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Exhibit 1.1
THE PRINCETON REVIEW, INC.
5,400,000 Shares
Common Stock
UNDERWRITING AGREEMENT
__________ ___, 2001
XX Xxxxxx
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Inc.
As Representatives of the Several Underwriters
c/o XX Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The Princeton Review, Inc., a Delaware corporation (herein called the
"Company"), proposes to issue and sell 5,400,000 shares of its authorized but
unissued Common Stock, $0.01 par value (herein called the "Common Stock") (said
5,400,000 shares of Common Stock being herein called the "Underwritten Stock").
In addition, the Company proposes to grant to the Underwriters (as hereinafter
defined) an option to purchase up to 810,000 additional shares of Common Stock
(herein called the "Option Stock" and with the Underwritten Stock herein
collectively called the "Stock"). The Common Stock is more fully described in
the Registration Statement and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the "Underwriters," which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Agreement on its behalf and to act for
it in the manner herein provided.
As part of the offering contemplated by this Agreement, U.S. Bancorp
Xxxxx Xxxxxxx Inc. (the "Designated Underwriter") has agreed to reserve out of
the Stock purchased by it under this agreement, up to ____________ shares, for
sale to the Company's employees, officers, and directors and other parties
associated with the Company (collectively, "Participants"), as set forth in the
Prospectus under the heading "Underwriting" (the "Directed Share Program"). The
Stock to be sold by the Designated Underwriter pursuant to the Directed Share
Program (the "Directed Shares") will be sold by the Designated Underwriter
pursuant to this Agreement at the public
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offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day on which this Agreement is executed
will be offered to the public by the Underwriters as set forth in the
Prospectus.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (herein called the "Commission") a registration statement on
Form S-1 (No. 333-43874), including the related preliminary prospectus, for the
registration of the Stock under the Securities Act of 1933, as amended (herein
called the "Securities Act"). Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission)
heretofore filed by the Company with the Commission have been delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a "Rule
462(b) registration statement"), and, in the event of any amendment thereto
after the effective date of such registration statement (herein called the
"Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term Prospectus as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
Preliminary Prospectus as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. Representations and Warranties of the Company.
The Company hereby represents and warrants to each of the Underwriters
as follows:
(i) Each of the Company and its subsidiaries has been duly
incorporated or organized and is validly existing as a corporation or
limited liability company in good standing under the laws of the
jurisdiction of its incorporation or organization, as applicable, has
full power and authority to own or lease its properties and conduct its
business as described in the Registration Statement and the Prospectus
and as being conducted, and is duly qualified as a foreign corporation
or limited liability company, as applicable, and in good standing in
all jurisdictions in which the character of the property owned or
leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified
would not have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole)(herein referred to as a "Material
Adverse Effect").
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(ii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any materially adverse change in the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, other than as set
forth in the Registration Statement and the Prospectus, and since such
dates, except in the ordinary course of business, neither the Company
nor any of its subsidiaries has entered into any material agreement or
transaction or incurred any material liability or obligation (indirect,
direct or contingent) not referred to in the Registration Statement and
the Prospectus.
(iii) The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date on
which Option Stock is to be purchased, the Prospectus will comply, in
all material respects, with the provisions of the Securities Act and
the rules and regulations of the Commission thereunder; on the
Effective Date, the Registration Statement did not contain any untrue
statement of a material fact and did not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which
Option Stock is to be purchased, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
none of the representations and warranties in this subparagraph (iii)
shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information relating to any Underwriter herein or otherwise
furnished in writing to the Company by or on behalf of the Underwriters
specifically for use in the Registration Statement or the Prospectus.
(iv) The authorized capital stock of the Company conforms to
the description thereof contained in the Registration Statement and the
Prospectus. The outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and are not subject to any preemptive or similar rights
(other than the rights of first refusal, co-sale and similar rights
contained in the stockholders' agreement (the "Stockholders'
Agreement") among the Company and its stockholders, dated April 1,
2000), which rights terminate upon the offering contemplated by this
Agreement). The Stock, when issued and sold to the Underwriters as
provided herein, will be duly and validly issued, fully paid and
nonassessable and the information set forth under the caption
"Capitalization" in the Prospectus is true and correct in all material
respects. All of the Stock conforms in all material respects to the
description thereof contained in the Registration Statement. The form
of certificates for the Stock conforms to the legal requirements of the
jurisdiction of the Company's incorporation. Except as described in the
Prospectus, there are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company (other than the rights of first refusal, co-sale and similar
rights contained in the Stockholders' Agreement, which rights terminate
upon the offering contemplated by this Agreement). No further approval
or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Stock as
contemplated herein.
(v) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Stock, nor, to the best knowledge of the Company, instituted
proceedings for that purpose.
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(vi) Prior to the Closing Date the Stock to be issued and sold
by the Company will be authorized for quotation on the Nasdaq National
Market upon official notice of issuance.
(vii) Except as disclosed in the Registration Statement and
the Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(viii) Except as disclosed in the Registration Statement and
the Prospectus, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
issuance and sale of the Stock as contemplated herein.
(ix) No consent, approval, authorization, or order of, or
registration or qualification of or with, any governmental agency or
body or any court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale
of the Stock, except such as have been obtained under the Securities
Act and such as may be required under, the Exchange Act or state
securities laws.
(x) The execution, delivery and performance of this Agreement,
and the issuance and sale of the Stock will not conflict with or result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, (A) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, (B) any agreement or instrument to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, (C) the
certificate of incorporation, bylaws or certificate of formation, as
applicable, of the Company or any such subsidiary, (D) any order,
decree or judgment of any court or governmental agency or body having
jurisdiction over the Company or any such subsidiary or any of their
properties; or (E) any certificates, permits, licenses, franchises,
consents, approvals, authorizations or clearances issued by federal,
state or foreign regulatory authorities and held by the Company or any
such subsidiary and the Company has full power and authority to
authorize, issue and sell the Stock as contemplated by this Agreement.
(xi) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or by-laws, or certificate
of formation or operating agreement, as applicable, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject or (iii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any or its
properties, as applicable, except in the case of (ii) and (iii) above
for violations or defaults which would not be reasonably likely to have
a Material Adverse Effect.
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(xii) This Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the
part of the Company, enforceable in accordance with its terms, except
as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(xiii) Except as disclosed in the Registration Statement and
the Prospectus, the Company and its subsidiaries have good and
marketable title to all real properties and all other properties and
assets owned by them that are material to the Company's business as
described in the Registration Statement, in each case free from liens,
encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by them
(other than the security interest granted in connection with the
Company's credit facilities with Excel Bank, N.A., and with the group
of lenders led by Reservoir Capital Partners, L.P.); and except as
disclosed in the Registration Statement and the Prospectus, the Company
and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(xiv) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(xv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect. No collective bargaining
agreement exists with any of the Company's or any subsidiary's
employees, and, to the Company's knowledge, no such agreement is
imminent.
(xvi) Except as would not be reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect and except as
disclosed in the Registration Statement and the Prospectus, (i) the
Company and its subsidiaries are the sole owners, free and clear of any
lien or encumbrance (other than the security interest granted in
connection with the Company's credit facilities with Excel Bank, N.A.
and with the group of lenders led by Reservoir Capital Partners L.P.),
of, or have a valid license to, all U.S. and foreign trademarks,
service marks, logos, designs, trade names, internet domain names and
corporate names, patents, registered designs, copyrights, mask works,
computer software and databases, web sites and web pages and related
items (and all intellectual property and proprietary rights
incorporated therein) and all other trade secrets, research and
development, formulae, know-how, proprietary and intellectual property
rights and information, whether or not registered, including all
grants, registrations and applications relating thereto (collectively,
the "Intellectual Property Rights"), necessary for the conduct of the
Company's business as now conducted as described in the Prospectus
(such Intellectual Property Rights owned by or licensed to the Company,
collectively, the "Company Rights"); (ii) the purported rights of the
Company and its subsidiaries in the Company Rights are valid and
enforceable; (iii) except as disclosed in the Registration Statement
and the Prospectus, neither the Company nor any subsidiary has received
any demand, claim, notice or inquiry from any Person in respect of the
Company Rights which challenges, threatens to challenge or inquires as
to whether there is any basis to
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challenge, the validity of, or the rights of the Company or such
subsidiary in, any such Company Rights, and neither the Company nor any
subsidiary knows of any basis for any such challenge; (iv) neither the
Company nor any subsidiary is in violation or infringement of, or has
violated or infringed, any Intellectual Property Rights of any other
Person; and (v) to the knowledge of the Company and its subsidiaries,
no Person is infringing any Company Rights.
(xvii) Except as disclosed in the Registration Statement and
the Prospectus, neither the Company nor any of its subsidiaries (i) is
in violation of any statute, law, rule, regulation, decision, decree,
judgment, permit, license or order of any governmental agency or body
or any court, domestic or foreign, relating to the protection or
restoration of the environment or to human health or safety, including
without limitation those relating to the use, disposal or release of
substances of any kind which are subject to regulation under the
foregoing (collectively, "environmental laws"), (ii) to the Company's
knowledge, owns, leases or operates any property contaminated with any
substance subject to regulation under environmental laws, (iii) is
liable pursuant to environmental laws for any release, disposal or
contamination at any location, or (iv) has received notice of, or
entered into any negotiations or agreements with any third party
relating to, any liability or potential liability under environmental
laws affecting them or their properties, assets or operations, which
violation, contamination, liability or potential liability would
individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any facts, events, circumstances or pending
investigations which might lead to such liability or potential
liability. Except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor any of its subsidiaries is a party
to or the subject of, or to the Company's knowledge is contemplated as
a party to or the subject of, any pending or threatened administrative
or judicial action or proceeding or order relating to environmental
laws.
(xviii) Except as disclosed in the Registration Statement and
the Prospectus, there are no pending actions, suits or proceedings
against or affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge, contemplated.
(xix) The audited financial statements of the Company,
together with the related notes and supporting schedules, and the
unaudited financial statements, filed as part of the Registration
Statement or included in the Prospectus, fairly present, in all
material respects, the financial condition and results of operations of
the Company and its consolidated subsidiaries at the dates and for the
periods indicated, in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. The unaudited financial statements (including related notes)
filed as part of the Registration Statement or included in the
Prospectus include all adjustments, consisting of normal recurring
adjustments, that the Company considers necessary for a fair
presentation of the financial position and results of operations for
these periods. The selected and summary financial data included in the
Registration Statement present fairly, in all material respects, the
information shown therein and have been compiled on a basis consistent
with the audited financial statements presented therein. No other
financial statements or schedules are required to be included in the
Registration Statement and the pro forma financial information included
in the Registration Statement and the Prospectus has been prepared in
accordance with the applicable requirements of
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the Securities Act and is based upon good faith estimates and
assumptions believed by the Company to be reasonable.
(xx) The Company maintains accurate books and records
reflecting its assets and maintains internal accounting controls which
provide reasonable assurance that (A) material transactions are
executed with Company management's authorization, (B) transactions are
recorded as necessary to permit preparation of financial statements and
to maintain accountability for assets, (C) access to assets is
permitted only in accordance with Company management's authorization
and (D) the reported accountability of assets is compared with existing
assets at reasonable intervals.
(xxi) The Company carries, or maintains insurance in such
amounts and covering such risks as is reasonably adequate for the
conduct of its business and the value of its properties. The Company
has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(xxii) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the rules and
regulations promulgated thereunder which have not been described in the
Prospectus or filed as exhibits to the Registration Statement.
(xxiii) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of
business) or guarantees of indebtedness by the Company to or for the
benefit of any of the officers or directors of the Company or any of
the members of the families of any of them, which are required to be
disclosed in the Registration Statement and the Prospectus which are
not so disclosed. No relationship, direct or indirect, exists between
the Company on the one hand, and the directors, officers, stockholders,
collaboration partners, joint venturers, licensees, licensors,
consultants, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus which is not so
described.
(xxiv) The Company has filed all federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, except where the failure to
file such returns or pay such taxes would not reasonably be expected to
have a Material Adverse Effect and no tax deficiency has been
determined adversely to the Company which will have (nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company, would reasonably be expected to have) a
Material Adverse Effect. All tax liabilities for the periods covered by
the financial statements of the Company included in the Registration
Statement and the Prospectus have in all material respects been
adequately accounted for or described in such financial statements of
the Company. The Company is not currently subject to any audit by any
tax authorities and, to the Company's knowledge, no such audit is
threatened or contemplated by any such authorities.
(xxv) The Company has not at any time during the last five (5)
years (i) made any unlawful contribution to any candidate for foreign
office or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any foreign, federal or state
government officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.
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(xxvi) Each "employee benefit plan" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
in which employees of the Company or any subsidiary participate or as
to which the Company or any subsidiary has any liability (the "ERISA
Plans") is in compliance in all material respects with the applicable
provisions of ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"), including, in the case of any ERISA Plan intended to be
qualified under Code Section 401(a), the provisions of Code Section
401(a). A determination letter has been received from the IRS as to
each ERISA Plan that is intended to be qualified under Code Section
401(a) and nothing has occurred that would be reasonably likely to
result in the revocation of any such determination letter. Neither the
Company nor any subsidiary has any liability, with respect to the ERISA
Plans or otherwise under Title IV of ERISA, nor does the Company expect
that any such liability will be incurred. Neither the Company nor any
subsidiary has any liability with respect to any ERISA Plan that
provides post-retirement welfare benefits that would have a Material
Adverse Effect. The descriptions of the Company's stock option, stock
bonus and other stock plans or arrangements, and of the options or
other rights granted and exercised thereunder, set forth in the
Prospectus are accurate and complete in all material respects.
(xxvii) The Company is not and, after giving effect to the
offering and sale of the Stock and the application of the proceeds
thereof as described in the Registration Statement and the Prospectus,
will not be an "investment company" as defined in the Investment
Company Act of 1940.
(xxviii) The Company has not taken and will not take, directly
or indirectly, any action designed to or that could cause or result in
stabilization or manipulation of the price of the Stock to facilitate
the sale or resale of the Stock.
(xxix) The accountants reporting upon the audited financial
statements and schedules included in the Registration Statement and the
Prospectus are independent public accountants as required by the Act
and the rules and regulations promulgated thereunder.
(xxx) The Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program. Furthermore,
no authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality
or court, other than such as have been obtained, is necessary under the
securities law and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States.
(xxxi) The Company has not offered, or caused the Underwriters
to offer, any Stock 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.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
5,400,000 shares of the Underwritten Stock to the several Underwriters and each
of the Underwriters agrees to purchase
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from the Company the respective aggregate number of shares of Underwritten Stock
set forth opposite its name in Schedule I. The price at which such shares of
Underwritten Stock shall be sold by the Company and purchased by the several
Underwriters shall be $_____ per share. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraphs (b) and (c) of this Section 3, the agreement of each Underwriter is
to purchase only the respective number of shares of the Underwritten Stock
specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice thereof
to you, and the non-defaulting Underwriters shall have the right within 24 hours
after the receipt by you of such notice to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non- defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
Underwriter and without any liability on the part of any non- defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 810,000 shares in the aggregate of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time and from time to time on or before the thirtieth
day after the date of this Agreement upon written or telegraphic notice by you
to the Company setting forth the aggregate number of shares of the Option Stock
as to which the several Underwriters are exercising the option. Delivery of
certificates for the shares of Option Stock, and payment therefor, shall be made
as provided in Section 5 hereof. The number of shares of the Option Stock to be
purchased by each Underwriter shall be the same percentage of the total number
of shares of the Option Stock to be
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purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Stock, as adjusted by you in such manner as you deem advisable to
avoid fractional shares.
4. Offering by Underwriters.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth under "Underwriting" in the Registration
Statement, any Preliminary Prospectus and the Prospectus relating to the Stock
filed by the Company (insofar as such information relates to the Underwriters)
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, any Preliminary Prospectus, and the
Prospectus, and you on behalf of the respective Underwriters represent and
warrant to the Company that the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten Stock
and the Option Stock (if the option granted by Section 3(c) hereof shall have
been exercised not later than 10:00 a.m., New York City time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the offices of Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the Americas, Xxx Xxxx,
Xxx Xxxx 00000-0000, at 10:00 a.m., New York City time, on the fourth business
day after the date of this Agreement, or at such time on such other day, not
later than seven full business days after such fourth business day, as shall be
agreed upon in writing by the Company and you. The date and hour of such
delivery and payment (which may be postponed as provided in Section 3(b) hereof)
are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 10:00 a.m., New York City time, on the date two business days preceding
the Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the offices of Xxxxx Xxxxxxxxxx LLP, 1301
Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000-0000, at 10:00 a.m., New York
City time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order by wire transfer in same day funds. Such payment shall
be made upon delivery of certificates for the Stock to you for the respective
accounts of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of [_____________] on the
business day prior to the Closing Date or, in the case of the Option Stock, by
3:00 p.m., New York City time, on the business day preceding the date of
purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose wire transfer shall not have
been received by you on the Closing Date or any later date on which Option Stock
is purchased for the account of such Underwriter. Any such payment by you shall
not relieve such Underwriter from any of its obligations hereunder.
6. Further Agreements of the Company.
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The Company covenants and agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of the
Commission.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you
a signed copy of the Registration Statement as originally filed and of each
amendment thereto filed prior to the time the Registration Statement becomes
effective and, promptly upon the filing thereof, a signed copy of each post-
effective amendment, if any, to the Registration Statement (together with, in
each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office or offices as you may designate, as many copies of the Prospectus as
you may reasonably request, and (iii) thereafter from time to time during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, likewise send to the Underwriters as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus is required
by law to be delivered by an Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the opinion of counsel
for the Company or of counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser of the Stock,
the Company will forthwith prepare and file with the Commission a supplement to
the Prospectus or an amended prospectus so that the Prospectus as so
supplemented or amended will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time such Prospectus
is delivered to such purchaser, not misleading. If, after the initial public
offering of the Stock by the Underwriters and during such period, the
Underwriters shall propose to vary the terms of offering thereof by reason of
changes in general market conditions or otherwise, you will advise the Company
in writing of the proposed variation, and, if in the opinion either of counsel
for the Company or of counsel for the Underwriters such proposed variation
requires that the Prospectus be supplemented or amended, the Company will
forthwith prepare and file with the Commission
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a supplement to the Prospectus or an amended prospectus setting forth such
variation. The Company authorizes the Underwriters and all dealers to whom any
of the Stock may be sold by the several Underwriters to use the Prospectus, as
from time to time amended or supplemented, in connection with the sale of the
Stock in accordance with the applicable provisions of the Securities Act and the
applicable rules and regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and of all information, documents and reports filed with the
Commission.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders an earnings statement in
accordance with Section 11(a) of the Securities Act and Rule 158 thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. (herein
called the "NASD") of the Registration Statement, any Preliminary Prospectus and
the Prospectus, (ii) the furnishing to the Underwriters of copies of any
Preliminary Prospectus and of the several documents required by paragraph (c) of
this Section 6 to be so furnished, (iii) the printing of this Agreement and
related documents delivered to the Underwriters, (iv) the preparation, printing
and filing of all supplements and amendments to the Prospectus referred to in
paragraph (d) of this Section 6, (v) the furnishing to you and the Underwriters
of the reports and information referred to in paragraph (g) of this Section 6
and (vi) the printing and issuance of stock certificates, including the transfer
agent's fees.
(j) The Company agrees to reimburse you, for the account of the several
Underwriters, for blue sky fees and related disbursements (including reasonable
counsel fees and disbursements and costs of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Stock under state securities or blue sky laws and in the review
of the offering by the NASD.
(k) The Company hereby agrees that, without the prior written consent
of XX Xxxxxx Securities Inc. on behalf of the Underwriters, the Company will
not, for a period of 180 days from the date of the final prospectus relating to
the public offering of the Stock by the Underwriters, directly or indirectly,
(i) sell, offer, contract to sell, make any short sale, pledge, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant
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to purchase or otherwise transfer or dispose of any shares of Common Stock or
any securities convertible into or exchangeable or exercisable for or any rights
to purchase or acquire Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
or ownership of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Stock to be sold to the Underwriters pursuant to this Agreement, (B) shares
of Common Stock to be issued by the Company upon the conversion of preferred
stock and Class B non-voting common stock outstanding as of the date hereof,
upon the exercise of options granted under the stock incentive plans of the
Company (herein called the "Option Plans") or upon the exercise of warrants
outstanding as of the date hereof, all as described under the caption
"Capitalization" in the Preliminary Prospectus, and (C) restricted stock,
deferred stock and options to purchase Common Stock to be granted under the
Option Plans.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event, unless in the opinion of the
Company's regular outside counsel, the dissemination of such press release or
other public statement would violate applicable securities laws.
(m) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(n) 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. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration Statement.
The Designated Underwriter will notify the Company as to which Participants will
need to be so restricted. The Company will direct the removal of such transfer
restrictions upon the expiration of such period of time.
(o) The Company will pay all reasonable fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if any,
incurred by the Underwriters in connection with the Directed Share Program.
(p) The Company will comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages
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or liabilities, joint or several, to which such indemnified parties or any of
them may become subject under the Securities Act, the Securities Exchange Act of
1934, as amended (herein called the "Exchange Act"), or the common law or
otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company contained in
this paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information relating to any Underwriter furnished as
herein stated or otherwise furnished in writing to the Company by or on behalf
of any Underwriter specifically for use in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto and (2) the indemnity agreement contained in this paragraph
(a) with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
and the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) unless the failure is the result of noncompliance by
the Company with paragraph (c) of Section 6 hereof. The indemnity agreements of
the Company contained in this paragraph (a) and the representations and
warranties of the Company contained in Section 2 hereof shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the delivery of and payment
for the Stock.
(b) The Company agrees to indemnify and hold harmless the Designated
Underwriter and each person, if any, who controls the Designated Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (the "Designated Entities"), from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to 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 to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
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(c) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, each of its officers who signs the Registration
Statement on his own behalf or pursuant to a power of attorney, each of its
directors, each other Underwriter and each person (including each partner or
officer thereof) who controls the Company or any such other Underwriter within
the meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information relating to any Underwriter furnished as
herein stated or otherwise furnished in writing to the Company by or on behalf
of such indemnifying Underwriter specifically for use in the Registration
Statement or the Prospectus or any such amendment thereof or supplement thereto.
The indemnity agreement of each Underwriter contained in this paragraph (c)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(d) Each party indemnified under the provisions of paragraphs (a), (b)
and (c) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the "Notice") of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the "Notice of Defense") to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying
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party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceeding or that there
may be legal defenses available to such indemnified party or parties different
from or in addition to those available to the indemnifying party or parties,
then counsel for the indemnified party or parties shall be entitled to conduct
the defense to the extent reasonably determined by such counsel to be necessary
to protect the interests of the indemnified party or parties and (ii) in any
event, the indemnified party or parties shall be entitled to have counsel chosen
by such indemnified party or parties participate in, but not conduct, the
defense. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (d) of this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the preceding sentence and (B) the indemnifying party or
parties shall bear such other expenses as it or they have authorized to be
incurred by the indemnified party or parties. If, within a reasonable time after
receipt of the Notice, no Notice of Defense has been given, the indemnifying
party or parties shall be responsible for any legal or other expenses incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceeding.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a), (b) or (c) of this Section 7, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in paragraph (a), (b) or (c) of this Section 7 (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Stock or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the total underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (e) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(e). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (e). Notwithstanding the provisions of
this paragraph (e), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent
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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 in this paragraph
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (d) of this Section 7).
(f) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
8. Termination. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date of
this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in hostilities or an escalation of
major hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets of
the United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, or limitations on prices (other than limitations on
hours or numbers of days of trading) for securities on either such exchange or
system, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of, or commencement of any
proceeding or investigation by, any court, legislative body, agency or other
governmental authority which in the Underwriters' reasonable opinion materially
and adversely affects or will materially or adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company to the Underwriters and no liability of the Underwriters to the
Company; provided, however, that in the event of any such termination the
Company agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in paragraphs (i)
and (j) of Section 6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all of its obligations to be performed hereunder
at or prior to the Closing Date or any later date on
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which Option Stock is to be purchased, as the case may be, and to the following
further conditions:
(a) The Registration Statement shall have become effective; and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder and
the validity and form of the certificates representing the Stock, all corporate
proceedings and other legal matters incident to the foregoing, and the form of
the Registration Statement and of the Prospectus (except as to the financial
statements contained therein), shall have been approved at or prior to the
Closing Date by Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters.
(c) You shall have received from Patterson, Belknap, Xxxx & Tyler LLP,
counsel for the Company, an opinion, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A hereto, and if Option
Stock is purchased at any date after the Closing Date, additional opinions from
such counsel, addressed to the Underwriters and dated such later date,
confirming that the statements expressed as of the Closing Date in such opinions
remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which it
originally became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the business, properties, financial
condition or results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, and, since such dates, except
in the ordinary course of business, the Company has not entered into any
material agreement or transaction or incurred any material liability or
obligation (indirect, direct or contingent) not referred to in the Registration
Statement in the form in which it originally became effective and the Prospectus
contained therein, (iv) the Company does not have any material contingent
obligations which are not disclosed in the Registration Statement and the
Prospectus, (v) there are not any pending or known threatened legal proceedings
to which the Company is a party or of which property of the Company is the
subject which are material and which are not disclosed in the Registration
Statement and the Prospectus, (vi) there are not any franchises, contracts,
leases or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company herein are true and correct as of
the Closing Date or any later date on which Option Stock is to be purchased, as
the case may be, and (viii) there has not been any material change in the market
for securities in general or in political, financial or economic conditions from
those reasonably foreseeable as to render it impracticable in your reasonable
judgment to make a public offering of the Stock, or a material adverse change in
market levels for securities in general (or those of companies in the Company's
industry in particular) or financial or economic conditions which render it
inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or such
later date, as the case may be, and signed by the Chief Executive Officer and
the Chief Financial Officer of the Company, stating that the respective
signatories of said certificate have carefully examined the Registration
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Statement in the form in which it originally became effective and the Prospectus
contained therein and any supplements or amendments thereto, and that the
statements included in clauses (i) through (vii) of paragraph (d) of this
Section 9 are true and correct.
(f) You shall have received (A) from Ernst & Young LLP with respect to
the financial statements of the Company as of December 31, 2000, 1999 and 1998,
and for each of the three years in the period ended December 31, 1999 and (B)
from Caras & Xxxxxxx, P.C., with respect to the financial statements of
Princeton Review of Boston, Inc. and Princeton Review of New Jersey, Inc. as of
December 31, 2000, and 1999 and for each of the two years in the period ended
December 31, 2000 a letter or letters, addressed to the Underwriters and dated
the Closing Date and any later date on which Option Stock is purchased,
confirming that they are independent public accountants with respect to the
Company or Princeton Review of Boston, Inc. and Princeton Review of New Jersey,
Inc., as applicable, for such applicable periods within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
based upon the procedures described in their respective letters delivered to you
concurrently with the execution of this Agreement (each herein called an
"Original Letter"), but carried out to a date not more than three business days
prior to the Closing Date or such later date on which Option Stock is purchased
(i) confirming, to the extent true, that the statements and conclusions set
forth in the applicable Original Letter are accurate as of the Closing Date or
such later date, as the case may be, and (ii) setting forth any revisions and
additions to the statements and conclusions set forth in the applicable Original
Letter which are necessary to reflect any changes in the facts described in such
Original Letter since the date of such Original Letter or to reflect the
availability of more recent financial statements, data or information. The
letters shall not disclose any change, or any development involving a
prospective change, in or affecting the business or properties of the Company or
Princeton Review of Boston, Inc. and Princeton Review of New Jersey, Inc., as
applicable, which, in your sole judgment, makes it impractical or inadvisable to
proceed with the public offering of the Stock or the purchase of the Option
Stock as contemplated by the Prospectus.
(g) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several jurisdictions,
or other evidence satisfactory to you, of the qualification referred to in
paragraph (f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly authorized for quotation on the Nasdaq National
Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all
directors, officers, and beneficial holders of the outstanding Common Stock
agreements, in form reasonably satisfactory to XX Xxxxxx Securities Inc.,
stating that without the prior written consent of XX Xxxxxx Securities Inc. on
behalf of the Underwriters, such person or entity will not, for a period of 180
days from the date of the final prospectus relating to the public offering of
the Stock by the Underwriters, directly or indirectly, (i) sell, offer, contract
to sell, make any short sale, pledge, 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 any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any rights to
purchase or acquire Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
All of the agreements, opinions, certificates and letters mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if Xxxxx
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Ballantine LLP, counsel for the Underwriters, shall be satisfied that they
comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all out-
of-pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the transactions
contemplated hereby.
10. Conditions of the Obligation of the Company. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to its other obligations
under Section 7 of this Agreement, the Company hereby agrees to reimburse on a
quarterly basis the Underwriters for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of the Company and the several Underwriters and, with respect to the
provisions of Section 7 hereof, the several parties (in addition to the Company
and the several Underwriters) indemnified under the provisions of said Section
7, and their respective personal representatives, successors and assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as such
purchaser, of any of the Stock from any of the several Underwriters.
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13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to XX Xxxxxx Securities Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: [ _________ ]; and if to the
Company, shall be mailed, sent by facsimile or delivered to it at its office,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxx, President
and Chief Executive Officer, facsimile number 000-000-0000. All notices given by
facsimile shall be promptly confirmed by letter.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of Section 6
hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
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Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
THE PRINCETON REVIEW, INC.
By :_____________________
Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
XX XXXXXX SECURITIES INC.
U.S. BANCORP XXXXX XXXXXXX INC.
XXXX XXXXX XXXX XXXXXX, INC.
By: XX Xxxxxx Securities Inc.
By: ______________________
Name:
Title:
Acting on behalf of the several Underwriters, including themselves, named in
Schedule I hereto.
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SCHEDULE I
UNDERWRITERS
Underwriters Number of Shares
to be Purchased
XX Xxxxxx Securities Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Inc.
----------------
Total...........................................
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ANNEX A
Matters to be Covered in the Opinion of Patterson, Belknap, Xxxx & Tyler LLP
Counsel for the Company
(i) each of the Company and its subsidiaries has been incorporated or
organized and is validly existing as a corporation or limited liability company
in good standing under the laws of the jurisdiction of its incorporation or
organization, as applicable, has full corporate or limited liability company
power and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation or limited liability
company, as applicable, and in good standing in each jurisdiction listed on
Schedule 1 hereto that the Company has advised such counsel are the only
jurisdictions in which the Company conducts substantial business;
(ii) the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus; proper corporate
proceedings have been taken to validly authorize such authorized capital stock;
all of the outstanding shares of such capital stock have been duly and validly
issued and are fully paid and nonassessable; the Underwritten Stock and the
Option Stock to be issued on the date hereof, if any, when issued and delivered
to and paid for by the Underwriters as provided in the Underwriting Agreement,
will be duly and validly issued, fully paid and nonassessable; any Option Stock
purchased after the Closing Date, when issued and delivered to and paid for by
the Underwriters as provided in the Underwriting Agreement, will be duly and
validly issued, fully paid and nonassessable; and no preemptive rights of, or
rights of refusal in favor of, shareholders exist with respect to the Stock, or
the issue and sale thereof, pursuant to the certificate of incorporation or
bylaws of the Company and, to the knowledge of such counsel, there are no
contractual preemptive rights that have not been waived, rights of first refusal
or rights of co-sale which exist with respect to the issue and sale of the
Stock;
(iii) Such counsel shall confirm that it has been informed by the staff
of the Securities and Exchange Commission that (1) the Registration Statement
has become effective under the Securities Act and (2) no stop order suspending
the effectiveness of the Registration Statement or suspending or preventing the
use of the Prospectus is in effect and that, to such counsel's knowledge, no
proceedings for that purpose have been instituted or are pending or contemplated
by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data included therein, as
to which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and with the rules and
regulations of the Commission thereunder;
(v) the information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such counsel) and
11(c) of Form S-1 is, to the best of such counsel's knowledge, accurately and
adequately set forth therein in all material respects, insofar as it constitutes
a summary of the legal matters or documents referred to therein, or no response
is required with respect to such Item and, the description of the Company's
stock option plans and the options granted and which may be granted thereunder
set forth in the Prospectus, insofar as it constitutes a summary of the legal
matters or documents referred to therein, accurately and fairly presents the
information required to be shown with respect to said plan and
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options to the extent required by the Securities Act and the rules and
regulations of the Commission thereunder;
(vi) such counsel do not know of any franchises, contracts, leases,
documents or pending or threatened legal proceedings which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(vii) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the issue and sale by the Company of the Stock as contemplated
by the Underwriting Agreement will not conflict with, or result in a breach of
(1) the certificate of incorporation, bylaws or certificate of formation of the
Company or any of its subsidiaries, (2) any agreement or instrument to which the
Company or any such subsidiary is a party that is filed as an exhibit to the
Registration Statement or (3) any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, except,
in the case of (2) or (3) above, for conflicts or breaches that would not be
reasonably likely to have a Material Adverse Effect;
(ix) to the best of such counsel's knowledge, all holders of securities
of the Company having rights to the registration in the Registration Statement
of shares of Common Stock, or other securities, because of the filing of the
Registration Statement by the Company have waived such rights or such rights
have expired by reason of lapse of time following notification of the Company's
intent to file the Registration Statement;
(x) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under the Exchange Act and
state securities or blue sky laws;
(xi) the Stock issued and sold by the Company will have been duly
authorized for quotation on the Nasdaq National Market upon official notice of
issuance; and
(xii) the Company is not, and after giving effect to the offering and
sale of the Stock and the application of the proceeds thereof as described in
the Prospectus will not be, required to register as an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or of the State of Delaware, upon
opinions of local counsel satisfactory in form and scope to counsel for the
Underwriters. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
In addition to the matters set forth above, counsel rendering the
foregoing opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel that leads them to believe that the
Registration Statement (except as to the financial statements and schedules and
other financial and statistical data contained therein or omitted therefrom, as
to which such counsel need not express any opinion or belief) at the Effective
Date contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, that the Prospectus (except
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as to the financial statements and schedules and other financial and statistical
data contained therein or omitted therefrom, as to which such counsel need not
express any opinion or belief) as of its date or at the Closing Date (or any
later date on which Option Stock is purchased), contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
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