Financial Engines, Inc. Common Stock Underwriting Agreement
Exhibit 1.1
Common Stock
, 2010
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
As representative (the “Representative”) of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Financial Engines, Inc., a Delaware corporation (the “Company”) proposes, subject to the terms
and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the
“Underwriters”) an aggregate of shares of Common Stock, par value $0.0001 per share (“Stock”), of
the Company, and the stockholders of the Company named in Schedule II hereto (the “Selling
Stockholders”) propose, subject to the terms and conditions stated herein, to sell to the
Underwriters an aggregate of shares and, at the election of the Underwriters, up to additional
shares of Stock. The aggregate of shares to be sold by the Company and the Selling Stockholders
at the election of the Underwriters is herein called “Firm Shares” and the aggregate of additional
shares to be sold by the Company is herein called the “Optional Shares”. The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the “Shares”.
1. (i) The Company represents and warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement on Form S-1 (File No. 333-163581) (the “Initial Registration
Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission
(the “Commission”); the Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits thereto, to you for each of
the other
Underwriters, have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration
Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
“Act”), which became effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act is hereinafter called a “Preliminary Prospectus”;
the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as amended at the time such part
of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the
“Registration Statement”; the Preliminary Prospectus relating to the Shares that was included in
the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(c)
hereof) is hereinafter called the “Pricing Prospectus”; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the “Prospectus”; and any
“issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Shares is
hereinafter called an “Issuer Free Writing Prospectus”);
(b) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free
Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder, and did 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, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representative expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of the answers therein to Items 7 and 11(m) of
Form S-1;
(c) For the purposes of this Agreement, the “Applicable Time” is [___:___] ___m
(Eastern time)
on the date of this Agreement. The Pricing Prospectus, as of the Applicable Time, did not include
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; and each Issuer Free Writing Prospectus listed on Schedule III hereto does not conflict
with the information contained in the Registration Statement, the Pricing Prospectus or the
Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with
the Pricing Prospectus as of the Applicable Time, did not include 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 this representation and warranty shall not apply to statements or omissions made in an Issuer
Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through the Representative expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement and the Prospectus will conform, in all material respects
to the requirements of the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to each part of the Registration Statement
and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto,
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; provided, however, that
this representation and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by an Underwriter
through the Representative expressly for use therein or by a Selling Stockholder expressly for use
in the preparation of the answers therein to Items 7 and 11(m) of Form S-1;
(e) Neither the Company nor Financial Engines Advisor L.L.C., a Delaware limited liability
company (the “Subsidiary”) has sustained since the date of the latest audited financial statements
included in the Pricing Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or contemplated in
the Pricing Prospectus; and, since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not been any change in the capital
stock or long-term debt
of the Company or the Subsidiary or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs, management, financial
position, stockholders’ equity or results of operations of the Company and the Subsidiary (a
“Material Adverse Effect”), otherwise than as set forth or contemplated in the Pricing Prospectus;
(f) Each of the Company and the Subsidiary have good and marketable title in fee simple to all
real property and good and marketable title to all personal
property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are described in the Pricing
Prospectus or such as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and the Subsidiary; and any
real property and buildings held under lease by the Company and the Subsidiary are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company
and the Subsidiary;
(g) Each of the Company and the Subsidiary has been duly incorporated and is validly existing
as a corporation or limited liability company in good standing under the laws of the jurisdiction
of its incorporation or formation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Pricing Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, or is subject to no material liability or disability by reason
of the failure to be so qualified in any such jurisdiction except to the extent that the failure to
be so qualified would not have a Material Adverse Effect; and the Company does not have any
subsidiaries other than the Subsidiary; the Company and the Subsidiary conduct business in the
states listed on Annex II hereto;
(h) The Company has an authorized capitalization as set forth in the Pricing Prospectus and
all of the issued shares of capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform to the description of the Stock contained
in the Pricing Prospectus and Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors’ qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims; none of the outstanding
shares of capital stock were issued in violation of any preemptive rights, rights of first refusal
or other similar rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or the
Subsidiary other than those accurately described in the Pricing Prospectus and the Prospectus.
The description of the Company’s stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, set forth in the Pricing Prospectus and the
Prospectus accurately and fairly presents the information required to be shown with respect to such
plans, arrangements, options and rights.
(i) The Shares have been duly and validly authorized and, when issued and delivered against
payment therefor as provided herein, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Stock contained in the Prospectus;
(j) The issue and sale of the Shares and the execution, delivery and performance by the
Company with this Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a material default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or the Subsidiary is a party or by which the
Company or the Subsidiary is bound or to which any of the property or assets of the Company or the
Subsidiary is subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or the Certificate of Formation or operating
agreement of the Subsidiary or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or the Subsidiary or any of their
properties; and no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and sale of the Shares
or the consummation by the Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters;
(k) The Company is not in violation of its Certificate of Incorporation or By-laws and the
Subsidiary is not in violation of its Certificate of Formation or operating agreement. Neither the
Company nor the Subsidiary is in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party or by which it or any
of its properties may be bound or in violation of any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or the Subsidiary or any of its properties,
as applicable; the Company and the Subsidiary possess such valid and current licenses,
certificates, authorizations or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
license, certificate, authorization or permit, except where the failure to have such licenses,
certificates, authorizations or permits would not have a Material Adverse Effect;
(l) The statements set forth in the Pricing Prospectus and Prospectus under the caption
“Description of Capital Stock”, insofar as they purport to
constitute a summary of the terms of the
Stock, under the caption “Material U.S. Federal Income Tax Considerations", under the caption
“Business — Regulation”, under the caption “Related Party Transactions”, under the caption
“Description of Certain Indebtedness” and under the caption “Underwriting”, insofar as they purport
to describe the provisions of the laws and documents referred to therein, are accurate, complete
and fair;
(m) Other than as set forth in the Pricing Prospectus, there are no legal or governmental
proceedings pending to which the Company, the Subsidiary or any officer or director of the Company
is a party or of which any property of the Company, the Subsidiary or any officer or director of
the Company is the subject which, if determined adversely to the Company or the Subsidiary, would
individually or in the aggregate have a Material Adverse Effect or adversely affect the
consummation of the transactions contemplated by this Agreement; and, to the best of the Company’s
knowledge, no such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(n) The Company is not and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, will not be an “investment company”, as such term is defined
in the Investment Company Act of 1940, as amended (the “Investment Company Act”);
(o) At the time of filing the Initial Registration Statement the Company was not and, as of
the date hereof, is not an “ineligible issuer,” as defined in Rule 405 under the Act;
(p) KPMG, LLP, who have certified certain financial statements of the Company and its
subsidiaries, is an independent public accountant as required by the Act and the rules and
regulations of the Commission thereunder;
(q) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) that complies with the requirements of the Exchange Act and has been designed by the
Company’s principal executive officer and principal financial officer, or under their supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. The Company’s internal control over financial reporting is effective and
the Company is not aware of any material weaknesses in its internal control over financial
reporting;
(r) Since the date of the latest audited financial statements included in the Pricing
Prospectus, there has been no change in the Company’s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting;
(s) The Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act) that comply with the
requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the Company’s principal executive officer and
principal financial officer by others within those entities; and such disclosure controls and
procedures are effective;
(t) All tax returns required to be filed by the Company and the Subsidiary in all
jurisdictions have been timely and duly filed, other than those filings being contested in good
faith. There are no tax returns of the Company and the Subsidiary that are currently being audited
by state, local or federal taxing authorities or agencies (and with respect to which the Company or
the Subsidiary has received notice). All taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from such entities, have
been paid, other than those being contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest;
(u) Each of the Company and the Subsidiary maintains insurance covering its properties,
operations, personnel and businesses which insures against such losses and risks as are adequate in
accordance with its reasonable business judgment to protect the Company and the Subsidiary and
their businesses;
(v) Except as disclosed in the Pricing Prospectus and the Prospectus, there are no material
business relationships or related party transactions which would be required to be disclosed
therein by Item 404 of Regulation S-K of the Commission and such business relationship or related
party transaction described therein is a fair and accurate description in all material respects of
the relationships and transactions so described;
(w) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), whether or not subject to ERISA, and each
employee compensation plan, program or arrangement (whether paid in cash, Company stock, and/or
other property), that is maintained, administered or contributed to by the Company or any of its
affiliates, that together with the Company would be deemed a “single employer” within the meaning
of Section 4001(b)(1) of ERISA (“ERISA Affiliates”) for employees or former employees of the
Company and its ERISA Affiliates has been maintained in compliance in all material respects with
its terms and the requirements of any applicable statutes, orders, rules and regulations, including
but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no
prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, for
which the Company or any of its ERISA Affiliates would have any material liability has occurred
with respect to any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; for each such plan that is subject to the funding rules of Section 412 of
the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of
the Code has been incurred, whether or not waived, and the fair market value of the assets of each
such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial assumptions; 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 its ERISA Affiliates would have any material
liability; and neither the Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur any material liability under Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan”;
(x) The operations of the Company and the Subsidiary are and have been conducted at all times
in material compliance with ERISA, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Employee Benefit Laws is pending or, to the knowledge of the
Company, threatened;
(y) The Company is not required to be registered, licensed or qualified as an investment
advisor, a commodity trading advisor, a commodity pool operator or a futures commission merchant or
any or all of the foregoing, as applicable; the Subsidiary and each officer and director of each of
the Company and the Subsidiary that is required to be registered, licensed or qualified as an
investment adviser or as a commodity trading advisor, a commodity pool operator or a futures
commission merchant or any or all of the foregoing, as applicable, is so registered, licensed or
qualified in each jurisdiction where the conduct of its business or other activities of the Company
or any such subsidiary, officer or director requires such registration, license or qualification
(and such registration, license or qualification is in full force and effect), except the failure
to be so registered, licensed or qualified would not, individually or in the aggregate, result in a
Material Adverse Effect, and is in compliance with all applicable laws, rules and regulations,
requiring any such registration, licensing or qualification; The Subsidiary has adopted a written
compliance program reasonably designed to ensure compliance with the Investment Advisers Act of
1940, as amended (the “Advisers Act”) and has appointed a chief compliance officer;
(z) Each investment advisory agreement to which the Subsidiary is a party is a valid and
legally binding obligation of the Subsidiary and in compliance with the applicable provisions of
the Advisers Act, and the Subsidiary is not in material breach or violation of or in default under
any such agreement;
(aa) Except as disclosed in the Pricing Prospectus, there are no contracts, agreements or
understandings between the Company or the Subsidiary and any
person granting such person the right
to require the Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed by the Company under
the Act;
(bb) Neither the Company nor the Subsidiary is, or will as a result of the transactions
contemplated by this Agreement be, required to register as a broker-dealer under the Exchange Act
and the rules and regulations of the Commission thereunder or the securities laws of any state. No
officer, partner or employee of the Company or the Subsidiary is, or will as a result of the
transactions contemplated by this Agreement be, required to register as a broker-dealer under the
Exchange Act and the rules and regulations of the Commission thereunder or the securities laws of
any state;
(cc) Neither the Company nor the Subsidiary and no director, officer, agent, employee or other
person associated with or acting on behalf of the Company or the Subsidiary, has violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment;
(dd) None of the Company, the Subsidiary or any of their respective affiliates does business
with any court, administrative agency, regulatory body, commission or other governmental authority,
board, bureau or instrumentality, domestic or foreign and any subdivision thereof, or with any
individual, corporation, firm, partnership, joint venture, limited liability company, estate,
trust, business association, organization or other entity located in, any country targeted by any
of the economic sanctions, programs or similar sanctions-related measures of the United States as
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute
or otherwise make available such proceeds to its subsidiaries or any joint venture partner or other
person or entity, for the purpose of financing the activities of any person currently subject to
any U.S. sanctions administered by OFAC;
(ee) The operations of the Company and the Subsidiary are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all
jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or the Subsidiary with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened;
(ff) Consummation of the transactions contemplated by this Agreement will not involve an
“assignment” within the meaning of such term under the Advisers Act (and the rules and regulations
thereunder) of any of the investment advisory contracts to which the Subsidiary is a party; nor
will consummation of such transactions adversely affect in any material respect the ability of the
Subsidiary to conduct its businesses in compliance with applicable law as described in the Pricing
Prospectus, including, but not limited to, providing investment advisory services to clients;
(gg) Each of the Company and the Subsidiary owns or possesses all inventions, patent
applications, patents, trademarks (both registered and unregistered), tradenames, service names,
copyrights, trade secrets and other proprietary information described in the Pricing Prospectus, if
any, as being owned or licenses by it or which is necessary for the conduct of, or material to, its
businesses (collectively, the “Intellectual Property”), and the Company is unaware of any claim to
the contrary or any challenge by any other person to the rights of the Company and the Subsidiary
with respect to the Intellectual Property. None of the Company or its subsidiaries has received
notice of a claim of infringement of the intellectual property of a third party. To the best of
the Company’s knowledge, neither the Company nor the Subsidiary has infringed or is infringing the
intellectual property of a third party;
(hh) The financial statements filed with the Commission as a part of the Registration
Statement and included in the Pricing Prospectus and the Prospectus present fairly the consolidated
financial position of the Company and the Subsidiary as of and at the dates indicated and the
results of their operations and cash flows for the periods specified. Such financial statements
comply as to form with the applicable accounting requirements of the Securities Act and have been
prepared in conformity with GAAP applied on a consistent basis throughout the periods involved,
except as may be expressly stated in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration Statement. The financial data
set forth in the Pricing Prospectus and the Prospectus under the captions “Prospectus
Summary—Summary Consolidated Financial Data”, “Selected Consolidated Financial Information”
“Management’s Discussion and Analysis of Financial Condition” and “Capitalization fairly present
the information set forth therein on a basis consistent with that of the audited financial
statements contained in the Registration Statement;
(ii) There is no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any transactions
contemplated by this Agreement; and
(jj) This Agreement has been duly authorized, executed and delivered by the Company.
(kk) Each holder of a currently outstanding option issued under any of the Company’s stock
plans with outstanding options and any other similar option granting agreement (collectively, the
“Option Plans”) and each person who has acquired shares of Common Stock pursuant to the exercise of
any option granted under the Option Plans that is not a party to an agreement substantially to the
effect set forth in Section 5(e) hereof is subject to provisions in such Option Plans that provide
that none of such options or shares may be sold or otherwise transferred or disposed of for a
period of 180 days after the date of the Prospectus and the Company has imposed a stop-transfer
instruction with the Company’s transfer agent in order to enforce the foregoing lock-up provision
imposed pursuant to the Option Plans.
(ll) Each stockholder who is a party to the Fifth Amended and Restated Investor Rights
Agreement dated December 20, 2004 (the “Investor Rights Agreement”) that is not a party to an
agreement substantially to the effect set forth in Section 5(e) hereof, that pursuant to the terms
of the Investor Rights Agreement is subject to the lock-up provisions of Section 1.15 of such
agreement pursuant to which none of the shares of the Company’s capital stock held by such
stockholder may be sold or otherwise transferred or disposed of for a period of 180 days after the
date of the Prospectus and the Company has imposed a stop-transfer instruction with the Company’s
transfer agent in order to enforce the foregoing lock-up provision imposed pursuant to the Investor
Rights Agreement.
1. (ii) Each of the Selling Stockholders severally represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(a) This Agreement has been duly authorized, executed and delivered by each of the Selling
Stockholders.
(b) All consents, approvals, authorizations and orders necessary for the execution and
delivery by such Selling Stockholder of this Agreement and the Power of Attorney and the Custody
Agreement hereinafter referred to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the Power-of-Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder;
(c) The sale of the Shares to be sold by such Selling Stockholder hereunder and the execution,
delivery and performance by such Selling Stockholder with all of the provisions of this Agreement,
the Power of Attorney
and the Custody Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or assets of such Selling
Stockholder is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or Bylaws of such Selling Stockholder if such Selling Stockholder is a
corporation, the Partnership Agreement of such Selling Stockholder if such Selling Stockholder is a
partnership or any statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property of such Selling Stockholder;
(d) Such Selling Stockholder has, and immediately prior to the each Time of Delivery (as
defined in Section 4 hereof) such Selling Stockholder will have, good and valid title to the Shares
to be sold by such Selling Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment therefor pursuant hereto, good
and valid title to such Shares, free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters;
(e) During the period beginning from the date hereof and continuing to and including the date
163 days after the date of the Prospectus (the initial “Lock-Up Period”), not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of,
the date of this Agreement), without the prior written consent of the Representative; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company releases
earnings results or announces material news or a material event or (2) prior to the expiration of
the initial Lock-Up period, the Company announces that it will release earnings results during the
15-day period following the last day of the initial Lock-Up Period, then in each case the Lock-Up
Period will be automatically extended until the expiration of the 17-day period beginning on the
date of release of the earnings results or the announcement of the material news or material event,
as applicable, unless the Representative waives, in writing, such extension; such Selling
Stockholder hereby acknowledges that the Company has agreed herein to provide written notice of any
event that would result in an extension of the Lock-Up Period pursuant to the previous sentence to
such Selling Stockholder (in accordance with Section 13 herein) and agrees that any such notice
properly delivered will be deemed to have been given to, and received by, the Selling
Stockholder; such Selling Stockholder hereby further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this provision during the
period from the date hereof to and including the 34th day following the expiration of the initial
Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
Lock-
Up Period (as such may have been extended pursuant to the previous paragraph) has expired;
Notwithstanding the foregoing, such Selling Stockholder may (a) transfer such Selling
Stockholder’s Stock (i) as a bona fide gift or gifts, provided that the donee or donees thereof
agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct
or indirect benefit of such Selling Stockholder or the immediate family of such Selling
Stockholder, provided that the trustee of the trust agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such transfer shall not involve a
disposition for value, (iii) to affiliates of such Selling Stockholder, including its partners (if
a partnership) or members (if a limited liability company), provided that the affiliate agrees to
be bound in writing by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value and that no filing by any party (transferor or
transferee) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) shall be
required or shall be voluntarily made in connection with such transfer; (iv) exercise options to
purchase Stock held by such Selling Stockholder on a “net” basis, provided that the Company becomes
the owner of the shares of Stock surrendered in the net exercise that such shares of Stock will be
subject to the lockup provisions applicable to the Company set forth herein, and that no filing by
any party (transferor or transferee) under the Exchange Act shall be required or shall be
voluntarily made in connection with such transfer; or (v) with the prior written consent of the
Representative on behalf of the Underwriters and (b) establish a trading plan pursuant to Rule
10b5-1(c) under the Exchange Act for the transfer of such Selling Stockholder’s Stock, provided
that such plan does not provide for the transfer of such Selling Stockholder’s Stock during the
Lock-up Period. For purposes of this Agreement, “immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, if such Selling Stockholder is a corporation, the corporation may transfer the capital
stock of the Company to any wholly-owned subsidiary of such corporation; provided,
however, that in any such case, it shall be a condition to the transfer that the transferee
execute an agreement stating that the transferee is receiving and holding such capital stock
subject to the provisions of this Agreement and there shall be no further transfer of such capital
stock except in accordance with this Agreement, and provided further that any such transfer shall
not involve a disposition for value. Further, notwithstanding the foregoing, the provisions of
this Agreement shall not apply to the sale or disposition of shares of Stock of the Company that
were purchased by such Selling Stockholder in the
Offering or that are shares of Stock of the Company that were purchased by such Selling
Stockholder after the Offering in an open-market purchase on a public securities market provided
that no filing by any party (transferor or transferee) under the Exchange Act shall be required or
shall be voluntarily made in connection with such transfer. Such Selling Stockholder agrees and
consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar
against the
transfer of such Selling Stockholder Shares except in compliance with the foregoing
restrictions.
(f) Such Selling Stockholder 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;
(g) To the extent that any statements or omissions made in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto are made in reliance
upon and in conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein, such Preliminary Prospectus and the Registration Statement
did, and the Prospectus and any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements
therein not misleading;
(h) Certificates in negotiable form representing all of the Shares to be sold by such Selling
Stockholder hereunder have been placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the “Custody Agreement”), duly executed and delivered by such Selling Stockholder
to ▇▇▇▇▇ Fargo Bank, N.A., as custodian (the “Custodian”), and such Selling Stockholder has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to you (the “Power of
Attorney”), appointing the persons indicated in Schedule II hereto, and each of them, as such
Selling Stockholder’s attorneys-in-fact (the “Attorneys-in-Fact”) with authority to execute and
deliver this Agreement on behalf of such Selling Stockholder, to determine the purchase price to be
paid by the Underwriters to the Selling Stockholders as provided in Section 2 hereof, to authorize
the delivery of the Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions contemplated by this
Agreement and the Custody Agreement.
(i) Each of the (i) Custody Agreement signed by such Selling Stockholder and the Custodian,
relating to the deposit of the Shares to be sold by
such Selling Stockholder and (ii) the Power of Attorney of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder.
(j) Such Selling Stockholder has no reason to believe (in the case of Selling Stockholders
that are not Specified Selling Stockholders (as defined below), without any independent inquiry or
investigation) that the representations
and warranties of the Company contained in this Section 1
are not true and correct, is familiar with the Registration Statement and the Pricing Prospectus
and has no knowledge (in the case of Selling Stockholders that are not Specified Selling
Stockholders, without any independent inquiry or investigation) of any material fact, condition or
information not disclosed in the Registration Statement and Pricing Prospectus which has adversely
affected or may adversely affect the business of the Company or any of its subsidiaries; and the
sale of the shares of Common Stock by such Selling Stockholder is not prompted by any information
concerning the Company which is not set forth in the Registration Statement and the Pricing
Prospectus; and
(k) The Shares represented by the certificates held in custody for such Selling Stockholder
under the Custody Agreement are subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable; the
obligations of the Selling Stockholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of the Selling Stockholders
in accordance with the terms and conditions of this Agreement and of the Custody Agreements; and
actions taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity, termination, dissolution or other event had not occurred, regardless of
whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company and each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of the Underwriters, and
each of the Underwriters agree, severally and not jointly, to purchase from the Company and each of
the Selling Stockholders, at a purchase price per share of
$[_____], the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying the aggregate
number of Shares to be sold by the Company and each of the Selling Stockholders as set forth
opposite their respective names in Schedule II hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of
Firm Shares to be purchased by all of the Underwriters from the Company and all of the Selling
Stockholders hereunder, and (b) in the event and to the extent that the Underwriters shall exercise
the election to purchase Optional Shares as provided below, the Company agrees to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from
each of the Company, at the purchase price per share set forth in clause (a) of this Section 2,
that portion of the number of Optional Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter
in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
The Company hereby grants, severally and not jointly, to the Underwriters the right to
purchase at their election up to [ ] Optional Shares, at the purchase price per share set forth
in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of
Firm Shares, provided that the purchase price per Optional Share shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company and payable on the Firm
Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares shall
be made and may be exercised only by written notice from you to the Company, given within a period
of 30 calendar days after the date of this Agreement, setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than
ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set forth in the
Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in definitive form, and in
such authorized denominations and registered in such names as the Representative may request upon
at least forty-eight hours’ prior notice to the Company and the Selling Stockholders shall be
delivered by or on behalf of the Company and the Selling Stockholders to the Representative,
through the facilities of the Depository Trust Company (“DTC”), for the respective accounts of
the Underwriters, against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the accounts specified by the Company and
the Custodian, as their interests may appear, to the Representative at least forty-eight hours in
advance. The Company will cause the certificates representing the Shares to be made
available for
checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below)
with respect thereto at the office of DTC or its designated custodian (the “Designated Office”).
The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30
a.m., New York City time, on [______] 2010 or such other time and date as the Representative and the
Company may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York
time, on the date specified by the Representative in the written notice given by the Representative
of the Underwriters’ election to purchase such Optional Shares, or such other time and date as the
Representative and the Company may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the “First Time of Delivery”, such time and date for delivery of the
Optional Shares, if not the First Time of Delivery, is herein called the “Second Time of Delivery”,
and each such time and date for delivery is herein called a “Time of Delivery”.
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties
hereto pursuant to Section 8 hereof, including the cross receipt for the Shares and any additional
documents requested by the Underwriters pursuant to Section 8(j) hereof, will be delivered at the
offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
“Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at ...p.m., Pacific time, on the New York
Business Day next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, “New York Business Day” shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in
New York City are generally authorized or obligated by law or executive order to close.
(c) The
Company, in accordance with the requirements of NASD Conduct Rule 2720, as amended
(“Rule 2720”), as administered by FINRA, and subject to the terms and conditions stated herein,
hereby confirms the engagement of ▇▇▇▇▇ and Company, LLC, and Cowen hereby confirms its agreement
to render services, as a “qualified independent underwriter” within the meaning of Rule 2720(f)(12)
in connection with the offering and sale of the Shares. Cowen, in its capacity as “qualified
independent underwriter” and not otherwise, is referred to herein as the “Independent Underwriter.”
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or
any supplement to the Registration Statement or the Prospectus prior to the last Time of Delivery
which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed or becomes effective or any
amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof; to
file promptly all material required to be filed by the Company with the Commission pursuant to Rule
433(d) under the Act; to advise you, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the use of
any
Preliminary Prospectus or other prospectus in respect of the Shares, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or other prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably request to qualify
the Shares for offering and sale under the securities laws of such jurisdictions as you may request
and to comply with such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day next succeeding the
date of this Agreement and from time to time, to furnish the Underwriters with written and
electronic copies of the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of the Shares and if at such
time any event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus in order to comply with the
Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any Underwriter is required to
deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in
connection with sales of any of the Shares at any time nine months or
more after the time of issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as
you may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders as soon as practicable, but in any
event not later than sixteen months after the effective date
of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and including the date
180 days after the date of the Prospectus (the “Company Lock-Up Period”), not to offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose,
except as provided hereunder, of any securities of the Company that are substantially similar to
the Shares, including but not limited to any options or warrants to purchase shares of Stock or any
securities that are convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior written consent; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company releases
earnings results or announces material news or a material event or (2) prior to the expiration of
the initial Company Lock-Up Period, the Company announces that it will release earnings results
during the 15-day period following the last day of the initial Company Lock-Up Period, then in each
case the Company Lock-Up Period will be automatically extended until the expiration of the 18-day
period beginning on the date of release of the earnings results or the announcement of the material
news or material event, as applicable, unless the Representative waives, in writing, such
extension; the Company will provide the Representative and each stockholder subject to the Lock-Up
Period pursuant to the lockup letters described in Section 8(i) with prior notice of any such
announcement that gives rise to an extension of the Lock-up Period;
(f) To furnish to its stockholders as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the Registration Statement),
to make available to its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(g) The Company shall engage and maintain, at its expense, a registrar and transfer agent for
the Common Stock;
(h) During a period of three years from the effective date of the Registration Statement, to
furnish to you copies of all reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are available, copies of any reports and
financial
statements furnished to or filed with the Commission or any national securities exchange
on which any class of securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission); provided, that any information or documents available
on the Commission’s Electronic Data Gathering, Analysis and Retrieval System shall be considered
furnished for purposes of this Section 5(h);
(i) To use the net proceeds received by it from the sale of the Shares pursuant to this
Agreement in the manner specified in the Pricing Prospectus under the caption “Use of Proceeds”;
(j) To use its best efforts to list for quotation the Shares on the Nasdaq Stock Market Inc.’s
Global Select Market (“NASDAQ”);
(k) To file with the Commission such information on Form 10-Q or Form 10-K as may be required
by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(m) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter
an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering
of the Shares (the “License”); provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be assigned or transferred;
(n) The Company will comply with all applicable securities and other laws, rules and
regulations, including, without limitation, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and use its best efforts to
cause the Company’s directors and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; and
(o) The Company will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, under the Exchange Act
or otherwise, the stabilization or manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares.
(p) The Company will enforce the terms of, and not to permit the release from, each lock-up
provision imposed pursuant to the Option Plans or the Investor Rights Agreement with each of the
Company’s directors, officers and stockholders and each person who acquires shares of Common Stock
pursuant to the exercise of any option or right granted under the Option Plans, unless permitted by
the Representative, and to issue and impose a stop-transfer instruction with the Company’s transfer
agent in order to enforce such lock-up provisions.
6. (a) The Company and each Selling Stockholder represents and agrees that, without the prior
consent of the Representative, it has not made and will not make any offer relating to the Shares
that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each
Underwriter represents and agrees that, without the prior consent of the Company and the
Representative, it has not made and will not make any offer relating to the Shares that would
constitute a free writing prospectus; any such free writing prospectus the use of which has been
consented to by the Company and the Representative is listed on Schedule III hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission,
being preceded or accompanied by a Prospectus satisfying Section 10 of the Act, or retention where
required and legending; and the Company represents that it has satisfied and agrees that it will
satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the
Commission any electronic road show;
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the Pricing Prospectus or the
Prospectus or would include an 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 then
prevailing, not misleading, the Company will give prompt notice thereof to the Representative. and,
if requested by the Representative, will prepare and furnish without charge to each Underwriter an
Issuer Free Writing Prospectus or other document which will correct such conflict, statement or
omission; provided, however, that this representation and warranty shall not apply to any
statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in
conformity with information furnished in writing to the Company by an Underwriter through the
Representative expressly for use therein.
7. The Company covenants and agrees with the several Underwriters that (a) the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s
counsel and accountants in
connection with the registration of the Shares under the Act and all
other expenses in connection with the preparation, printing, reproduction and filing of the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof
to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey (iv) all fees and expenses in connection with listing the
Shares on NASDAQ; (v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required review by the Financial Industry Regulatory
Authority, Inc. of the terms of the sale of the Shares; (vi) costs and expenses in connection with
presentations or meetings undertaken in connection with the marketing of the offering and sale of
the Shares to prospective investors; (vii) the cost of preparing stock certificates; (viii) the
cost and charges of any transfer agent or registrar; and (ix) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise specifically provided for
in this Section; and (b) each Selling Stockholder will pay or cause to be paid all costs and
expenses incident to the performance of such Selling Stockholder’s obligations hereunder which are
not otherwise specifically provided for in this Section, including (i) any fees and expenses of
counsel for such Selling Stockholder, (ii) such Selling Stockholder’s pro rata share of the fees
and expenses of the Attorneys-in-Fact and the Custodian, and (iii) all expenses and taxes incident
to the sale and delivery of the Shares to be sold by such Selling Stockholder to the Underwriters
hereunder. It is understood, however, that, the Company shall bear, and the Selling Stockholders
shall not be required to pay or to reimburse the Company for, the cost of any other matters not
directly relating to the sale and purchase of the Shares pursuant to this Agreement, and that
except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale
of any of the Shares by them, and any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to be delivered at each
Time of Delivery, shall be subject, in their discretion, to the condition that all representations
and warranties and other statements of the Company and the Selling Stockholders herein are, at and
as of such Time of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its obligations hereunder theretofore to be performed, and
the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing by the rules and
regulations under the Act and in accordance with Section 5(a) hereof; all material required
to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with
the Commission within the applicable time period prescribed for such filing by Rule 433; if
the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been
initiated or threatened by the Commission; all requests for additional information on the
part of the Commission shall have been complied with to your reasonable satisfaction and;
the FINRA shall have raised no objection to the Fairness and reasonableness of the
underwriting terms and arrangements;
(b) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, shall have furnished to
you such written opinion or opinions (a form of each such opinion is attached as Annex
II(a) hereto), dated such Time of Delivery, in form and substance satisfactory to you, with
respect to matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass upon such
matters;
(c) Pillsbury ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex II hereto),
dated such Time of Delivery, in form and substance satisfactory to you, to the effect set
forth in Annex II:
(d) The respective counsel for each of the Selling Stockholders, as indicated in
Schedule II hereto, each shall have furnished to you their written opinion with respect to
each of the Selling Stockholders for whom they are acting as counsel, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly executed and
delivered by such Selling Stockholder and constitute valid and binding agreements of
such Selling Stockholder in accordance with their terms;
(ii) This Agreement has been duly executed and delivered by or on behalf of such
Selling Stockholder; and the sale of the Shares to be sold by such Selling Stockholder
hereunder and the execution, delivery and performance by such Selling Stockholder with
all of the
provisions of this Agreement, the Power-of-Attorney and the Custody
Agreement and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any terms or provisions
of, or constitute a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel to which such
Selling Stockholder is a party or by which such Selling Stockholder is bound or to
which any of the property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such Selling Stockholder is a
corporation, the Partnership Agreement of such Selling Stockholder if such Selling
Stockholder is a partnership or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation of the transactions contemplated by
this Agreement in connection with the Shares to be sold by such Selling Stockholder
hereunder, except any such consent, approval, authorization or order which has been
duly obtained and is in full force and effect, such as have been obtained under the
Act and such as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of such Shares by the Underwriters;
(iv) Immediately prior to such Time of Delivery, such Selling Stockholder had
good and valid title to the Shares to be sold at such Time of Delivery by such Selling
Stockholder under this Agreement, free and clear of all liens, encumbrances, equities
or claims, and full right, power and authority to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder hereunder; and
(v) Good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters;
(e) On the date of the Prospectus at a time prior to the execution of this Agreement,
at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to
the Registration Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, KPMG, LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as
Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as Annex I(b) hereto);
(f) (i) Neither the Company nor the Subsidiary shall have sustained since the date of
the latest audited financial statements included in the Pricing Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii)
since the respective dates as of which information is given in the Pricing Prospectus there
shall not have been any change in the capital stock or long-term debt of the Company or the
Subsidiary or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders’ equity or
results of operations of the Company and the Subsidiary, otherwise than as set forth or
contemplated in the Pricing Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(g) On or after the Applicable Time (i) no downgrading shall have occurred in the
rating accorded the Company’s debt securities by any “nationally recognized statistical
rating organization”, as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its rating of any
of the Company’s debt securities;
(h) On or after the Applicable Time there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities generally on
NASDAQ; (ii) a suspension or material limitation in trading in the Company’s securities on
NASDAQ; (iii) a general moratorium on commercial banking activities declared by either
Federal, or New York or California State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v) the occurrence of
any other calamity or crisis or any change in financial, political or economic conditions
in the United States or elsewhere, if the effect of any such event specified in clause (iv)
or (v) in your judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(i) The Shares to be sold at such Time of Delivery shall have been duly listed for
quotation on NASDAQ;
(j) The Company shall have obtained and delivered to the Underwriters executed copies
of an agreement from each stockholder listed on Exhibit A hereto, substantially to the
effect set forth in Section 5(e) hereof in form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section 5(c) hereof with
respect to the furnishing of prospectuses on the New York Business Day next succeeding the
date of this Agreement;
(l) On the date hereof, the Company and the Selling Stockholders shall have furnished
for review by the Representative copies of the Powers of Attorney and Custody Agreements
executed by each of the Selling Stockholders and such further information, certificates and
documents as the Representative may reasonably request; and
(m) The Company and the Selling Stockholders shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the Company and of
the Selling Stockholders, respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Selling Stockholders, respectively,
herein at and as of such Time of Delivery, as to the performance by the Company and the
Selling Stockholders of all of their respective obligations hereunder to be performed at or
prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as you may reasonably request.
9. (a) The Company and each of the Specified Selling Stockholders, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any
“issuer information” filed or required to be
filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided, however, that the
Company and the Specified Selling Stockholders shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representative expressly for
use therein and provided further, that each of the Specified Selling Stockholders shall not be
liable under this Section 9(a) for any amount greater than the product of (A) the number of Shares
purchased by the Underwriters from such Specified Selling Stockholder under Section 2 hereof, times
(B) the per Share proceeds, before expenses, to the selling stockholders as set forth on the cover
page of the Prospectus. For purposes of this Agreement, “Specified Selling Stockholders” means the
stockholders listed on Schedule IV. The Company also agrees to indemnify and hold harmless the Independent Underwriter and each person,
if any, who controls the Independent Underwriter within the meaning of either Section 15 of the
Act, or Section 20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments incurred as a result of the Independent Underwriter’s participation as
Independent Underwriter in connection with the offering of the Shares, except for any losses,
claims, damages, liabilities, and judgments finally determined by a court of competent jurisdiction
or any arbitration tribunal to have resulted from the Independent Underwriter’s, or such
controlling person’s, gross negligence or willful misconduct, and to reimburse the Independent
Underwriter for any legal or other expenses reasonably incurred by the Independent Underwriter in
connection with investigating or defending any such action or claim as such expenses are incurred.
(b) Each of the Selling Stockholders, severally and not jointly, will indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, an Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, an Preliminary Prospectus, the Pricing Prospectus or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that such Selling
Stockholder shall not be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any Underwriter through the
Representative expressly for use therein and provided further, that each of the Selling
Stockholders shall not be liable under this Section 9(b) for any amount greater than the product of
(A) the number of Shares purchased by the Underwriters from such Selling Stockholder under Section
2 hereof, times (B) the per Share proceeds, before expenses, to the selling stockholders as set
forth on the cover page of the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and each Selling Stockholder
against any losses, claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Registration Statement,
any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the Representative
expressly for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a), (b) or (c) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the indemnified party, be counsel
to the indemnifying party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of
the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 9 is unavailable to or insufficient to
hold harmless an indemnified party under subsection (a), (b) or (c) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other from the offering of the
Shares. If, however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the notice required under
subsection (d) above, then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting expenses) received by the
Company and the Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. Each of the Company, the Selling Stockholders and the Underwriters agrees that the Independent
Underwriter will not receive any additional benefits hereunder for serving as the “qualified
independent underwriter” in connection with the offering of the
Shares. The relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The Company, each
of the Selling Stockholders and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (e) 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 above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this subsection (e), no
Underwriter shall be required to contribute any amount in excess of the amount by
which the total
price at which the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this Section 9 shall be
in addition to any liability which the Company and the respective Selling Stockholders may
otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act and each broker-dealer affiliate of any
Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any person who, with
his or her consent, is named in the Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company or any Selling Stockholder within the
meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the Shares which it
has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you
or another party or other parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company and the Selling Stockholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satisfactory to you to
purchase such Shares on such terms. In the event that, within the respective prescribed periods,
you notify the Company and the Selling Stockholders that you have so arranged for the purchase of
such Shares, or the Company and the Selling Stockholders notify you that they have so arranged for
the purchase of such Shares, you or the Company and the Selling Stockholders shall have the right
to postpone such Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The
term “Underwriter” as used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company and the Selling Stockholders as provided in
subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to purchase hereunder at
such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder)
of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company and the Selling Stockholders as provided in
subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds
one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Stockholders shall not exercise the right described in subsection
(b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders, except for the expenses to be borne by the Company and the Selling
Stockholders and the Underwriters as provided in Section 7 hereof and the indemnity and
contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties and other statements
of the Company, the Selling Stockholders and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or
the Company, or any of the Selling Stockholders, or any officer or director or
controlling person of the Company, or any controlling person of any Selling Stockholder, and
shall survive delivery of and payment for the Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof, neither the Company
nor the Selling Stockholders shall then be under any liability to any Underwriter except as
provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by
or on behalf of the Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by
you,
including fees and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company
and the Selling Stockholders shall then be under no further liability to any Underwriter in respect
of the Shares not so delivered except as provided in Sections 7 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement
on behalf of any Underwriter made or given by you as the representative; and in all dealings with
any Selling Stockholder hereunder, you and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the
representative at ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department; if to any Selling Stockholder shall be delivered or
sent by mail, telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 9(d) hereof shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling Stockholders by you
upon request; provided, however, that notices under subsection 5(e) shall be in writing, and if to
the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the
representative at ▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Control Room. Any such statements, requests, notices or agreements shall take effect upon receipt
thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), the underwriters are required to
obtain, verify and record information that identifies their respective clients, including the
Company, which information may include the name and address of their respective clients, as well as
other information that will allow the underwriters to properly identify their respective clients.
14. This Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriters, the Company and the Selling Stockholders and, to the extent provided in Sections 9
and 11 hereof, the officers and directors of the Company and each person who controls the Company,
and Selling Stockholders or any
Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right under or by virtue of
this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the term “business day”
shall mean any day when the Commission’s office in Washington, D.C. is open for business.
16. The Company and each Selling Stockholder acknowledges and agrees that (i) the purchase and
sale of the Shares pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith
and with the process leading to such transaction each Underwriter, including the Independent Underwriter, is acting solely as a principal
and not the agent or fiduciary of the Company and the Selling Stockholders, (iii) no Underwriter, including the Independent Underwriter,
has assumed an advisory or fiduciary responsibility in favor of the Company and the Selling
Stockholders with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company on other
matters) or any other obligation to the Company and the Selling Stockholders except the obligations
expressly set forth in this Agreement and (iv) each of the Company and the Selling Stockholders
has consulted its own legal and financial advisors to the extent it deemed appropriate. The
Company and the Selling Stockholders agrees that they will not claim that the Underwriters (including the Independent Underwriter), or any
of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar
duty to the Company or the Selling Stockholders, in connection with such transaction or the
process leading thereto.
17. This Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company, the Selling Stockholders and the Underwriters, or any of them, with
respect to the subject matter hereof.
18. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.
19. The Company, the Selling Stockholders and each of the Underwriters hereby irrevocably
waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
20. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
21. Notwithstanding anything herein to the contrary, the Company and the Selling Stockholders
are authorized to disclose to any persons the U.S. federal and state income tax treatment and tax
structure of the potential transaction and
all materials of any kind (including tax opinions and
other tax analyses) provided to the Company and the Selling Stockholders relating to that treatment
and structure, without the Underwriters imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply with
securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to
that treatment.
If the foregoing is in accordance with your understanding, please sign and return to us eight
counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters,
this letter and such acceptance hereof shall constitute a binding agreement between each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be submitted to the
Company and the Selling Stockholders for examination, upon request, but without warranty on your
part as to the authority of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for a Selling
Stockholder represents by so doing that he has been duly appointed as Attorney-in-Fact by such
Selling Stockholder pursuant to a validly existing and binding Power-of-Attorney which authorizes
such Attorney-in-Fact to take such action.
| Very truly yours, | ||||||
| Financial Engines, Inc. | ||||||
| By: | ||||||
| Title: | ||||||
| [Names of Selling Stockholders] | ||||||
| By: | ||||||
| Title: | ||||||
| As Attorney-in-Fact acting on behalf of each of the Selling Stockholders named in Schedule II to this Agreement. | ||||||
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
By: |
||||
On behalf of each of the Underwriters
SCHEDULE I
| Number of | ||||||||
| Optional | ||||||||
| Shares to | ||||||||
| be | ||||||||
| Total | Purchased | |||||||
| Number of | if | |||||||
| Firm Shares | Maximum | |||||||
| to be | Option | |||||||
| Underwriter | Purchased | Exercised | ||||||
▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. |
||||||||
[Names of other Underwriters] |
||||||||
Total |
||||||||
SCHEDULE II
| [Number of Optional | ||||
| Shares to be | ||||
| Total Number of | Sold if | |||
| Firm Shares | Maximum Option | |||
| to be Sold | Exercised | |||
The Company |
||||
The Selling Stockholders: |
||||
[Name of Selling Stockholder] |
||||
Total
|
||||
F-1