Exhibit 1.1
DEALERTRACK HOLDINGS, INC.
___________ Shares of Common Stock, Par Value $0.01 Per Share
Underwriting Agreement
___________, 2005
Xxxxxx Brothers Inc.
As Representative of the
several Underwriters listed
in Schedule I hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DealerTrack Holdings, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representative (the
"Representative"), an aggregate of ___________ shares, and, at the option of the
Underwriters, to cover over-allotments, if any, up to an additional ___________
shares, of common stock, par value $0.01 per share (the "Stock"), of the
Company, and the stockholders of the Company listed in Schedule II hereto (the
"Selling Stockholders") propose to sell to the Underwriters an aggregate of
___________ shares of the Stock. The aggregate of ___________ shares of the
Stock to be sold by the Company and the Selling Stockholders is herein called
the "Underwritten Shares" and the aggregate of ___________ additional shares of
the Stock to be sold by the Company at the Underwriters' option, to cover
over-allotments, if any, is herein called the "Option Shares". The Underwritten
Shares and the Option Shares are herein referred to as the "Shares".
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement on Form S-1 (File
No. 333-126944), including a prospectus, relating to the Shares. Such
registration statement, as amended at the time it becomes effective, including
the information, if any, deemed pursuant to Rule 430A under the Securities Act
to be part of the registration statement at the time of its effectiveness ("Rule
430 Information"), is referred to
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herein as the "Registration Statement"; and as used herein, the term
"Preliminary Prospectus" means each prospectus that is included in such
registration statement (and any amendments thereto) before it becomes effective
and the prospectus included in the Registration Statement at the time of its
effectiveness that omits Rule 430 Information; and the term "most recent
Preliminary Prospectus" means the latest Preliminary Prospectus included in the
Registration Statement on or prior to the date hereof ; and the term
"Prospectus" means the prospectus in the form first used (or made available upon
request of purchasers pursuant to Rule 173 under the Securities Act) in
connection with confirmation of sales of the Shares and that is filed pursuant
to Rule 424(b) under the Securities Act. If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Registration Statement and the Prospectus.
At or prior to ____ [a.m.] [p.m.] (New York City time) on the date of this
Agreement (the "Applicable Time"), the Company prepared the following
information: (i) the most recent Preliminary Prospectus and (ii) "free writing
prospectuses" (as defined in Rule 405 under the Securities Act) prepared by or
on behalf of the Company or used or referred to by the Company in connection
with the offering of the Shares ("Issuer Free Writing Prospectus"), including
any Issuer Free Writing Prospectuses that were filed by the Company with the
Commission on or before the Applicable Time ("Filed Issuer Free Writing
Prospectuses"). In addition, you have informed us that the Underwriters have or
will orally provide the pricing information set out on Annex E to prospective
purchasers prior to confirming sales (the "Oral Pricing Information" and,
collectively with the most recent Preliminary Prospectus and each Filed Issuer
Free Writing Prospectus, the "Pricing Disclosure Package"). If, subsequent to
the date of this Agreement, the Company and the Underwriters have determined
that such Pricing Disclosure Package included an untrue statement of a material
fact or omitted a statement of material fact necessary to make the information
therein, in the light of the circumstances under which it was made, not
misleading and have agreed to provide an opportunity to purchasers of the Shares
to terminate their old purchase contracts and enter into new purchase contracts,
then "Pricing Disclosure Package" will refer to the information available to
purchasers at the time of entry into the first such new purchase contract.
2. Purchase of the Shares by the Underwriters. (a) The Company and each of
the Selling Stockholders agree, severally and not jointly, to sell the Shares to
the several Underwriters as provided in this Agreement, and each Underwriter, on
the basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from the Company and each of the Selling Stockholders at a purchase
price per share of $___________ (the "Purchase Price") the number of
Underwritten Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Underwritten Shares to be sold
by the Company and each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Underwritten Shares to be purchased by such Underwriter
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Underwritten Shares to be
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purchased by all the Underwriters from the Company and all the Selling
Stockholders hereunder. Notwithstanding any indication to the contrary in this
Agreement, none of the Shares to be sold by X.X. Xxxxxx Partners (23A SBIC),
L.P., or any affiliate of X.X. Xxxxxx Partners (23A SBIC), L.P., pursuant to
this Agreement will be sold to X.X. Xxxxxx Securities Inc. To the extent
necessary to give effect to the prior sentence, the parties to this Agreement
hereby agree that any allocation of Underwritten Shares to be sold by the
Selling Stockholders to the account of X.X. Xxxxxx Securities Inc. pursuant to
this Agreement shall consist entirely of Underwritten Shares owned by Selling
Stockholders other than X.X. Xxxxxx Partners (23A SBIC), L.P. or any affiliate
of X.X. Xxxxxx Partners (23A SBIC), L.P.
The public offering price of the Shares is not in excess of the price
recommended by Xxxxxxx Xxxxx & Company, L.L.C., acting as a "qualified
independent underwriter" within the meaning of Rule 2720 of the Rules of Conduct
of the National Association of Securities Dealers, Inc.
In addition, the Company agrees to sell the Option Shares to the several
Underwriters in accordance with the terms of this Agreement and such
Underwriters shall have the option to purchase at their election up to a maximum
of ___________ Option Shares, to cover over-allotments, if any, at the Purchase
Price. The Underwriters, on the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, shall have
the option to purchase, severally and not jointly, from the Company, to cover
over-allotments, if any, at the Purchase Price that portion of the number of
Option Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction the numerator of which is the maximum
number of Option Shares which such Underwriter is entitled to purchase and the
denominator of which is the maximum number of Option Shares which all of the
Underwriters are entitled to purchase hereunder.
The Underwriters may exercise the option to purchase the Option Shares at
any time and from time to time on or before the thirtieth day following the date
of this Agreement, by written notice from the Representative to the Company and
an Attorney-in-Fact (as defined below). Such notice shall set forth the
aggregate number of Option Shares as to which the option is being exercised and
the date and time when the Option Shares are to be delivered and paid for, which
may be the same date and time as the Closing Date (as hereinafter defined) but
shall not be earlier than the Closing Date nor later than the tenth full
business day (as hereinafter defined) after the date of such notice (unless such
time and date are postponed in accordance with the provisions of Section 11
hereof). Any such notice shall be given at least three Business Days prior to
the date and time of delivery specified therein, unless otherwise agreed by the
parties hereto.
(b) The Company and the Selling Stockholders understand that the
Underwriters intend to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Representative is
advisable, and initially to offer the Shares on the terms set forth in the most
recent Preliminary Prospectus and the Prospectus. The Company and the Selling
Stockholders acknowledge and agree that the Underwriters may offer and sell
Shares
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to or through any affiliate of an Underwriter and that any such affiliate may
offer and sell Shares purchased by it to or through any Underwriter.
Approximately ___________ Underwritten Shares ("Directed Shares") will
initially be reserved by the several Underwriters for offer and sale to
employees and persons, who have heretofore delivered to Xxxxxx Brothers Inc.
offers or indications of interest to purchase Directed Shares in form reasonably
satisfactory to Xxxxxx Brothers Inc., having business relationships with the
Company and its subsidiaries ("Directed Share Participants") upon the terms and
conditions set forth in the most recent Preliminary Prospectus and the
Prospectus (the "Directed Share Program") and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc., and any
allocation of such Directed Shares among such persons will be made in accordance
with timely directions received by Xxxxxx Brothers Inc. from the Company. Under
no circumstances will Xxxxxx Brothers Inc. or any Underwriter be liable to the
Company or to any Directed Share Participant for any action taken or omitted to
be taken in good faith in connection with such Directed Share Program. To the
extent that any Directed Shares are not affirmatively reconfirmed for purchase
by any Directed Share Participant on or immediately after the date of this
Agreement, such Directed Shares may be offered to the public as part of the
public offering contemplated hereby.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representative
with regard to payment to the Company and by the Attorneys-in-Fact (as defined
below), or any of them, to the Representative with regard to payment to the
Selling Stockholders, in the case of the Underwritten Shares, at the offices of
Xxxxx Xxxx & Xxxxxxxx at 10:00 A.M. New York City time on ___________, 2005, or
at such other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representative and the Company and an
Attorney-in-Fact may agree upon in writing or, in the case of the Option Shares,
on the date and at the time and place specified by the Representative in the
written notice of the Underwriters' election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares are referred to herein
as the "Closing Date" and any time and date for such payment for the Option
Shares, if other than the Closing Date, are herein referred to as an "Additional
Closing Date".
Payment for the Shares to be purchased on the Closing Date or an Additional
Closing Date, as the case may be, shall be made against delivery to the
Representative for the respective accounts of the several Underwriters of the
Shares to be purchased on such date in such form and registered in such names
and in such denominations as the Representative shall request in writing not
later than two full business days prior to the Closing Date or an Additional
Closing Date, as the case may be, with any transfer taxes payable in connection
with the sale of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. The certificates, if any, for the Shares will
be made available for inspection and packaging by the Representative at the
office of Xxxxxx Brothers Inc. set forth above not later than 1:00 P.M., New
York City time, on the business day prior to the Closing Date or an Additional
Closing Date, as the case may be.
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(d) Each of the Company and the Selling Stockholders acknowledges and
agrees that the Underwriters are acting solely in the capacity of an arm's
length contractual counterparty to the Company and the Selling Stockholders with
respect to the offering of Shares contemplated hereby (including in connection
with determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company, the Selling Stockholders or any other
person. Additionally, neither the Representative nor any other Underwriter is
advising the Company, the Selling Stockholders or any other person as to any
legal, tax, investment, accounting or regulatory matters in any jurisdiction.
The Company and the Selling Stockholders shall consult with their own advisors
concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby
and, unless and to the extent otherwise expressly set forth herein, the
Underwriters shall have no responsibility or liability to the Company or the
Selling Stockholders with respect thereto. Any review by the Underwriters of the
Company, the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Underwriters and
shall not be on behalf of the Company or the Selling Stockholders.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and the most
recent Preliminary Prospectus, at the time of filing thereof, complied in all
material respects with the Securities Act 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 in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representative expressly for use in the most recent
Preliminary Prospectus.
(b) Pricing Disclosure Package. The Pricing Disclosure Package, at the
Applicable Time did not, and as of the Closing Date and as of an Additional
Closing Date, as the case may be, will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representative expressly for use in the Pricing Disclosure Package.
(c) Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus
(including, without limitation, any "road show" that is a free writing
prospectus pursuant to Rule 433 under the Securities Act), when considered
together with the Pricing Disclosure Package at the Applicable Time, did not and
as of the Closing Date and as of an Additional Closing Date, as the case may be,
will not contain any untrue statement of a material fact or omit to state a
material
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fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each Issuer Free
Writing Prospectus conformed or will conform in all material respects to the
requirements of the Securities Act on the date of first use, and the Company has
complied with all prospectus delivery and any filing requirements applicable to
each Issuer Free Writing Prospectus pursuant to the Securities Act. The Company
has not made any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus without the prior written consent of the Representative;
it being understood that the Representative has consented to the pre-recorded
"road show" of the Company that appears on xxx.xxxxxxxxxxxxxx.xxx. The Company
has retained in accordance with the Securities Act all Issuer Free Writing
Prospectuses that were not required to be filed pursuant to the Securities Act.
The Company has taken all actions necessary so that any "road show" (as defined
in Rule 433 under the Securities Act) in connection with the offering of the
Shares will not be required to be filed pursuant to the Securities Act.
(d) Ineligible Issuer Status. The Company was not at the time of initial
filing of the Registration Statement and at the earliest time thereafter 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 Shares, is not on the
date hereof and will not be on the Closing Date or an Additional Closing Date,
as the case may be, an "ineligible issuer" (as defined in Rule 405 under the
Securities Act).
(e) Registration Statement and Prospectus. No order suspending the
effectiveness of the Registration Statement has been issued by the Commission
and no proceeding for that purpose or pursuant to Section 8A of the Securities
Act against the Company or related to the offering has been initiated or, to the
knowledge of the Company, threatened by the Commission; as of the applicable
effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with
the Securities 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 in order to make the statements therein not misleading; and as of the
applicable date of the Prospectus and any amendment or supplement thereto and as
of the Closing Date and as of an Additional Closing Date, as the case may be,
the Prospectus will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative expressly for
use in the Registration Statement and the Prospectus and any amendment or
supplement thereto.
(f) Financial Statements. The financial statements and the related notes
thereto included in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus comply in all respects with the applicable
requirements of the Securities Act and present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting
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principles applied on a consistent basis throughout the periods covered thereby,
and the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein; the other financial
information included in each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information
shown thereby; and the pro forma financial information and the related notes
thereto included in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus have been prepared in accordance with the applicable
requirements of the Securities Act, and the assumptions underlying such pro
forma financial information are reasonable and are set forth in each of the
Registration Statement, the Pricing Disclosure Package and the Prospectus, in
each case, in all material respects.
(g) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included in each of the Registration Statement, the
Pricing Disclosure Package and the Prospectus, (i) there has not been any
material change in the capital stock or long-term debt of the Company or any of
its subsidiaries, or any dividend or distribution of any kind declared, set
aside for payment, paid or made by the Company on any class of capital stock, or
any material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; (ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material to
the Company and its subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company and its
subsidiaries taken as a whole; and (iii) neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except with respect to each of the foregoing clauses, as disclosed in each of
the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(h) Organization and Good Standing. The Company and each of its significant
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect, or a prospective material adverse
effect, on the business, properties, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21.1 to the
Registration Statement.
(i) Capitalization. The Company has an authorized capitalization as set
forth in each of the Registration Statement, the Pricing Disclosure Package and
the Prospectus under the heading
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"Capitalization"; all the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been duly and
validly authorized and issued and are fully paid and non-assessable and are not
subject to any pre-emptive or similar rights; except as described in or
expressly contemplated by each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options; the capital stock of the Company
conforms in all material respects to the description thereof contained in each
of the Registration Statement, the Pricing Disclosure Package and the
Prospectus; and all the outstanding shares of capital stock or other equity
interests of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable (except, in the case of
any foreign subsidiary, for directors' qualifying shares) and are owned directly
or indirectly by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction on voting or transfer or any other claim of any
third party (collectively, "Liens"), except for Liens (i) pursuant to or
contemplated by that certain Credit Agreement dated as of April 15, 2005 among
DealerTrack, Inc., the Company, the lenders party thereto and JPMorgan Chase
Bank, N.A., as Administrative Agent and LC Issuing Bank (the "Credit Agreement")
or (ii) the foreclosure of which would not have a Material Adverse Effect.
(j) Due Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery by it of this Agreement and the consummation by it of the
transactions contemplated hereby has been duly and validly taken.
(k) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(l) The Shares. The Shares to be issued and sold by the Company hereunder
have been duly authorized by the Company and, when issued and delivered and paid
for as provided herein, will be duly and validly issued and will be fully paid
and nonassessable and will conform to the descriptions thereof in each of the
Registration Statement, the Pricing Disclosure Package and the Prospectus; and
the issuance of the Shares is not subject to any preemptive or similar rights.
(m) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its significant subsidiaries is a
party or by which the Company or any of its significant subsidiaries is bound or
to which any of the property or assets of the Company or any of its significant
subsidiaries is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the
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case of clauses (ii) and (iii) above, for any such default or violation that
would not, individually or in the aggregate, have a Material Adverse Effect.
(n) No Conflicts. The execution, delivery and performance by the Company of
this Agreement and the issuance and sale of the Shares to be sold by the Company
hereunder will not (i) conflict with or 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 or any of its significant subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its significant subsidiaries is a
party or by which the Company or any of its significant subsidiaries is bound or
to which any of the property or assets of the Company or any of its significant
subsidiaries is subject, (ii) result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the Company or any of
its significant subsidiaries or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority applicable to the Company or any of its
significant subsidiaries, except, in the case of clauses (i) and (iii) above,
for any such conflicts, breaches, violations, defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement.
(o) No Consents Required. No consent, approval, authorization, order,
registration or qualification (collectively, "Consents") of or with any court or
arbitrator or governmental or regulatory authority is required for the
execution, delivery and performance by the Company of this Agreement and the
issuance and sale of the Shares to be sold by the Company hereunder, except for
(i) the registration of the Shares under the Securities Act, (ii) such Consents
as may be required under applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters, and (iii) such
Consents as would not, individually or in the aggregate, materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement.
(p) Legal Proceedings. Except as described in each of the Registration
Statement, the Pricing Disclosure Package and the Prospectus, there are no
legal, governmental or regulatory investigations, actions, suits or proceedings
pending to which the Company or any of its significant subsidiaries is or may be
a party or to which any property of the Company or any of its significant
subsidiaries is or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its significant subsidiaries,
could reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement; to the best knowledge of the Company, no such investigations,
actions, suits or proceedings are threatened or contemplated by any governmental
or regulatory authority or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement,
the Pricing Disclosure package or the Prospectus that are not so described in
the Registration Statement, the Pricing Disclosure Package and the Prospectus
and (ii) there are no statutes, regulations or contracts or other documents that
are required under the Securities Act to be filed as exhibits to the
Registration
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Statement or described in the Registration Statement, the Pricing Disclosure
package or the Prospectus that are not so filed as exhibits to the Registration
Statement or described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
(q) Independent Accountants. PricewaterhouseCoopers LLP, who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants with respect to the Company and its subsidiaries
as required by the Securities Act. KPMG LLP, who have certified certain
financial statements of Chrome Systems, Inc., were independent public
accountants with respect to Chrome Systems, Inc. at the time of such
certification, as required by the Securities Act.
(r) Title to Real and Personal Property. The Company and its significant
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real and personal property that
are material to the respective businesses of the Company and its significant
subsidiaries, in each case free and clear of all liens (other than liens
pursuant to or contemplated by the Credit Agreement), encumbrances, claims and
defects and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and its significant subsidiaries or (ii) could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
(s) Title to Intellectual Property. The Company and its significant
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses as presently conducted; and the conduct of their
respective businesses as presently conducted will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others, in each case, except as disclosed in each of the
Registration Statement, the Pricing Disclosure Package and the Prospectus.
(t) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement, the Pricing Disclosure Package or
the Prospectus and that is not so described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
(u) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, will not be required to register as an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Investment Company Act").
11
(v) Public Utility Holding Company Act. Neither the Company nor any of its
subsidiaries is a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" thereof within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(w) Taxes. The Company and its subsidiaries have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed
through the date hereof; and except as disclosed in each of the Registration
Statement, the Pricing Disclosure Package and the Prospectus, there is no tax
deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries or any of their respective
properties or assets, in each case, except as would not have a Material Adverse
Effect.
(x) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Registration Statement, the
Pricing Disclosure Package and the Prospectus, except where the failure to
possess or make the same would not, individually or in the aggregate, have a
Material Adverse Effect; and except as described in each of the Registration
Statement, the Pricing Disclosure Package and the Prospectus or would not have a
Material Adverse Effect, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course.
(y) No Labor Disputes. No material labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company, is contemplated or threatened.
(z) Compliance With Environmental Laws. The Company and its subsidiaries
(i) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as would not, individually
or in the aggregate, have a Material Adverse Effect.
(aa) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for
12
employees or former employees of the Company and its affiliates has been
maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and
the Internal Revenue Code of 1986, as amended (the "Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the
Code, has occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan that
is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code
has been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions, except, in each case, as
would not have a Material Adverse Effect.
(bb) Accounting Controls. The Company and its subsidiaries maintain systems
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) Insurance. Except as disclosed in each of the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company and its
significant subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, including business interruption insurance,
which insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company and its significant subsidiaries and their
respective businesses; and neither the Company nor any of its significant
subsidiaries has (i) received notice from any insurer or agent of such insurer
that capital improvements or other expenditures are required or necessary to be
made in order to continue such insurance or (ii) any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business.
(dd) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(ee) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or
13
is subject, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's properties or assets to the Company or any other
subsidiary of the Company, other than any prohibition pursuant to or
contemplated by the Credit Agreement.
(ff) No Broker's Fees. Neither the Company nor any of its subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the offering and sale of the Shares.
(gg) No Registration Rights. Except as disclosed in each of the
Registration Statement, the Pricing Disclosure Package and the Prospectus, no
person has the right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issuance and
sale of the Shares to be sold by the Company hereunder or, to the best knowledge
of the Company, the sale of the Shares to be sold by the Selling Stockholders
hereunder.
(hh) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares in violation of
any state or federal laws.
(ii) Business With Cuba. The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida) relating to
doing business with the Government of Cuba or with any person or affiliate
located in Cuba.
(jj) Margin Rules. Neither the issuance, sale and delivery of the Shares
nor the application of the proceeds thereof by the Company as described in each
of the Registration Statement, the Pricing Disclosure Package and the Prospectus
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
(kk) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act")), contained in the
Registration Statement, the Pricing Disclosure Package or the Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(ll) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus is not based on or derived from sources
that are reliable and accurate in all material respects.
14
(mm) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of
the Company or any of the Company's directors or officers, in their capacities
as such, to comply with Section 402, related to loans, of the Xxxxxxxx-Xxxxx Act
of 2002 (the "Xxxxxxxx-Xxxxx Act").
(nn) No NASD Affiliation. Except as described in each of the Registration
Statement, the Pricing Disclosure Package and the Prospectus, no officer,
director, nominee for director or 5% or greater stockholder of the Company or
Selling Stockholder has a direct or indirect affiliation or association with any
member of the National Association of Securities Dealers, Inc.
(oo) Directed Share Program. Each of the Registration Statement, the
Pricing Disclosure Package, the Prospectus and the most recent Preliminary
Prospectus comply, and any amendments or supplements thereto will comply, with
any applicable laws or regulations of jurisdictions in which the Pricing
Disclosure Package, the Prospectus or the most recent Preliminary Prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
Directed Share Program; no consent, approval, authorization, order or
qualification of or with any court or governmental or regulatory authority is
required in connection with the offering of the Directed Shares in any
jurisdiction where the Directed Shares are being offered, except, in each of the
foregoing cases, as would not, individually or in the aggregate, (A) materially
and adversely affect the ability of the Company to perform its obligations under
this Agreement or (B) have a Material Adverse Effect; the Company has not
offered, or caused Xxxxxx Brothers Inc. to offer, Shares to any person pursuant
to the Directed Share Program with the specific intent to unlawfully influence
(i) a customer or supplier of the Company to alter the customer's or supplier's
level or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its
products.
The Company has not distributed and, prior to the later to occur of the
Closing Date or an Additional Closing Date, as the case may be, and completion
of the distribution of the Shares, will not distribute any offering materials in
connection with the offering and sale of the Shares other than the Pricing
Disclosure Package and the Prospectus and, in connection with the Directed Share
Program, the enrollment materials prepared by Xxxxxx Brothers Inc.
(pp) Exchange Listing. The Shares have been approved for quotation on the
National Association of Securities Dealers Automated Quotations National Market
(the "Nasdaq National Market").
4. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders, severally and not jointly, represents and warrants to each
Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations
and orders necessary for the execution and delivery by such Selling Stockholder
of this Agreement and the Power of Attorney (the "Power of Attorney") and the
Custody Agreement (the "Custody Agreement") hereinafter referred to, and for the
sale and delivery of the Underwritten Shares to be sold by such Selling
Stockholder hereunder, have been obtained, except as may be required under
applicable state securities laws in connection with the purchase and
distribution of the
15
Underwritten Shares by the Underwriters and except for any such consents,
approvals, authorizations or orders the failure of which to obtain would not,
individually or in the aggregate, materially and adversely affect the ability of
such Selling Stockholder to perform its obligations under this Agreement; and
such Selling Stockholder has full right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody Agreement and to sell, assign,
transfer and deliver the Underwritten Shares to be sold by such Selling
Stockholder hereunder; this Agreement, the Power of Attorney and the Custody
Agreement have each been duly authorized, executed and delivered by such Selling
Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Selling
Stockholder of this Agreement, the Power of Attorney and the Custody Agreement
and the sale of the Underwritten Shares to be sold by such Selling Stockholder
will not (i) conflict with or 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
such Selling Stockholder pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject, (ii)
result in any violation of the provisions of the charter or by-laws or similar
organizational documents of such Selling Stockholder or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory agency applicable to such
Selling Stockholder, except, in the case of clauses (i) and (iii) above, for any
such conflicts, breaches, violations, defaults, liens, charges or encumbrances
as would not, individually or in the aggregate, materially and adversely affect
the ability of such Selling Stockholder to perform its obligations under this
Agreement.
(c) Title to Shares. Such Selling Stockholder has valid title to the
Underwritten Shares to be sold at the Closing Date, by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or adverse
claims; such Selling Stockholder will have, immediately prior to the Closing
Date, valid title to the Underwritten Shares to be sold at the Closing Date, by
such Selling Stockholder, free and clear of all liens, encumbrances, equities or
adverse claims; and, upon delivery of the certificates representing such
Underwritten Shares and payment therefor pursuant hereto, valid title to such
Underwritten Shares, free and clear of all liens, encumbrances, equities or
adverse claims, will pass to the several Underwriters.
(d) No Stabilization. Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Shares in violation of any state or federal laws.
(e) Registration Statement, Pricing Disclosure Package, Prospectus and
Issuer Free Writing Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement 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 in order to
make the statements therein not misleading; as of the Applicable Time and as of
the Closing Date, the Pricing Disclosure Package did not and will not contain
any untrue statement of a
16
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; as of the applicable
date of the Prospectus and any amendment or supplement thereto and as of the
Closing Date, the Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and as of the Applicable Time, to the
knowledge of such Selling Stockholder, each Issuer Free Writing Prospectus
(including, without limitation, any "road show" that is a free writing
prospectus under Rule 433), when considered together with the Pricing Disclosure
Package, did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the representations and warranties set
forth in this Section 4(e) are limited to (i) statements made in reliance upon
and in conformity with information relating to such Selling Stockholder
furnished to the Company in writing by such Selling Stockholder expressly for
use in the Registration Statement, the Pricing Disclosure Package, the
Prospectus, each Issuer Free Writing Prospectus or any amendments or supplements
thereto (it being understood and agreed that the only such information furnished
by such Selling Stockholder to the Company consists of the information
specifically relating to such Selling Stockholder set forth in the table and
notes thereto under the caption "Principal and Selling Stockholders" in the most
recent Preliminary Prospectus and the Prospectus) and (ii) omissions relating
specifically to such Selling Stockholder.
(f) Material Information. As of the date hereof and as of the Closing Date,
the sale of the Underwritten Shares by such Selling Stockholder is not and will
not be prompted by any material information concerning the Company (i) which is
not set forth in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus and (ii) the failure of which to be set forth in each
of the Registration Statement, the Pricing Disclosure Package and the Prospectus
constitutes a violation of any federal securities laws.
Each of the Selling Stockholders represents and warrants that certificates
in negotiable form representing all of the Underwritten Shares to be sold by
such Selling Stockholders hereunder have been placed in custody under a Custody
Agreement relating to such Underwritten Shares, in the form heretofore furnished
to you, duly executed and delivered by such Selling Stockholder to Wachovia
Bank, National Association, as custodian (the "Custodian"), and that such
Selling Stockholder has duly executed and delivered Powers of Attorney, in the
form heretofore furnished to you, appointing the person or persons specified
therein, and each of them, as such Selling Stockholder's Attorneys-in-Fact (the
"Attorneys-in-Fact" or any one of them the "Attorney-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Stockholders as provided herein, to authorize the delivery of the Underwritten
Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement.
17
Each of the Selling Stockholders specifically agrees that the Underwritten
Shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement, are subject to the interests of the
Underwriters hereunder, and that the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder of
the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable.
Each of the Selling Stockholders specifically agrees that the obligations of
such Selling Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder, or, in
the case of an estate or trust, by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or in the case of a
partnership, corporation or similar organization, by the dissolution of such
partnership, corporation or organization, or by the occurrence of any other
event. If any individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust should be
terminated, or if any such partnership, corporation or similar organization
should be dissolved, or if any other such event should occur, before the
delivery of the Underwritten Shares hereunder, certificates representing such
Underwritten Shares shall be delivered by or on behalf of such Selling
Stockholder in accordance with the terms and conditions of this Agreement and
the Custody Agreement, and actions taken by the Attorneys-in-Fact pursuant to
the Powers of Attorney shall be as valid as if such death, incapacity,
termination, dissolution or other event had not occurred, regardless of whether
or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other event.
5. Further Agreements of the Company. The Company covenants and agrees with
each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will use all
commercially reasonable efforts to cause the Registration Statement to become
effective at the earliest possible time and will file (i) the final Prospectus
with the Commission within the time periods specified by Rule 424(b) and Rule
430A under the Securities Act, and (ii) any Issuer Free Writing Prospectus to
the extent required by Rule 433 under the Securities Act; and the Company will
furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the
extent not previously delivered) to the Underwriters in New York City on the
business day next succeeding the date of this Agreement in such quantities as
the Representative may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge (i) upon
request, to the Representative, two signed copies of the Registration Statement
as originally filed and each amendment thereto, in each case including all
exhibits and consents filed therewith; and (ii) to each Underwriter, upon
request, (A) a conformed copy of the Registration Statement as originally filed
and each amendment thereto (without exhibits) and (B) subject to Section 5(e)
below, during the Prospectus Delivery Period, as many copies of the Prospectus
(including all amendments and supplements thereto) and each Issuer Free Writing
Prospectus as the Representative may reasonably request. As used herein, the
term "Prospectus Delivery Period" means such period of time after the first date
of the public offering of the Shares as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to be
18
delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before
preparing, using, authorizing, approving, referring to or filing any Issuer Free
Writing Prospectus, and before filing any amendment or supplement to the
Registration Statement or the Prospectus, the Company will furnish to the
Representative and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not
prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the
Representative reasonably objects promptly after receipt thereof. The Company
shall not make any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus without the prior written consent of the Representative.
(d) Notice to the Representative. The Company will advise the
Representative promptly, and confirm such advice in writing upon request, (i)
when the Registration Statement has become effective; (ii) when any amendment to
the Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any Issuer Free Writing Prospectus or any
amendment to the Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from the Commission
relating to the Registration Statement or any other request by the Commission
for any additional information; (v) of the issuance by the Commission of any
order suspending the effectiveness of the Registration Statement or preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose or pursuant to
Section 8A of the Securities Act; (vi) of the occurrence of any event within the
Prospectus Delivery Period as a result of which the Prospectus, the Pricing
Disclosure Package or any Issuer Free Writing Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances existing when the
Prospectus, the Pricing Disclosure Package or any such Issuer Free Writing
Prospectus is delivered to a purchaser, not misleading; and (vii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use all
commercially reasonable efforts to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification of the Shares and, if any such order is issued, will use
all commercially reasonable efforts to obtain as soon as practicable the
withdrawal thereof.
(e) Ongoing Compliance. If (1) during the Prospectus Delivery Period (i)
any event shall occur or condition shall exist as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading or (ii)
19
if in the written advice of counsel to the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law, the Company
will immediately notify the Underwriters thereof and forthwith prepare and,
subject to paragraph (c) above, file with the Commission and furnish to the
Underwriters and to such dealers as the Representative may designate, such
amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with applicable
law, (2) at any time prior to the Closing Date (i) any event shall occur or
condition shall exist as a result of which the Pricing Disclosure Package as
then amended or supplemented would include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances, not
misleading or (ii) if in the written advice of counsel to the Underwriters, it
is necessary to amend or supplement the Pricing Disclosure Package to comply
with applicable law, the Company will immediately notify the Underwriters
thereof and forthwith prepare and, subject to paragraph (c) above, file with the
Commission (to the extent required) and furnish to the Underwriters and to such
dealers as the Representative may designate, such amendments or supplements to
the Pricing Disclosure Package as may be necessary so that the statements in the
Pricing Disclosure Package as so amended or supplemented will not, in the light
of the circumstances, be misleading or so that the Pricing Disclosure Package
will comply with applicable law, or (3) at any time after the date hereof any
events shall have occurred as a result of which any Issuer Free Writing
Prospectus, as then amended or supplemented, would conflict with the information
in the Registration Statement, the most recent Preliminary Prospectus or the
Prospectus, the Company will immediately notify the Underwriters thereof and
forthwith prepare and, subject to paragraph (c) above, file with the Commission
(to the extent required) and furnish to the Underwriters and to such dealers as
the Representative may designate, such amendments or supplements to such Issuer
Free Writing Prospectus that will correct such conflict; provided that the
preparation, filing and furnishing of any such amendments or supplements on or
prior to the date that is nine months after the first date of the public
offering of the Shares shall be at the expense of the Company and shall
thereafter be at the expense of the Underwriters.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualifications in
effect so long as required for distribution of the Shares; provided that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representative as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement.
20
(h) Clear Market. For a period of 180 days after the date of this
Agreement, without the prior written consent of the Representative, the Company
will not (i) offer, pledge, announce the intention to sell, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of the Stock or any securities
convertible into or exercisable or exchangeable for the Stock or (ii) enter into
any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of the Stock
or such other securities, in cash or otherwise, without the prior written
consent of the Representative, other than (A) the Shares to be sold hereunder,
(B) any shares of Common Stock issued upon the exercise of options granted under
existing employee stock option plans, (C) grants by the Company of employee
stock options or restricted stock in accordance with the terms of a plan in
effect on the date hereof, (D) the filing by the Company of any registration
statement with the Commission on Form S-8 relating to the offering of securities
pursuant to the terms of a plan in effect on the date hereof and (E) shares of
Common Stock (or options, warrants or convertible securities in respect thereof)
issued in connection with a bona fide merger or acquisition transaction,
provided that the Common Stock (or options, warrants or convertible securities
in respect thereof) so issued is subject to the terms of a duplicate form of the
"lock-up agreement" set forth in Exhibit D hereto. Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period, the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (2) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the restrictions
imposed by this Section 5(h) shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Shares as described in each of the Registration Statement, the Pricing
Disclosure Package and the Prospectus under the heading "Use of Proceeds".
(j) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(k) Exchange Listing. The Company will use all commercially reasonable
efforts to list for quotation the Shares on the Nasdaq National Market.
(l) Reports. To the extent not available on the Commission's XXXXX system,
for a period of two years from the date hereof, the Company will furnish to the
Representative, as soon as they are available, copies of all reports or other
communications (financial or other) furnished to holders of the Shares, and
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or automatic quotation system.
21
(m) Record Retention. The Company will retain in accordance with the
Securities Act all Issuer Free Writing Prospectuses not required to be filed
pursuant to the Securities Act.
(n) Filings. The Company will file with the Commission such reports as may
be required by Rule 463 under the Securities Act.
(o) Restriction of Directed Shares. In connection with the Directed Share
Program, the Company will ensure that the Directed Shares will be restricted to
the extent required by the National Association of Securities Dealers, Inc. or
the rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of 180 days (in the case of Directed Share
Participants who are insiders, employees, directors or executive officers of the
Company, or an immediate family member of any of the foregoing persons) or 90
days (in the case of all other Directed Share Participants) following the date
of this Agreement, and Xxxxxx Brothers Inc. will notify the Company as to which
Directed Share Participants will need to be so restricted. At the request of
Xxxxxx Brothers Inc., the Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(p) Directed Shares Compliance. The Company will comply in all material
respects with all applicable securities and other applicable laws, rules and
regulations in each jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
6. Further Agreements of the Selling Stockholders. Each of the Selling
Stockholders covenants and agrees with each Underwriter that:
(a) Clear Market. For a period of 180 days after the date of this
Agreement, without the prior written consent of the Representative, such Selling
Stockholder will not (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of the Stock or any
securities convertible into or exercisable or exchangeable for the Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of the Stock or such other securities, in cash or otherwise or (iii) make any
demand for or exercise any right with respect to the registration of any shares
of the Stock or any security convertible into or exercisable or exchangeable for
the Stock without the prior written consent of the Representative in each case
other than (A) Underwritten Shares to be sold by such Selling Stockholder
hereunder, (B) transactions relating to shares of Common Stock acquired in open
market transactions after the Closing Date, (C) transfers of shares of Common
Stock as a bona fide gift, provided that (x) the Common Stock so transferred is
subject to the terms of a duplicate form of the "lock-up agreement" set forth in
Exhibit D hereto and (y) no party, including such Selling Stockholder, shall be
required to, nor shall it voluntarily, file a report under Section 16(a) of the
Exchange Act in connection with such transfer (other than a filing on Form 5
made after the expiration of the 180-day restricted period referred to above),
(D) dispositions to any trust for the direct or indirect benefit of such Selling
Stockholder and/or the immediate family members of such Selling Stockholder,
provided that (x) the Common Stock so disposed of is subject to the
22
terms of a duplicate form of the "lock-up agreement" set forth in Exhibit D
hereto and (y) no party, including such Selling Stockholder, shall be required
to, nor shall it voluntarily, file a report under Section 16(a) of the Exchange
Act in connection with such disposition (other than a filing on Form 5 made
after the expiration of the 180-day restricted period referred to above), (E)
pledges to any financial institution as collateral and foreclosures of such
pledges, provided that the Common Stock so pledged is subject to the terms of a
duplicate form of the "lock-up agreement" set forth in Exhibit D hereto or (F)
transfers by such Selling Stockholder to its affiliates, provided that the
Common Stock so transferred is subject to the terms of a duplicate form of the
"lock-up agreement" set forth in Exhibit D hereto. Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period, the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (2) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 180-day period, the restrictions
imposed by this Section 6(a) shall continue to apply with respect to each
Selling Stockholder (with the exception of X.X. Xxxxxx Partners (23A SBIC),
L.P.) until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. Any
discretionary release, waiver or termination by the Representative of the
provisions set forth in this Section 6(a) or in any "lock-up agreement"
substantially in the form of Annex D hereto shall be applied to all persons
subject to such provisions (including the Selling Stockholders) pro rata based
on the number of shares of Common Stock held by such persons.
The restrictions set forth in this Section 6(a) shall lapse and become null
and void if (i) the registration statement filed with the Commission with
respect to the offering of the Shares is withdrawn prior to the effectiveness of
this Agreement, (ii) the Company notifies the Representative, prior to the
effectiveness of this Agreement, that it does not intend to proceed with the
offering of the Shares, or (iii) this Agreement (other than the provisions
hereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares to be sold hereunder.
(b) Tax Form. It will deliver to the Representative prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated.
(c) Free Writing Prospectus. No Selling Stockholder nor any person acting
on behalf of such Selling Stockholder (other than, if applicable, the Company
and the Underwriters) shall use or refer to any "free writing prospectus" (as
defined in Rule 405 under the Securities Act), relating to the Shares, other
than any Filed Issuer Free Writing Prospectus.
7. Certain Agreements of the Underwriters. Each Underwriter severally
represents and agrees that:
23
(a) It has not and will not use, authorize use of, refer to, or participate
in the planning for use of, any "free writing prospectus", as defined in Rule
405 under the Securities Act (which term includes use of any written information
furnished to the Commission by the Company and not incorporated by reference
into the Registration Statement and any press release issued by the Company)
other than (i) any Filed Issuer Free Writing Prospectus or any Issuer Free
Writing Prospectus prepared pursuant to Section 5(c) above, or (ii) any free
writing prospectus prepared by such underwriter and consented to by the Company
in advance, including any such free writing prospectus that is consented to by
the Company in advance that contains "issuer information" (as defined in Rule
433(h)(2) under the Securities Act) that was not included (including through
incorporation by reference) in the most Preliminary Prospectus or a previously
filed Issuer Free Writing Prospectus (each such free writing prospectus referred
to in clause (ii), an "Underwriter Free Writing Prospectus," and any such
"issuer information" referred to in cause (ii) with respect to whose use the
Company has given its consent, "Permitted Issuer Information").
(b) It will retain copies of each free writing prospectus used or referred
to by it to the extent required by Rule 433 under the Securities Act.
8. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on an Additional Closing Date, as the case may be, as provided
herein is subject to the performance by, with respect to the Closing Date or the
Additional Closing Date, as the case may be, the Company and, with respect to
the Closing Date only, each of the Selling Stockholders of their respective
covenants and other obligations hereunder and to the following additional
conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement (or
if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective, and
the Representative shall have received notice thereof, not later than 5:00 P.M.,
New York City time, on the date hereof; no order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceeding for such
purpose or pursuant to Section 8A under the Securities Act shall be pending
before or threatened by the Commission; the Prospectus and each Issuer Free
Writing Prospectus shall have been timely filed with the Commission under the
Securities Act (in the case of an Issuer Free Writing Prospectus, only to the
extent required by Rule 433 under the Securities Act) and in accordance with
Section 5(a) hereof.
(b) Representations and Warranties. The respective representations and
warranties of the Company and the Selling Stockholders contained herein shall be
true and correct on the date hereof and on and as of the Closing Date or an
Additional Closing Date, as the case may be; and the statements of the Company
and its officers and of each of the Selling Stockholders made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date or an Additional Closing Date, as the case may be.
(c) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement, no event or condition of a type described in Section 3(f) hereof
shall have occurred
24
or shall exist, which event or condition is not described in each of the Pricing
Disclosure Package (excluding any amendment or supplement thereto) and the
Prospectus (excluding any amendment or supplement thereto) and the effect of
which in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or an Additional Closing Date, as the case may be, on the terms and
in the manner contemplated by this Agreement, the Pricing Disclosure Package and
the Prospectus.
(d) Officer's Certificate of the Company and the Selling Stockholders. The
Representative shall have received on and as of the Closing Date or an
Additional Closing Date, as the case may be, a certificate (i) of the chief
financial officer or chief accounting officer of the Company and one additional
senior executive officer of the Company who is satisfactory to the
Representative (A) confirming that such officers have carefully reviewed each of
the Registration Statement, the Pricing Disclosure Package and the Prospectus
and, to the best knowledge of such officers, the representations of the Company
set forth in Section 3(b), 3(c) and 3(d) hereof are true and correct, (B)
confirming that the other representations and warranties of the Company in this
Agreement are true and correct and that the Company has complied in all material
respects with all agreements and satisfied in all material respects all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date or Additional Closing Date, as the case may be, and (C) to the
effect set forth in paragraphs (a) and (c) above and (ii) from each Selling
Stockholder, in form and substance reasonably satisfactory to the
Representative, (A) confirming that the representation of such Selling
Stockholder set forth in Section 4(e) hereof is true and correct and (B)
confirming that the other representations and warranties of such Selling
Stockholder in this Agreement are true and correct and that such Selling
Stockholder has complied in all material respects with all agreements and
satisfied in all material respects all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date.
(e) Comfort Letters. On the date of this Agreement and on the Closing Date
or an Additional Closing Date, as the case may be, each of
PricewaterhouseCoopers LLP and KPMG LLP shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Underwriters, in form and
substance reasonably satisfactory to the Representative, (i) 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
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) containing other statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus; provided, that the letters
delivered on the Closing Date or an Additional Closing Date, as the case may be,
shall use a "cut-off" date no more than three business days prior to such
Closing Date or such Additional Closing Date, as the case may be. With respect
to the letters of PricewaterhouseCoopers LLP and KPMG LLP delivered to the
Representative on the Closing Date or an Additional Closing Date, as the case
may be, such letters shall confirm in all material respects the conclusions and
findings of such firm with respect to the financial statements, financial
information and other matters covered by the letter of such firm dated and
delivered the date of this Agreement.
25
(f) Opinion of Xxxxxx & Xxxxxxx LLP. Xxxxxx & Xxxxxxx LLP, outside counsel
for the Company, shall have furnished to the Representative, at the request of
the Company, (i) its written opinions, dated the Closing Date or an Additional
Closing Date, as the case may be, and addressed to the Underwriters, in the
forms attached as Annexes A-I and A-II hereto, and (ii) its disclosure letter,
dated the Closing Date or an Additional Closing Date, as the case may be, and
addressed to the Underwriters, in the form attached as Annex A-III hereto.
(g) Opinion of Xxxxxx Xxxx, LLP. Xxxxxx Xxxx, LLP, outside counsel for the
Company, shall have furnished to the Representative, at the request of the
Company, its written opinion, dated the Closing Date or an Additional Closing
Date, as the case may be, and addressed to the Underwriters, in the form
attached as Annex B hereto.
(h) Opinion of Xxxx Xxxxxx, Esq. Xxxx Xxxxxx, Esq., General Counsel of the
Company, shall have furnished to the Representative, at the request of the
Company, his written opinion, dated the Closing Date or an Additional Closing
Date, as the case may be, and addressed to the Underwriters, in the form
attached as Annex C hereto.
(i) Opinion of Counsel for the Selling Stockholders. Each of O'Melveny &
Xxxxx LLP (counsel for X.X. Xxxxxx Partners (23A SBIC), L.P.), J. Xxxxxxx Xxx,
Esq. (counsel for ACF Investment Corp.), Xxxx X. Xxxxxxxxx, Esq. (counsel for
Xxxxx Fargo Small Business Investment Company, Inc.), Xxxx Xxxxxxxxx, Esq.
(counsel for Xxxxx Fargo Financial, Inc.), Xxxxx X. Xxxxxx, Esq. (counsel for
ADP, Inc.), Seed Xxxxxxx LLP (counsel for DJR US, LLC), Xxxxxx & Xxxxxxx LLP
(counsel, with respect to certain limited matters, for Xxxxx Xxxxxx) and
Xxxxxxxxx Xxxxxxxx, Esq. (counsel for Xxxxx Xxxxxx), each counsel for a Selling
Stockholder, shall have furnished to the Representative, at the request of such
Selling Stockholder, its written opinion, dated the Closing Date and addressed
to the Underwriters, in form and substance reasonably satisfactory to counsel
for the Underwriters.
(j) Opinion of Counsel for the Underwriters. The Representative shall have
received on and as of the Closing Date or an Additional Closing Date, as the
case may be, an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
with respect to such matters as the Representative may reasonably request, and
such counsel shall have received such documents and information as it may
reasonably request to enable them to pass upon such matters.
(k) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date or an Additional Closing Date, as the case may be,
prevent the issuance or sale of the Shares; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date or an Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(l) Good Standing. The Representative shall have received on and as of the
Closing Date or an Additional Closing Date, as the case may be, satisfactory
evidence of the good standing of the Company and its significant subsidiaries in
their respective jurisdictions of organization and their good standing as
foreign entities in such other jurisdictions as the
26
Representative may reasonably request, in each case in writing or any standard
form of telecommunication from the appropriate governmental authorities of such
jurisdictions.
(m) Exchange Listing. The Shares to be delivered on the Closing Date or an
Additional Closing Date, as the case may be, shall have been approved for
quotation on the Nasdaq National Market.
(n) Lock-up Agreements. The "lock-up" agreements between you and certain
shareholders, optionholders, officers and directors of the Company, each
substantially in the form of Annex D hereto, and between you and Directed Share
Participants, relating to sales and certain other dispositions of shares of the
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date or an Additional
Closing Date, as the case may be.
(o) Additional Documents. On or prior to the Closing Date or, with respect
to the Company, an Additional Closing Date, as the case may be, the Company and
the Selling Stockholders shall have furnished to the Representative such further
certificates and documents as the Representative may reasonably request and that
are customarily delivered in connection with transactions of the type
contemplated by this Agreement.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters in accordance with the terms of this Agreement.
9. Indemnification and Contribution.
(a) Indemnification of the Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities (including,
without limitation, reasonable legal fees and other reasonable expenses incurred
in connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in (A) the Registration Statement, the most recent Preliminary
Prospectus, the Prospectus or in any amendment or supplement thereto, (B) any
Issuer Free Writing Prospectus or in any amendment or supplement thereto or (C)
any Permitted Issuer Information used or referred to in any "free writing
prospectus" (as defined in Rule 405 under the Securities Act) by any
Underwriter, or (ii) the omission or alleged omission to state therein any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case except insofar as such losses, claims,
damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the
27
Representative expressly for use therein, it being understood and agreed that
the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below.
The Company also agrees to indemnify and hold harmless Xxxxxxx Xxxxx &
Company, L.L.C. ("Xxxxxxx Xxxxx"), its affiliates, directors and officers and
each person, if any, who controls Xxxxxxx Xxxxx within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities incurred as a result of Xxxxxxx
Xxxxx'x participation as a "qualified independent underwriter", within the
meaning of the Rules of Conduct of the National Association of Securities
Dealers, Inc., in connection with the offering of the Shares.
The Company also agrees to indemnify and hold harmless Xxxxxx Brothers
Inc., its affiliates, directors and officers and each person, if any, who
controls Xxxxxx Brothers Inc. within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, reasonable legal
fees and other reasonable expenses incurred in connection with any suit, action
or proceeding or any claim asserted, as such fees and expenses are incurred),
joint or several, that (i) arise out of, or are based upon, any untrue statement
or alleged untrue statement of a material fact contained in any material
prepared by or with the approval of the Company for distribution to Directed
Share Participants in connection with the Directed Share Program, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (ii)
arise out of, or are based upon, the failure of the Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program.
(b) Indemnification of the Underwriters by the Selling Stockholders. Each
of the Selling Stockholders, severally and not jointly, in proportion to the
number of Underwritten Shares to be sold by such Selling Stockholder, hereunder
agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
reasonable expenses incurred in connection with any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the most recent Preliminary Prospectus, the Prospectus, any Issuer
Free Writing Prospectus or in any amendment or supplement thereto or in any
Permitted Issuer Information or any "free writing prospectus" (as defined in
Rule 405 under the Securities Act) prepared by or on behalf of such Selling
Stockholder or used or referred to by such Selling Stockholder in connection
with the offering of the Shares in violation of Section 6(c) hereof (a "Selling
Stockholder Free Writing Prospectus"), (ii) the omission or alleged omission to
state in the Registration Statement, the most recent Preliminary Prospectus, the
Prospectus or in any amendment or supplement thereto or in any Permitted Issuer
Information or any Selling Stockholder Free Writing Prospectus any
28
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; provided that the indemnity agreement of such Selling Stockholder
set forth in this paragraph 9(b) shall be limited (other than in respect of any
Selling Stockholder Free Writing Prospectus) to such statements or omissions
that are made in reliance upon and in conformity with information relating to
such Selling Stockholder furnished to the Company in writing by such Selling
Stockholder expressly for use in the Registration Statement, the most recent
Preliminary Prospectus or in the Prospectus, any Issuer Free Writing Prospectus
or in any amendment or supplement thereto or in any Permitted Issuer Information
(it being understood and agreed that the only such information furnished by such
Selling Stockholder to the Company consists of the information specifically
relating to such Selling Stockholder set forth in the table and notes thereto
under the caption "Principal and Selling Stockholders" in the most recent
Preliminary Prospectus and the Prospectus). The aggregate liability of each such
Selling Stockholder under the indemnity agreement contained in this paragraph
9(b) and the contribution agreement contained in paragraph 9(e) shall be limited
in an amount equal to the aggregate net proceeds of the Underwritten Shares sold
by such Selling Stockholder under this Agreement.
(c) Indemnification of the Company and the Selling Stockholders. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who signed the Registration Statement
and each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each of the
Selling Stockholders, its respective affiliates, directors and officers and each
person, if any, who controls such Selling Stockholder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in the first paragraph of Section 9(a) above,
but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use in the
Registration Statement, the most recent Preliminary Prospectus, the Prospectus
or in any amendment or supplement thereto, any Issuer Free Writing Prospectus or
in any amendment or supplement thereto, it being understood and agreed upon that
the only such information furnished by any Underwriter consists of the following
information furnished on behalf of each Underwriter: the concession and
reallowance figures appearing in the ___________ paragraph under the caption
"Underwriting" in the Prospectus and the information contained in the
___________ paragraphs under the caption "Underwriting" in each of the most
recent Preliminary Prospectus and the Prospectus.
(d) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to the preceding paragraphs of this Section 9, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 9 except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided,
29
further, that the failure to notify the Indemnifying Person shall not relieve it
from any liability that it may have to an Indemnified Person otherwise than
under this Section 9. If any such proceeding shall be brought or asserted
against an Indemnified Person and it shall have notified the Indemnifying Person
thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person and any others
entitled to indemnification pursuant to this Section 9 that the Indemnifying
Person may designate in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to one local counsel in each applicable jurisdiction) for all
Indemnified Persons, and that all such fees and expenses shall be paid or
reimbursed as they are incurred; provided, however that if indemnity may be
sought pursuant to the second paragraph of Section 9(a) above in respect of such
proceeding, then in addition to such separate firm of the Underwriters, their
affiliates and such control persons of the Underwriters the indemnifying party
shall be liable for the fees and expenses of not more than one separate firm (in
addition to one local counsel in each applicable jurisdiction) for Xxxxxxx Xxxxx
in its capacity as a "qualified independent underwriter", its affiliates and all
persons, if any, who control Xxxxxxx Xxxxx within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act; provided, further,
however that if indemnity may be sought pursuant to the third paragraph of
Section 9(a) above in respect of such proceeding, then in addition to such
separate firm of the Underwriters, their affiliates and such control persons of
the Underwriters the indemnifying party shall be liable for the fees and
expenses of not more than one separate firm (in addition to one local counsel in
each applicable jurisdiction) for Xxxxxx Brothers Inc., its affiliates and all
persons, if any, who control Xxxxxx Brothers Inc. within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act. Any such
separate firm for any Underwriter, its affiliates, directors and officers and
any control persons of such Underwriter shall be designated in writing by Xxxxxx
Brothers Inc., any such separate firm for the Company, its directors, its
officers who signed the Registration Statement and any control persons of the
Company shall be designated in writing by the Company, any such separate firm
for the Selling Stockholders shall be designated in writing by an
Attorney-in-Fact, any such separate firm for Xxxxxxx Xxxxx in its capacity as
"qualified independent underwriter" shall be designated in writing by Xxxxxxx
Xxxxx and any such separate firm for Xxxxxx Brothers Inc. in respect of the
Directed Share Program shall be designated in writing by Xxxxxx Brothers Inc.
The Indemnifying Person 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 Person agrees to
indemnify each
30
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested in writing that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person 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 the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.
(e) Contribution. If the indemnification provided for in paragraphs (a),
(b) and (c) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company or the Selling Stockholders, as the case may
be, on the one hand and the Underwriters or Xxxxxxx Xxxxx in its capacity as a
"qualified independent underwriter" or Xxxxxx Brothers Inc. in respect of the
Directed Share Program, as the case may be, on the other hand from the offering
of the Shares or the offering of the Directed Shares, as the case may be or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company or the
Selling Stockholders, as the case may be, on the one hand and the Underwriters
or Xxxxxxx Xxxxx in its capacity as a "qualified independent underwriter" or
Xxxxxx Brothers Inc. in respect of the Directed Share Program, as the case may
be, on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
or the Selling Stockholders, as the case may be, on the one hand and the
Underwriters or Xxxxxxx Xxxxx in its capacity as a "qualified independent
underwriter" or Xxxxxx Brothers Inc. in respect of the Directed Share Program,
as the case may be, on the other hand shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company or the Selling Stockholders, as the case may be, from the sale of
the Shares and the total underwriting discounts and commissions received by the
Underwriters in connection therewith, in each case as set forth in the table on
the cover of the Prospectus, or the fee to be received by Xxxxxxx Xxxxx in its
capacity as a "qualified independent underwriter", or the total underwriting
discounts and commissions received by Xxxxxx Brothers Inc. from the offering of
the Directed Shares, as the case may be, bear to the aggregate offering price of
the Shares. The relative fault of the Company or the Selling Stockholders, as
the case may be, on the one hand and the Underwriters or Xxxxxxx Xxxxx in its
capacity as a "qualified independent underwriter", on the
31
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders, as the case may be, or by the Underwriters or
Xxxxxxx Xxxxx in its capacity as a "qualified independent underwriter", as the
case may be, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. If the loss,
claim, damage or liability is caused by an untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact, the relative fault of the Company or the Selling Stockholders, as
the case may be, on the one hand and the Xxxxxx Brothers Inc. in respect of the
Directed Share Program, on the other hand shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders, or
by Xxxxxx Brothers Inc., and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The aggregate liability of each such Selling Stockholder under the contribution
agreement contained in this paragraph 9(e) and the indemnity agreement contained
in paragraph 9(b) shall be limited to an amount equal to the aggregate net
proceeds of the Underwritten Shares sold by such Selling Stockholder under this
Agreement.
(f) Limitation on Liability. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Selling Stockholders or the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (e) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 9, in no event shall (i) an
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission or (ii)
Xxxxxx Brothers Inc. be required to contribute any amount in excess of the
amount by which the total underwriting discounts and commissions received by
Xxxxxx Brothers Inc. with respect to the offering of the Directed Shares exceeds
the amount of any damages that Xxxxxx Brothers Inc. has otherwise been required
to pay. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to their respective purchase obligations hereunder and not joint.
(g) Non-Exclusive Remedies. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
32
10. Effectiveness of Agreement. This Agreement shall become effective upon
the later of (i) the execution and delivery hereof by the parties hereto and
(ii) receipt by the Company and the Representative of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
11. Termination. This Agreement may be terminated in the absolute
discretion of the Representative, by written notice to the Company and the
Selling Stockholders, if after the execution and delivery of this Agreement and
prior to the Closing Date or, in the case of the Option Shares, prior to an
Additional Closing Date (i) trading generally shall have been suspended or
materially limited on or by any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago
Board of Trade; (ii) trading of any securities issued or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis, including, without limitation, as a result of
terrorist activities after the date hereof, either within or outside the United
States, that, in the judgment of the Representative, is material and adverse and
makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date or an Additional Closing Date, as the
case may be, on the terms and in the manner contemplated by this Agreement, the
Pricing Disclosure Package and the Prospectus.
12. Defaulting Underwriter. (a) If, on the Closing Date or an Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company and the Selling
Stockholders on the terms contained in this Agreement. If, within 36 hours after
any such default by any Underwriter, the non-defaulting Underwriters do not
arrange for the purchase of such Shares, then the Company and the Selling
Stockholders shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or agree
to purchase the Shares of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company and the Selling Stockholders may postpone the
Closing Date or an Additional Closing Date, as the case may be, for up to five
full business days in order to effect any changes that in the opinion of counsel
for the Company, counsel for the Selling Stockholders or counsel for the
Underwriters may be necessary in the Registration Statement and the Prospectus
or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and the
Prospectus or any such other document that effects any such changes. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule I hereto that, pursuant to this Section 12, purchases Shares that a
defaulting Underwriter agreed but failed to purchase.
33
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or an Additional Closing Date, as the case may be does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter's
pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or an Additional Closing Date, as the case may be, exceeds one-eleventh of
the aggregate amount of Shares to be purchased on such date, or if the Company
and the Selling Stockholders shall not exercise the right described in paragraph
(b) above, then this Agreement or, with respect to any Additional Closing Date,
the obligation of the Underwriters to purchase Shares on an Additional Closing
Date, as the case may be, shall terminate without liability on the part of the
non-defaulting Underwriters. Any termination of this Agreement pursuant to this
Section 12 shall be without liability on the part of the Company and the Selling
Stockholders, except that the Company will continue to be liable for the payment
of expenses as set forth in Section 13 hereof and except that the provisions of
Section 9 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company, the Selling Stockholders or any
non-defaulting Underwriter for damages caused by its default.
13. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
(and solely with respect to clause (xi) below, each Selling Stockholder) will
pay or cause to be paid all costs and expenses incident to the performance of
their obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the
Pricing Disclosure Package and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof (except that
the Underwriters shall pay or cause to be paid one-half of the costs
attributable to the distribution via courier or other shipping service of such
documents); (iii) the fees and expenses of the Company's counsel and independent
accountants; (iv) the fees and expenses incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Shares under the laws of such jurisdictions as the Representative may
designate and the preparation, printing and distribution of a Blue Sky
Memorandum (including the reasonable related fees and expenses of counsel for
the Underwriters); (v) the cost of preparing stock certificates; (vi) the costs
and
34
charges of any transfer agent and any registrar; (vii) all expenses and
application fees incurred in connection with any filing with, and clearance of
the offering by, the National Association of Securities Dealers, Inc. (including
the fees and expenses of Xxxxxxx Xxxxx acting as "qualified independent
underwriter" within the meaning of Rule 2720 of the Rules of Conduct of the
National Association of Securities Dealers, Inc.); (viii) all expenses incurred
by the Company in connection with any "road show" presentation to potential
investors (except that the Representative shall pay or cause to be paid one-half
of the costs attributable to the Company's and the Representative's use of a
private airplane to attend such "road show" presentations); (ix) all expenses
and application fees related to the quotation of the Shares on the Nasdaq
National Market; (x) all costs and expenses of the Underwriters relating to the
Directed Share Program, including the fees and disbursements of counsel for the
Underwriters and any stamp duties or other taxes incurred by the Underwriters in
connection therewith; and (xi) the fees and expenses of each Selling
Stockholder's separate counsel.
(b) If (i) this Agreement is terminated pursuant to Section 11, (ii) the
Company or the Selling Stockholders for any reason fail to tender the Shares for
delivery to the Underwriters or (iii) the Underwriters decline to purchase the
Shares for any reason permitted under this Agreement (other than a termination
of this Agreement pursuant to Section 12 hereof), the Company agrees to
reimburse the Underwriters for all reasonable out-of-pocket costs and expenses
(including the reasonable fees and expenses of their counsel) reasonably
incurred by the Underwriters in connection with this Agreement and the offering
contemplated hereby.
14. 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 the officers and directors and any controlling persons referred
to in Section 9 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
15. Research Independence. Each of the Company and the Selling Stockholders
acknowledge that the Underwriters' research analysts and research departments
are required to be independent from their respective investment banking
divisions and are subject to certain regulations and internal policies, and that
such Underwriters' research analysts may hold and make statements or investment
recommendations and/or publish research reports with respect to the Company
and/or the offering of the Shares that differ from the views of its investment
bankers. The Company and the Selling Stockholders hereby waive and release, to
the fullest extent permitted by law, any claims that the Company or the Selling
Stockholders may have against the Underwriters solely with respect to any
conflict of interest that may arise from the fact that the views expressed by
their independent research analysts and research departments may be different
from or inconsistent with the views or advice communicated to the Company or the
Selling Stockholders by such Underwriters' investment banking divisions. The
Company and the Selling Stockholders acknowledge that each of the Underwriters
is a full service securities firm and as such from time to time, subject to
applicable securities laws, may effect transactions for
35
its own account or the account of its customers and hold long or short positions
in debt or equity securities of the Company.
16. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of the Company, the Selling Stockholders or the Underwriters pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company, the Selling Stockholders or the
Underwriters.
17. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term "subsidiary" has the meaning set forth in Rule 405 under
the Securities Act; and (d) the term "significant subsidiary" has the meaning
set forth in Rule 1-02(w) of Regulation S-X under the Securities Act.
18. Miscellaneous. (a) Authority of the Representative. Any action by the
Underwriters hereunder may be taken by the Representative on behalf of the
Underwriters, and any such action taken by the Representative shall be binding
upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representative at Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax: (000) 000-0000), Attention: Syndicate
Registration, with a copy, in the case of any notice pursuant to Section 8
hereof, to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax: (212)
000-0000). Notices to the Company shall be given to it at DealerTrack Holdings,
Inc., 0000 Xxxxxx Xxxxxx, Xxxxx X00, Xxxx Xxxxxxx, Xxx Xxxx 00000 (Fax: (516)
000-0000), Attention: Xxxx X. Xxxxxx, Esq. Notices to the Selling Stockholders
shall be given to the Attorneys-in-Fact at DealerTrack Holdings, Inc., 0000
Xxxxxx Xxxxxx, Xxxxx XX0, Xxxx Xxxxxxx, Xxx Xxxx 00000, (Fax: (000) 000-0000),
Attention: Xxxxxx X. Xxx, III and Xxxx X. Xxxxxx, Esq.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
36
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
37
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
DEALERTRACK HOLDINGS, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SELLING STOCKHOLDERS
By:
------------------------------------
Name: Xxxxxx X. Xxx, III
Title: Attorney-in-Fact
By:
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
As Attorneys-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule II to this Agreement.
Accepted: __________, 2005
XXXXXX BROTHERS INC.
For itself and on behalf of the several
Underwriters listed in Schedule I
hereto.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE I
Underwriter Number of Shares
----------- ----------------
Xxxxxx Brothers Inc.
X.X. Xxxxxx Securities Inc.
Wachovia Capital Markets, LLC
Xxxxxxx Xxxxx & Company, L.L.C.
XX Xxxxx & Co., LLC
----------------
Total
SCHEDULE II
Number of
Underwritten Shares:
--------------------
Company:
Selling Stockholders:
X.X. Xxxxxx Partners (23A SBIC), L.P.
ACF Investment Corp.
Xxxxx Fargo Small Business Investment Company, Inc.
Xxxxx Fargo Financial, Inc.
ADP, Inc.
DJR US, LLC
Xxxxx Xxxxxx
A-I-1
ANNEX A-I
FORM OF OPINION OF XXXXXX & XXXXXXX LLP
A-II-1
ANNEX A-II
FORM OF TAX OPINION OF XXXXXX & XXXXXXX LLP
A-III-1
ANNEX A-III
FORM OF DISCLOSURE LETTER OF XXXXXX & XXXXXXX LLP
B-1
ANNEX B
FORM OF OPINION OF XXXXXX XXXX, LLP
C-1
ANNEX C
FORM OF OPINION OF XXXX XXXXXX, ESQ.
D-1
ANNEX D
FORM OF LOCK-UP AGREEMENT
________ ___, 2005
XXXXXX BROTHERS INC.
As Representative of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: DealerTrack Holdings, Inc. -- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with DealerTrack Holdings, Inc., a Delaware corporation (the
"Company"), providing for the public offering (the "Public Offering") by the
several Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of common stock, par value $0.01 per share, of the Company (the
"Securities"). Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of Xxxxxx Brothers Inc. on behalf of the
Underwriters, the undersigned will not, during the period ending 180 days after
the date of the prospectus relating to the Public Offering and that is first
used to confirm sales of the Securities (the "Prospectus"), (1) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of common stock, $0.01 per share par value, of the
Company (the "Common Stock") or any securities convertible into or exercisable
or exchangeable for Common Stock (including without limitation, Common Stock
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the
D-2
Securities and Exchange Commission and securities which may be issued upon
exercise of a stock option or warrant) or (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. In addition, the undersigned agrees
that, without the prior written consent of Xxxxxx Brothers Inc. on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The foregoing sentences shall not
apply to (i) transactions relating to shares of Common Stock acquired in open
market transactions after the Closing Date, (ii) transfers of shares of Common
Stock as a bona fide gift, provided that (A) the Common Stock so transferred is
subject to the terms of a duplicate form of this lock-up agreement and (B) no
party, including the undersigned, shall be required to, nor shall it
voluntarily, file a report under Section 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") in connection with such transfer (other
than a filing on Form 5 made after the expiration of the 180-day restricted
period referred to above), (iii) dispositions to any trust for the direct or
indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that (A) the Common Stock so disposed of is subject to the
terms of a duplicate form of this lock-up agreement and (B) no party, including
the undersigned, shall be required to, nor shall it voluntarily, file a report
under Section 16(a) of the Exchange Act in connection with such disposition
(other than a filing on Form 5 made after the expiration of the 180-day
restricted period referred to above), (iv) pledges to any financial institution
as collateral and foreclosures of such pledges, provided that the Common Stock
so pledged is subject to the terms of a duplicate form of this lock-up
agreement, (v) transfers by the undersigned to its affiliates, provided that the
Common Stock so transferred is subject to the terms of a duplicate form of this
lock-up agreement and (vi) the adoption by an officer or director of the Company
of a written trading plan pursuant to Rule 10b5-1 under the Exchange Act,
provided that (A) no dispositions or sales are made pursuant to such written
trading plan during the 180-day restricted period referred to above and (B) no
party, including the undersigned, shall be required to, nor shall it
voluntarily, file a report under Section 16(a) of the Exchange Act in connection
with the adoption of such written trading plan.
Notwithstanding the foregoing, if (1) during the last 17 days of the 180
day restricted period, the Company issues an earnings release or material news
or a material event relating to the Company occurs; or (2) prior to the
expiration of the 180-day restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed by this lock-up agreement shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event.(1)
Any discretionary release, waiver or termination by Xxxxxx Brothers Inc. of
the provisions set forth in Section 6(a) of the Underwriting Agreement or in
this lock-up agreement or in any other similar lock-up agreement relating to the
Public Offering shall be applied to all
----------
(1) This provision shall be deleted from any lock-up agreement executed by X.X.
Xxxxxx Partners (23A SBIC), L.P. or any affiliate thereof pursuant to
Section 6(a) of the Underwriting Agreement.
D-3
persons subject to such provisions (including the undersigned) pro rata based on
the number of shares of Common Stock held by such persons.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this lock-up agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this lock-up agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
This lock-up agreement shall lapse and become null and void if (i) the
Underwriting Agreement does not become effective within 90 days of the date of
this lock-up agreement, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Public Offering is
withdrawn prior to the effectiveness of the Underwriting Agreement, (iii) the
Company notifies Xxxxxx Brothers Inc., prior to the effectiveness of the
Underwriting Agreement, that it does not intend to proceed with the Public
Offering, or (iv) the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Common Stock to be sold thereunder.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this lock-up agreement.
D-4
This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-1
ANNEX E
Pricing Information Provided Orally by the Underwriters
[ ]
