Rocky Shoes & Boots, Inc. Common Stock PURCHASE AGREEMENT
Exhibit 1
Execution Copy
Rocky Shoes & Boots, Inc.
Common Stock
May 3, 2006
XXXXX XXXXXXX & CO.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Bearing Inspection Holdings Inc. (the “Selling Shareholder”) proposes, subject to the terms
and conditions contained herein, to sell to Xxxxx Xxxxxxx & Co. (the “Underwriter”) an aggregate of
484,261 shares (the “Securities”) of Common Stock, no par value per share (the “Common Stock”), of
Rocky Shoes & Boots, Inc., an Ohio corporation (the “Company”).
The Company and the Selling Shareholder hereby confirm their agreement with respect to the
sale of the Securities to the Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a registration statement covering the
registration of the Securities on Form S-3 (File No. 333-133056) under the Securities Act of 1933,
as amended (the “Securities Act”) and the rules and regulations (the “Rules and Regulations”) of
the Commission thereunder, and such amendments to such registration statement as may have been
required to the date of this Agreement. Such registration statement has been declared effective by
the Commission. Such registration statement, at any given time, including amendments thereto to
such time, the exhibits and any schedules thereto at such time, the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act at such time and the
documents and information otherwise deemed to be a part thereof or included therein by Rule 430B
under the Securities Act or otherwise pursuant to the Rules and Regulations at such time, is herein
called the “Registration Statement.” Any registration statement filed by the Company pursuant to
Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement” and, from
and after the date and time of filing of the Rule 462(b) Registration Statement, the term
“Registration Statement” shall include the Rule 462(b) Registration Statement.
The Company proposes to file with the Commission pursuant to Rule 424 under the Securities Act
a final prospectus supplement relating to the Securities to a form of prospectus included in the
Registration Statement relating to the Securities in the form heretofore delivered to you. Such
prospectus in the form in which it appears in the Registration Statement and such supplemental form
of prospectus, in the form in which it shall be filed with the Commission pursuant to Rule 424(b)
is hereinafter called the “Prospectus.” Any preliminary form of Prospectus which is filed or used
prior to filing of the Prospectus is hereinafter called a “Preliminary Prospectus.” Any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities
Act as of the date of such prospectus.
For purposes of this Agreement, all references to the Registration Statement, the Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”). All references in this
Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or
the Prospectus
shall be deemed to mean and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and which is deemed to be
incorporated therein by reference therein or otherwise deemed by the Rules and Regulations to be a
part thereof.
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, the Underwriter as follows:
(i) No order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission and each Preliminary Prospectus, at the time of filing or the time
of first use within the meaning of the Rules and Regulations, complied in all material
respects with the requirements of the Securities Act and the Rules and Regulations and did
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, in the light of
the circumstances under which they were made, not misleading; except that the foregoing
shall not apply to statements in or omissions from any Preliminary Prospectus in reliance
upon, and in conformity with, written information furnished to the Company by you
specifically for use in the preparation thereof.
(ii) The Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company has complied to
the Commission’s satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such
purpose have been instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.
(iii) Each part of the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto, at the time such part became effective (including
each deemed effective date with respect to the Underwriter pursuant to Rule 430B under the
Securities Act), at all other subsequent times until the expiration of the Prospectus
Delivery Period (as defined below), and at the Closing Date, and the Prospectus (or any
amendment or supplement to the Prospectus), at the time of filing or the time of first use
within the meaning of the Rules and Regulations, at all subsequent times until expiration of
the Prospectus Delivery Period, and at the Closing Date complied and will comply in all
material respects with the applicable requirements and provisions of the Securities Act, the
Rules and Regulations and the Exchange Act and did not and 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. The Prospectus, as amended or
supplemented, as of its date, or the time of first use within the meaning of the Rules and
Regulations, at all subsequent times until the expiration of the Prospectus Delivery Period,
and at the Closing Date, did not and will not contain any untrue statement of a material
fact or omit 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. The
representations and warranties set forth in the two immediately preceding sentences do not
apply to statements in, or omissions from, the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in conformity with written
information relating to the Underwriter furnished to the Company by you specifically for use
in the preparation thereof.
(iv) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and the Statutory Prospectus, all considered together (collectively, the
“Time of Sale Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing
Prospectus, when considered together with the Time of Sale Disclosure Package, includes or
included as of the Time of Sale any untrue statement of a material fact or omits or omitted
as of
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the Time of Sale to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from any Statutory
Prospectus included in the Registration Statement or any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company by you
through you specifically for use therein. As used in this paragraph and elsewhere in this
Agreement:
(1)
“Time of Sale” means 4:00 pm (Eastern time) on the date of this Agreement.
(2) “Statutory Prospectus” as of any time means the Preliminary Prospectus that
is included in the Registration Statement immediately prior to that time. For
purposes of this definition, information contained in a form of prospectus that is
deemed retroactively to be a part of the Registration Statement pursuant to Rule
430B under the Securities Act shall be considered to be included in the Statutory
Prospectus as of the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) under the Securities Act.
(3) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act
because it contains a description of the Securities or of the offering that does not
reflect the final terms or pursuant to Rule 433(d)(8)(ii) under the Securities Act
because it is a “bona fide electronic road show” as defined in Rule 433 which is
made available by the Company without restriction, in each case in the form filed or
required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule 433(g) under the Securities
Act.
(4) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by it being specified in Schedule I to this Agreement.
(5) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus. The term Issuer
Limited-Use Free Writing Prospectus also includes any “bona fide electronic road
show,” as defined in Rule 433 under the Securities Act, that is made available
without restriction pursuant to Rule 433(d)(8)(ii) under the Securities Act even
though not required to be filed with the Commission.
(v) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the Prospectus Delivery Period or until any earlier date that the Company
notified or notifies the Underwriter as described in Section 4(a)(iii)(B), did not, does not
and will not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, any Statutory Prospectus or the
Prospectus. The foregoing sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by you specifically for use therein.
(B) (1) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the Securities Act) of the Securities and (2) at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act,
including the Company or any subsidiary in the preceding three years not having been
convicted of a felony or misdemeanor or having been made the subject of a judicial or
administrative decree or order as described in Rule 405 (without taking account of any
determination by the Commission pursuant
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to Rule 405 that it is not necessary that the Company be considered an ineligible issuer), nor an “excluded issuer” as defined in Rule 164
under the Securities Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions to use thereof
as set forth in Rules 164 and 433 under the Securities Act.
(vi) The financial statements of the Company, together with the related notes, set
forth or incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus comply in all material respects with the requirements
of the Securities Act and the Exchange Act and fairly present the financial condition of the
Company as of the dates indicated and the results of operations and changes in cash flows
for the periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement, the Time of Sale Disclosure Package and
Prospectus present fairly the information required to be stated therein. No other financial
statements, schedules or financial information are required to be included in the
Registration Statement, the Time of Sale Disclosure Package or the Prospectus. Deloitte &
Touche LLP, which has expressed its opinion with respect to the financial statements and
schedules filed as a part of the Registration Statement and included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus and with regard to the
Company’s internal control over financing reporting and management’s assessment thereof, is
(A) an independent public accounting firm within the meaning of the Securities Act and the
Rules and Regulations, (B) a registered public accounting firm (as defined in Section
2(a)(12) of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and (C) not in
violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act. Except as
disclosed in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, there are no material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), or any other relationships with unconsolidated entities
or other persons, that may have a material current or, to the Company’s knowledge, future
effect on the Company’s financial condition, results of operations, liquidity, capital
expenditures, capital resources or significant components of revenue or expenses.
(vii) Each of the Company and its subsidiaries has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of organization. Each of
the Company and its subsidiaries has full corporate power and authority to own its
properties and conduct its business as currently being carried on and as disclosed in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus, and is duly
qualified to do business and is in good standing as a foreign company in each jurisdiction
in which it owns or leases real property or in which the conduct of its business makes such
qualification necessary, except for those failures to be so qualified or to be in good
standing which would not have a material adverse effect upon the business, prospects,
properties, operations, condition (financial or otherwise) or results of operations of the
Company and its subsidiaries, taken as a whole (“Material Adverse Effect”).
(viii) Except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or warrants), or any material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to purchase the capital stock,
of the Company or any of its subsidiaries, or any material adverse change in the condition
(financial or otherwise), business, prospects, properties, operations or results of
operations of the Company and its subsidiaries, taken as
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a whole (“Material Adverse Change”)or any development involving a prospective Material Adverse Change.
(ix) Except as disclosed in the Time of Sale Disclosure Package and in the Prospectus,
there is not pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company is the subject before or brought by any court or
governmental agency, authority or body, or any arbitrator, which, individually or in the
aggregate, would reasonably be expected to result in any Material Adverse Change. There are
no actions, suits or proceedings to which the Company is a party or of which any property or
assets of the Company is the subject that are required to be disclosed in the Registration
Statement, Time of Sale Disclosure Package and Prospectus by the Securities Act or by the
Rules and Regulations that have not been so disclosed.
(x) There are no statutes, regulations, contracts or documents that are required to be
disclosed in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus or be filed as exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations that have not been so disclosed or filed.
(xi) This Agreement has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal and binding obligation of the Company, enforceable in
accordance with its terms, except as rights to indemnity hereunder may be limited by federal
or state securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and by general principles of equity. The execution, delivery and
performance of this Agreement and the consummation of the transactions herein contemplated
will not (A) result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, any agreement or
instrument to which the Company is a party or by which it is bound or to which any of its
property is subject, (B) result in any violation of the provisions of the Company’s charter
or by-laws, or (C) result in the violation of any law or statute, or any order, rule,
regulation, judgment or decree of any court, arbitrator or governmental agency or body
having jurisdiction over the Company or any of its properties. No consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, except such as may be required under
the Securities Act, the rules of the National Association of Securities Dealers, Inc. or
state securities or blue sky laws; and the Company has full power and authority to enter
into this Agreement.
(xii) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, are duly authorized and validly issued,
and are fully paid and nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase securities that have not been waived in writing
(a copy of which has been delivered to counsel to the Underwriter), and the holders thereof
are not subject to personal liability by reason of being such holders. The capital stock of
the Company, including the Common Stock, conforms to the description thereof in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus.
Except as otherwise disclosed in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument
to which the Company is a party or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or sale of the Securities as contemplated by this
Agreement gives rise to
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any rights for or relating to the registration of any shares of
Common Stock or other securities of the Company. All of the issued and outstanding shares
of capital stock of or other ownership interest of each of the Company’s subsidiaries have
been duly and validly authorized and issued and are fully paid and nonassessable, and,
except as otherwise disclosed in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus and except for any directors’ qualifying shares, the Company
owns of record and beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, (except in favor of (i) GMAC Commercial Finance
LLC, as agent for certain lenders under a Loan and Security Agreement dated as of January 6,
2005, as amended, restated, supplemented or otherwise modified from time to time, and (ii)
American Capital Financial Services, Inc., as agent for certain purchasers under a Note
Purchase Agreement dated as of January 6, 2005, as amended, restated, supplemented or
otherwise modified from time to time), all of the issued and outstanding shares of such
stock or ownership interests (other than qualifying shares). Except as disclosed in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus, there
are no options, warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company or any subsidiary of the Company any shares of the capital stock of
the Company or any subsidiary of the Company. The Company has authorized and outstanding
capitalization as set forth in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus.
(xiii) The Company and each of its subsidiaries holds, and is operating in compliance
in all material respects with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and orders are valid and in full
force and effect; and the Company and each of its subsidiaries is in compliance in all
material respects with all applicable federal, state, local and foreign laws, regulations,
orders and decrees.
(xiv) The Company and its subsidiaries have good and marketable title to all property
(whether real or personal) disclosed in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus as being owned by them, in each case free and clear
of all liens, claims, security interests, other encumbrances or defects except such as are
disclosed in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus. The property held under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.
(xv) The Company and each of its subsidiaries owns or possesses all patents, patent
applications, trademarks, service marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets and rights necessary for the
conduct of the business of the Company and its subsidiaries as currently carried on and as
disclosed in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus; except as stated in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, no name which the Company or any of its subsidiaries uses and
no other aspect of the business of the Company or any of its subsidiaries will involve or
give rise to any infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets or other similar rights of
others material to the business or prospects of the Company and neither the Company nor any
of its subsidiaries has received any notice alleging any such infringement or fee.
(xvi) Neither the Company nor any of its subsidiaries is (A) in violation of its
respective charter or by-laws or (B) in breach of or otherwise in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such a default in the
performance or observance of any material term, covenant, obligation, agreement or condition
contained in any
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bond, debenture, note, indenture, loan agreement, mortgage or any other
material contract, lease or other instrument to which it is subject or by which any of them
may be bound, or to which any of the material property or assets of the Company or any of
its subsidiaries is subject or (C) in violation in any material respect of any law or
statute or any order, rule, regulation, judgment or decree of any court or governmental
authority.
(xvii) The Company and its subsidiaries have timely filed all federal,
state, local and foreign income and franchise tax returns required to be filed or have
requested extensions thereof and are not in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect thereto, other than any
which the Company or any of its subsidiaries is contesting in good faith. There is no
pending dispute with any taxing authority relating to any of such returns and the Company
has no knowledge of any proposed liability for any tax to be imposed upon the properties or
assets of the Company for which there is not an adequate reserve reflected in the Company’s
financial statements included in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.
(xviii) The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities other than any
Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or other
materials permitted by the Securities Act to be distributed by the Company; provided,
however, that, except as set forth on Schedule I, the Company has not made and will
not make any offer relating to the Securities that would constitute a “free writing
prospectus” as defined in Rule 405 under the Securities Act, except in accordance with the
provisions of Section 4(a)(xiv) of this Agreement.
(xix) The Common Stock is registered pursuant to Section 12(g) of the Exchange Act and
is included or approved for inclusion on the Nasdaq National Market and the Company has
taken no action designed to, or likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq
National Market nor has the Company received any notification that the Commission or the
National Association of Securities Dealers, Inc. is contemplating terminating such
registration or listing. The Company has complied in all material respects with the
applicable requirements of the Nasdaq National Market for maintenance of inclusion of the
Common Stock thereon.
(xx) Other than the subsidiaries of the Company listed in Exhibit 21 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2005, the Company,
directly or indirectly, owns no capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust or other entity.
(xxi) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management’s general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as
disclosed in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, since the most recent audit of the effectiveness of the Company’s internal
control over financial reporting, (i) neither the board of directors of the Company nor the
audit committee of the board of directors of the Company has been informed of, or become
aware of, any significant deficiency or any material weakness in the design or operation of the
Company’s internal control over financial reporting (whether or not remediated), nor any
fraud, whether or not material, that involves management or other employees of the Company
or its subsidiaries and (ii) there has been no change in the Company’s internal control over
financial reporting that has
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materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting.
(xxii) The Company has not incurred any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xxiii) The Company carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of its business and the value of its properties
and as is customary for companies engaged in similar businesses in similar industries.
(xxiv) The Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxv) The conditions for use of Form S-3, set forth in the General Instructions
thereto, have been satisfied.
(xxvi) The documents incorporated by reference in the Time of Sale Disclosure Package
and in the Prospectus, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and were filed on a timely basis with the Commission and
none of such documents contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; any further documents so filed and incorporated
by reference in the Time of Sale Disclosure Package or in the Prospectus, when such
documents are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an 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.
(xxvii) The Company is and has been, and, to its knowledge, its officers and directors
are and have been, in compliance with all applicable provisions of the Xxxxxxxx-Xxxxx Act
and the rules and regulations of the Commission thereunder.
(xxviii) The Company has established and maintains disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the Company,
including its subsidiaries, is made known to the principal executive officer and the
principal financial officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus.
(b) The Selling Shareholder represents and warrants to, and agrees with, the Underwriter as
follows:
(i) The Selling Shareholder is the record and beneficial owner of, and has, and on the
Closing Date will have, valid and marketable title to the Securities to be sold by the
Selling Shareholder, free and clear of all security interests, claims, liens, restrictions
on transferability, legends, proxies, equities or other encumbrances; and upon delivery of
and payment for such Securities hereunder, the Underwriter will acquire valid and marketable
title thereto, free and clear of any security interests, claims, liens, restrictions on transferability, legends,
proxies, equities or other encumbrances. The Selling Shareholder is selling the Securities
for the Selling Shareholder’s own account and is not selling such Securities, directly or
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indirectly, for the benefit of the Company, and no part of the proceeds of such sale
received by the Selling Shareholder will inure, either directly or indirectly, to the
benefit of the Company other than as disclosed in the Registration Statement and Prospectus.
The certificate representing the Securities to be sold by the Selling Shareholder;
represents validly issued, outstanding, fully paid and nonassessable shares of Common Stock.
(ii) The Selling Shareholder has the power and authority to enter into this Agreement
and to sell, transfer and deliver the Securities to be sold by the Selling Shareholder.
(iii) This Agreement has been duly authorized, executed and delivered by the Selling
Shareholder and constitutes a valid and binding agreement of the Selling Shareholder,
enforceable in accordance with its terms, except as rights to indemnity hereunder or
thereunder may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors rights generally and by general
principles of equity. The execution and delivery of this Agreement and the performance of
the terms hereof and the consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument to which the Selling Shareholder is a party or by
which the Selling Shareholder is bound, or any law, regulation, order or decree applicable
to the Selling Shareholder, except for such breaches, violation or defaults as could not
reasonably be expected to have a Material Adverse Effect; no consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the sale of the Securities
being sold by the Selling Shareholder, except such as may be required under the Securities
Act or state securities laws or blue sky laws.
(iv) The Selling Shareholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, except as disclosed or
incorporated by reference in the Registration Statement (including the Registration Rights
Agreement, dated January 6, 2005, between the Company and the Selling Shareholder (the
“Registration Rights Agreement”)).
(v) The Selling Shareholder has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the Securities other
than any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or
other materials permitted by the Securities Act to be distributed by the Selling
Shareholder; provided, however, that, except as set forth on Schedule I, the Selling
Shareholder has not made nor will make any offer relating to the Securities that would
constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act
except a Permitted Free Writing Prospectus authorized by the Company and the Underwriter for
distribution in accordance with the provisions of Section 4(a)(xiv) hereof.
(vi) The Selling Shareholder has reviewed the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus and neither the Registration Statement, the Time of
Sale Disclosure Package nor the Prospectus contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary to make the
statements therein not misleading regarding the Selling Shareholder.
(c) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriter shall be deemed a representation and warranty by the Company to the Underwriter
as to the matters covered thereby; any certificate signed by the Selling Shareholder and delivered
to you or to counsel for the Underwriter shall be deemed a representation and warranty by the
Selling Shareholder to the Underwriter as to the matters covered thereby.
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3. Purchase, Sale and Delivery of Securities. On the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein set forth, the
Selling Shareholder agrees, to sell the Securities, to the Underwriter, and the Underwriter agrees,
to purchase from the Selling Shareholder the Securities. The purchase price for each Security
shall be $22.37 per share.
The Securities will be delivered by the Selling Shareholder to you for the account of the
Underwriter against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Selling Shareholder at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp
Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth)
full business day following the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the “Closing Date.” If the Underwriter so elects, delivery of the Securities
may be made by credit through full fast transfer to the accounts at The Depository Trust Company
designated by the Underwriter. Certificates representing the Securities, in definitive form and in
such denominations and registered in such names as you may request upon at least two business days’
prior notice to the Company and the Selling Shareholder, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day next preceding the Closing
Date at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis,
Minnesota, or such other location as may be mutually acceptable.
4. Covenants.
(a) The Company covenants and agrees with the Underwriter as follows:
(i) During the period beginning on the date hereof and ending on the later of the
Closing Date or such date, as in the opinion of counsel for the Underwriter, the Prospectus
is no longer required by law to be delivered (or in lieu thereof the notice referred to in
Rule 173(a) under the Securities Act is no longer required to be provided), in connection
with sales by an underwriter or dealer (the “Prospectus Delivery Period”), prior to amending
or supplementing the Registration Statement, including any Rule 462(b) Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, the Company shall furnish
to the Underwriter for review a copy of each such proposed amendment or supplement, and the
Company shall not file any such proposed amendment or supplement to which the Underwriter or
counsel to the Underwriter reasonably object.
(ii) After the date of this Agreement, the Company shall promptly advise the
Underwriter in writing (i) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (ii) of the time and date of any filing of
any post-effective amendment to the Registration Statement or any amendment or supplement to
any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus, (iii) of
the time and date that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment thereto or of
any order preventing or suspending its use or the use of any Preliminary Prospectus, the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, or of
any proceedings to remove, suspend or terminate from listing or quotation the Common Stock
from any securities exchange upon which it is listed for trading or included or designated
for quotation, or of the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any time, the Company will
use its best efforts to obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b),
430A and 430B, as applicable, under the Securities Act and will use its reasonable efforts to confirm
that any filings
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made by the Company under Rule 424(b), Rule 433 or Rule 462 were received
in a timely manner by the Commission (without reliance on Rule 424(b)(8) or Rule 164(b)).
(iii) (A) During the Prospectus Delivery Period, the Company will comply as far as it
is able with all requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force, and by the
Exchange Act so far as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof, the Time of Sale Disclosure Package and
the Prospectus. If during such period any event occurs as a result of which the Prospectus
(or if the Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) would include an 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
then existing, not misleading, or if during such period it is necessary or appropriate in
the opinion of the Company or its counsel or the Underwriter or counsel to the Underwriter
to amend the Registration Statement or supplement the Prospectus (or, if the Prospectus is
not yet available to prospective purchasers, the Time of Sale Disclosure Package) to comply
with the Securities Act or to file under the Exchange Act any document which would be deemed
to be incorporated by reference in the Prospectus in order to comply with the Securities Act
or the Exchange Act, the Company will promptly notify you and will amend the Registration
Statement or supplement the Prospectus (or, if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) or file such document (at the
expense of the Company) so as to correct such statement or omission or effect such
compliance.
(B) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company has promptly notified or will promptly notify
the Underwriter and has promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(C) If immediately prior to the third anniversary of the initial effective date of the
Registration Statement, any of the Securities remain unsold by the Underwriter, the Company
will prior to that third anniversary file, if it has not already done so, a new shelf
registration statement relating to the Securities, in a form satisfactory to the
Underwriter, will use its best efforts to cause such registration statement to be declared
effective within 180 days after that third anniversary, and will take all other action
necessary or appropriate to permit the public offering and sale of the Securities to
continue as contemplated in the expired registration statement relating to the Securities.
References herein to the Registration Statement shall include such new shelf registration
statement.
The Company shall take or cause to be taken all necessary action to qualify the Securities
for sale under the securities laws of such jurisdictions as you reasonably designate and to
continue such qualifications in effect so long as required for the distribution of the
Securities, except that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to execute a general consent to service of process in any state
or to subject itself to taxation in respect of doing business in any jurisdiction in which
it is not otherwise so subject.
(iv) The Company will furnish to the Underwriter and counsel for the Underwriter copies
of the Registration Statement (which will include three complete manually signed copies of
the Registration Statement and all consents and exhibits filed therewith), each Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
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Writing Prospectus, and all amendments and supplements to such documents, in each case
as soon as available and in such quantities as you may from time to time reasonably request.
(v) During a period of five years commencing with the date hereof, the Company will
furnish to the Underwriter copies of all periodic and special reports furnished to the
shareholders of the Company and all information, documents and reports filed with the
Commission, the National Association of Securities Dealers, Inc., the Nasdaq Stock Market or
any securities exchange except to the extent that such information, documents and reports
that are filed with the Commission electronically via XXXXX or any successor system.
(vi) The Company will make generally available to its security holders as soon as
practicable, but in any event not later than 15 months after the end of the Company’s
current fiscal quarter, an earnings statement (which need not be audited) covering a
12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Rules and Regulations.
(vii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriter of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants and counsel
but, except as otherwise provided below, not including fees of the Underwriter’s counsel or
the Selling Shareholder’s counsel and accountants) in connection with the preparation,
printing, filing, delivery, and shipping of the Registration Statement (including the
financial statements therein and all amendments, schedules, and exhibits thereto), the
Securities, any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus,
any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other underwriting documents, (C) the
fees and expenses of any transfer agent or registrar, (D) the filing fees and fees and
disbursements of Underwriter’s counsel incident to any required review and approval by the
National Association of Securities Dealers, Inc. of the terms of the sale of the Securities,
(E) listing fees, if any and (F) all other costs and expenses incident to the performance of
its obligations hereunder that are not otherwise specifically provided for herein. If this
Agreement is terminated by the Underwriter pursuant to Section 8 hereof or if the sale of
the Securities provided for herein is not consummated by reason of any failure, refusal or
inability on the part of the Company or the Selling Shareholder to perform any agreement on
its or their part to be performed, or because any other condition of the Underwriter’s
obligations hereunder required to be fulfilled by the Company or the Selling Shareholder is
not fulfilled, the Company will reimburse the Underwriter for all out-of-pocket
disbursements (including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges) incurred by the
Underwriter in connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder. As between the
Company and the Selling Shareholder, the provisions of this paragraph do not supersede the
provisions of the Registration Rights Agreement; however, the Registration Rights Agreement
shall not impact your reliance on this paragraph.
(viii) The Company will not, without your prior written consent, from the date of
execution of this Agreement and continuing to and including the date 90 days after the date
of the Prospectus (the “Lock-Up Period”) offer for sale; sell, contract to sell, pledge,
grant any option for the sale of, enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the Company or any
affiliate, or otherwise issue or dispose of, directly or indirectly (or publicly disclose
the intention to make any such offer, sale, pledge, grant, issuance or other disposition),
any Common Stock or any securities convertible into or exchangeable for, or any
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options or rights to purchase or acquire, Common Stock. The Company agrees not to
accelerate the vesting of any option or warrant or the lapse of any repurchase right prior
to the expiration of the Lock-Up Period. If (1) during the period that begins on the date
that is 18 calendar days before the last day of the Lock-Up Period and ends on the last day
of the Lock-Up Period, (a) the Company issues an earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs; or (2) prior
to the expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-Up Period, then the
restrictions in this Agreement, unless otherwise waived by you in writing, shall continue to
apply until the expiration of the date that is 18 calendar days after the date on which (a)
the Company issues the earnings release, (b) the Company publicly announces material news or
(c) a material event relating to the Company occurs. The Company will provide the
Underwriter and the Selling Shareholder with prior notice of any such announcement that
gives rise to the extension of the Lock-Up Period.
(ix) The Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(x) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xi) During the Prospectus Delivery Period, the Company will file on a timely basis
with the Commission such periodic and special reports as required by the Rules and
Regulations.
(xii) The Company and its subsidiaries will maintain such controls and other
procedures, including without limitation those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including without limitation,
controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure, to ensure that material information
relating to Company, including its subsidiaries, is made known to them by others within
those entities.
(xiii) The Company and its subsidiaries will comply with all effective applicable
provisions of the Xxxxxxxx-Xxxxx Act.
(xiv) The Company represents and agrees that, unless it obtains the prior written
consent of the Underwriter, and the Underwriter represents and agrees that, unless it
obtains the prior written consent of the Company, it has not made and will not make any
offer relating to the Securities that would constitute an “issuer free writing prospectus,”
as defined in Rule 433 under the Securities Act, or that would otherwise constitute a “free
writing prospectus,” as defined in Rule 405 under the Securities Act, required to be filed
with the Commission; provided that the prior written consent of the parties hereto shall be
deemed to have been given in respect of the free writing prospectuses included in
Schedule I. Any such free writing prospectus consented to by the Company and the
Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The
Company represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
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and has complied and will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where required,
legending and record keeping.
(b) The Selling Shareholder covenants and agrees with the Underwriter as follows:
(i) Except as otherwise agreed to by the Company and the Selling Shareholder pursuant
to the Registration Rights Agreement, a true and correct copy of which has been delivered to
counsel to the Underwriter, the Selling Shareholder will pay (A) all taxes, if any, on the
transfer and sale, respectively, of the Securities, (B) the fees of the Selling
Shareholder’s counsel and accountants, (C) all filing fees and fees and disbursements of the
Underwriter’s counsel incurred in connection with the qualification of the Securities for
offering and sale by the Underwriter or by dealers under the securities or blue sky laws of
the states, and (D) the out-of-pocket costs and expenses incurred by the Underwriter
relating to investor presentations on any “road show” undertaken in connection with the
marketing of the Securities; provided, however, that the Selling Shareholder agrees to
reimburse the Company for any reimbursement made by the Company to the Underwriter pursuant
to Section 4(a)(vii) hereof to the extent such reimbursement resulted from the failure or
refusal on the part of the Selling Shareholder to comply under the terms or resulting from
the breach of this Agreement or breach of any representation, warranty or covenant on the
part of the Selling Shareholder resulting in its failure to fulfill any of the conditions of
this Agreement. As between the Company and the Selling Shareholder, the provisions of this
paragraph do not supersede the provisions of the Registration Rights Agreement; however, the
Registration Rights Agreement shall not impact your reliance on this paragraph.
(ii) If this Agreement shall be terminated by the Underwriter because of any failure,
refusal or inability on the part of the Selling Shareholder to perform any agreement on the
Selling Shareholder’s part to be performed, or because any other condition of the
Underwriter’s obligations hereunder required to be fulfilled by the Selling Shareholder is
not fulfilled, the Selling Shareholder agrees to reimburse the Underwriter for all
out-of-pocket disbursements (including fees and disbursements of counsel for the
Underwriter) incurred by the Underwriter in connection with its investigation, preparing to
market and marketing the Securities or in contemplation of performing its obligations
hereunder.
(iii) The Securities to be sold by the Selling Shareholder, represented by the
certificate to be delivered by the Selling Shareholder to the Underwriter under Section 3,
are subject to the interest of the Underwriter and the obligations of the Selling
Shareholder hereunder shall not be terminated, except as provided in this Agreement, by any
act of the Selling Shareholder, by operation of law, whether by the liquidation, dissolution
or merger of the Selling Shareholder, or by the occurrence of any other event. If the
Selling Shareholder should liquidate, dissolve or be a party to a merger or if any other
such event should occur before the delivery of the Securities hereunder, the certificate for
the Securities shall be delivered by the Selling Shareholder or its successor or executor in
accordance with the terms and conditions of this Agreement as if such liquidation,
dissolution, merger or other event had not occurred.
(iv) The Selling Shareholder will not, without your prior written consent, during the
Lock-Up Period, offer for sale, sell, contract to sell, pledge, grant any option for the
sale of, enter into any transaction which is designed to, or might reasonably be expected
to, result in disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) or otherwise dispose of, directly or indirectly (or
publicly disclose the intention to make any such offer, sale, pledge, grant, or other
disposition), any Common Stock or any securities convertible into or exchangeable for, or
any options or rights to purchase or acquire, Common Stock, except to the Underwriter
pursuant to this Agreement. In addition, the Selling Shareholder agrees that, without the
prior written consent of the Underwriter, it will not, during the Lock-Up Period, make any
demand
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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 shares of Common
Stock. If (A) during the period that begins on the date that is 18 calendar days before the
last day of the Lock-Up Period and ends on the last day of the Lock-Up Period, (i) the
Company issues an earnings release, (ii) the Company publicly announces material news or
(iii) a material event relating to the Company occurs; or (B) prior to the expiration of the
Lock-Up Period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the Lock-Up Period, then the restrictions in this
Agreement, unless otherwise waived by you in writing, shall continue to apply until the
expiration of the date that is 18 calendar days after the date on which (X) the Company
issues the earnings release, (Y) the Company publicly announces material news or (Z) a
material event relating to the Company occurs.
The
restrictions on transfers of this clause (iv), however, will not apply to any shares of Common Stock acquired by the Selling Shareholder in the open market. In addition,
notwithstanding the foregoing, the Selling Shareholder may transfer shares of Common Stock
or securities convertible into or exchangeable or exercisable for any shares of Common Stock
to any corporation, business trust, association, limited liability company, partnership,
limited liability partnership, limited liability limited partnership or other entity which
is directly or indirectly controlled by, or is under common control with the Selling
Shareholder; provided, however, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is receiving
and holding such shares of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock subject to the provisions of this Agreement and
there shall be no further transfer of such Common Stock or securities convertible into or
exchangeable or exercisable for any shares of Common Stock except in accordance with this
Agreement.
(v) The Selling Shareholder has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(vi) The Selling Shareholder shall promptly notify you if the Selling Shareholder has
knowledge of any event, or of any change in information relating to the Selling Shareholder
or any new information relating to the Company or relating to any matter stated in the Time
of Sale Disclosure Package or in the Prospectus or any supplement thereto or any Issuer
General Free Writing Prospectus, which results in the Time of Sale Disclosure Package or in
the Prospectus (as amended or supplemented) or any Issuer General Free Writing Prospectus
including an untrue statement of a material fact or omitting to state any material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(vii) The Selling Shareholder shall deliver to the Underwriter prior to the Closing
Date, a properly completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in lieu thereof).
5. Conditions of Underwriter’s Obligations. The obligations of the Underwriter hereunder are
subject to the accuracy, as of the date hereof and at the Closing Date (as if made at the Closing
Date), of and compliance in all material respects with all representations, warranties and
agreements of the Company and the Selling Shareholder contained herein, to the performance by the
Company and the Selling Shareholder of their respective obligations hereunder and to the following
additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule
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424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no stop order
suspending the effectiveness of the Registration Statement or any part thereof, any Rule 462(b)
Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Time
of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been
issued; no proceedings for the issuance of such an order shall have been initiated or threatened;
any request of the Commission for additional information (to be included in the Registration
Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus
or otherwise) shall have been complied with to your satisfaction; and the National Association of
Securities Dealers, Inc. shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(b) The Underwriter shall not have advised the Company that the Registration Statement, the
Time of Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto,
or any Issuer Free Writing Prospectus, contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is required to be
stated therein or necessary to make the statements therein not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, neither the Company nor any of its subsidiaries shall have incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other rights to purchase
the capital stock of the Company or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising in the ordinary
course of business), or any loss by strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, incurred by the Company or any subsidiary, the effect of
which, in any such case described above, in your judgment, makes it impractical or inadvisable to
offer or deliver the Securities on the terms and in the manner contemplated in the Time of Sale
Disclosure Package and in the Prospectus.
(d) On the Closing Date, there shall have been furnished to you, as the Underwriter, the
opinion of Porter, Wright, Xxxxxx & Xxxxxx LLP, counsel for the Company, dated such Closing Date
and addressed to you, to the effect that:
(i) Each of the Company and the Company’s subsidiaries that have been organized under
the laws of Ohio or Delaware (the “Domestic Entities”) has been organized and is validly
existing and in good standing under the laws of its jurisdiction of organization. Each of
the Domestic Entities has full corporate power and authority to own its properties and
conduct its business as currently being carried on, as disclosed in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus, and is duly
qualified to do business and is in good standing as a foreign entity in each jurisdiction
listed on a schedule to this opinion. To such counsel’s knowledge, no governmental
authority of any jurisdiction in which any Domestic Entity is not so qualified and in good
standing has asserted that such Domestic Entity is required to be qualified as a foreign
entity in that jurisdiction.
(ii) The capital stock of the Company conforms as to legal matters to the description
thereof contained in the Time of Sale Disclosure Package and in the Prospectus under the
caption “Description of Capital Stock.” All of the issued and outstanding shares of the
capital stock of the Company have been duly authorized and validly issued and are fully paid
and nonassessable, and the holders thereof are not subject to personal liability by reason
of being such holders. There are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the
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voting or transfer of, any shares of Common Stock pursuant to the Company’s articles of
incorporation, code of regulations or any agreement or other instrument known to such
counsel to which the Company is a party or by which the Company is bound. To such counsel’s
knowledge, neither the filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company.
(iii) All of the issued and outstanding shares of capital stock or other ownership
interest of each of the Company’s subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, to such counsel’s knowledge, the Company
or a subsidiary of the Company owns of record and beneficially, free and clear of any
security interests, claims, liens, or other encumbrances (except in favor of (i) GMAC
Commercial Finance LLC, as agent for certain lenders under a Loan and Security Agreement
dated as of January 6, 2005, as amended, restated, supplemented or otherwise modified from
time to time, and (ii) American Capital Financial Services, Inc., as agent for certain
purchasers under a Note Purchase Agreement dated as of January 6, 2005, as amended,
restated, supplemented or otherwise modified from time to time), all of the issued and
outstanding shares of such stock or ownership interests (other than qualifying shares). To
such counsel’s knowledge, except as disclosed in the Registration Statement, in the Time of
Sale Disclosure Package and in the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company or any
subsidiary any shares of the capital stock or other ownership interest of the Company or any
subsidiary of the Company.
(iv) The Registration Statement has become effective under the Securities Act and, to
such counsel’s knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted or, to the
knowledge of such counsel, threatened by the Commission.
(v) The descriptions in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus of statutes, regulations, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the information required to be
shown; and such counsel does not know of any statutes, regulations, legal or governmental
proceedings or contracts or other documents required to be disclosed in the Time of Sale
Disclosure Package or in the Prospectus (or required to be filed under the Exchange Act if
upon such filing they would be incorporated in whole or in part, by reference therein) or
included as exhibits to the Registration Statement that are not disclosed or included as
required.
(vi) The Company has full corporate power and authority to enter into this Agreement,
and this Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid, legal and binding obligation of the Company enforceable in accordance
with its terms (except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors rights
generally and by general principles of equity); the execution, delivery and performance of
this Agreement and the consummation of the transactions herein contemplated will not result
in a breach or violation of any of the terms and provisions of, or constitute a default
under, any statute, rule or regulation, any agreement or instrument known to such counsel to
which the Company is a party or by which it is bound or to which any of its property is
subject, the Company’s articles of incorporation or code of regulations, or any order or
decree known to such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its respective properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, except such as may be required under
the Securities Act or state securities laws.
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(vii) The Registration Statement, the Statutory Prospectus included in the Time of Sale
Disclosure Package and the Prospectus, and any amendment thereof or supplement thereto,
comply, and as of their respective effective or issue dates (including without limitation
each deemed effective date with respect to the Underwriter pursuant to the Rules and
Regulations) complied, as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations; the conditions for use of Form S-3, set forth
in the General Instructions thereto, have been satisfied.
(viii) In connection with the sale of the Securities, such counsel has reviewed the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus and has
participated in conferences with officers and other representatives of the Company at which
the contents of such documents were discussed. The purpose of such counsel’s professional
engagement was not to establish or confirm factual matters set forth in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, and such counsel has not
undertaken any obligation to verify independently any of the factual matters set forth
therein. Moreover, many of the determinations required to be made in the preparation of the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus involve
matters of a non-legal nature. Subject to the foregoing, such counsel confirms to you that,
on the basis of the information gained in the course of performing the services referred to
above, taking into account opinions as to materiality of officers and other representatives
of the Company, nothing has come to the attention of such counsel that causes such counsel
to believe that (a) any part of the Registration Statement or any amendment thereof
(including any information omitted from the Registration Statement at the time it became
effective but that is deemed to be part of and included in the Registration Statement
pursuant to Rule 430B) when such part became effective (including each deemed effective date
with respect to the Underwriter pursuant to the Rules and Regulations) and as of the Closing
Date (including any 462(b) Registration Statement), contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or (b) that the
documents specified in a schedule to such counsel’s letter, consisting of those included in
the Time of Sale Disclosure Package as of the Time of Sale and as of the Closing Date,
included or includes any untrue statement of material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; or (c) that the Prospectus (as of its issue date and
as of the Closing Date) included or includes any untrue statement of material fact or
omitted or omits to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided, however, that
such counsel does not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement, the Time of Sale Disclosure
Package, or the Prospectus (except for the statements as to which such counsel expressed an
opinion in paragraphs (ii) and (v)), and such counsel does not express any belief with
respect to the financial statements, including the notes and schedules thereto,
or any other financial or statistical information or data derived therefrom, contained in
the Registration Statement, the Time of Sale Disclosure Package, or the Prospectus or
omitted therefrom.
(ix) Each document filed pursuant to the Exchange Act (other than the financial
statements and supporting schedules included therein, as to which no opinion need to be
rendered) and incorporated or deemed to be incorporated by reference in the Time of Sale
Disclosure Package or in the Prospectus complied when so filed as to form in all material
respects with the Exchange Act.
In rendering such opinion such counsel may rely (i) as to matters of law other than Ohio and
federal law, upon the opinion or opinions of local counsel; provided, that the extent of such
reliance is specified in such opinion and that such counsel shall state that such opinion or
opinions of local counsel are
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satisfactory to them and that they believe they and you are justified in relying thereon and (ii)
as to matters of fact, to the extent such counsel deems reasonable upon certificates of officers of
the Company and its subsidiaries provided that the extent of such reliance is specified in such
opinion.
(e) On the Closing Date, there shall have been furnished to the Underwriter the opinion of
Dechert, LLP, counsel for the Selling Shareholder, dated the Closing Date and addressed to the
Underwriter, to the effect that:
(i) Upon payment for the Securities to be sold by the Selling Shareholder and pursuant
to the Underwriting Agreement, delivery of the Securities, as directed by the Underwriter,
to Cede & Co. or such other nominee as may be designated by the Depository Trust Company
(“DTC”), registration of the Securities in the name of Cede & Co. or such other nominee and
the crediting of the Securities on the books of DTC to securities accounts of the
Underwriter (assuming that neither DTC nor the Underwriter has notice of any adverse claim
within the meaning of Section 8-105 of the New York Uniform Commercial Code (the “UCC”) to
the Securities), (A) DTC shall be a “protected purchaser” of the Securities within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the Underwriter
will acquire a security entitlement in respect of the Securities and (C) no action based on
any “adverse claim” (within the meaning of Section 8-102 of the UCC) to the Securities may
be asserted against the Underwriter with respect to such security entitlement.
(ii) The Selling Shareholder has the power and authority to enter into this Agreement
and to perform and discharge the Selling Shareholder’s obligations hereunder; and this
Agreement has been duly and validly authorized, executed and delivered by the Selling
Shareholder.
(iii) The execution and delivery of this Agreement and the performance of the terms
hereof and the consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a default under,
the agreements to which the Selling Shareholder is a party set forth on a schedule thereto,
the Selling Shareholder’s certificate of incorporation or bylaws, or any statute, rule
regulation, order or decree known to such counsel of any court or government agency or body
having jurisdiction over the Selling Shareholder or any of its respective properties; and no
consent, approval, authorization or order of, or filing with, any court or governmental
agency or body is required with respect to the Selling Shareholder for the execution,
delivery and performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the sale of the Securities being sold by the Selling
Shareholder, except such as may be required under the Securities Act or state securities
laws or blue sky laws.
In rendering such opinion such counsel may rely (i) as to matters of law other than the
Delaware General Corporation Law, the laws of the State of New York and federal law, upon the
opinion or opinions of local counsel; provided, that the extent of such reliance is specified in
such opinion and that such counsel shall state that such opinion or opinions of local counsel are
satisfactory to them and that they believe they and you are justified in relying thereon and (ii)
as to matters of fact, to the extent such counsel deems reasonable upon certificates of officers of
the Selling Shareholder provided that the extent of such reliance is specified in such opinion.
(f) On the Closing Date, there shall have been furnished to you, as the Underwriter, such
opinion or opinions from Faegre & Xxxxxx LLP, counsel for the Underwriter, dated the Closing Date
and addressed to you, with respect to the formation of the Company, the validity of the Securities,
the Registration Statement, the Time of Sale Disclosure Package, the Prospectus and other related
matters as you reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
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(g) On the Closing Date you, as the Underwriter, shall have received a letter of Deloitte &
Touche LLP, dated the Closing Date and addressed to you, confirming that they are independent
public accountants within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation
S-X of the Commission, and stating, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the Time of Sale Disclosure Package, as of a date not prior to the date
hereof or more than five days prior to the date of such letter), the conclusions and findings of
said firm with respect to the financial information and other matters covered by its letter
delivered to you concurrently with the execution of this Agreement, and the effect of the letter so
to be delivered on the Closing Date shall be to confirm the conclusions and findings set forth in
such prior letter subject to the confirmation comfort procedures of said firm.
(h) On the Closing Date, there shall have been furnished to you, as the Underwriter, a
certificate, dated the Closing Date and addressed to you, signed by the chief executive officer and
by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of the Closing Date, and the Company
has complied with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Time of Sale Disclosure Package and the
Prospectus), and
(A) each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus)
contain, and contained, when such part of the Registration Statement (or such
amendment) became effective, all statements and information required to be included
therein, each part of the Registration Statement, or any amendment thereof, does not
contain, and did not contain, when such part of the Registration Statement (or such
amendment) became effective, any untrue statement of a material fact or omit to
state, and did not omit to state when such part of the Registration Statement (or
such amendment) became effective, any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Prospectus, as
amended or supplemented, does not include and did not include as of its date, or the
Time of Sale, any untrue statement of a material fact or omit to state and did not
omit to state as of its date, or the Time of Sale, a material fact necessary to make
the statements therein, in light of the circumstances under which they were made,
(B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, include, nor included as of the Time of Sale any untrue
statement of a material fact or omits, or omitted as of the Time of Sale, to state
any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
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(C) since the Time of Sale, there has occurred no event required to be set
forth in an amended or supplemented prospectus which has not been so set forth, and
there has been no document required to be filed under the Exchange Act that upon
such filing would be deemed to be incorporated by reference into the Time of Sale
Disclosure Package or into the Prospectus that has not been so filed,
(D) subsequent to the respective dates as of which information is given in the
Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, except such
liabilities or obligations incurred in the ordinary course of business, or entered
into any material transactions, not in the ordinary course of business, or declared
or paid any dividends or made any distribution of any kind with respect to its
capital stock, and except as disclosed in the Time of Sale Disclosure Package and in
the Prospectus, there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of outstanding options or warrants), or any material change
in the short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of the
Company, or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising
in the ordinary course of business), or any loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, incurred by the
Company or any subsidiary, and
(E) except as stated in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of its
subsidiaries is a party before or by any court or governmental agency, authority or
body, or any arbitrator, which might result in any Material Adverse Change.
(i) On the Closing Date, there shall have been furnished to you, as the Underwriter, a
certificate or certificates, dated the Closing Date and addressed to you, signed by the Selling
Shareholder to the effect that the representations and warranties of the Selling Shareholder
contained in this Agreement are true and correct as if made at and as of the Closing Date, and that
the Selling Shareholder has complied with all the agreements and satisfied all the conditions to be
performed or satisfied at or prior to the Closing Date.
(j) The Company shall have furnished to you and counsel for the Underwriter such additional
documents, certificates and evidence as you or they may have reasonably requested.
(k) The Nasdaq National Market shall have approved the Securities for listing, subject only to
official notice of issuance.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance to you and counsel
for the Underwriter. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Underwriter against any losses,
claims, damages or liabilities to which the Underwriter may become subject, under the Securities
Act or otherwise (including in settlement of any litigation if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including the information
deemed to be a part of the Registration Statement at the time of effectiveness and at any
subsequent time pursuant to Rules 430A and 430B of the Rules and
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Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package,
the Prospectus, or any amendment or supplement thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus), any Issuer Free
Writing Prospectus or any “issuer information” filed or required to be filed by the Company
pursuant to Rule 433, or in any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the offering of the Common Stock
(“Marketing Materials”), including any roadshow or investor presentations made to investors by the
Company (whether in person or electronically), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the Underwriter for any legal or
other expenses reasonably incurred by it in connection with investigating or defending against such
loss, claim, damage, liability or action; or (ii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iii) in whole or in part upon
any failure of the Company to perform its obligations hereunder or under law; provided, however,
that the Company shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any such amendment or
supplement, any Issuer Free Writing Prospectus or in any Marketing Materials, in reliance upon and
in conformity with written information furnished to the Company by you or the Selling Shareholder,
specifically for use in the preparation thereof.
In addition to its other obligations under this Section 6(a), the Company agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(a), it will reimburse the Underwriter on a monthly basis for
all reasonable legal fees or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the Company’s obligation to
reimburse the Underwriter for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriter shall promptly
return the payment to the Company, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by U.S. Bank, National Association (the “Prime Rate”). Any
such interim reimbursement payments which are not made to the Underwriter within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of such request.
This indemnity agreement shall be in addition to any liabilities which the Company may otherwise
have.
(b) The Selling Shareholder agrees to indemnify and hold harmless the Underwriter against any
losses, claims, damages or liabilities to which the Underwriter may become subject, under the
Securities Act or otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Selling Shareholder), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto (including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus), any Issuer Free Writing Prospectus or Marketing
Materials, or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading; in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statements or omissions were included in reliance upon and in conformity with
written information relating to the Selling Shareholder furnished or confirmed to the Company by
the Selling Shareholder specifically for use in the preparation thereof, and will reimburse the
Underwriter for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action; or (ii) in whole
or in part upon any inaccuracy in the representations and warranties of the Selling Shareholder
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contained herein; or (iii) in whole or in part upon any failure of the Selling Shareholder to
perform its obligations hereunder or under law; provided, however, that in no event shall the
Selling Shareholder be liable under this Section 6(b) for any amount in excess of the aggregate
amount of proceeds the Selling Shareholder received from the sale of Securities pursuant to this
Agreement. This indemnity agreement shall be in addition to any liabilities which the Selling
Shareholder may otherwise have.
In addition to its other obligations under this Section 6(b), the Selling Shareholder agrees
that, as an interim measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 6(b), it will reimburse the Underwriter on a monthly basis
for all reasonable legal fees or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of the Selling
Shareholder’s obligation to reimburse the Underwriter for such expenses and the possibility that
such payments might later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been improper, the
Underwriter shall promptly return the payment to the Selling Shareholder, together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Underwriter within 30 days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.
(c) The Underwriter will indemnify and hold harmless the Company and the Selling Shareholder
against any losses, claims, damages or liabilities to which the Company and the Selling Shareholder
may become subject, under the Securities Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the Underwriter), insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company by you, specifically for use in the preparation thereof, and will
reimburse the Company and the Selling Shareholder for any legal or other expenses reasonably
incurred by the Company or the Selling Shareholder in connection with investigating or defending
against any such loss, claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsection (a), (b) or (c) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially prejudiced by such failure.
In case any such action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such indemnified party of the
indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, the indemnified party shall
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have the right to employ one separate counsel in any such action 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, in the good faith opinion of legal counsel to the indemnifying party or the
indemnified party, due to actual or potential differing interests between them, in which event the
reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to you as incurred (in accordance with the provisions of this Section 6).
The indemnifying party under this Section 6 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
against any loss, claim, damage, liability or expense 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 this Section 6, 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, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding and (b) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a), (b) or (c) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c) above, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Selling Shareholder
on the one hand and the Underwriter on the other from the offering of the Securities 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 Company and the Selling Shareholder on the one hand and the Underwriter
on the other 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 Selling Shareholder on the one hand and the Underwriter on the other shall
be deemed to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Selling Shareholder bear to the total underwriting discounts
and commissions received by the Underwriter, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company, the
Selling Shareholder or the Underwriter and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The Company,
the Selling Shareholder and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this subsection were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to
in the first sentence of this subsection. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of this subsection
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim which is the
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subject of this subsection. Notwithstanding the provisions of this subsection, the
Underwriter shall not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages that the 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.
(f) The obligations of the Company and the Selling Shareholder under this Section 6 shall be
in addition to any liability which the Company and the Selling Shareholder may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Securities Act; and the obligations of the Underwriter under
this Section 6 shall be in addition to any liability that the Underwriter may otherwise have and
shall extend, upon the same terms and conditions, to each director of the Company (including any
person who, with his consent, is named in the Registration Statement as about to become a director
of the Company), to each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company or the Selling Shareholder within the meaning of the
Securities Act.
(g) The Underwriter confirms and the Company and the Selling Shareholder acknowledges that the
statements with respect to the public offering of the Securities by the Underwriter set forth under
the heading “Underwriting” in the Time of Sale Disclosure Package and in the Prospectus are correct
and constitute the only information concerning the Underwriter furnished in writing to the Company
by or on behalf of the Underwriter specifically for inclusion in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company and the Selling Shareholder herein or in certificates delivered pursuant
hereto, including but not limited to the agreements of the Underwriter, the Company and the Selling
Shareholder contained in Section 6 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling persons, or the Selling
Shareholder or any controlling person thereof, and shall survive delivery of, and payment for, the
Securities to and by the Underwriter hereunder.
8. Termination of this Agreement.
(a) You, as the Underwriter, shall have the right to terminate this Agreement by giving notice
to the Company and the Selling Shareholder as hereinafter specified at any time at or prior to the
Closing Date if (i) the Company or the Selling Shareholder shall have failed, refused or been
unable, at or prior to the Closing Date, to perform any agreement on its or their part to be
performed hereunder, (ii) any condition of the Underwriter’s obligations hereunder is not
fulfilled, (iii) trading in the Company’s Common Stock shall have been suspended by the Commission
or the Nasdaq National Market or trading in securities generally on the Nasdaq National Market, New
York Stock Exchange or the American Stock Exchange shall have been suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the Nasdaq National Market, New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration by the United States of a national emergency
or war, any change in financial markets, any substantial change or development involving a
prospective substantial change in United States or international political, financial or economic
conditions, or any other calamity or crisis that, in your judgment, is material and adverse and
makes it impractical or inadvisable to proceed with the completion of the sale of and payment for
the Securities. Any such termination shall be without liability
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of any party to any other party except that the provisions of Section 4(a)(vii), Section
4(b)(ii) and Section 6 hereof shall at all times be effective and shall survive such termination.
(b) If you elect to terminate this Agreement as provided in this section, the Company and the
Selling Shareholder, shall be notified promptly by you by telephone, confirmed by letter.
9. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriter, shall be mailed, delivered or telecopied to Xxxxx Xxxxxxx &
Co., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: General
Counsel (telecopy no. 612-303-1772); if to the Company, shall be mailed, delivered or telecopied to
it at Rocky Shoes & Boots, Inc., 00 Xxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxx 00000, Attention: Chief
Executive Officer (telecopy no. 740-753-5523); if to the Selling Shareholder, shall be mailed,
delivered or telecopied to Bearing Inspection Holdings Inc. c/o SILLC Management, Inc., Raritan
Plaza 0, Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxx
(telecopy no. 732-512-4858), or in each case to such other address as the person to be notified may
have requested in writing. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for such purpose.
10. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision herein contained.
The term “successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Securities from the Underwriter.
11. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Underwriter have been retained solely to act as an underwriter in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the Company and the
Underwriter has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Underwriter has advised or is advising the Company on other matters;
(b) the price and other terms of the Securities set forth in this Agreement were established by the
Company following discussions and arms-length negotiations with the Underwriter and the Company is
capable of evaluating and understanding and understands and accepts the terms, risks and conditions
of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriter
and its affiliates are engaged in a broad range of transactions that may involve interests that
differ from those of the Company and that the Underwriter has no obligation to disclose such
interest and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; (d) it has been advised that the Underwriter is acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the Underwriter, and not on
behalf of the Company; and (e) it waives to the fullest extent permitted by law, any claims it may
have against the Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty in
respect of any of the transactions contemplated by this Agreement and agrees that the Underwriter
shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary
duty claim on behalf of or in right of the Company, including shareholders, employees or creditors
of the Company.
12. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
13. Consent to Jurisdiction. Any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the City and County of
New York or the courts of the State of New York in each case located in the City and County of New
York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any
such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts
in any such suit, action or
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proceeding. Service of any process, summons, notice or document by mail to such party’s
address set forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any such court that
any such suit, action or other proceeding brought in any such court has been brought in an
inconvenient forum.
14. Waiver of Immunity. With respect to any Related Proceeding, each party irrevocably
waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with
respect to any Related Judgment, each party waives any such immunity in the Specified Courts or any
other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
15. Counterparts. This Agreement may be executed by facsimile signature and in one or more
counterparts and, if executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original and all such counterparts shall together constitute one and the same
instrument.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon
this letter will become a binding agreement between the Company, the Selling Shareholder and the
Underwriter in accordance with its terms.
| Very truly yours, | ||||||
| Rocky Shoes & Boots, Inc. | ||||||
| By | /s/ Xxxxx X. XxXxxxxx | |||||
| Title | EVP & CFO | |||||
| Bearing Inspection Holdings Inc. | ||||||
| By | /s/ Xxxxx X. Xxxxxx | |||||
| Title | Vice President | |||||
Confirmed as of the date first
above mentioned.
above mentioned.
Xxxxx Xxxxxxx & Co.
By
/s/ Xxxx X. Xxxxxxx
Managing Director
Managing Director
SCHEDULE I
Issuer General Free Writing Prospectuses
None.
