6,500,000 Shares SANDY SPRING BANCORP, INC. COMMON STOCK (PAR VALUE $1.00 PER SHARE) UNDERWRITING AGREEMENT
EXECUTION
COPY
6,500,000
Shares
XXXXX
SPRING BANCORP, INC.
COMMON
STOCK (PAR VALUE $1.00 PER SHARE)
March 17,
2010
March 17,
2010
XXXXXX X.
XXXXX & CO. INCORPORATED
As Representative of the Several
Underwriters
Identified in Schedule I Annexed
Hereto
c/o
Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxx 00000
Ladies
and Gentlemen:
Xxxxx
Spring Bancorp, Inc., a Maryland corporation (the “ Company ”), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the “ Underwriters ”) 6,500,000
shares of the common stock, $1.00 par value per share, of the Company (the “
Firm Shares
”).
The
Company also proposes to issue and sell to the several Underwriters up to an
additional 975,000 shares of common stock, $1.00 par value per share, of the
Company (the “ Additional
Shares ”), if and to the extent that you, Xxxxxx X. Xxxxx & Co.
Incorporated (“ Baird ”)
and Xxxxxx Xxxxxxxxxx Xxxxx LLC (“Managers”), as managers of the offering, shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the “ Shares .” The shares of common
stock, $1.00 par value per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the “
Common Stock
..”
The
Company has prepared and filed, in accordance with the Securities Act of 1933,
as amended (the “ Securities
Act ”), and the rules and regulations thereunder, with the Securities and
Exchange Commission (the “ Commission ”) a registration
statement on Form S-3 (file number 333-157134), including a prospectus, relating
to the Shares, which registration statement and prospectus incorporate or are
deemed to incorporate by reference documents that the Company has filed, or will
file, with the Commission in accordance with the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), and the rules
and regulations thereunder. The registration statement as amended at the time it
became effective for purposes of Section 11 of the Securities Act (as such
section applies to the Underwriters), including the documents filed as part
thereof and information contained or incorporated by reference in the prospectus
or otherwise deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act, is
hereinafter referred to as the “ Registration Statement
..” If the Company files an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the “ Rule 462
Registration Statement ”), then any reference herein to the term “ Registration Statement ” shall
be deemed to include such Rule 462 Registration Statement. The Company has also
filed with, or transmitted for filing to, or shall promptly after the date of
this Agreement file with or transmit for filing to, the Commission a prospectus
supplement (in the form first used to confirm sales of the Shares (or in the
form first made available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities Act), the “ Prospectus Supplement ”)
pursuant to Rule 424 under the Securities Act. The term " Base Prospectus " means the
prospectus dated February 19, 2009, relating to the Shares, in the form in which
it has most recently been filed with the Commission as part of the Registration
Statement on or prior to the date of this Agreement. The term " Prospectus " means the Base
Prospectus as supplemented by the Prospectus Supplement. The term " Preliminary Prospectus " means
any preliminary form of Prospectus (including without limitation the preliminary
Prospectus Supplement dated March 17, 2010, filed with the Commission pursuant
to Rule 424).
1.
Representations and Warranties of
the Company . The Company represents and warrants to and agrees with each
of the Underwriters on the date hereof, on the Closing Date and on each Option
Closing Date, if any, that:
(a) The
Registration Statement has become effective under the Securities Act; no stop
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus is in
effect, and no proceedings for such purpose are pending before or, to the
Company’s knowledge, threatened by the Commission.
(b) The
Base Prospectus and any Preliminary Prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations
thereunder (including, without limitation, Rule 430B(a) or
430A(b)).
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(c) (i)
Each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder; (ii)
each part of the Registration Statement, when such part became effective, did
not contain and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; (iii) the Registration Statement, as of the date hereof, does
not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
(iv) the Registration Statement complies and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act; (v)
the conditions to the use of Form S-3 in connection with the offering and sale
of the Shares as contemplated hereby have been satisfied; (vi) the Registration
Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Securities Act (including
without limitation Rule 415(a)(5)); (vii) at no time during the period that
begins on the earlier of the date of the Preliminary Prospectus and the date on
which the Preliminary Prospectus was filed with the Commission and ends
immediately prior to the execution of this Agreement did any Preliminary
Prospectus 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; (viii) the Time of
Sale Prospectus does not, and at the Time of Sale, at the Closing Date (as
defined in Section 4 ) and, if applicable, each Option
Closing Date (as defined in Section 5), the Time of Sale Prospectus, as then
amended or supplemented by the Company, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; (ix) each Permitted Free Writing Prospectus does
not conflict with the information contained in the Registration Statement, the
Time of Sale Prospectus or the Prospectus; (x) each road show, when considered
together with the Time of Sale Prospectus, does 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; and (xi) the Prospectus, as of the date it is filed with
the Commission pursuant to Rule 424, at the Closing Date and at each Option
Closing Date, if any, will comply in all material respects with the Securities
Act (including without limitation Section 10(a) of the Securities Act) 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; provided, however, that the
representations and warranties set forth in this Section 1(c) do not apply to
statements or omissions in the Registration Statement, the Time of Sale
Prospectus, any Preliminary Prospectus, any Permitted Free Writing Prospectus,
any road show or the Prospectus or any amendments or supplements thereto based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Managers expressly for use therein, it being
agreed that the only information furnished by the Underwriters to the Company
expressly for use therein are the statements contained (i) in the first two
sentences of the first paragraph under the heading “Commissions and Expenses”
and (ii) under the headings “Stabilization” and “Passive Market Making,” in each
case under the caption “Underwriting” in the Prospectus.
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(d) Prior
to the execution of this Agreement, the Company has not, directly or indirectly,
offered or sold any Shares by means of any “prospectus” (within the meaning of
the Securities Act) or used any “prospectus” (within the meaning of the
Securities Act) in connection with the offer or sale of the Shares, in each case
other than the Preliminary Prospectus and/or the Permitted Free Writing
Prospectuses; the Company has not, directly or indirectly, prepared, used or
referred to any free writing prospectuses, without the prior written consent of
Baird, other than the Permitted Free Writing Prospectuses and road shows
furnished or presented to the Managers before first use. Each Permitted Free
Writing Prospectus has been prepared, used or referred to in compliance with
Rules 164 and 433 under the Securities Act; assuming that such Permitted Free
Writing Prospectus is so sent or given after the Registration Statement was
filed with the Commission (and after such Permitted Free Writing Prospectus was,
if required pursuant to Rule 433(d) under the Securities Act, filed with the
Commission), the sending or giving, by any Underwriter, of any Permitted Free
Writing Prospectus will satisfy the provisions of Rule 164 and Rule 433 (without
reliance on subsections (b), (c) and (d) of Rule 164); the conditions set forth
in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1)
under the Securities Act are satisfied, and the registration statement relating
to the offering of the Shares contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of Rule 433 or Rule
431 under the Securities Act, satisfies the requirements of Section 10 of the
Securities Act; neither the Company nor the Underwriters are disqualified, by
reason of subsection (f) or (g) of Rule 164 under the Securities Act, from
using, in connection with the offer and sale of the Shares, free writing
prospectuses pursuant to Rules 164 and 433 under the Securities Act; each
Permitted Free Writing Prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by
or behalf of or used or referred to by the Company complies or will comply in
all material respects with the requirements of the Securities Act; and, to the
Company’s knowledge, no free writing prospectus prepared by or on behalf of or
used by any Underwriter contains any “issuer information” within the meaning of
Rule 433(h)(2) under the Securities Act.
(e) The
Company was, at the time of the Registration Statement was initially filed and
when it became effective, eligible to use Form S-3 to register the offering of
the Shares contemplated hereby. The Company was not an “ineligible issuer” (as
defined in Rule 405 under the Securities Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Act with respect
to the offering of the Shares contemplated by the Registration
Statement.
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(f) In
accordance with Financial Industry Regulatory Authority (“ FINRA ”) Rule
5110(c)(7)(C)(i), the Shares have been registered with the Commission on Form
S-3 under the Securities Act pursuant to the standards for such Form S-3 in
effect prior to October 21, 1992.
(g) Shares
of Common Stock are listed for quotation on the NASDAQ Global Select Market (“
NASDAQ ”), and the
Company has not received any notice from the NASDAQ regarding the delisting of
such shares from the NASDAQ. The Shares are duly listed for quotation, and
admitted and authorized for trading, subject to official notice of issuance, on
the NASDAQ.
(h) The
Company is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended, with respect to Xxxxx Spring Bank and has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Time of Sale Prospectus and the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not (i) have a material adverse effect on the assets,
business, condition (financial or otherwise), results of operation or prospects
of the Company and its subsidiaries, taken as a whole, (ii) prevent or
materially interfere with the consummation of the transactions contemplated
hereby, or result in the delisting of shares of Common Stock from the NASDAQ
(the occurrence of any such effect, prevention, interference or result described
in the foregoing clauses (i) or (ii) being herein referred to as a “ material adverse effect
”).
(i) Each
subsidiary of the Company has been duly organized, is validly existing as a
corporation or limited liability company in good standing under the laws of the
jurisdiction of its organization, has the corporate power and authority to own
its property and to conduct its business as described in the Time of Sale
Prospectus and the Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect; all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims. The deposit accounts of
the Company’s subsidiary depository institution are insured up to the applicable
limits by the Deposit Insurance Fund of the Federal Deposit Insurance
Corporation (the “ FDIC
”) to the fullest extent permitted by law and the rules and regulations of the
FDIC, and no proceeding for the revocation or termination of such insurance has
been instituted or is pending or, to the knowledge of the Company, is
threatened.
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(j) This
Agreement has been duly authorized, executed and delivered by the Company and
when duly executed and delivered by the Underwriters, will constitute a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by general equitable
principles.
(k) The
authorized and outstanding capitalization of the Company is as set forth in the
Time of Sale Prospectus and will be as set forth in the Prospectus, subject, in
each case, to the issuance of shares of Common Stock upon exercise of stock
options and warrants disclosed as outstanding in the Time of Sale Prospectus and
the Prospectus, as the case may be, and the grant of options under existing
stock option plans described in the Time of Sale Prospectus and the Prospectus.
The authorized capital stock of the Company conforms and will conform as to
legal matters to the description thereof contained in the Time of Sale
Prospectus and the Prospectus.
(l) The
shares of Common Stock outstanding prior to the issuance of the Shares to be
sold by the Company have been duly authorized, are validly issued, fully paid
and non-assessable, have been issued in compliance with applicable securities
laws and were not issued in violation of any preemptive or similar rights. All
prior offers and sales of securities by the Company were made in compliance in
all material respects with the Securities Act and all other applicable laws and
regulations.
(m) The
Shares to be sold by the Company have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(n) Neither
the execution and delivery by the Company of, nor the performance by the Company
of its obligations under, this Agreement will conflict with, contravene, result
in a breach or violation of, or imposition of any lien, charge or encumbrance
upon any assets of the Company or any of its subsidiaries pursuant to, or
constitute a default under (i) any statute, law, rule, regulation, judgment,
order or decree of any governmental body, regulatory or administrative agency or
court having jurisdiction over the Company or any subsidiary; (ii) the articles
of incorporation or bylaws of the Company or any of its subsidiaries; or (iii)
any contract, agreement, obligation, covenant or instrument to which the Company
or any of its subsidiaries (or any of their respective assets) is subject or
bound, except, in the case of clauses (i) and (iii), for those conflicts,
breaches, violations, impositions or defaults that would not result in a
material adverse effect.
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(o) No
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
NASDAQ), or approval of the Company’s shareholders, is required in connection
with the issuance and sale of the Shares or the consummation of the transactions
contemplated hereby, other than (i) registration of the Shares under the
Securities Act, which has been effected (or, with respect to any Rule 462
Registration Statement, will be effected in accordance Rule 462(b) under the
Securities Act), or (ii) any necessary qualification under the securities or
blue sky laws of the various jurisdictions in which the Shares are being offered
by the Underwriters or (iii) the filing of a supplemental listing application
and related materials with the NASDAQ or (iv) under the FINRA
Rules.
(p) There
are no actions, suits, claims, investigations or proceedings pending or, to the
Company’s knowledge, threatened or contemplated to which the Company or any of
its subsidiaries or any of their respective directors or officers is or would be
a party or of which any of their respective properties is or would be subject at
law or in equity, before or by any federal, state, local or foreign governmental
or regulatory commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NASDAQ) (i) other than any such action,
suit, claim, investigation or proceeding which, if resolved adversely to the
Company or any of its subsidiaries, would not, individually or in the aggregate,
have a material adverse effect or (ii) that are required to be described in the
Time of Sale Prospectus and the Prospectus and are not so described. There are
no contracts or other documents that are required to be described in the
Registration Statement, the Time of Sale Prospectus or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described or filed
as required.
(q) The
Company is not, and after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus will
not be, required to register as an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended (the “ 1940 Act ”).
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(r) The
financial statements included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, together with the
related notes and schedules, present fairly the consolidated financial position
of the Company and its subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and changes in shareholders’
equity of the Company for the periods specified and have been prepared in
compliance with the requirements of the Securities Act and Exchange Act and in
conformity with U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved; all pro forma financial statements
or data included or incorporated by reference in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, if any, comply with the requirements
of the Securities Act and the Exchange Act, and the assumptions used in the
preparation of such pro forma financial statements and data are reasonable, the
pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the Time of Sale
Prospectus and the Prospectus are accurately and fairly presented and prepared
on a basis consistent with the financial statements and books and records of the
Company; there are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus or the Prospectus that are not included
or incorporated by reference as required; the Company and its subsidiaries do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not described in the Time of Sale
Prospectus and the Prospectus; and all disclosures contained or incorporated by
reference in the Time of Sale Prospectus and the Prospectus regarding “non-GAAP
financial measures” (as such term is defined by the rules and regulations of the
Commission) comply with Regulation G under the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.
(s) All
statistical or market-related data included or incorporated by reference in the
Time of Sale Prospectus and the Prospectus are based on or derived from sources
that the Company reasonably believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required. Each “forward-looking statement” (within the
meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act)
contained or incorporated by reference in the Registration Statement, the Time
of Sale Prospectus, the Prospectus and the Permitted Free Writing Prospectuses
has been made or reaffirmed with a reasonable basis and in good
faith.
(t) The
Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“ Environmental Laws ”), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not have a
material adverse effect. There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
would have a material adverse effect.
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(u) There
are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(v) Subsequent
to the respective dates as of which information is given in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus, (i)
there has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the assets, business, condition
(financial or otherwise), management, operations or earnings of the Company and
its subsidiaries, taken as a whole; (ii) the Company and its subsidiaries have
not incurred any material liability or obligation, direct or contingent, nor
entered into any material transaction; (iii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than ordinary
and customary dividends; and (iv) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
subsidiaries, except in each case as described in each of the Registration
Statement, the Time of Sale Prospectus and the Prospectus,
respectively.
(w) The
Company and its subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all real and personal property
owned by them which is material to the business of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Time of Sale Prospectus and the Prospectus
or such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, in each case except as described
in the Time of Sale Prospectus and the Prospectus.
(x) Each
of the Company and its subsidiaries owns or possesses all inventions, patent
applications, patents, trademarks (both registered and unregistered), trade
names, service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement, the Time of Sale Prospectus
and the Prospectus as being owned or licensed by it or which is necessary for
the conduct of its businesses (collectively, the “ Intellectual Property ”),
except where the failure to own or possess such rights would not, individually
or in the aggregate, result in a material adverse effect, and the Company is
unaware of any claim to the contrary or any challenge by any other person to the
rights of the Company or any of its subsidiaries with respect to the
Intellectual Property. Neither the Company nor any of its subsidiaries has
infringed or is infringing the intellectual property of a third party, and
neither the Company nor any of its subsidiaries has received notice of a claim
by a third party to the contrary, except where such infringement would not,
singly or in the aggregate, result in a material adverse
effect.
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(y) No
material labor dispute with the employees of the Company or any of its
subsidiaries exists, except as described in the Time of Sale Prospectus and the
Prospectus, or, to the knowledge of the Company, is imminent; and the Company is
not aware of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or contractors that
could have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(z) The
Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged; neither
the Company nor any of its subsidiaries has been refused any insurance coverage
sought or applied for; and neither the Company nor any of its subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a material adverse effect.
(aa) The
Company and its subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect.
The Company and its subsidiaries are in material compliance with the terms and
conditions of all such certificates, authorizations and permits and all filings
of any reports, statements, information or form required by applicable law,
regulation or order were filed in material compliance with such laws,
regulations or orders and no regulatory authorities have asserted any material
deficiencies with respect to such submissions.
(bb) Except
as otherwise would not have a material adverse effect, no subsidiary of the
Company is subject to any material direct or indirect prohibition on paying any
dividends to the Company, on making any other distribution on such subsidiary’s
capital stock, on repaying to the Company any loans or advances to such
subsidiary from the Company or on transferring any of such subsidiary’s property
or assets to the Company or any other subsidiary of the Company, except as
described in the Time of Sale Prospectus and the Prospectus.
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(cc) The
Company maintains “internal control over financial reporting” (as defined in
Rules 13a-15 and 15d-15 under the Exchange Act) in compliance with the
requirements of the Exchange Act. The Company’s internal control over financial
reporting has been designed by the Company’s principal executive officer and
principal financial officer, or under their supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and is effective in performing the functions for
which it was established. Except as described in the Time of Sale Prospectus and
the Prospectus, since the end of the Company's most recent audited fiscal year,
there has been (i) no significant deficiency or material weakness in the design
or operation of the Company’s internal control over financial reporting (whether
or not remediated) which is reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information, and (ii)
no change in the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(dd) The
Company maintains “disclosure controls and procedures” (as such term is defined
in Rules 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company’s
Chief Executive Officer and Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are effective in
performing the functions for which they were established; the principal
executive officers (or their equivalents) and principal financial officers (or
their equivalents) of the Company have made all certifications required by the
Xxxxxxxx-Xxxxx Act of 2002 and any related rules and regulations promulgated by
the Commission (the “Xxxxxxxx-Xxxxx Act”), and the statements made in each such
certification are accurate; the Company, its subsidiaries and its directors and
officers are each in compliance in all material respects with the applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(ee) Neither
the Company nor any of its subsidiaries has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Time of Sale Prospectus or the
Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been
threatened by the Company or any of its subsidiaries or, to the Company’s
knowledge, any other party to any such contract or agreement.
(ff) All
tax returns required to be filed by the Company or any of its subsidiaries have
been timely filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest,
additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been timely paid, other than those being contested in good
faith and for which adequate reserves have been provided or which if not paid,
would not, individually or in the aggregate, result in a material adverse
effect.
11
(gg) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder; and the Company
and its subsidiaries have instituted and maintain policies and procedures
designed to ensure continued compliance therewith, including without limitation
a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management’s
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(hh) Except
as described in the Time of Sale Prospectus and the Prospectus, the Company has
not sold, issued or distributed any shares of Common Stock during the six-month
period preceding the date hereof, including any sales pursuant to Rule 144A
under, or Regulation D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(ii) Neither
the Company nor, to the knowledge of the Company, any of its subsidiaries nor
any of their respective directors, officers, affiliates or controlling persons
has taken, directly or indirectly, any action designed, or which has constituted
or might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(jj) Xxxxx
Xxxxxxxx LLP, the accounting firm that certified the financial statements and
supporting schedules included, incorporated or deemed to be incorporated by
reference in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, is an independent registered public accounting firm as required by
the Securities Act and the regulations thereof, the Exchange Act and the
regulations thereof, and is not and has not been in violation of the auditor
independence requirements of the Sarbanes Oxley Act and the related rules and
regulations of the Securities and Exchange Commission in respect of the entity
whose financial statements it audited.
(kk) Except
as disclosed in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, neither the Company nor any of its subsidiaries is a party to or
subject to any order, decree, agreement, memorandum of understanding or similar
agreement or other regulatory enforcement action or proceeding with or by, or is
a party to or recipient of a commitment letter, supervisory letter or similar
undertaking to or from, or is subject to any directive by, any regulatory
authority charged with the supervision or regulation of depository institutions
or engaged in the insurance of deposits (including the FDIC) or the supervision
or regulation of the Company or any of its subsidiaries, and neither the Company
nor any of its subsidiaries has been advised by any such regulatory authority
that such regulatory authority is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, commitment letter, supervisory
letter or similar undertaking which would, singly or in the aggregate, result in
a material adverse effect. There is no unresolved violation, criticism or
exception by any such regulatory authority with respect to any examination of
the Company and its subsidiaries which would, singly or in the aggregate,
reasonably be expected to result in a material adverse effect.
12
(ll)
Any and all material swaps, caps, floors, futures,
forward contracts, option agreements (other than employee stock options) and
other derivative financial instruments, contracts or arrangements, whether
entered into for the account of the Company or one of its subsidiaries or for
the account of a customer of the Company or one of its subsidiaries, were
entered into in the ordinary course of business and in accordance with prudent
business practice and applicable laws, rules, regulations and policies of all
applicable regulatory agencies and with counterparties believed to be
financially responsible at the time. The Company and each of its subsidiaries
have duly performed in all material respects all of their obligations thereunder
to the extent that such obligations to perform have accrued, and there are no
breaches, violations or defaults or allegations or assertions of such by any
party thereunder.
(mm)
Each of the Company, the Company’s subsidiaries and
their respective “ERISA Affiliates” (as defined below) are in compliance in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (collectively, “ERISA”). No “reportable event” (as
defined in ERISA) has occurred with respect to any “employee benefit plan” (as
defined in ERISA) for which the Company, any of the Company’s subsidiaries or
their respective ERISA Affiliates would have any liability. None of the Company,
the Company’s subsidiaries or their respective ERISA Affiliates have incurred,
or expect to incur, liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections
412, 4971, 4975 or 4980B of the United States Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder
(collectively, the “Code”). Each “employee benefit plan” for which the Company,
any of the Company’s subsidiaries or any of their respective ERISA Affiliates
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such
qualification. “ERISA Affiliate” means, with respect to the Company or any of
its subsidiaries, any member of any group of organizations described in Sections
414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA of which the
Company or such subsidiary is a member.
13
(nn) Neither
the Company nor any of its subsidiaries has participated in any reportable
transaction, as defined in Treasury Regulation Section 1.6011-
(4)(b)(1).
(oo) None
of the Company, any of the Company’s subsidiaries or, to the knowledge of the
Company, any Affiliate of the Company or any of its subsidiaries
has: (A) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(B) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; or (C) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(pp) No
relationship, direct or indirect, exists between or among the Company or any of
its subsidiaries, on the one hand, and the directors, officers, shareholders,
customers or suppliers of the Company or any of its subsidiaries, on the other
hand, that is required by the Securities Act or the regulations thereof to be
described in the Registration Statement, the Time of Sale Prospectus and the
Prospectus and that is not so described.
(qq) Except
as disclosed in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, neither the Company nor any of its subsidiaries is a party to a
letter of intent, accepted term sheet or similar instrument or any binding
agreement that contemplates an acquisition, disposition, transfer or sale of the
assets (as a going concern) or capital stock of the Company or of any subsidiary
or business unit or any similar business combination transaction which would be
material to the Company and its subsidiaries taken as a whole.
(rr) Each
subsidiary of the Company which is engaged in the business of acting as an
insurance agency (an “ Insurance Subsidiary ”) is
duly licensed or registered with any applicable regulatory authorities in each
jurisdiction where it is required to be so licensed or registered to conduct its
business, except where the failure to be so licensed or registered would not
have a material adverse effect. Each Insurance Subsidiary has all other
necessary approvals of and from all applicable regulatory authorities to conduct
its businesses, except where the failure to have such approvals would not have a
material adverse effect. No Insurance Subsidiary has received any notification
from any applicable regulatory authority to the effect that any additional
approvals from such regulatory authority are needed to be obtained by such
subsidiary and have not been obtained, in any case where it could be reasonably
expected that the Insurance Subsidiary will be unable to obtain such additional
approvals and the failure to obtain any such additional approvals would require
such subsidiary to cease or otherwise materially limit the conduct of its
business. Each Insurance Subsidiary is in compliance with the requirements of
insurance laws and regulations of each jurisdiction that are applicable to such
subsidiary, except where the failure to be in compliance with such requirements
would not, individually or in the aggregate, have a material adverse effect, and
has filed all notices, reports, documents or other information required to be
filed thereunder, except where such failure to file would not have, individually
or in the aggregate, a material adverse effect.
14
2.
Agreements to Sell and
Purchase . Subject to the terms and conditions set forth herein, the
Company hereby agrees to issue and sell 6,500,000 Firm Shares to the several
Underwriters at a price of $12.825 per share (the “ Purchase Price ”), and each
Underwriter agrees, severally and not jointly, to purchase from the Company at
the Purchase Price the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as the Managers may determine) set forth opposite
the name of such Underwriter set forth in Schedule I hereto.
Moreover,
subject to the terms and conditions set forth herein, the Company hereby agrees
to issue and sell up to 975,000 Additional Shares to the Underwriters at the
Purchase Price, and the Underwriters shall have the right (but not the
obligation) to purchase, severally and not jointly, up to 975,000 Additional
Shares at the Purchase Price. The Managers may exercise this right on behalf of
the Underwriters in whole or from time to time in part by giving written notice
not later than 30 days after the date of this Agreement. Any exercise notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Each
purchase date must be at least one business day after the written notice is
given and may not be earlier than the closing date for the Firm Shares or later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. On each
day, if any, that Additional Shares are to be purchased (an “ Option Closing Date ”), each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the Managers may determine) that bears the same proportion to the total number
of Additional Shares to be purchased on such Option Closing Date as the number
of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
3.
Terms of Public Offering .
The Company is advised by the Managers that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after this
Agreement has become effective as in the Managers’ judgment is advisable. The
Company is further advised by the Managers that the Shares are to be offered to
the public initially at $13.50 per share (the “ Public Offering Price
”).
4.
Payment and Delivery .
Payment for the Firm Shares to be sold by the Company shall be made to the
Company in Federal or other funds immediately available in Milwaukee against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., Central Time, on March 23, 2010, or at such other
time on the same or such other date, not later than March 30, 2010, as shall be
designated in writing by the Managers. The time and date of such payment are
hereinafter referred to as the “ Closing Date
..”
15
Payment
for any Additional Shares shall be made to the Company in Federal or other funds
immediately available in Milwaukee against delivery of such Additional Shares
for the respective accounts of the several Underwriters at 10:00 a.m., Central
Time, on the date specified in the corresponding notice described in Section 2
or at such other time on the same or on such other date, in any event not later
than April 28, 2010, as shall be designated in writing by the
Managers.
The Firm
Shares and Additional Shares shall be registered in such names and in such
denominations as the Managers shall request in writing not later than two full
business days prior to the Closing Date or the applicable Option Closing Date,
as the case may be. The Firm Shares and Additional Shares shall be delivered to
the Managers on the Closing Date or an Option Closing Date, as the case may be,
for the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
5.
Conditions to the Underwriters’
Obligations . The
several obligations of the Underwriters are subject to the condition that all
representations and warranties on the part of the Company contained in this
Agreement are, on the date hereof, on the Closing Date and on each Option
Closing Date, if any, true and correct, the condition that the Company has
performed its obligations required to be performed prior to the Closing Date and
the following further conditions:
(a) Subsequent
to the execution and delivery of this Agreement and prior to the Closing Date
and each Option Closing Date, if any:
(i) there
shall not have occurred any downgrading, nor shall any notice have been given of
any intended or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the rating
accorded any of the securities of the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization,” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there
shall not have occurred any change, or any development involving a prospective
change, in the assets, business, condition (financial or otherwise), management,
operations, earnings or prospects of the Company and its subsidiaries, taken as
a whole, from that set forth in the Time of Sale Prospectus that makes it, in
the Managers’ judgment, impracticable or inadvisable to offer or sell the Shares
on the terms and in the manner contemplated in the Time of Sale
Prospectus.
16
(b) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, a certificate, dated the Closing Date or such Option Closing Date,
as the case may be, and signed by the Chief Executive Officer and Chief
Financial Officer of the Company, to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date or such Option Closing Date, as the case may be, and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date or such Option Closing Date, as the case may be, and as to such
other matters as the Managers may reasonably request. The delivery of the
certificate provided for in this Section 5(b) shall constitute a representation
and warranty of the Company as to the statements made in such
certificate.
(c) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, an opinion of Xxxxxxxxxx Xxxxxxxx LLP, outside counsel for the
Company, and an opinion of Xxxxxx X. Xxxxxxxxxx, Esq., General Counsel for the
Company, each dated the Closing Date or such Option Closing Date, as the case
may be, in form and substance reasonably satisfactory to counsel for the
Underwriters to the effect set forth in Exhibit A hereto. In rendering such
opinion, Xxxxxxxxxx Xxxxxxxx LLP, may rely as to matters of fact (but not as to
legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and its subsidiaries and of public
officials. The opinion of Xxxxxxxxxx Xxxxxxxx LLP and the opinion of the General
Counsel for the Company shall be rendered to the Underwriters at the request of
the Company and shall so state therein.
(d) The
Underwriters shall have received on the Closing Date and each Option Closing
Date, if any, an opinion of Xxxxx & Xxxxxxx LLP, counsel for the
Underwriters, dated the Closing Date or such Option Closing Date, as the case
may be, in form and substance satisfactory to the Underwriters. In rendering
such opinion, Xxxxx & Xxxxxxx LLP, may rely as to matters of fact (but not
as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and its subsidiaries and of public
officials.
(e) The
Underwriters shall have received, on each of the date hereof, the Closing Date
and each Option Closing Date, if any, a letter dated the date hereof, the
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from Xxxxx Xxxxxxxx LLP, independent
public accountants, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter
delivered on the Closing Date shall use a “cut-off date” not earlier than the
date hereof.
(f) No
stop order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus, the Time of Sale
Prospectus or the Prospectus shall have been issued, and no proceedings for such
purpose shall have been instituted or threatened by the Commission; no notice of
objection of the Commission to the use of the Registration Statement shall have
been received; and all requests for additional information on the part of the
Commission shall have been complied with to the Managers’
satisfaction.
17
(g) The
“lock-up” agreements, each substantially in the form of Exhibit B hereto,
between the Managers and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to Managers on or before the date
hereof, shall be in full force and effect on the Closing Date.
(h) The
Shares shall have been approved for quotation on NASDAQ.
The
several obligations of the Underwriters to purchase Additional Shares hereunder
are subject to the delivery to the Managers on the applicable Option Closing
Date of such documents as the Managers may reasonably request, including
certificates of officers of the Company, legal opinions and an accountants’
comfort letter, and other matters related to the issuance of such Additional
Shares.
6.
Covenants of the Company .
The Company covenants with each Underwriter as follows:
(a) To
furnish to the Managers, without charge, signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to the Managers in Milwaukee, Wisconsin, without charge,
prior to 10:00 a.m. Central Time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 6(f) or 6(g) below, as
many copies of the Time of Sale Prospectus, the Prospectus and any supplements
and amendments thereto or to the Registration Statement as the Managers may
request.
(b) Before
amending or supplementing the Registration Statement, the Time of Sale
Prospectus or the Prospectus, to furnish to the Managers a copy of each such
proposed amendment or supplement and not to file any such proposed amendment or
supplement to which the Managers object, and to file with the Commission within
the applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) To
furnish to the Managers a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company and not to
use or refer to any proposed free writing prospectus to which the Managers
object.
(d) Not
to take any action that would result in an Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
18
(e) To
advise the Managers promptly of any request by the Commission for amendments or
supplements to the Registration Statement, Base Prospectus, any Preliminary
Prospectus, Permitted Free Writing Prospectus, Prospectus Supplement or
Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of any Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus;
and if the Commission should enter such a stop order, to use its best efforts to
obtain the lifting or removal of such order as soon as possible.
(f) If
the Time of Sale Prospectus is being used to solicit offers to buy the Shares at
a time when the Prospectus is not yet available to prospective purchasers and
any event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Time of Sale Prospectus in order to make the statements
therein, in the light of the circumstances, not misleading, or if any event
shall occur or condition exist as a result of which the Time of Sale Prospectus
conflicts with the information contained in the Registration Statement then on
file, or if, in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Time of Sale Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to any dealer upon request, either amendments or
supplements to the Time of Sale Prospectus so that the statements in the Time of
Sale Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable
law.
(g) If,
during such period after the first date of the public offering of the Shares as
in the opinion of counsel for the Underwriters the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses Managers will furnish to the Company) to which Shares may have
been sold by Managers on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
19
(h) If,
at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a
Registration Statement under Rule 462(b) under the Securities Act, to be filed
with the Commission and become effective before the Shares may be sold, the
Company will use its best efforts to cause such post-effective amendment or such
Registration Statement to be filed and become effective, and will pay any
applicable fees in accordance with the Securities Act, as soon as possible; and
the Company will advise Managers promptly and, if requested by the Managers,
will confirm such advice in writing, (i) when such post-effective amendment or
such Registration Statement has become effective, and (ii) if Rule 430A under
the Securities Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Securities Act (which the Company agrees to
file in a timely manner in accordance with such Rules).
(i) If,
at any time during the period when a prospectus is required by the Securities
Act to be delivered (whether physically or through compliance with Rule 172
under the Securities Act or any similar rule) in connection with any sale of
Shares, the Registration Statement shall cease to comply with the requirements
of the Securities Act with respect to eligibility for the use of the form on
which the Registration Statement was filed with the Commission, to (i) promptly
notify the Managers, (ii) promptly file with the Commission a new registration
statement under the Securities Act, relating to the Shares, or a post-effective
amendment to the Registration Statement, which new registration statement or
post-effective amendment shall comply with the requirements of the Securities
Act and shall be in a form satisfactory to the Managers, (iii) use its best
efforts to cause such new registration statement or post-effective amendment to
become effective under the Securities Act as soon as practicable, (iv) promptly
notify the Managers of such effectiveness and (v) take all other action
necessary or appropriate to permit the public offering and sale of the Shares to
continue as contemplated in the Prospectus; all references herein to the
Registration Statement shall be deemed to include each such new registration
statement or post-effective amendment, if any;
(j) If
the third anniversary of the initial effective date of the Registration
Statement occurs before all the Shares have been sold by the Underwriters, prior
to the third anniversary to file a new shelf registration statement and to take
any other action necessary to permit the public offering of the Shares to
continue without interruption; references herein to the Registration Statement
shall include the new registration statement declared effective by the
Commission.
(k) To
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus (or, in lieu thereof,
the notice referred to in Rule 173(a) under the Securities Act) is required in
connection with the offering or sale of the Shares.
20
(l) Promptly
to furnish such information or to take such action as the Managers may
reasonably request and otherwise to qualify the Shares for offer and sale under
the securities or “blue sky” laws of such jurisdictions as the Managers shall
reasonably request, and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Shares; provided, however, that
the Company shall not be required to qualify as a foreign corporation or to file
a consent to service of process in any jurisdiction (excluding service of
process with respect to the offer and sale of the Shares); and to promptly
advise the Managers of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for offer or sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(m) To
make generally available to the Company’s security holders and to the Managers
as soon as practicable an earnings statement covering a period of at least
twelve months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(n)
To use its best efforts to cause the Shares to be listed
for quotation on the NASDAQ and to maintain the listing of the Common Stock,
including the Shares, for quotation on the NASDAQ.
(o) During
the period beginning on the date of this Agreement and continuing to and
including 90 days after the date of the Prospectus, and without the prior
written consent of Xxxxx with the authorization to release the lock-up letter on
behalf of the Underwriters, not to (i) to issue, offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether such transaction described in clause (i)
or (ii) above is to be settled by delivery of the Common Stock or such other
securities, in cash or otherwise, (3) file any registration statement with the
Commission relating to the offering of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
(4) publicly announce an intention to effect any transaction specified in clause
(1), (2) or (3). The restrictions contained in the preceding sentence
shall not apply to (i) the Shares to be sold hereunder, (ii) the grant of
options to purchase shares of Common Stock pursuant to the Company’s stock
option plans under the terms of such plans in effect on the date hereof,
provided such options are granted at fair market value and in amounts and with
exercise terms consistent with the Company’s past practice, or the sale of
shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plans (or the filing of a registration statement on Form S-8 to
register shares of Common Stock issuable under such plans), or (iii) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date of the
Underwriting Agreement of which Xxxxx has been advised in writing.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the
expiration of the 90-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 90-day period, the restrictions imposed by this agreement shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material
event. The Company shall promptly notify Xxxxx of any earnings
release, news or event that may give rise to an extension of the initial 90-day
restricted period.
21
(p) To
prepare, if the Managers so request, a final term sheet relating to the offering
of the Shares, containing only information that describes the final terms of the
Shares or the offering in a form consented to by the Managers, and to file such
final term sheet within the period required by Rule 433(d)(5)(ii) under the
Securities Act following the date the final terms have been established for the
offering of the Shares.
(q) To
comply with Rule 433(d) under the Securities Act (without reliance on Rule
164(b) under the Securities Act) and with Rule 433(g) under the Securities
Act.
(r) Not
to take, directly or indirectly, any action designed, or which will constitute,
or has constituted, or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(s) Not,
at any time at or after the execution of this Agreement, to offer or sell any
Shares by means of any “prospectus” (within the meaning of the Securities Act)
or use any “prospectus” (within the meaning of the Securities Act) in connection
with the offer or sale of the Shares, except in each case other than the
Prospectus.
(t) To
maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
(u) To
apply the net proceeds to the Company from the sale of the Shares in the manner
set forth under the caption “Use of Proceeds” in the Prospectus Supplement and
not to invest or use such proceeds in a manner as would require the Company or
any of its subsidiaries to register as an investment company under the 1940
Act.
22
7.
Expenses
.. Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company agrees to pay or cause
to be paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company’s counsel and the Company’s accountants in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any Preliminary Prospectus, the Time of Sale Prospectus,
the Prospectus, any free writing prospectus prepared by or on behalf of, used
by, or referred to by the Company and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing,
shipping and delivering of copies thereof to the Underwriters and dealers, in
the quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any
securities or blue sky memorandum in connection with the offer and sale of the
Shares under the securities laws of the jurisdictions in which the Shares may be
offered or sold and all expenses in connection with the qualification of the
Shares for offer and sale under such securities laws as provided in
Section 6(l) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by FINRA, (v) all costs and expenses
incident to listing the Shares for quotation on NASDAQ, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses of
the Company relating to investor presentations on any “road show” undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
road show, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) the document production charges and expenses associated with printing
this Agreement, (x) all expenses in connection with any offer and sale of the
Shares outside of the United States, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with offers
and sales outside of the United States, and (xi) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section.
The
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they
may make. Notwithstanding the above, if the sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 5 is not satisfied, because of any termination
of this Agreement by the Underwriters pursuant to Section 9 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
obligation or covenant hereunder or comply with any provision hereof other than
by reason of a default by any of the Underwriters, the Company will reimburse
the Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, through the Managers on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereby.
23
The
provisions of this Section shall not supersede or otherwise affect any agreement
that the Sellers may otherwise have for the allocation of such expenses among
themselves.
8.
Indemnity and
Contribution . (a) The Company agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by, arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any issuer
information that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act, any road show not constituting a free writing
prospectus, or the Prospectus or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which there were made, not misleading; provided, however, that
the Company shall not be liable under this Section 8(a) to the extent that such
losses, claims, damages or liabilities are caused by, arise out of or are based
upon any such untrue statement or omission or alleged untrue statement or
omission made therein in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Managers expressly for use
therein.
24
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, the directors of the Company, the officers of the Company who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by, arising from or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any Company
information that the Company has filed, or is required to file, pursuant to Rule
433(d) of the Securities Act, any road show not constituting a free writing
prospectus, or the Prospectus or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which there were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission or
alleged untrue statement or omission was made therein in reliance upon and in
conformity with information relating to such Underwriter furnished to the
Company in writing by such Underwriter through the Managers expressly for use
therein.
(c) In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b) such person (the “ indemnified party ”) shall
promptly notify the person against whom such indemnity may be sought (the “
indemnifying party ”) in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (i)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act or who are affiliates of any Underwriter
within the meaning of Rule 405 under the Securities Act, and (ii) the fees
and expenses of more than one separate firm (in addition to any local counsel)
for the Company, its directors, its officers who sign the Registration Statement
and each person, if any, who controls the Company within the meaning of either
such Section, and that all such fees and expenses shall be reimbursed as they
are incurred. In the case of any such separate firm for the
Underwriters and such control persons and affiliates of any Underwriters, such
firm shall be designated in writing by Xxxxx. In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the
Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
25
(d) To
the extent the indemnification provided for in 8(a) or 8(b) is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand in connection with the offering
of the Shares shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters’ respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not
joint.
26
(e) The
Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 8(d) shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
(f) The
indemnity and contribution provisions contained in this Section 8 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter, any person controlling any Underwriter or any affiliate of any
Underwriter, or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the
Shares.
9.
Termination
.. The Underwriters may terminate this Agreement by notice given by
the Managers to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (a) trading generally shall have been
suspended or materially limited or minimum prices shall have been established
on, or by NASDAQ, (b) trading of any securities of the Company shall have been
suspended or materially limited on any exchange or in any over-the-counter
market, (c) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (d) any moratorium or
material limitation on commercial banking activities shall have been declared by
Federal, Illinois or New York state authorities, (e) there shall have occurred
any outbreak or escalation of hostilities, act of terrorism involving the United
States or declaration by the United States of a national emergency or war, or
(f) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (e) or (f), makes it, in the Managers’ judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus (exclusive of any supplement
thereto).
27
10.
Effectiveness; Defaulting
Underwriters . This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
If, on
the Closing Date or an Option Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase Shares that it has or they
have agreed to purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule I bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as the Managers may specify, to purchase the Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event
shall the number of Shares that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares to be purchased on such date, and arrangements
satisfactory to the Managers and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Managers or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement, in the Time of Sale Prospectus, in the Prospectus or in any other
documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Shares to be sold on such Option
Closing Date or (ii) purchase not less than the number of Additional Shares that
such non-defaulting Underwriters would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
28
11.
Representations and
Indemnities to Survive . The respective agreements,
representations, warranties, indemnities and other statements of the Company and
the Underwriters set forth or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Shares. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this
Agreement.
12.
Entire Agreement
.. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by
this Agreement) that relate to the offering of the Shares, represents the entire
agreement between the Company, on the one hand, and the Underwriters, on the
other, with respect to the preparation of any Preliminary Prospectus, the Time
of Sale Prospectus, the Prospectus, the conduct of the offering, and the
purchase and sale of the Shares.
(b) The
Company acknowledges that in connection with the offering of the
Shares: (i) the Underwriters have acted at arm’s length and are not
agents of, and owe no fiduciary duties to, the Company or any other person in
respect of the transactions contemplated by this Agreement irrespective of
whether the Underwriters have advised or are advising the Company on other
matters; (ii) the Underwriters owe the Company only those duties and obligations
set forth in this Agreement and prior written agreements (to the extent not
superseded by this Agreement), if any; (iii) the Underwriters may have interests
that differ from those of the Company and (iv) the Purchase Price and the Public
Offering Price of the Shares set forth in this Agreement were established and
agreed to by the Company following arm’s length discussions with the
Underwriters, and the Company understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement. The
Company waives to the full extent permitted by applicable law any claims it may
have against the Underwriters arising from an alleged breach of fiduciary duty
in connection with the offering of the Shares.
13.
Counterparts
.. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart by facsimile or
electronic transmission shall be equally as effective as delivery of an original
counterpart of this Agreement. The failure by a party to deliver an
original executed counterpart to this Agreement shall not affect the validity,
enforceability and binding effect of this Agreement.
14.
Applicable Law
.. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Illinois.
29
15.
Headings
.. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.
16.
Notices.
All communications hereunder shall be in writing and effective only upon receipt
and if to the Underwriters shall be delivered, mailed or sent to the Managers in
care of Xxxxxx X. Xxxxx & Co. Incorporated, Xxxxxxxx Xxxxx Xxxxx, Xxxxx
0000, 0000 Xxxxxxxx Xxxxx, XxXxxx, XX 00000, Fax: (000) 000-0000, Attention:
Xxxx Xxxxxxx, with a copy to the Legal Department, Xxxxxx X. Xxxxx & Co.
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Fax:
(000)000-0000; and if to the Company shall be delivered, mailed or sent to Xxxxx
Spring Bancorp, Inc., 00000 Xxxxxxx Xxxxxx, Xxxxx, XX 00000, Attention: Xxxxxx
X. Xxxxxxxxxx, Esq., General Counsel.
[ Remainder of Page Intentionally Left
Blank ]
30
|
Very
truly yours,
|
|||
|
XXXXX
SPRING BANCORP, INC.
|
|||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxxx
|
||
|
Name:
|
Xxxxxx
X. Xxxxxxxxxx
|
||
|
Title:
|
General
Counsel
|
||
|
Accepted
as of the date hereof
|
|
|
XXXXXX
X. XXXXX & CO. INCORPORATED
|
|
|
XXXXXX
XXXXXXXXXX XXXXX LLC
|
|
|
Acting
severally on behalf of themselves and
|
|
|
the
several Underwriters named in
|
|
|
Schedule
I hereto
|
|
By:
|
Xxxxxx
X. Xxxxx & Co. Incorporated
|
|
|
/s/Xxxx X. Xxxxxxx
|
||
|
Name:
Xxxx X. Xxxxxxx
|
||
|
Title:
Managing Director
|
31
SCHEDULE I
|
Underwriter
|
Number of Firm Shares
To Be Purchased
|
Number of Additional
Shares
To Be Purchased
|
||||||
|
Xxxxxx
X. Xxxxx & Co. Incorporated
|
5,200,000
|
780,000
|
||||||
|
Xxxxxx
Xxxxxxxxxx Xxxxx LLC
|
1,300,000
|
195,000
|
||||||
|
Total:
|
6,500,000
|
975,000
|
||||||
SCHEDULE
II
Time
of Sale Prospectus
|
1.
|
Preliminary Prospectus, including
Preliminary Prospectus Supplement dated March 17, 2010 and Base
Prospectus dated February 19,
2009
|
|
2.
|
Issuer Free Writing Prospectus
filed with the Securities and Exchange Commission on March 17,
2010.
|
|
3.
|
Number of Shares to be Sold:
6,500,000
|
Offering
size: $87,750,000
Estimated
net proceeds to the Company (after underwriting discounts and commissions and
offering expenses): $83,087,500
Price per
share: $13.50
Underwriting
discount and commissions per share: $0.675
Trade
date: March 18, 2010
Closing
date: March 23, 2010
EXHIBIT
A
FORM
OF OPINION OF COMPANY’S GENERAL COUNSEL
TO
BE DELIVERED PURSUANT TO SECTION 5(c)
|
1.
|
The
Company is registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the “BHCA”), is validly existing as a
corporation in good standing under the laws of the State of Maryland, and
has the corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus and the
Prospectus.
|
|
2.
|
The
Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
|
|
3.
|
The
activities of the Company as described in the Registration Statement, Time
of Sale Prospectus and Prospectus are permitted of a bank holding company
under the BHCA and the Company has all necessary approvals of the Board of
Governors of the Federal Reserve System to own the capital stock of its
subsidiaries.
|
|
4.
|
The
Bank is validly existing as a state-chartered bank and is in good standing
under the laws of the State of Maryland. The Bank has the
corporate power to own, lease and operate its current properties and to
conduct its business as described in the Time of Sale Prospectus and the
Prospectus and has all banking power and authority to own, lease and
operate its properties and to conduct its business as described in the
Time of Sale Prospectus and the
Prospectus.
|
|
5.
|
The
Bank is an insured depositary institution under the Federal Deposit
Insurance Act, as amended, and the deposit accounts of the Bank are
insured up to applicable limits by the Federal Deposit Insurance
Corporation.
|
|
6.
|
Each
subsidiary of the Company (other than Xxxxx Spring Bank) is validly
existing as a corporation or limited liability company in good standing
under the laws of the jurisdiction of its organization, has the corporate
power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect.
|
|
7.
|
The
Company has an authorized capitalization as set forth in the Time of Sale
Prospectus and the Prospectus, and the authorized capital stock of the
Company conforms as to legal matters to the description thereof contained
in each of the Time of Sale Prospectus and the
Prospectus.
|
|
8.
|
The
shares of Common Stock outstanding prior to the issuance of the Shares to
be sold by the Company have been duly authorized and are validly issued,
fully paid and
non-assessable.
|
|
9.
|
All
of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or
claims.
|
|
10.
|
Neither
the execution and delivery by the Company of, nor the performance by the
Company of its obligations under, this Agreement will conflict with or
result in a breach or violation of, or constitute a default under, any
contract, agreement, obligation, covenant or instrument to which the
Company or any of its subsidiaries (or any of their respective assets) is
subject or bound, except for any such conflicts, breaches, violations or
defaults that would not, individually or in the aggregate, reasonably be
expected to result in a material adverse
effect.
|
After due inquiry, I do not know of any
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not so
described.
Nothing has come to my attention that
causes me to believe that the documents incorporated by reference in the
Prospectus (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which I express no
belief), when they were filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Nothing has come to my attention that
causes me to believe that (1) the Registration Statement or the prospectus
included therein (except for the financial statements and financial schedules
and other financial and statistical data included therein, as to which I express
no belief) at the time the Registration Statement became effective for purposes
of Section 11 of the Securities Act (as such section relates to the
Underwriters) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (2) the Time of Sale Prospectus (except for
the financial statements and financial schedules and other financial and
statistical data included therein, as to which I express no belief) as of the
Time of Sale or, as amended or supplemented, if applicable, as of the Closing
Date contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (3) the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data included therein,
as to which I express no belief) as of its date or, as amended or supplemented,
if applicable, as of the Closing Date contained or contains any untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
FORM
OF OPINION OF COMPANY’S COUNSEL TO BE DELIVERED PURSUANT TO
SECTION
5(C)
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1.
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The
Shares to be sold by the Company are duly authorized and, when issued and
delivered in accordance with the terms of the Underwriting Agreement, will
be validly issued, fully paid and
non-assessable.
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2.
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The
issuance of the Shares is not subject to any preemptive or similar rights
under the laws of the State of Maryland or the articles of incorporation
of the Company.
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3.
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The
Underwriting Agreement has been duly authorized, executed and delivered by
the Company.
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4.
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No
approval, authorization, consent or order of or filing with any federal or
state governmental authority, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including,
without limitation, the NASDAQ), or approval of the shareholders of the
Company, is required in connection with the issuance and sale of the
Shares or the consummation of the transactions contemplated hereby, other
than (i) registration of the Shares under the Securities Act, which has
been effected (or, with respect to any Rule 462 Registration Statement,
will be effected in accordance Rule 462(b) under the Securities Act), (ii)
any necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters, or (iii) under FINRA
Rules.
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5.
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Neither
the execution and delivery by the Company of, nor the performance by the
Company of its obligations under, the Underwriting Agreement will conflict
with, contravene, or result in any breach or violation of, or constitute a
default under (i) any statute or any rule, regulation or order of any
governmental body, regulatory or administrative agency or court having
jurisdiction over the Company; (ii) the articles of incorporation or
bylaws of the Company or (iii) any material contract or agreement to which
the Company or any of its subsidiaries (or any of their respective assets)
is subject or bound that is filed as an exhibit to any of the Incorporated
Documents pursuant to Item 601(b)(10) of Regulation S-K under the
Securities Act.
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6.
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The
statements relating to legal matters or documents included in (A) the Base
Prospectus under “Description of Common Stock,” “Plan of Distribution,”
and “Regulation and Supervision” and (B) the Time of Sale Prospectus and
the Prospectus under the caption “Description of Common Stock”, “Certain
United States Federal Income Tax Considerations for Non-U.S. Holders”, and
“Certain ERISA Considerations”, in each case fairly and accurately
summarize in all material respects such matters and
documents.
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7.
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The
Company is not, and after giving effect to the offering and sale of the
Shares and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an “investment company” as
such term is defined in the Investment Company Act of 1940, as
amended.
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8.
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We
do not know of any contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not described or filed
as required.
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9.
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(1)
each document filed pursuant to the Exchange Act and incorporated by
reference in the Registration Statement, the Time of Sale Prospectus and
the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to
which we express no opinion) appeared on its face to be appropriately
responsive as of its filing date in all material respects to the
requirements of the Exchange Act and the applicable rules and regulations
of the Commission thereunder and (2) the Registration Statement, the Time
of Sale Prospectus and the Prospectus (except for the financial statements
and financial schedules and other financial and statistical data included
therein, as to which we express no belief) appear on their face to be
appropriately responsive in all material respects to the requirements of
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
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10.
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Nothing
has come to our attention that causes us to believe that (1) the
Registration Statement or the prospectus included therein (except for the
financial statements and financial schedules and other financial and
statistical data included therein, as to which we express no belief) at
the time the Registration Statement became effective for purposes of
Section 11 of the Securities Act (as such section relates to the
Underwriters) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (2) the Time of Sale
Prospectus (except for the financial statements and financial schedules
and other financial and statistical data included therein, as to which we
express no belief) as of the Time of Sale or, as amended or supplemented,
if applicable, as of the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (3) the
Prospectus (except for the financial statements and financial schedules
and other financial and statistical data included therein, as to which we
express no belief) as of its date or, as amended or supplemented, if
applicable, as of the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
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EXHIBIT B
LOCK-UP
LETTER TO BE SIGNED BY OFFICERS AND DIRECTORS
March 17,
2010
XXXXXX X.
XXXXX & CO. INCORPORATED
as
Representative of the several Underwriters
to be
named in the Underwriting Agreement
c/o
Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx
Xxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxx 00000
Ladies
and Gentlemen:
The
undersigned understands that Xxxxxx X. Xxxxx & Co. Incorporated (“ Baird ”) and Xxxxxx Xxxxxxxxxx
Xxxxx LLC (the “ Managers ”) propose to enter
into an Underwriting Agreement (the “ Underwriting Agreement ”) with
Xxxxx Spring Bancorp, Inc., a Maryland corporation (the “ Company ”), providing for the
public offering (the “ Public
Offering ”) by the several Underwriters (the “ Underwriters ”), including the
Managers, of 6,500,000 shares (the “ Shares ”) of the Common Stock,
$1.00 par value per share, of the Company (the “ Common Stock ”).
To induce
the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees
that, without the prior written consent of Baird on behalf of the Underwriters,
it will not, during the period commencing on the date of the Underwriting
Agreement and ending 90 days after the date of the final prospectus relating to
the Public Offering (the “ Restricted Period ”), (1)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, (3) file any registration statement with the
Commission relating to the offering of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
(4) publicly announce an intention to effect any transaction specified in clause
(1), (2) or (3). The foregoing sentence shall not apply to (a)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering, provided that no filing under
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) shall be
required or shall be voluntarily made in connection with subsequent sales of
Common Stock or other securities acquired in such open market transactions, (b)
transfers of shares of Common Stock or any security convertible into Common
Stock as a bona fide gift, (c) transfers by will or intestate succession to the
undersigned’s family or to a trust, the beneficiaries of which are exclusively
the undersigned or members of the undersigned’s family, (d) distributions of
shares of Common Stock or any security convertible into Common Stock to limited
partners or stockholders of the undersigned , (e) shares of Common Stock pledged
in a bona fide transaction outstanding as of the date hereof to a lender to the
undersigned, as disclosed on the date hereof in writing to Baird, (f) transfers
pursuant to the exercise by the undersigned of stock options that have been
granted by the Company prior to, and are outstanding as of, the date of the
Underwriting Agreement, where the Common Stock received upon any such exercise
is held by the undersigned, individually or as fiduciary, in accordance with the
terms of this Lock-Up Agreement ; provided that in the case of
any transfer or distribution pursuant to clause (b), (c) or (d), (i) each donee
or distributee shall sign and deliver a lock-up letter substantially in the form
of this letter and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made during the restricted period referred
to in the foregoing sentence. In addition, the undersigned agrees
that, without the prior written consent of Baird on behalf of the Underwriters,
it will not, during the Restricted Period, make any demand for or exercise any
right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common
Stock. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the undersigned’s shares of Common Stock except in compliance
with the foregoing restrictions.
3
If:
(1) during
the last 17 days of the Restricted Period the Company issues an earnings release
or material news or a material event relating to the Company occurs;
or
(2) prior
to the expiration of the Restricted Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the restricted period;
then the
restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
The
undersigned understands that the Company and the Underwriters are relying upon
this agreement in proceeding toward consummation of the Public
Offering. The undersigned further understands that this agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives and assigns.
4
The
undersigned understands that, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Stock to be sold thereunder, the undersigned shall be
released from all obligations under this Lock-up
Agreement. Notwithstanding anything herein to the contrary, this
Lock-Up Agreement shall automatically terminate and be of no further effect as
of 5 p.m. Eastern Time on May 1, 2010 if a closing for the Public Offering of
the Shares has not yet occurred as of that time.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters. This Lock-up Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
[ Remainder of Page Intentionally Left
Blank ]
5
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Very
truly yours,
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(Name)
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(Address)
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6
