PATRIOT RISK MANAGEMENT, INC. Shares of Common Stock UNDERWRITING AGREEMENT
EXHIBIT 1.1
PATRIOT RISK MANAGEMENT, INC.
Shares of Common Stock
Shares of Common Stock
•, 2008
FRIEDMAN, BILLINGS, XXXXXX & CO., INC. and
XXX-XXXX XXXXXX XXXXXXX XXXXXXX XXXXXX, LLC,
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XXX-XXXX XXXXXX XXXXXXX XXXXXXX XXXXXX, LLC,
as Representatives of the several Underwriters
c/o Friedman, Billings, Xxxxxx & Co., Inc.
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Patriot Risk Management, Inc., a Delaware corporation (the “Company”), confirms its agreement
with each of the underwriters listed on Schedule I hereto (collectively, the “Underwriters”) for
whom Friedman, Billings, Xxxxxx & Co., Inc. and Xxx-Xxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx, LLC are
acting as representatives (in such capacity, collectively, the “Representatives”), with respect to
(i) the sale by the Company of 15,000,000 shares (the “Initial Shares”) of common stock, par value
$0.001 per share, of the Company (the “Common Stock”), and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of shares of Common Stock set forth opposite
the names of the Underwriters in Schedule I hereto, and (ii) the grant of the option described in
Section 1(b) hereof to purchase all or any part of 2,250,000 additional shares of Common Stock (the
“Option Shares”) to cover over-allotments, if any, from the Company to the Underwriters, acting
severally and not jointly, in the respective numbers of shares of Common Stock set forth opposite
the names of each of the Underwriters listed in Schedule I hereto. The Initial Shares to be
purchased by the Underwriters and all or any part of the Option Shares subject to the option
described in Section 1(b) hereof are hereinafter called, collectively, the “Shares.”
The Company understands that the Underwriters propose to make a public offering of the Shares
as soon as the Underwriters deem advisable after this Underwriting Agreement (this “Agreement”) has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-1 (No. 333-150864) including a related preliminary prospectus, for
the registration of the Shares under the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations thereunder (collectively, the “Securities Act Regulations”). The
Company has prepared and filed such amendments to the registration statement and such amendments or
supplements to
the related preliminary prospectus as may have been required to the date hereof and will file
such additional amendments or supplements as may hereafter be required. The registration statement
has been declared effective under the Securities Act by the Commission. The registration
statement, as amended at the time it was declared effective by the Commission (and, if the Company
files a post-effective amendment to such registration statement which becomes effective prior to
the Closing Time (as defined herein), such registration statement as so amended) and including all
information deemed to be a part of the registration statement pursuant to Rule 430A of the
Securities Act Regulations or otherwise is hereinafter called the “Registration Statement.” Any
registration statement filed pursuant to Rule 462(b) of the Securities Act Regulations is
hereinafter called the “Rule 462(b) Registration Statement,” and after such filing the term
“Registration Statement” shall include the 462(b) Registration Statement. Each prospectus included
in the Registration Statement before the Registration Statement was declared effective by the
Commission under the Securities Act, and any preliminary form of prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the
Securities Act Regulations is hereinafter called the “Preliminary Prospectus.” The term
“Prospectus” means the final prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Securities Act Regulations, and any amendments thereof or
supplements thereto.
The Commission has not issued any order preventing or suspending the use of any Preliminary
Prospectus.
The term “Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended
or supplemented immediately prior to the Initial Sale Time (as defined below), (ii) the Issuer Free
Writing Prospectuses (as defined below), if any, identified in Schedule II hereto1,
(iii) any other Free Writing Prospectus (as defined below) that the parties hereto shall hereafter
expressly agree to treat as part of the Disclosure Package, and (iv) the pricing information set
forth on Schedule III hereto, taken as a whole.
The term “Issuer Free Writing Prospectus” means any issuer free writing prospectus, as defined
in Rule 433 of the Securities Act Regulations. The term “Free Writing Prospectus” means any free
writing prospectus, as defined in Rule 405 of the Securities Act Regulations.
The Company and the Underwriters agree as follows:
1. Sale and Purchase:
(a) Initial Shares. Upon the basis of the warranties and representations and other terms and
conditions herein set forth, at the purchase price per share of Common Stock of $•, the
Company agrees to sell the Initial Shares to the Underwriters, and each
| 1 | Schedule II to include all issuer free writing prospectuses used in the transaction other than electronic roadshows. |
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Underwriter agrees,
severally and not jointly, to purchase from the Company the number of Initial Shares set forth in
Schedule I hereto opposite such Underwriter’s name, plus
any additional number of Initial Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 8 hereof, subject in each case, to such adjustments
among the Underwriters as the Representatives in their sole discretion shall make to eliminate any
sales or purchases of fractional shares.
(b) Option Shares. In addition, upon the basis of the warranties and representations and
other terms and conditions herein set forth, at the purchase price per share of Common Stock set
forth in Section 1(a) hereof, the Company hereby grants an option to the Underwriters, acting
severally and not jointly, to purchase from the Company all or any part of the Option Shares plus
any additional number of Option Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 8 hereof. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time within such 30-day
period only for the purpose of covering over allotments which may be made in connection with the
offering and distribution of the Initial Shares upon notice by the Representatives to the Company
setting forth the number of Option Shares as to which the several Underwriters are then exercising
the option and the time and date of payment and delivery for such Option Shares. Any such time and
date of delivery (an “Option Closing Time”) shall be determined by the Representatives, but shall
not be later than three full business days (or earlier, without the consent of the Company, than
two full business days) after the exercise of such option, nor in any event prior to the Closing
Time, as hereinafter defined. If the option is exercised as to all or any portion of the Option
Shares, the Company will sell that number of Option Shares then being purchased, and each of the
Underwriters, acting severally and not jointly, will purchase that proportion of the total number
of Option Shares then being purchased which the number of Initial Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Initial Shares, plus any
additional number of Option Shares which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 8 hereof, subject in each case to such adjustments among the
Underwriters as the Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares. The “Last Option Closing Date” means the earlier of (1) three full
business days after the date that is 30 days after the date hereof or (2) the date on which an
Option Closing Time occurs at which the Underwriters purchase from the Company that number of
Option Shares that, when added to the total number of Option Shares previously purchased by the
Underwriters at all Option Closing Times occurring prior to such date, equals the total number of
Option Shares set forth in the first paragraph of this Agreement.
2. Payment and Delivery:
(a) Initial Shares. The Initial Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representatives may request upon at least forty-eight hours’ prior notice to the Company shall be
delivered by or on behalf of the Company to the
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Representatives, including, at the option of the
Representatives, through the facilities of The Depository Trust Company (“DTC”) for the account of
such Underwriter, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire
transfer of Federal (same-day) funds to the account specified to the Representatives by the
Company upon at least forty-eight hours’ prior notice. The Company will cause the certificates
representing the Initial Shares to be made available for checking and packaging not later than 1:00
p.m. New York City time on the business day prior to the Closing Time (as defined below) with
respect thereto at the office of Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or at the office of DTC or its designated custodian, as
the case may be (the “Designated Office”). The time and date of such delivery and payment shall be
9:30 a.m., New York City time, on the third (fourth, if the determination of the purchase price of
the Initial Shares occurs after 4:30 p.m., New York City time) business day after the date hereof
(unless another time and date shall be agreed to by the Representatives and the Company). The time
and date at which such delivery and payment are actually made is hereinafter called the “Closing
Time.”
(b) Option Shares. Any Option Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such names as the
Representatives may request upon at least forty-eight hours’ prior notice to the Company shall be
delivered by or on behalf of the Company to the Representatives, including, at the option of the
Representatives, through the facilities of DTC for the account of such Underwriter, against payment
by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified to the Representatives by the Company upon at least
forty-eight hours’ prior notice. The Company will cause the certificates representing the Option
Shares to be made available for checking and packaging at least twenty-four hours prior to the
Option Closing Time with respect thereto at the Designated Office. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on the date specified by the
Representatives in the notice given by the Representatives to the Company of the Underwriters’
election to purchase such Option Shares or on such other time and date as the Company and the
Representatives may agree upon in writing.
(c) Directed Shares. It is understood that approximately 100,000 shares of the Initial Shares
(“Directed Shares”) initially will be reserved by the Underwriters for offer and sale to directors,
officers, employees and persons having business relationships with the Company (“Directed Share
Participants”) upon the terms and conditions set forth in both the Prospectus and the Disclosure
Package and in accordance with the rules and regulations of the Financial Industry Regulatory
Authority (the “Directed Share Program”). Under no circumstances will the Representatives or any
Underwriter be liable to the Company or to any Directed Share Participant for any action taken or
omitted to be taken in good faith in connection with such Directed Share Program. To the extent
that any Directed Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participant on or immediately after the date of this Agreement, such Directed Shares may be offered
to the public as part of the public offering contemplated herein.
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3. Representations and Warranties of the Company:
The Company represents and warrants to the Underwriters as of the date hereof, as of the
Initial Sale Time (as defined below), as of the Closing Time and as of any Option Closing Time (if
any), and agrees with each Underwriter, that:
(a) (i) the Company has an authorized capitalization as set forth in both the Prospectus and
the Disclosure Package; the outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and have not been issued in
violation of or subject to any pre-emptive right or other similar right of shareholders arising by
operation of law, under the charter or by-laws of the Company, under any agreement to which the
Company is a party or otherwise, which right has not been irrevocably waived in its entirety, and
(ii) except as disclosed in both the Prospectus and the Disclosure Package, there are no
outstanding (A) securities or obligations of the Company or any of the subsidiaries of the Company
(each, a “Subsidiary”) convertible into or exchangeable for any capital stock of the Company or any
Subsidiary, (B) warrants, rights or options to subscribe for or purchase from the Company or any
Subsidiary any such capital stock or any such convertible or exchangeable securities or obligations
or (C) obligations of the Company or any Subsidiary to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants, rights or options;
(b) each of the Company and the Subsidiaries (all of which are named in Exhibit 21 to the
Registration Statement) has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of organization with full corporate power
and authority to own its respective properties and to conduct its respective businesses as
described in the Prospectus and the Disclosure Package, and, in the case of the Company, to execute
and deliver this Agreement and to consummate the transactions contemplated herein;
(c) all issued and outstanding shares of each Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable and have not been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first refusal or other similar right
of shareholders arising by operation of law, under the charter or by-laws of such Subsidiary, under
any agreement to which such Subsidiary is a party or otherwise, which right has not been
irrevocably waived in its entirety, and are owned by the Company free and clear of any pledge,
security interest, lien, encumbrance, claim or equitable interest;
(d) the Company and each of the Subsidiaries is duly qualified and is in good standing in each
jurisdiction in which it conducts its respective businesses or in which it owns or leases real
property or otherwise maintains an office and in which (i) such qualification is necessary and (ii)
the failure, individually or in the aggregate, to be so qualified could reasonably be expected to
have a material adverse effect on the assets, business, operations, earnings, prospects, properties
or condition (financial or otherwise), present or prospective, of the Company and the Subsidiaries
taken as a
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whole, (any such effect or change, where the context so requires, is hereinafter called
a “Material Adverse Effect” or “Material Adverse Change”); except as disclosed in both
the Prospectus and the Disclosure Package, no Subsidiary is prohibited or restricted, directly
or indirectly, from paying dividends to the Company or from making any other distribution with
respect to such Subsidiary’s capital stock or from repaying to the Company or any other Subsidiary
any amounts which may from time to time become due under any loans or advances to such Subsidiary
from the Company or such other Subsidiary or from transferring any such Subsidiary’s property or
assets to the Company or to any other Subsidiary; other than the equity securities referred to in
the “Business—Investments” section of the Prospectus, the Company does not own, directly or
indirectly, any capital stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association;
(e) the Company and each Subsidiary is in compliance with all applicable laws, rules,
regulations, orders, decrees and judgments, including those relating to transactions with
affiliates, except where such non-compliance, individually or in the aggregate, could not have a
Material Adverse Effect;
(f) neither the Company nor any Subsidiary is in breach of or in default under (nor has any
event occurred which with notice, lapse of time or both would constitute a breach of or default
under) its respective organizational documents or in the performance or observance of any
obligation, agreement, covenant or condition contained in any license, indenture, mortgage, deed of
trust, loan or credit agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective properties is bound, except for
such breaches or defaults which could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(g) the execution, delivery and performance of this Agreement, and consummation of the
transactions contemplated herein will not (i) conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice, lapse of time or both would
constitute a breach of or default under) (A) any provision of the organizational documents of the
Company or any Subsidiary, (B) any provision of any license, indenture, mortgage, deed of trust,
loan or credit agreement or other agreement or instrument to which the Company or any Subsidiary is
a party or by which any of them or their respective properties may be bound or affected or (C) any
federal, state, local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or any Subsidiary, except, in the case of clause (B) or (C), for such
breaches or defaults which could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or (ii) result in the creation or imposition of any lien, charge,
claim or encumbrance upon any property or asset of the Company or any Subsidiary, which property or
asset is material, individually or in the aggregate, to the Company and its Subsidiaries taken as a
whole;
(h) this Agreement has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement of the Company enforceable in
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accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by
general equitable principles (regardless of whether such principles are considered in a
proceeding at law or in equity) and except to the extent that the indemnification and contribution
provisions of Section 9 hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(i) no approval, authorization, consent or order of or filing with any federal, state, local
or foreign governmental or regulatory commission, board, body, authority or agency is required in
connection with the Company’s execution, delivery or performance of this Agreement, its
consummation of the transactions contemplated herein or its sale and delivery of the Shares, other
than (i) such as have been obtained, or will have been obtained at the Closing Time or the relevant
Option Closing Time, as the case may be, under the Securities Act and the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), (ii) such approvals as have been obtained in connection
with the approval of the listing of the Shares on the Nasdaq Global Market (the “Nasdaq”) and (iii)
any necessary qualification under the securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters;
(j) each of the Company and the Subsidiaries has all necessary licenses, authorizations,
accreditations, certifications, consents and approvals and has made all necessary filings required
under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary
authorizations, accreditations, certifications, consents and approvals from other persons, required
in order to conduct their respective businesses and provide the products and services currently
provided or proposed to be provided as described in the Prospectus and the Disclosure Package,
except to the extent that any failure to have any such licenses, authorizations, accreditations,
certifications, consents or approvals, to make any such filings or to obtain any such
authorizations, accreditations, certifications, consents or approvals could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect; except as described in the
Prospectus and the Disclosure Package, neither the Company nor any of the Subsidiaries is in
violation of or in default under, or has received any notice regarding a possible violation,
default or revocation of, any such license, authorization, accreditation, certification, consent or
approval or any federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Subsidiaries the effect of which could reasonably
be expected to result in a Material Adverse Change; and no such license, authorization,
accreditation, certification, consent or approval contains a materially burdensome restriction that
is not adequately disclosed in both the Prospectus and the Disclosure Package;
(k) each of the Registration Statement and any Rule 462(b) Registration Statement has become
effective under the Securities Act; no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the Securities Act; no
proceedings for that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated or
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threatened by the Commission; and the Company has complied to the
Commission’s satisfaction with any request on the part of the Commission for additional
information;
(l) the Preliminary Prospectus when filed and the Registration Statement as of each effective
date and as of the date hereof complied, and the Prospectus and any further amendments or
supplements to the Registration Statement, the Preliminary Prospectus or the Prospectus will, when
they become effective or are filed with the Commission, as the case may be, comply, in all material
respects with the requirements of the Securities Act and the Securities Act Regulations;
(m) the Registration Statement, as of its effective date and as of the date hereof, did not
and does not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading; and the
Preliminary Prospectus does not, and the Prospectus or any amendment or supplement thereto will
not, as of the applicable filing date, the date hereof and at the Closing Time and each Option
Closing Time (if any), contain an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes no warranty or representation
with respect to any statement contained in or omitted from the Registration Statement, the
Preliminary Prospectus or the Prospectus in reliance upon and in conformity with the information
concerning the Underwriters and furnished in writing by or on behalf of the Underwriters through
the Representatives to the Company expressly for use therein (that information being limited to
that described in the last sentence of the first paragraph of Section 9(b) hereof);
(n) as of •:00 [a.m.] [p.m.] (Eastern time) on the date of this Agreement (the “Initial
Sale Time”), the Disclosure Package did not, and at the Closing Time and each Option Closing Time,
the Disclosure Package 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; as of its issue date or date of first use
and at all subsequent times through the Initial Sale Time, each Issuer Free Writing Prospectus did
not, and at the time of each sale of Shares and at the Closing Time and each Option Closing Time,
each such Issuer Free Writing Prospectus 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 the
Company makes no warranty or representation with respect to any statement contained in or omitted
from the Disclosure Package in reliance upon and in conformity with the information concerning the
Underwriters and furnished in writing by or on behalf of the Underwriters through the
Representatives to the Company expressly for use therein (that information being limited to that
described in the last sentence of the first paragraph of Section 9(b) hereof);
(o) each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the Last Option Closing Date, did not, does not and will not
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include any information that
conflicted, conflicts or will conflict with the information contained in the Registration
Statement;
(p) the Company is eligible to use Free Writing Prospectuses in connection with this offering
pursuant to Rules 164 and 433 of the Securities Act Regulations; any Free Writing Prospectus that
the Company is required to file pursuant to Rule 433(d) of the Securities Act Regulations has been,
or will be, filed with the Commission in accordance with the requirements of the Securities Act and
the Securities Act Regulations; and each Free Writing Prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act Regulations or that was prepared by
or on behalf of or used by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(q) except for the Issuer Free Writing Prospectuses identified in Schedule II hereto, and any
electronic road show relating to the public offering of the Shares contemplated herein, the Company
has not prepared, used or referred to, and will not, without the prior consent of the
Representatives, prepare, use or refer to, any Free Writing Prospectus;
(r) the Preliminary Prospectus, the Prospectus and any Issuer Free Writing Prospectuses (to
the extent any such Issuer Free Writing Prospectus was required to be filed with the Commission)
delivered to the Underwriters for use in connection with the public offering of the Shares
contemplated herein have been and will be identical to the versions of such documents transmitted
to the Commission for filing via the Electronic Data Gathering Analysis and Retrieval System
(“XXXXX”), except to the extent permitted by Regulation S-T;
(s) the Company filed the Registration Statement with the Commission before using any Issuer
Free Writing Prospectus, and each Issuer Free Writing Prospectus was preceded or accompanied by the
most recent Preliminary Prospectus satisfying the requirements of Section 10 under the Securities
Act, which Preliminary Prospectus included an estimated price range;
(t) except as disclosed in the Prospectus and the Disclosure Package, there are no actions,
suits, proceedings, inquiries or investigations pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary or any of their respective officers or directors
or to which the properties, assets or rights of the Company or any Subsidiary are subject, at law
or in equity, before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority, arbitral panel or agency which could reasonably be expected to
result in a judgment, decree, award or order having a Material Adverse Effect;
(u) the financial statements, including the notes thereto, included in each of the
Registration Statement, the Prospectus and the Disclosure Package present fairly the consolidated
financial position of the entities to which such financial statements relate
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(the “Covered
Entities”) as of the dates indicated and the consolidated results of operations and changes in
financial position and cash flows of the Covered Entities for the periods specified; such financial
statements have been prepared in conformity with generally accepted accounting principles as
applied in the United States and on a consistent basis during the periods involved and in
accordance with Regulation S-X promulgated by the Commission; the financial statement schedules
included in the
Registration Statement and the amounts in both the Prospectus and the Disclosure Package under
the captions “Prospectus Summary—Summary Historical Consolidated Financial Information” and
“Selected Historical Consolidated Financial Information” fairly present the information shown
therein and have been compiled on a basis consistent with the financial statements included in each
of the Registration Statement, the Prospectus and the Disclosure Package; and no other financial
statements or supporting schedules are required to be included in the Registration Statement, the
Prospectus or the Disclosure Package;
(v) BDO Xxxxxxx, LLP, whose reports on the consolidated financial statements of the Company
and the Subsidiaries are filed with the Commission as part of each of the Registration Statement,
the Prospectus and the Disclosure Package, is and was during the periods covered by its reports,
independent public accountants as required by the Securities Act and the Securities Act Regulations
and is registered with the Public Company Accounting Oversight Board;
(w) subsequent to the respective dates as of which information is given in each of the
Registration Statement, the Prospectus and the Disclosure Package, and except as may be otherwise
stated in such documents, there has not been (i) any Material Adverse Change or any development
that could reasonably be expected to result in a Material Adverse Change, whether or not arising in
the ordinary course of business, (ii) any transaction that is material to the Company and the
Subsidiaries taken as a whole, contemplated or entered into by the Company or any of the
Subsidiaries, (iii) any obligation, contingent or otherwise, directly or indirectly incurred by the
Company or any Subsidiary that is material to the Company and Subsidiaries taken as a whole or (iv)
any dividend or distribution of any kind declared, paid or made by the Company on any class of its
capital stock;
(x) the Shares conform in all material respects to the description thereof contained in the
Registration Statement, the Prospectus and the Disclosure Package;
(y) except as disclosed in both the Prospectus and the Disclosure Package, there are no
persons with registration or other similar rights to have any equity or debt securities, including
securities which are convertible into or exchangeable for equity securities, registered pursuant to
the Registration Statement or otherwise registered by the Company under the Securities Act;
(z) the Shares have been duly authorized and, when issued and duly delivered against payment
therefor as contemplated by this Agreement, will be validly issued, fully paid and non-assessable,
free and clear of any pledge, lien, encumbrance, security
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interest or other claim, and the issuance
and sale of the Shares by the Company is not subject to preemptive or other similar rights arising
by operation of law, under the organizational documents of the Company or under any agreement to
which the Company or any Subsidiary is a party or otherwise;
(aa) the Shares have been approved for listing on the Nasdaq; the Company has taken all
necessary actions to ensure that, as of the Initial Sale Time and at all subsequent times through
the Last Option Closing Date, it was, is and will be in compliance with all
applicable corporate governance requirements set forth in the Nasdaq Marketplace Rules that
are then in effect and is taking such steps as are necessary to ensure that it will be in
compliance with other applicable corporate governance requirements set forth in the Nasdaq
Marketplace Rules not in effect as of the date hereof but that become effective at any time prior
to the Last Option Closing Date upon the effectiveness of such requirements, taking into account
any applicable grace periods;
(bb) the Company has not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the sale or
resale of the Shares;
(cc) neither the Company nor any of its affiliates (i) is required to register as a “broker”
or “dealer” in accordance with the provisions of the Exchange Act, or the rules and regulations
thereunder (the “Exchange Act Regulations”), or (ii) directly, or indirectly through one or more
intermediaries, controls or has any other association with (within the meaning of Article I of the
By-laws of the National Association of Securities Dealers, Inc. (the “NASD”)) any member firm of
the Financial Industry Regulatory Authority (“FINRA”);
(dd) any certificate signed by any officer of the Company or any Subsidiary delivered to the
Representatives or to counsel for the Underwriters pursuant to or in connection with this Agreement
shall be deemed a representation and warranty by the Company to each Underwriter as to the matters
covered thereby;
(ee) the form of certificate used to evidence the Common Stock complies in all material
respects with all applicable statutory requirements, with any applicable requirements of the
organizational documents of the Company and the requirements of the Nasdaq;
(ff) the Company and the Subsidiaries have good and marketable title in fee simple to all real
property, if any, and good title to all personal property owned by them, in each case free and
clear of all liens, security interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the Prospectus and the Disclosure Package or such as do not
materially and adversely affect the value of such property and do not interfere with the use made
or proposed to be made of such property by the Company and the Subsidiaries; and any real property
and buildings held
-11-
under lease by the Company or any Subsidiary are held under valid, existing and
enforceable leases, with such exceptions as are disclosed in both the Prospectus and the Disclosure
Package or are not material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such Subsidiary;
(gg) the descriptions in each of the Registration Statement, the Prospectus and the Disclosure
Package of the legal or governmental proceedings, contracts, leases and other legal documents
therein described present fairly the information required to be described by the Securities Act or
by the Securities Act Regulations, and there are no legal or governmental proceedings, contracts,
leases or other documents of a character required to be described in the Registration Statement,
the Prospectus or the Disclosure
Package or required to be filed as exhibits to the Registration Statement which are not
described or filed as required by the Securities Act or by the Securities Act Regulations; all
agreements between the Company or any of the Subsidiaries and third parties expressly referenced in
both the Prospectus and the Disclosure Package are legal, valid and binding obligations of the
Company or one or more of the Subsidiaries, enforceable against the Company or its Subsidiaries, as
applicable, in accordance with their respective terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and by general equitable principles (regardless of whether such principles are
considered in a proceeding at law or equity);
(hh) the Company and each Subsidiary owns or possesses adequate licenses or other rights to
use all patents, trademarks, service marks, trade names, copyrights, software and design licenses,
trade secrets, manufacturing processes, other intangible property rights and know-how (collectively
“Intangibles”) necessary to entitle the Company and each Subsidiary to conduct its business as
described in both the Prospectus and the Disclosure Package, and neither the Company nor any
Subsidiary has received notice of infringement of or conflict with (and the Company knows of no
such infringement of or conflict with) asserted rights of others with respect to any Intangibles
which could have a Material Adverse Effect;
(ii) (x) the Company has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) of the Exchange Act Regulations), which (A) are designed to
ensure that material information relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s principal executive officer and its principal financial officer by
others within those entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared, (B) have been evaluated for effectiveness as of
the end of the last fiscal period covered by the Registration Statement and (C) are effective in
all material respects to perform the functions for which they were established and (y) the Company
is not aware of (A) any significant deficiency or material weakness in the design or operation of
its internal controls over financial reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial information to management and
the Board of Directors or (B) any fraud, whether or not material, that involves management or other
employees who have a significant role in the
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Company’s internal control over financial reporting.
Since the end of the Company’s most recent fiscal year, there have been no significant changes in
internal control over financial reporting or in other factors that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over financial reporting;
(jj) the Company and each of the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(kk) each of the Company and the Subsidiaries has filed on a timely basis all necessary
federal, state, local and foreign income and franchise tax returns required to be filed through the
date hereof and have paid all taxes shown as due thereon; no tax deficiency has been asserted
against the Company or any Subsidiary, nor does the Company know of any tax deficiency which is
likely to be asserted against the Company or any Subsidiary which, if determined adversely to the
Company or any Subsidiary, could have a Material Adverse Effect; and all tax liabilities are
adequately provided for on the respective books of the Company and the Subsidiaries;
(ll) each of the Company and the Subsidiaries maintains insurance (issued by insurers of
recognized financial responsibility) of the types and in the amounts generally deemed adequate for
their respective businesses and consistent with insurance coverage maintained by similar companies
in similar businesses, including insurance covering real and personal property owned or leased by
the Company and the Subsidiaries against theft, damage, destruction, acts of vandalism and all
other risks customarily insured against, all of which insurance is in full force and effect, it
being understood that no representation is made in this subsection (ll) as to reinsurance ceded by
the Company and its Subsidiaries;
(mm) neither the Company nor any of the Subsidiaries is in violation of, or has received
notice of any violation with respect to, any applicable environmental, safety or similar law
applicable to the business of the Company or any of the Subsidiaries; the Company and the
Subsidiaries have received all permits, licenses or other approvals required of them under
applicable federal and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses; and the Company and the Subsidiaries are in compliance with
all terms and conditions of any such permit, license or approval, except any such violation of law
or regulation, failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals which could not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Change;
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(nn) neither the Company nor any Subsidiary is in violation of, or has received notice of, any
violation with respect to any federal or state law relating to discrimination in the hiring,
promotion or pay of employees, nor any applicable federal or state wages and hours law, the
violation of any of which could reasonably be expected to have a Material Adverse Effect;
(oo) the Company and each of the Subsidiaries are in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder (“ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any of the Subsidiaries would have any liability; the
Company and each of the Subsidiaries have not incurred and do not expect to incur liability under
(i) Title IV of ERISA with respect to the termination of, or withdrawal from, any “pension plan” or
(ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “Code”); and each “pension plan” for
which the Company and each of the Subsidiaries would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would reasonably be expected to cause the
loss of such qualification;
(pp) neither the Company nor any of the Subsidiaries nor any officer or director purporting to
act on behalf of the Company or any of the Subsidiaries has at any time (i) made any contributions
to any candidate for political office, or failed to disclose fully any such contributions, in
violation of law, (ii) made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law or (iii) engaged in any transactions, maintained any bank
account or used any corporate funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the Company and the
Subsidiaries;
(qq) except as otherwise disclosed in both the Prospectus and the Disclosure Package, there
are no outstanding loans, extensions of credit or advances or guarantees of indebtedness by the
Company or any of the Subsidiaries to or for the benefit of any of the officers or directors of the
Company or any of the Subsidiaries or any of the members of the families of any of them;
(rr) except as otherwise disclosed in both the Prospectus and the Disclosure Package, neither
the Company nor any of the Subsidiaries nor, to the knowledge of the Company, any employee or agent
of the Company or any of the Subsidiaries, has made any payment of funds of the Company or of any
Subsidiary or received or retained any funds in violation of any law, rule or regulation or of a
character required to be disclosed in the Prospectus or the Disclosure Package;
-14-
(ss) all securities issued by the Company, any of the Subsidiaries or any trusts established
by the Company or any Subsidiary have been as of the Initial Sale Time or, as of the Closing Time
or any Option Closing Time, will be issued and sold in compliance with (i) all applicable federal
and state securities laws, (ii) the laws of the applicable jurisdiction of incorporation of the
issuing entity and (iii) to the extent applicable to the issuing entity, the requirements of the
Nasdaq;
(tt) in connection with this offering, the Company has not offered and will not offer its
Common Stock or any other securities convertible into or exchangeable or exercisable for Common
Stock in a manner in violation of the Securities Act, and the Company has not distributed and will
not distribute any offering material in connection with the offer and sale of the Shares except for
the Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus or the Registration
Statement;
(uu) the Company has complied and will comply with all the provisions of Florida Statutes,
Section 517.075 (Chapter 92-198, Laws of Florida), and neither the Company nor any of the
Subsidiaries or affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba;
(vv) the Company has not incurred any liability for any finder’s fees or similar payments in
connection with the transactions herein contemplated;
(ww) no relationship, direct or indirect, exists between or among the Company or any of the
Subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of
the Company or any of the Subsidiaries on the other hand, which is required by the Securities Act
and the Securities Act Regulations to be described in the Registration Statement, the Prospectus or
the Disclosure Package, which is not so described;
(xx) neither the Company nor any of the Subsidiaries is and, after giving effect to the
offering and sale of the Shares, will be an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the Investment Company Act of 1940, as amended
(the “Investment Company Act”);
(yy) there are no existing or, to the knowledge of the Company, threatened labor disputes with
the employees of the Company or any of the Subsidiaries which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(zz) the Company, the Subsidiaries and any of the officers and directors of the Company or any
of the Subsidiaries, in their capacities as such, are, and at the Closing Time and any Option
Closing Time will be, in compliance in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated thereunder;
(aaa) no consent, approval, authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in connection with
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the offering of the Directed Shares in any jurisdiction where the Directed Shares are being
offered. The Company has not offered, or caused the Representatives to offer, Shares to any person
pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer’s or supplier’s level or type of business
with the Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products;
(bbb) the Company (i) complies with the Privacy Statements (as defined below) as applicable to
any given set of personal information collected by the Company from Individuals (as defined below),
(ii) complies in all material respects with all applicable federal, state, local and foreign laws
and regulations regarding the collection, retention, use, transfer or disclosure of personal
information and (iii) takes reasonable measures to protect and maintain the confidential nature of
the personal information provided to the Company by Individuals in accordance with the terms of the
applicable Privacy Statements; to the Company’s knowledge, no claims or controversies have arisen
regarding the Privacy Statements or the implementation thereof. As used herein, “Privacy
Statements” means, collectively, any and all of the Company’s privacy statements and policies
published on Company websites or products or otherwise made available by the Company regarding the
collection, retention, use and distribution of the personal information of individuals, including
from visitors or users of any Company websites or products (“Individuals”); and
(ccc) none of the Company nor any of the Subsidiaries or, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of such entities is aware of or has taken any
action, directly or indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”),
including making use of the mails or any means or instrumentality of interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or authorization of the payment of any money,
or other property, gift, promise to give or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA, and the
Company and the Subsidiaries and, to the knowledge of the Company, their affiliates have conducted
their businesses in compliance with the FCPA.
4. Certain Covenants:
The Company hereby agrees with each Underwriter:
(a) to furnish such information as may be required and otherwise to cooperate in qualifying
the Shares for offering and sale under the securities or blue sky laws of such jurisdictions (both
domestic and foreign) as the Representatives may designate and to maintain such qualifications in
effect as long as requested by the Representatives for the distribution of the Shares, provided
that the Company shall not be required to qualify as a foreign corporation, to subject itself to
taxation or to consent to the service of
-16-
process under the laws of any such jurisdiction (except service of process with respect to the
offering and sale of the Shares);
(b) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement to be declared effective before the offering
of the Shares may commence, the Company will endeavor to cause such post-effective amendment to
become effective as soon as possible and will advise the Representatives promptly and, if requested
by the Representatives, will confirm such advice in writing, when such post-effective amendment has
become effective under the Securities Act or the Securities Act Regulations;
(c) to prepare the Prospectus in a form approved by the Underwriters and file such Prospectus
with the Commission pursuant to Rule 424(b) of the Securities Act Regulations not later than 10:00
a.m. (New York City time) on the day following the execution and delivery of this Agreement or on
such other day as the parties hereto may mutually agree and to furnish promptly (and with respect
to the initial delivery of such Prospectus, not later than 10:00 a.m. (New York City time) on the
day following the execution and delivery of this Agreement or on such other day as the parties may
mutually agree to the Underwriters) copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) in such quantities and at such locations as the
Underwriters may reasonably request for the purposes contemplated by the Securities Act
Regulations, which Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the version transmitted to the Commission for filing via XXXXX,
except to the extent permitted by Regulation S-T and Rule 424;
(d) to advise the Representatives promptly and (if requested by the Representatives) to
confirm such advice in writing, when the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective under the Securities Act Regulations;
(e) to furnish a copy of each proposed Free Writing Prospectus to the Representatives and
counsel for the Underwriters and obtain the consent of the Representatives prior to referring to,
using or filing with the Commission any Free Writing Prospectus pursuant to Rule 433(d) of the
Securities Act Regulations, other than the Issuer Free Writing Prospectuses, if any, identified in
Schedule II hereto;
(f) to comply with the requirements of Rules 164 and 433 of the Securities Act Regulations
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission,
legending and record keeping, as applicable;
(g) to advise the Representatives immediately, confirming such advice in writing, of (i) the
receipt of any comments from, or any request by, the Commission for amendments or supplements to
the Registration Statement, the Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus, or for additional information with
-17-
respect thereto, (ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or suspending the use of the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, or of the suspension
of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceedings for any of such purposes and, if the Commission or any other
government agency or authority should issue any such order, to make every reasonable effort to
obtain the lifting or removal of such order as soon as possible, (iii) any examination pursuant to
Section 8(e) of the Securities Act concerning the Registration Statement that becomes known to the
Company, or (iv) if the Company becomes subject to a proceeding under Section 8A of the Securities
Act in connection with the public offering of Shares contemplated herein, to advise the
Representatives promptly of any proposal to amend or supplement the Registration Statement, the
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus and to file no such
amendment or supplement to which the Representatives shall reasonably object in writing;
(h) to furnish to the Underwriters for a period of five years from the date of this Agreement
(i) as soon as available, copies of all annual, quarterly and current reports or other
communications supplied to holders of shares of Common Stock, (ii) as soon as practicable after the
filing thereof, copies of all reports filed by the Company with the Commission, FINRA or any
securities exchange and (iii) such other information as the Underwriters may reasonably request
regarding the Company and the Subsidiaries;
(i) to advise the Underwriters promptly of the happening of any event or development known to
the Company within the time during which a Prospectus relating to the Shares (or in lieu thereof
the notice referred to in Rule 173(a) of the Securities Act Regulations) is required to be
delivered under the Securities Act Regulations if, in the judgment of the Company or in the
reasonable opinion of the Representatives or counsel for the Underwriters, (i) such event or
development would require the making of any change in the Prospectus or the Disclosure Package so
that the Prospectus or the Disclosure Package would not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
(ii) as a result of such event or development any Issuer Free Writing Prospectus conflicted or
would conflict with the information contained in the Registration Statement relating to the Shares
or (iii) it is necessary at any time to amend or supplement the Prospectus or the Disclosure
Package to comply with any law and, during such time, to promptly prepare and furnish to the
Underwriters copies of the proposed amendment or supplement before filing any such amendment or
supplement with the Commission and thereafter promptly furnish at the Company’s own expense to the
Underwriters and to dealers, copies in such quantities and at such locations as the Representatives
may from time to time reasonably request of an appropriate amendment or supplement to the
Prospectus or the Disclosure Package so that the Prospectus or the Disclosure Package as so amended
or supplemented will not, in the light of the circumstances when it (or in lieu thereof the notice
referred to in Rule 173(a) of the
-18-
Securities Act Regulations) is so delivered, be misleading or, in the case of any Issuer Free
Writing Prospectus, conflict with the information contained in the Registration Statement, or so
that the Prospectus or the Disclosure Package will comply with the law;
(j) to file promptly with the Commission any amendment or supplement to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus that
may, in the reasonable judgment of the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(k) prior to filing with the Commission any amendment or supplement to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus, to
furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing;
(l) to furnish promptly to each Representative a signed copy of the Registration Statement, as
initially filed with the Commission, and of all amendments or supplements thereto (including all
exhibits filed therewith) and such number of conformed copies of the foregoing as the
Representatives may reasonably request;
(m) during the period referred to in Section 4(h) hereof, (i) to file all documents required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act in the manner
and within the time periods required by the Exchange Act and the Exchange Act Regulations and (ii)
to furnish to each Representative a copy of any document (other than any request for confidential
treatment) filed with the Commission the full text of which is not filed via XXXXX;
(n) to apply the net proceeds of the sale of the Shares in accordance with its statements
under the caption “Use of Proceeds” in the Prospectus and the Disclosure Package;
(o) to make generally available to its security holders and to deliver to the Representatives
as soon as practicable, but in any event not later than the end of the fiscal quarter first
occurring after the first anniversary of the effective date of the Registration Statement, an
earnings statement complying with the provisions of Section 11(a) of the Securities Act (in form,
at the option of the Company, complying with the provisions of Rule 158 of the Securities Act
Regulations), covering a period of 12 months beginning after the effective date of the Registration
Statement;
(p) to use its best efforts to maintain the listing of the Shares on the Nasdaq and to file
with the Nasdaq all documents and notices required by the Nasdaq of companies that have securities
that are traded on the Nasdaq;
(q) to engage and maintain, at its expense, a registrar and transfer agent for the Shares;
(r) to refrain, from the date hereof until 180 days after the date of the Prospectus, without
the prior written consent of the Representatives, from, directly or
-19-
indirectly, (i) offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell, granting any option, right or
warrant to purchase or otherwise disposing of or transferring (or entering into any transaction or
device which is designed to, or could be expected to, result in the disposition by any person at
any time in the future of), any share of Common Stock or any security convertible into, exercisable
for or exchangeable for Common Stock or filing any registration statement under the Securities Act
with respect to any of the foregoing (other than the registration statement on Form S-8 described
in the Prospectus and the Disclosure Package), (ii) entering into any swap or any other arrangement
or transaction that transfers to another, in whole or in part, directly or indirectly, any of the
economic consequences of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, (iii) filing or causing to be filed a registration statement
under the Securities Act, including any amendment thereto, with respect to the registration of any
shares of Common Stock or securities convertible into, exercisable for or exchangeable for Common
Stock or any other security of the Company (other than the registration statement on Form S-8
described in the Prospectus and the Disclosure Package) or (iv) publicly disclosing the intention
to do any of the foregoing. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder or (B) any shares of Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectus, and the 180-day restricted period
described in the preceding sentence will be extended if: (1) during the last 17 days of the
180-day restricted period the Company issues an earnings release or material news or a material
event relating to the Company occurs or (2) prior to the expiration of the 180-day restricted
period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day restricted period, in which case the restrictions
described above will continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the announcement of the material news or material event, unless
such extension is waived in writing by Friedman, Billings, Xxxxxx & Co., Inc.;
(s) not to, and to use its best efforts to cause its officers, directors and affiliates not
to, (i) take, directly or indirectly, prior to termination of the underwriting syndicate
contemplated by this Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the future reasonably
be expected to cause or result in, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Shares, (ii) sell, bid for, purchase
or pay anyone any compensation for soliciting purchases of the Shares or (iii) pay or agree to pay
to any person any compensation for soliciting any order to purchase any other securities of the
Company;
(t) to cause each stockholder, officer and director of the Company to furnish to the
Representatives, prior to the Initial Sale Time, a letter or letters, substantially in the form of
Exhibit A hereto;
-20-
(u) that the provisions of Sections 2, 3, 4(a), 4(b) and 9-19 (inclusive) of the letter
agreement dated November 16, 2007 between the Company and Friedman, Billings, Xxxxxx & Co., Inc.
shall survive the execution and delivery of this Agreement and the consummation of the transactions
contemplated herein;
(v) if, at any time during the 90-day period after the date of the Prospectus, any publication
or event relating to or affecting the Company shall occur as a result of which, in the reasonable
opinion of the Representatives, the market price of the Common 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) and after written notice from the Representatives
advising the Company to the effect set forth above, to forthwith prepare, consult with the
Representatives concerning the substance of and disseminate a press release or other public
statement, reasonably satisfactory to the Representatives, responding to or commenting on such
publication or event;
(w) that the Company will comply with all of the provisions of any undertakings in the
Registration Statement; and
(x) that the Company (i) will comply with all applicable securities and other applicable laws,
rules and regulations, including FINRA rules and regulations, in each jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program and (ii) will pay all
reasonable fees and disbursements of counsel incurred by the Underwriters in connection with the
Directed Share Program and any stamp duties, similar taxes or duties or other taxes, if any,
incurred by the Underwriters in connection with the Directed Share Program.
5. Payment of Expenses:
(a) The Company agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, including expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, the Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the preparation, issuance and delivery of the certificates for
the Shares to the Underwriters, including any stock or other transfer taxes or duties payable upon
the sale of the Shares to the Underwriters, (iii) the printing of this Agreement and any dealer
agreements and furnishing of copies of each to the Underwriters and to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and sale under state laws
that the Company and the Representatives have mutually agreed are appropriate and the determination
of their eligibility for investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters relating thereto and the
printing and furnishing of copies of any blue sky surveys or legal investment surveys to
-21-
the Underwriters and to dealers), (v) filing for review of the public offering of the Shares
by FINRA (including the legal fees and filing fees and other disbursements of counsel for the
Underwriters relating thereto), (vi) the fees and expenses of any transfer agent or registrar for
the Shares and miscellaneous expenses referred to in the Registration Statement, (vii) the fees and
expenses incurred in connection with the listing of the Shares on the Nasdaq, (viii) making road
show presentations with respect to the offering of the Shares, (ix) preparing and distributing
bound volumes of transaction documents for the Representatives and their legal counsel and (x) the
performance of the Company’s other obligations hereunder. Upon the request of the Representatives,
the Company will provide funds in advance for filing fees.
(b) The Company agrees to reimburse the Representatives for their reasonable out-of-pocket
expenses in connection with the performance of their activities under this Agreement, including
printing, facsimile and courier service expenses, accommodation and travel expenses and the fees
and expenses of the Underwriters’ outside legal counsel or other advisors, accountants, appraisers,
etc. (the “Expense Reimbursement”); provided, however, that the maximum amount of
fees and expenses of the Underwriters’ outside legal counsel that shall be included in the Expense
Reimbursement shall not exceed $600,000 without prior approval of the Company, it being understood
that the fees and expenses of counsel with respect to state securities or blue sky laws and with
respect to the review of the public offering of the Shares by FINRA (all of which shall be
reimbursed by the Company pursuant to the provisions of Section 5(a) hereof) shall be disregarded
for the purposes of calculating the amount of fees and expenses of the Underwriters’ outside legal
counsel that are included in the Expense Reimbursement; provided further that if
the sale of the Initial Shares as contemplated by this Agreement is consummated, the
Representatives shall not be entitled to the Expense Reimbursement and promptly following the
consummation of the sale of the Initial Shares as contemplated by this Agreement (but in no event
later than five business days following such sale), the Representatives shall reimburse the Company
for all amounts previously paid under this Section 5(b). The Company agrees with each Underwriter
to pay (directly or by reimbursement) all fees and expenses incident to the performance of such
Underwriter’s obligations under this Agreement which are otherwise specifically provided for
herein.
(c) If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company also will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (such as printing, facsimile, courier service, accommodations, travel and
the fees and disbursements of Underwriters’ counsel and any other advisors, accountants,
appraisers, etc.) reasonably incurred by such Underwriters in connection with this Agreement or the
transactions contemplated herein.
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6. Conditions of the Underwriters’ Obligations:
The obligations of the Underwriters hereunder to purchase Shares at the Closing Time or each
Option Closing Time, as applicable, are subject to the accuracy of the representations and
warranties on the part of the Company hereunder on the date hereof and at the Closing Time and each
Option Closing Time, as applicable, the performance by the Company of its obligations hereunder and
to the satisfaction of the following further conditions at the Closing Time or each Option Closing
Time, as applicable:
(a) The Company shall furnish to the Underwriters at the Closing Time and each Option Closing
Time an opinion of Xxxxx Lord Xxxxxxx & Xxxxxxx LLP, counsel for the Company and the Subsidiaries,
addressed to the Underwriters and dated the Closing Time and each Option Closing Time,
substantially in the form of Exhibit B hereto.
(b) The Company shall furnish to the Underwriters at the Closing Time and each Option Closing
Time an opinion of Xxxxxxxx X. Xxxxxx, Counsel for the Company and the Subsidiaries, addressed to
the Underwriters and dated the Closing Time and each Option Closing Time, substantially in the form
of Exhibit C hereto.
(c) On the date of this Agreement and at the Closing Time and each Option Closing Time (if
applicable), the Representatives shall have received from BDO Xxxxxxx, LLP letters dated the
respective dates of delivery thereof and addressed to the Representatives, in form and substance
satisfactory to the Representatives, containing statements and information of the type specified in
AU Section 634 “Letters for Underwriters and Certain other Requesting Parties” issued by the
American Institute of Certified Public Accountants with respect to the financial statements,
including any pro forma financial statements, and certain financial information of the Company and
the Subsidiaries included in the Registration Statement, the Prospectus and the Disclosure Package,
and such other matters customarily covered by comfort letters issued in connection with registered
public offerings; provided, however, that the letters delivered at the Closing Time and each Option
Closing Time (if applicable) shall use a “cut-off” date no more than three business days prior to
such Closing Time or such Option Closing Time, as the case may be.
In the event that the letters referred to above set forth any changes in indebtedness,
decreases in total assets or retained earnings or increases in borrowings, it shall be a further
condition to the obligations of the Underwriters that (i) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the Representatives deem
such explanation unnecessary, and (ii) such changes, decreases or increases do not, in the sole
judgment of the Representatives, make it impractical or inadvisable to proceed with the purchase
and delivery of the Shares as contemplated by the Registration Statement.
(d) The Representatives shall have received at the Closing Time and each Option Closing Time
the favorable opinion of Sidley Austin LLP, dated the Closing
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Time or such Option Closing Time, addressed to the Representatives and in form and substance
satisfactory to the Representatives.
(e) The Registration Statement shall have become effective not later than 5:00 p.m., New York
City time, on the date of this Agreement, or such later time and date as the Representatives shall
approve.
(f) No amendment or supplement to the Registration Statement, the Prospectus or any document
in the Disclosure Package shall have been filed to which the Underwriters shall have objected in
writing.
(g) Prior to the Closing Time and each Option Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement or any order preventing or suspending the use of the
Prospectus or any document in the Disclosure Package shall have been issued, and no proceedings for
such purpose shall have been initiated or threatened, by the Commission; (ii) no suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or the initiation or
threatening of any proceedings for any of such purposes, shall have occurred; (iii) all requests
for additional information on the part of the Commission shall have been complied with to the
reasonable satisfaction of the Representatives; (iv) the Registration Statement shall not contain
an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and (v) the Prospectus and the
Disclosure Package shall not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(h) All filings with the Commission required by Rule 424 of the Securities Act Regulations to
have been filed by the Closing Time or each Option Closing Time, as applicable, shall have been
made within the applicable time period prescribed for such filing by such Rule.
(i) Between the time of execution of this Agreement and the Closing Time or the relevant
Option Closing Time there shall not have been any Material Adverse Change or any prospective
Material Adverse Change, and no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of the Subsidiaries, in each case, which in the
Representatives’ sole judgment, makes it impracticable or inadvisable to proceed with the public
offering of the Shares as contemplated by the Registration Statement.
(j) The Shares shall have been approved for listing on the Nasdaq.
(k) FINRA shall not have raised any objection with respect to the fairness and reasonableness
of the underwriting terms and arrangements.
(l) The Representatives shall have received lock-up agreements from each officer, director and
stockholder of the Company, in the form of Exhibit A hereto, and such letter agreements shall be in
full force and effect.
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(m) At the Closing Time and each Option Closing Time, the Underwriters shall have received a
certificate of the Company’s Chairman, Chief Executive Officer and President or Senior Vice
President and Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company in this Agreement are true
and correct, as if made on and as of the Closing Time or any Option Closing Time, as
applicable, and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing Time or
any Option Closing Time, as applicable;
(ii) no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the Securities Act;
(iii) the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, the Disclosure Package, any amendment or supplement thereto,
and this Agreement, and that when the Registration Statement became effective and at
all times subsequent thereto up to the Closing Time or any Option Closing Time, as
applicable, the Registration Statement, the Prospectus and the Preliminary Prospectus,
and any amendments or supplements thereto, contained all material information required
to be included therein by the Securities Act or the Exchange Act and the Securities Act
Regulations and the Exchange Act Regulations and in all material respects conformed to
the applicable requirements of the Securities Act, the Exchange Act, the Securities Act
Regulations and the Exchange Act Regulations; the Registration Statement and any
amendments thereto, did not and, as of the Closing Time or any Option Closing Time, as
applicable, does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus and the Disclosure Package, and any amendments or
supplements thereto, did not and as of the Closing Time or any Option Closing Time, as
applicable, do not include any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
and, since the effective date of the Registration Statement, there has occurred no
event required to be summarized or described in an amendment or supplement to the
Prospectus or the Disclosure Package which has not been so summarized or described; and
(iv) subsequent to the respective dates as of which information is given in the
Registration Statement, the Prospectus and the Disclosure Package, there has not been
(A) any Material Adverse Change, (B) any
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transaction that is material to the Company and the Subsidiaries considered as one
enterprise, except transactions entered into in the ordinary course of business,
(C) any obligation, direct or contingent, that is material to the Company and the
Subsidiaries considered as one enterprise, incurred by the Company or the
Subsidiaries, except obligations incurred in the ordinary course of business, (D)
any change in the capital stock or outstanding indebtedness of the Company or any
Subsidiary that is material to the Company and the Subsidiaries considered as one
enterprise, (E) any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or any Subsidiary, or (F) any loss or damage
(whether or not insured) to the property of the Company or any Subsidiary which
has been sustained or will have been sustained which has a Material Adverse
Effect.
(n) The Company shall have furnished to the Underwriters such other documents and certificates
as to the accuracy and completeness of any statement in the Registration Statement, the Prospectus
and the Disclosure Package, the representations, warranties and statements of the Company contained
herein, the performance by the Company of its covenants contained herein and the fulfillment of any
conditions contained herein, as of the Closing Time or any Option Closing Time, as applicable, as
the Underwriters may reasonably request.
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7. Termination:
(a) The obligations of the several Underwriters hereunder shall be subject to termination in
the absolute discretion of the Representatives, at any time prior to the Closing Time or any Option
Closing Time, (i) if any of the conditions specified in Section 6 of this Agreement shall not have
been fulfilled when and as required by this Agreement to be fulfilled, (ii) if there has been since
the respective dates as of which information is given in the Registration Statement, the Prospectus
or the Disclosure Package, any Material Adverse Change, or any development involving a prospective
Material Adverse Change, or material change in management of the Company or any Subsidiary, whether
or not arising in the ordinary course of business, (iii) if there has occurred any outbreak or
escalation of hostilities or other national or international calamity or crisis or change in
economic, political or other conditions, the effect of which on the United States or international
financial markets is such as to make it, in the judgment of the Representatives, impracticable to
market the Shares or enforce contracts for the sale of the Shares, (iv) if trading in any
securities of the Company has been suspended by the Commission or by the Nasdaq, or if trading
generally on the New York Stock Exchange or on the Nasdaq has been suspended (including an
automatic halt in trading pursuant to market-decline triggers, other than those in which solely
program trading is temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed or if maximum ranges for prices
for securities have been required by the New York Stock Exchange or the Nasdaq or by order of the
Commission or any other governmental authority, (v) if there has been any downgrade in the rating
of any of the Company’s debt securities or preferred stock by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g) of the Securities Act
Regulations), (vi) if any federal, state, local or foreign statute, regulation, rule or order of
any court or other governmental authority has been enacted, published, decreed or otherwise
promulgated which, in the reasonable opinion of the Representatives, materially adversely affects
or will materially adversely affect the business or operations of the Company, or (vii) if any
action has been taken by any federal, state, local or foreign government or agency in respect of
its monetary or fiscal affairs which, in the reasonable opinion of the Representatives, could
reasonably be expected to have a material adverse effect on the securities markets in the United
States.
(b) If the Representatives elect to terminate this Agreement as provided in this Section 7,
the Company and the Underwriters shall be notified promptly by telephone, promptly confirmed by
facsimile.
(c) If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement or if such sale is
not carried out because the Company shall be unable to comply in all material respects with any of
the terms of this Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9 hereof), and the Underwriters shall be
under no obligation or liability to the Company under this Agreement (except to the extent provided
in Section 9 hereof) or to one another hereunder.
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8. Increase in Underwriters’ Commitments:
(a) If any Underwriter shall default at the Closing Time or any Option Closing Time in its
obligation to take up and pay for the Shares to be purchased by it under this Agreement at such
time, the Representatives shall have the right, within 36 hours after such default, to make
arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Shares which such Underwriter shall have agreed but
failed to take up and pay for (the “Defaulted Shares”). Absent the completion of such arrangements
within such 36-hour period, (i) if the total number of Defaulted Shares does not exceed 10% of the
total number of Shares to be purchased at such time, each non-defaulting Underwriter shall take up
and pay for (in addition to the number of Shares which it is otherwise obligated to purchase at
such time pursuant to this Agreement) the portion of the total number of Shares agreed to be
purchased by the defaulting Underwriter at such time in the proportion that its underwriting
obligations hereunder bears to the underwriting obligations of all non-defaulting Underwriters and
(ii) if the total number of Defaulted Shares exceeds 10% of the total number of Shares to be
purchased at such time, the Representatives may terminate this Agreement by notice to the Company,
without liability of any party to any other party except that the provisions of Sections 5 and 9
hereof shall at all times be effective and shall survive such termination.
(b) Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Shares hereunder at such time
unless all of the Shares to be purchased at such time are purchased at such time by the
Underwriters (or by substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the Representatives).
(c) If one or more new underwriters or Underwriters is substituted for a defaulting
Underwriter in accordance with Section 8(a) hereof, the Company or the non-defaulting Underwriters
shall have the right to postpone the Closing Time or the relevant Option Closing Time for a period
not exceeding five business days in order that any necessary changes in the Registration Statement
and Prospectus and other documents may be effected.
(d) The term “Underwriter” as used in this Agreement shall refer to and include any
underwriter substituted under this Section 8 with the same effect as if such substituted
underwriter had originally been named in this Agreement.
9. Indemnity and Contribution by the Company and the Underwriters:
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter and any person
who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and the directors, officers, employees and agents of each Underwriter, from
and against any loss, expense, liability, damage or claim (including the reasonable cost of
investigation) which, jointly
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or severally, any such Underwriter or controlling person may incur under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, expense, liability, damage or claim arises out of
or is based upon (i) any breach of any representation, warranty or covenant of the Company
contained herein, (ii) any failure on the part of the Company to comply with any applicable law,
rule or regulation relating to the offering of securities being made pursuant to the Prospectus,
(iii) any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment), any Issuer Free Writing Prospectus that the Company has
filed or was required to file with the Commission or otherwise retain, any “road show” (as defined
in Rule 433 of the Securities Act Regulations) not constituting an Issuer Free Writing Prospectus
(a “Non-Prospectus Road Show”), any “issuer information” as defined in Rule 433 of the Securities
Act Regulations used or referred to by any Underwriter or contained in the Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any Preliminary Prospectus,
the Prospectus and the Prospectus as amended or supplemented by the Company), (iv) any application
or other document, or any amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any jurisdiction (domestic or
foreign) in order to qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange (each, an “Application”), (v)
any omission or alleged omission to state a material fact required to be stated in any such
Registration Statement, or necessary to make the statements made therein not misleading, (vi) any
omission or alleged omission from any such Issuer Free Writing Prospectus, Non-Prospectus Road
Show, Prospectus or Application of a material fact necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading, (vii) any untrue
statement or alleged untrue statement of any material fact contained in any audio or visual
materials used in connection with the marketing of the Shares, including slides, videos, films and
tape recordings; except, in the case of clause (iii), (v) or (vi) above only, insofar as any such
loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission of a material fact contained in and in
conformity with information furnished in writing by the Underwriters through the Representatives to
the Company expressly for use in such Registration Statement, Prospectus or Application. The
indemnity agreement set forth in this Section 9(a) shall be in addition to any liability which the
Company may otherwise have.
If any action is brought against any Underwriter or controlling person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph, such Underwriter
or controlling person shall promptly notify the Company in writing of the institution of such
action, and the Company shall assume the defense of such action, including the employment of
counsel and payment of expenses; provided, however, that any failure or delay to so notify the
Company will not relieve the Company of any obligation hereunder, except to the extent that their
ability to defend is actually impaired by such failure or delay. Such Underwriter or controlling
person shall have the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or such controlling person
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unless (A)
the employment of such counsel shall have been authorized in writing by the Company in connection
with the defense of such action, (B) the Company shall not have employed counsel to have charge of
the defense of such action within a reasonable time after delivery of notice of such action or (C)
such indemnified party or parties shall have reasonably concluded (based on the advice of counsel)
that there may be defenses available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which events such fees and
expenses shall be borne by the Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related actions in the same
jurisdiction (other than local counsel in any such jurisdiction) representing the indemnified
parties who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such claim or action
effected without its consent.
(b) Each Underwriter agrees, severally and not jointly, to indemnify, defend and hold harmless
the Company, the Company’s directors, the Company’s officers that signed the Registration Statement
and any person who controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any loss, expense, liability, damage or claim
(including the reasonable cost of investigation) which the Company or any such person may incur
under the Securities Act, the Exchange Act or otherwise, insofar as such loss, expense, liability,
damage or claim arises out of or is based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any amendment), any Issuer Free
Writing Prospectus that the Company has filed or was required to file with the Commission, any
Non-Prospectus Road Show, the Prospectus or any Application, (ii) any omission or alleged omission
to state a material fact required to be stated in any such Registration Statement, or necessary to
make the statements made therein not misleading, or (iii) any omission or alleged omission from any
such Issuer Free Writing Prospectus, Non-Prospectus Road Show, Prospectus or Application of a
material fact necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading, but in the case of clause (i), (ii) or (iii) only
insofar as such untrue statement or alleged untrue statement or omission or alleged omission was
made in such Registration Statement, Issuer Free Writing Prospectus, Non-Prospectus Road Show,
Prospectus or Application in reliance upon and in conformity with information furnished in writing
by the Underwriters through the Representatives to the Company expressly for use therein. The date
on which the Underwriters expect to deliver the shares on the front cover, the information in the
table listing the Underwriters and the number of shares of Common Stock each has agreed to purchase
and the statements set forth in the paragraphs under the “Stabilization” caption in the
“Underwriting” section of the Preliminary Prospectus and the Prospectus (to the extent such
statements relate to the Underwriters) constitute the only information furnished by or on behalf of
any Underwriter through the Representatives to the
Company for purposes of Section 3(m) and Section 3(n) of this Agreement and this Section 9.
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If any action is brought against the Company or any such person in respect of which indemnity
may be sought against any Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify the Representatives in writing of the institution of such action, and
the Representatives, on behalf of the Underwriters, shall assume the defense of such action,
including the employment of counsel and payment of expenses; provided, however, that any failure or
delay to so notify the Representatives will not relieve the Representatives of any obligation
hereunder, except to the extent that its ability to defend is actually impaired by such failure or
delay. The Company or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company or such person
unless (A) the employment of such counsel shall have been authorized in writing by the
Representatives in connection with the defense of such action, (B) the Representatives shall not
have employed counsel to have charge of the defense of such action within a reasonable time or (C)
such indemnified party or parties shall have reasonably concluded (based on the advice of counsel)
that there may be defenses available to it or them which are different from or additional to those
available to the Underwriters (in which case the Representatives shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that the Underwriters shall not be liable for the expenses of more than one
separate firm of attorneys in any one action or series of related actions in the same jurisdiction
(other than local counsel in any such jurisdiction) representing the indemnified parties who are
parties to such action). Anything in this paragraph to the contrary notwithstanding, no
Underwriter shall be liable for any settlement of any such claim or action effected without the
written consent of the Representatives.
(c) If the indemnification provided for in this Section 9 is unavailable or insufficient to
hold harmless an indemnified party under Section 9(a) and 9(b) hereof in respect of any losses,
expenses, liabilities, damages or claims referred to therein, then each applicable 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 such losses, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriters from the offering of the Shares or (ii) if (but only if) the
allocation provided by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and of the Underwriters in connection with the statements or
omissions which resulted in such losses, expenses, liabilities, damages or claims, 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 proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the underwriting discounts and commissions received
by the Underwriters. The relative fault of the Company and of the Underwriters shall be determined
by reference to, among other things, whether the untrue statement or alleged untrue statement of a
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material fact or omission or alleged omission relates to information supplied by the Company or by
the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any claim or action.
(d) The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in Section 9(c)(i) hereof
and, if applicable, Section 9(c)(ii) hereof. Notwithstanding the other provisions of this Section
9, no Underwriter shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such Underwriter. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not joint.
(e) The Company agrees to indemnify and hold harmless each Underwriter and its affiliates and
each person, if any, who controls each Underwriter and its affiliates within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all
losses, expenses, liabilities, damages and claims (including 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)
as a result of the failure of any participant to pay for and accept delivery of Directed Shares
that the participant has agreed to purchase; or (iii) related to, arising out of, or in connection
with the Directed Share Program.
10. Survival:
The indemnity and contribution provisions of Section 9 and the covenants, warranties and
representations of the Company contained in Sections 3, 4 and 5 of this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of any Underwriter, or
any person who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the
respective directors, officers, employees and agents of each Underwriter or by or on behalf of the
Company, its directors and officers or any person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the
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Exchange Act, and shall survive any
termination of this Agreement or the sale and delivery of the Shares. The Company and each
Underwriter agree promptly to notify the others of the commencement of any litigation or proceeding
against it and, in the case of the Company, against any of the Company’s officers and directors, in
connection with the sale and delivery of the Shares, or in connection with the Registration
Statement, Prospectus or Disclosure Package.
11. Duties:
Nothing in this Agreement shall be deemed to create a partnership, joint venture or agency
relationship between the parties. The Underwriters undertake to perform such duties and
obligations only as expressly set forth herein. Such duties and obligations of the Underwriters
with respect to the Shares shall be determined solely by the express provisions of this Agreement,
and the Underwriters shall not be liable except for the performance of such duties and obligations
with respect to the Shares as are specifically set forth in this Agreement. The Company
acknowledges and agrees that: (a) the purchase and sale of the Shares pursuant to this Agreement,
including the determination of the public offering price of the Shares and any related discounts
and commissions, is an arm’s-length commercial transaction between the Company, on the one hand,
and the several Underwriters, on the other hand, and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (b) in connection with each transaction contemplated hereby and the
process leading to such transaction each Underwriter is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary of the Company or its affiliates,
stockholders, creditors or employees or any other party; (c) no Underwriter has assumed or will
assume an advisory, agency or fiduciary responsibility in favor of the Company with respect to any
of the transactions contemplated hereby or the process leading thereto (irrespective of whether
such Underwriter has advised or is currently advising the Company on other matters); and (d) the
several Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and the several
Underwriters have no obligation to disclose any of such interests. The Company acknowledges that
the Underwriters disclaim any implied duties (including any fiduciary duty), covenants or
obligations arising from the Underwriters’ performance of the duties and obligations expressly set
forth herein. The Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the several Underwriters with respect to any breach or
alleged breach of agency or fiduciary duty.
12. Notices:
Except as otherwise herein provided, all statements, requests, notices and agreements shall be
in writing and, if to the Underwriters, shall be sufficient in all respects if delivered to
Friedman, Billings, Xxxxxx & Co., Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
Attention: Syndicate Department/Xxxxx X. Xxxxxxxxx (telephone: (000) 000-0000, facsimile: (000)
000-0000); if to the Company, shall be
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sufficient in all respects if delivered to the Company at
the offices of the Company at Patriot Risk Management, Inc., 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx
0000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx (telephone: (000) 000-0000,
facsimile: (000) 000-0000.
13. Governing Law:
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
14. Interpretation:
For purposes of this Agreement, the words “include,” “includes” and “including” shall be
deemed to be followed by the words “without limitation.”
15. Parties at Interest:
The Agreement herein set forth has been and is made solely for the benefit of the
Underwriters, the Company and the controlling persons, directors and officers referred to in
Sections 9 and 10 hereof, and their respective successors, assigns, executors and administrators.
No other person, partnership, limited liability company, association or corporation (including any
purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
16. Counterparts and Facsimile Signatures:
This Agreement may be signed by the parties in counterparts which together shall constitute
one and the same agreement among the parties. A facsimile signature shall constitute an original
signature for all purposes.
* * * * *
-34-
If the foregoing correctly sets forth the understanding among the Company and the
Underwriters, please so indicate in the space provided below for such purpose, whereupon this
Agreement shall constitute a binding agreement among the Company and the Underwriters.
| Very truly yours, PATRIOT RISK MANAGEMENT, INC. |
||||
| By: | ||||
| By: | ||||
| Title: | ||||
Accepted and agreed to as
of the date first above written:
of the date first above written:
| FRIEDMAN, BILLINGS, XXXXXX & CO., INC. |
||||
| By: | ||||
| Title: | ||||
| For itself and as Representative of the other Underwriters named on Schedule I hereto. XXX-XXXX XXXXXX XXXXXXX XXXXXXX XXXXXX, LLC |
||||
| By: | ||||
| Title: | ||||
For itself and as Representative of the other
Underwriters named on Schedule I hereto.
Underwriters named on Schedule I hereto.
SCHEDULE I
| Number of Initial | ||||
| Underwriter | Shares to be Purchased | |||
Friedman, Billings, Xxxxxx & Co., Inc. |
Ÿ | |||
Xxx-Xxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx, LLC |
Ÿ | |||
Total |
15,000,000 | |||
SCHEDULE II
Issuer Free Writing Prospectuses
SCHEDULE III
Pricing Information
Pricing Information
Number of Initial Shares: ____________
Public offering price per share: $______
Public offering price per share: $______
