Subsidiary, except
12
such actions, claims, notices of noncompliance,
violations, investigations and proceedings that (individually or in
the aggregate) would not result in a Material Adverse
Effect.
(ll) Neither the Company, any
Subsidiary nor, to the Company’s knowledge, any of its
employees or agents has at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign office,
or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by
the laws of the United States of any jurisdiction
thereof.
(mm) Neither the Company nor any
Subsidiary (i) is in violation of its certificate or articles of
incorporation, bylaws, certificate of formation, limited liability
company agreement, partnership agreement or other organizational
documents, (ii) is in default under, and no event has occurred
which, with notice or lapse of time or both, would constitute a
default under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its Subsidiaries pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
it is a party or by which it is bound or to which any of its
property or assets is subject or (iii) is in violation in any
respect of any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other
legal or governmental agency or body, foreign or domestic, except
(in the case of clauses (i) (other than with respect to the
Company), (ii) and (iii) above) violations or defaults that would
not (individually or in the aggregate) have a Material Adverse
Effect and except (in the case of clause (ii) alone) for any lien,
charge or encumbrance disclosed in the Registration Statement and
the Prospectus.
(nn) The Company is in compliance in
all material respects with applicable provisions of the
Sarbanes-Oxley Act of 2002 that are effective and is actively
taking steps to effect compliance with other applicable provisions
of the Sarbanes-Oxley Act of 2002 upon the effectiveness of such
provisions.
(oo) The Company does not have any
off-balance sheet arrangements within the meaning of Regulation S-K
of the Rules and Regulations.
Any certificate signed by or on
behalf of the Company and delivered to the Representatives or to
counsel for the Underwriters’ shall be deemed to be a
representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
2. Representations and Warranties
of the Selling Shareholders . Each Selling Shareholder
severally and not jointly represents and warrants to, and agrees
with, each of the Underwriters as of the date hereof and as of the
Closing Date that:
(a) Such Selling Shareholder has
full right, power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated by this Agreement, the Registration
Statement and the Prospectus. This Agreement and the transactions
contemplated by this Agreement, the Registration Statement and the
Prospectus have been duly and validly authorized by such Selling
Shareholder. This Agreement has been duly and validly executed and
delivered by such Selling Shareholder
13
and constitutes the legal, valid and binding
obligation of such Selling Shareholder, enforceable in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and except
as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) Such Selling Shareholder has
full right, power and authority to execute and deliver a Custody
Agreement and Power of Attorney substantially in the form of
Exhibits D and E hereto (such Selling Shareholder’s
“Custody Agreement” and “Power of
Attorney”, respectively), to perform its obligations
thereunder and to consummate the transactions contemplated thereby.
The Custody Agreement and Power of Attorney and the transactions
contemplated thereby have been duly and validly authorized by such
Selling Shareholder. The Custody Agreement and Power of Attorney
have each been duly and validly executed and delivered by such
Selling Shareholder and constitute the legal, valid and binding
obligation of such Selling Shareholder, enforceable in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and except
as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). Counterparts of such Selling
Shareholder’s Custody Agreement, duly signed by (i) National
City Bank, as custodian (in such capacity, the
“Custodian”), and (ii) such Selling Shareholder have
been delivered to the Company and the Representatives on or prior
to the date of this Agreement.
(c) Such Selling Shareholder agrees
that the Shares to be sold by such Selling Shar
