] Shares ADS Tactical, Inc. FORM OF UNDERWRITING AGREEMENT
| [ ], 2011 |
X.X. Xxxxxx Securities LLC
Xxxxxx Xxxxxxx & Co. LLC
Xxxxxx Xxxxxxx & Co. LLC
| c/o | X.X. Xxxxxx Securities LLC 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
|
| Xxxxxx Xxxxxxx & Co. LLC 0000 Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
||
Ladies and Gentlemen:
ADS Tactical, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the
several Underwriters named in Schedule II hereto (the “Underwriters”), and certain shareholders of
the Company named in Schedule I hereto (the “Selling Shareholders”), severally and not jointly
propose to sell to the several Underwriters, an aggregate of [ ] shares of the common stock, $0.01
par value, of the Company (the “Firm Shares”), of which [ ] shares are to be issued and sold by the
Company and [ ] shares are to be sold by the Selling Shareholders, each Selling Shareholder selling
the amount of the Firm Shares set forth opposite such Selling Shareholder’s name in Schedule I
hereto.
The Company also proposes to issue and sell to the several Underwriters, and the Selling
Shareholders severally and not jointly propose to sell to the several Underwriters not more than an
additional [ ] shares of its common stock, $0.01 par value, (the “Additional Shares”) if and to the
extent that Xxxxxx Xxxxxxx & Co. LLC (“Xxxxxx Xxxxxxx”) and X.X. Xxxxxx Securities LLC
(“X.X. Xxxxxx”), as Managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the Underwriters in
Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the “Shares.” The shares of common stock, $0.01 par value, of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to as the “Common
Stock.” The Company and the Selling Shareholders are hereinafter sometimes collectively referred to
as the “Sellers.”
The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement, including a prospectus, relating to the Shares. The registration statement
as amended at the time it becomes effective, including the information (if any) deemed to be part
of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the “Securities Act”) (“Rule 430 Information”), is hereinafter
referred to as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus”
means each prospectus included in such registration statement (and any amendments thereto) before
effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included in the Registration Statement at the time of its
effectiveness that omits Rule 430 Information. The prospectus in the form first used to confirm
sales of Shares (or in the form first made available to the Underwriters by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as
the “Prospectus.” If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the “Rule 462
Registration Statement”), then any reference herein to the term “Registration Statement” shall be
deemed to include such Rule 462 Registration Statement.
For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule
405 under the Securities Act, “Time of Sale Prospectus” means the Preliminary Prospectus, together
with the documents and information set forth in Schedule III hereto, and “broadly available road
show” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities
Act that has been made available without restriction to any person.
Xxxxxx Xxxxxxx has agreed to reserve a portion of the Shares to be purchased by it under this
Agreement for sale to the Company’s directors, officers, employees and business associates and
other parties related to the Company (collectively, “Participants”), as set forth in the Prospectus
under the heading “Underwriters” (the “Directed Share Program”). The Shares to be sold by Xxxxxx
Xxxxxxx and its affiliates pursuant to the Directed Share Program are referred to hereinafter as
the “Directed Shares”. Any Directed Shares not orally confirmed for purchase by any Participant by
the end of the business day on which this Agreement is executed will be offered to the public by
the Underwriters as set forth in the Prospectus.
1. Representations and Warranties of the Company. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the Company’s knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any
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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, (ii) the Registration Statement, when it became effective, complied and the
Prospectus, when it is first filed in accordance with Rule 424(b) under the Securities Act and on the
Closing Date and any Option Closing Date (as defined in
Section 3), will comply in all
material respects with the Securities Act and the applicable rules and regulations of the
Commission thereunder, (iii) as of [•]:[•] p.m., New York City time, on the date hereof (the
“Applicable Time”), the Time of Sale Prospectus did not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, (iv) as of the Applicable Time, each
broadly available road show, if any, when considered together with the Time of Sale Prospectus, did
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading and (v) on its date, the Closing Date and any Option Closing Date, the Prospectus does
not contain and, as amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement, the Time of Sale Prospectus, each broadly available road show or the
Prospectus based upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) The Company is not an “ineligible issuer” in connection with the offering pursuant to
Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with
the Commission in accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that the Company has
filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule III hereto, and electronic road shows, if any, each furnished to you before
first use, the Company has not prepared, used or referred to, and will not, without your prior
consent, prepare, use or refer to, any free writing prospectus.
(d) The Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the Time of Sale
Prospectus and is duly
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qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property requires such
qualification (which jurisdictions are as set forth in Schedule IV), except to the extent that the
failure to be so qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as described in the
Time of Sale Prospectus and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of property requires
such qualification (which jurisdictions are as set forth in Schedule IV),except to the extent that
the failure to be so qualified or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole; 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 are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) This Agreement has been duly authorized, executed and delivered by the Company.
(g) The authorized capital stock of the Company conforms as to legal matters in all
material respects to the description thereof contained under the heading “Description of Capital
Stock” in each of the Time of Sale Prospectus and the Prospectus.
(h) The shares of Common Stock (including the Shares to be sold by the Selling
Shareholders) outstanding prior to the issuance of the Shares to be sold by the Company have been
duly authorized and are validly issued, fully paid and non-assessable.
(i) The Shares to be sold by the Company have been duly authorized and, when issued and
delivered against payment therefore in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(j) The execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement will not contravene (i) any provision of applicable law or
(ii) the certificate of incorporation or by-laws of the Company or (iii) any agreement or other
instrument binding upon the Company or any of its subsidiaries, or (iv) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the Company or any
subsidiary, except, in the case of clauses
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(iii) and (iv), for any such contravention that would
not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and no
consent, approval, authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under this Agreement,
except (i) for the registration of the Shares under the Securities Act, (ii) for such registration
as is required under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (iii)
for such consents, approvals, authorizations, orders or qualifications as may be required by the
Financial Industry Regulatory Authority, Inc. (“FINRA”) and (iv) such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer and sale of the
Shares.
(k) There has not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company and its subsidiaries, taken as a whole, from that set forth
in the Time of Sale Prospectus.
(l) There are no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened to which the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject other than (A) proceedings
accurately described in all material respects in the Time of Sale Prospectus or (B) proceedings
that would not have a material adverse effect on the Company and its subsidiaries, taken as a
whole, or on the power or ability of the Company to perform its obligations under this Agreement or
to consummate the transactions contemplated by the Time of Sale Prospectus; and there are no
statutes or regulations to which the Company or any of its subsidiaries is subject, or any
contracts or other documents to which the Company or any of its subsidiaries is a party, that are
required to be described in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as required.
(m) Each Preliminary Prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(n) The Company is not, and after giving effect to the offering and sale of the Shares and
the application of the proceeds thereof as described in the Prospectus under the heading “Use of
Proceeds” will not be, required to register as an “investment company” as such term is defined in
the Investment Company Act of 1940, as amended.
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(o) The Company and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or approval, except, in the
case of each of clauses (i), (ii) and (iii), where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) There are no costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third parties) which would,
singly or in the aggregate, reasonably be expected to have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(q) Except as described in each of the Time of Sale Prospectus and the Prospectus, there
are no contracts, agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
(r) Neither the Company nor any of its subsidiaries or affiliates, nor any director,
officer, or employee, nor, to the Company’s knowledge, any agent or representative of the Company
or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an
offer, payment, promise to pay, or authorization or approval of the payment or giving of money,
property, gifts or anything else of value, directly or indirectly, to any “government official”
(including any officer or employee of a government or government-owned or controlled entity or of a
public international organization, or any person acting in an official capacity for or on behalf of
any of the foregoing, or any political party or party official or candidate for political office)
to influence official action or secure an improper advantage; and the Company and its subsidiaries
and affiliates have conducted their businesses in compliance with applicable anti-corruption laws
and have instituted and maintain policies and procedures designed to promote and achieve compliance
with such laws and with the representation and warranty contained herein.
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(s) The operations of the Company and its subsidiaries are and have been conducted at all
times in material compliance with all applicable financial recordkeeping and reporting
requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions
where the Company and its subsidiaries conduct business, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Anti-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 any of its subsidiaries with respect to the
Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(t) (i) The Company represents that neither the Company nor any of its subsidiaries, nor
any director, officer, or employee thereof, nor, to the Company’s knowledge, any agent, affiliate
or representative of the Company or any of its subsidiaries, is an individual or entity (“Person”)
that is, or is owned or controlled by a Person that is:
(A) the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively,
“Sanctions”), nor
(B) located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran,
Libya, North Korea, Sudan and Syria).
(ii) The Company represents and covenants that neither it nor the Selling Shareholders will,
directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
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(iii) The Company represents and covenants that for the past 5 years, it and its subsidiaries
have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions
with any Person, or in any country or territory, that at the time of the dealing or transaction is
or was the subject of Sanctions.
(u) Subsequent to the respective dates as of which information is given in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company and its
subsidiaries, taken as a whole, have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction outside the ordinary course of business; (ii)
the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock other
than ordinary and customary dividends; and (iii) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its subsidiaries, taken as a
whole, except in each case as described in each of the Registration Statement, the Time of Sale
Prospectus and the Prospectus, respectively.
(v) The Company and its subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by them which is
material to the business of the Company and its subsidiaries, taken as a whole, free and clear of
all liens, encumbrances and defects except such as are described in the Time of Sale Prospectus or
such as do not materially affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property and buildings by
the Company and its subsidiaries, in each case except as described in the Time of Sale Prospectus.
(w) The Company and its subsidiaries own or possess or have the right to use, or can
acquire on reasonable terms ownership or the right to use, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures), trademarks, service
marks and trade names currently employed by them in connection with the business now operated by
them, and neither the Company nor any of its subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
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(x) No material labor dispute with the employees of the Company or any of its subsidiaries
exists, except as described in the Time of Sale Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or contractors that could have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(y) The Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are customary in the
businesses in which they are engaged; neither the Company nor any of its subsidiaries has been
refused any insurance coverage sought or applied for in the past twelve months; and neither the
Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its
business at a cost that would not reasonably be expected to have a material adverse effect on
the Company and its subsidiaries, taken as a whole, except as described in the Time of Sale
Prospectus.
(z) The Company and its subsidiaries possess all certificates, authorizations, licenses
and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses as described in each of the Time of Sale Prospectus and the
Prospectus, except where any failures to posses the same would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and
its subsidiaries, taken as a whole, except as described in the Time of Sale Prospectus.
(aa) Except as described in each of the Time of Sale Prospectus and the Prospectus, the
Company maintains a consolidated system of internal accounting controls on behalf of the Company
and its subsidiaries sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as described in the Time of
Sale Prospectus, since the end of the Company’s most recent audited fiscal year, (i) the Company
has not been advised by its independent accountants of any material weakness in the Company’s
internal control over financial reporting (whether or not
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remediated) and (ii) there has not been
any 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.
(bb) Except as described in the Time of Sale Prospectus, the Company has not sold, issued
or distributed any shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or warrants.
(cc) The Registration Statement, the Prospectus, the Time of Sale Prospectus and any
Preliminary Prospectus comply, and any amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus, the Time of Sale
Prospectus or any
Preliminary Prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program.
(dd) No consent, approval, authorization or order of, or qualification with, any
governmental body or agency, other than those obtained, is required in connection with the offering
of the Directed Shares in any jurisdiction where the Directed Shares are being offered.
(ee) The Company has not offered, or caused Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Entity as
defined in Section 12 to offer, Shares to any person pursuant to the Directed Share Program with
the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the
customer’s or supplier’s level or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or its products.
(ff) Except as described in each of the Time of Sale Prospectus and the Prospectus, the
Company and each of its subsidiaries have filed all federal, state, local and foreign tax returns
required to be filed through the date of this Agreement or have requested extensions thereof
(except where the failure to file would not, individually or in the aggregate, have a material
adverse effect) and have paid all taxes required to be paid thereon (except for cases in which the
failure to file or pay would not have a material adverse effect, or, except as currently being
contested in good faith and for which reserves required by U.S. GAAP have been created in the
financial statements of the Company), and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company nor any of its subsidiaries
have any notice or knowledge of any tax deficiency which could reasonably be
10
expected to be
determined adversely to the Company or its subsidiaries and which could reasonably be expected to
have) a material adverse effect.
(gg) The Company made a valid election to be an S corporation, became an S corporation
when this election became effective on [ ], 2011 and was an S corporation from the date this
election became effective until the date hereof.
2. Representations and Warranties of the Selling Shareholders. Each Selling Shareholder,
severally and not jointly, represents and warrants to and agrees with each of the Underwriters
that:
(a) This Agreement has been duly authorized, executed and delivered by or on behalf of
such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and the performance by such
Selling Shareholder of its obligations under, this Agreement, the Custody Agreement signed by such
Selling Shareholder and [ ], as Custodian, relating to the deposit of the Shares to be sold by such
Selling
Shareholder (the “Custody Agreement”) and the Power of Attorney appointing certain individuals
as such Selling Shareholder’s attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the “Power of Attorney”) will
not contravene (i) any provision of applicable law, or (ii) the certificate of incorporation or
by-laws of such Selling Shareholder (if such Selling Shareholder is a corporation), or (iii) any
agreement or other instrument binding upon such Selling Shareholder or (iv) any judgment, order or
decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder,
except in the case of clauses (iii) and (iv), for any such contravention that would not reasonably
be expected to impair in any material respect the consummation of such Selling Shareholder’s
obligations hereunder; and no consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power of Attorney of such Selling
Shareholder, except (i) for the registration of the Shares under the Securities Act, (ii) for such
registration as is required under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), (iii) for such consents, approvals, authorizations, orders or qualifications as may be
required by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and (iv) such as may be
required by the securities or Blue Sky laws of the various states in connection with the offer and
sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date will have, valid title to the
Shares to be sold by such Selling Shareholder free and clear of all security interests, claims,
liens, equities or other encumbrances and the legal right and power, and all authorization and
approval required by law, to enter into this
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Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Shares to be sold by such Selling Shareholder or a
security entitlement in respect of such Shares.
(d) The Custody Agreement and the Power of Attorney, to the extent such Selling
Shareholder is a party thereto, have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling Shareholder.
(e) Such Selling Shareholder is not prompted by any information concerning the Company or
its subsidiaries which is not set forth in the Time of Sale Prospectus to sell its Shares pursuant
to this Agreement.
(f) To such Selling Shareholder’s knowledge, (i) the Registration Statement, when it
became effective, did not contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) the Registration
Statement, when it became effective, complied and the Prospectus, when it is first filed in
accordance with Rule 424(b) under the Securities Act and on the Closing Date and any Option Closing
Date, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission thereunder, (iii) as
of the Applicable Time, the Time of Sale Prospectus did not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (iv) as of the Applicable
Time, each broadly available road show, if any, when considered together with the Time of Sale
Prospectus, did not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading and (v) on its date, the Closing Date and any Option Closing Date, the
Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement, the Time of Sale Prospectus, each broadly
available road show or the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use therein.
3. Agreements to Sell and Purchase. Each Seller, severally and not jointly, hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the representations
and warranties herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Seller at $[ ] a share (the “Purchase Price”) the
number of Firm Shares
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(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth in Schedule II hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Sellers, severally and not jointly, hereby agree to sell to the
Underwriters, and the Underwriters shall have the right to purchase, severally and not jointly, up
to [ ] Additional Shares at the Purchase Price[, provided, however, that the amount paid by the
Underwriters for any Additional Shares shall be reduced by an amount per share equal to any
dividends declared by the Company and payable on the Firm Shares but not payable on such Additional
Shares], of which up to [ ] shares are to be issued and sold by the Company and up to [ ] shares
are to be sold by the Selling Shareholders, each Selling Shareholder selling the amount of
Additional Shares set forth opposite such Selling Shareholder’s name in Schedule I hereto. Xxxxxx
Xxxxxxx and X.X. Xxxxxx may exercise this right on behalf of the Underwriters in whole or from time
to time in part by giving written notice not later than 30 days after the date of this Agreement.
Any exercise notice shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Each purchase date must be at
least one business day after the written notice is given and may not be earlier than the closing
date for the Firm Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for the purpose of
covering sales of shares in excess of the number of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an “Option Closing Date”), each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments
to eliminate fractional shares as you may determine) that bears the same proportion to the total
number of Additional Shares to be purchased on such Option Closing Date as the number of Firm
Shares set forth in Schedule II hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written consent of X.X. Xxxxxx and Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period ending 180 days after the
date of the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or
any other securities so owned convertible into or exercisable or exchangeable for Common Stock or
(2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise or (3) file any registration statement with the Commission
13
relating to the
offering of any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
The restrictions contained in the preceding paragraph shall not apply to (a) the Shares to be
sold hereunder, (b) the issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing prior to the date hereof, (c) the establishment of a
trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common
Stock, provided that such plan does not provide for the transfer of Common Stock during the 180-day
restricted period and possible extension of such period described below in this paragraph, (d) the
filing of a registration statement with the Commission on Form S-8 (or any equivalent form)
relating to the offering of securities in accordance with the terms of an equity incentive plan
described in each of the Time of Sale Prospectus and the Prospectus, (e) the grant of restricted
stock, options, long-term incentive units or other securities of which the Underwriters have been
advised in writing prior to the date hereof, pursuant to an equity incentive plan described in each
of the Time of Sale Prospectus and the Prospectus, provided that such grant does not require the
filing of a statement of changes of beneficial ownership of securities on a Form 4 (or any
equivalent form) due to a reduction in beneficial ownership, or (f) the issuance by the Company of
up to the number of shares representing [5]% of the total number of outstanding shares of Common
Stock (including options, warrants or other securities convertible into or exchangeable for shares
of Common Stock) in connection with bona fide mergers or acquisitions, joint ventures, commercial
relationships or other strategic transactions, provided that the acquirer of any such shares
of Common Stock (or options, warrants or other securities convertible into or exchangeable for
shares of Common Stock) so issued enters into an agreement in the form of Exhibit A hereto with
respect to such shares of Common Stock (or options, warrants or other securities convertible into
or exchangeable for shares of Common Stock) for the remainder of the 180-day restricted period and
possible extension of such period described below in this paragraph. Notwithstanding the
foregoing, if (1) during the last 17 days of the 180-day restricted period the Company issues an
earnings release or material news or a material event relating to the Company occurs; or (2) prior
to the expiration of the 180-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the 180-day period, the
restrictions imposed by this agreement shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of the material news or
material event. The Company shall promptly notify X.X. Xxxxxx and Xxxxxx Xxxxxxx of any earnings
release, news or event that may give rise to an extension of the initial 180-day restricted period.
4. Terms of Public Offering. The Sellers are advised by you that the Underwriters propose
to make a public offering of their respective portions of the
14
Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public initially at $[ ] a
share (the “Public Offering Price”) and to certain dealers selected by you at a price that
represents a concession not in excess of $[ ] a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess of $[ ] a share,
to any Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each Seller shall be
made to such Seller in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on [ ], 2011, or at such other time on the same or such other date, not later
than [ ], 2011, as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the “Closing Date.”
Payment for any Additional Shares shall be made to each Seller in Federal or other funds
immediately available in New York City against delivery of such Additional Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 3 or at such other time on the same or
on such other date, in any event not later than [ ], 2011, as shall be designated in writing by
you.
The Firm Shares and Additional Shares shall be registered in such names and in such
denominations as you shall request in writing not later than one full business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and
Additional Shares shall be delivered to you
on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts
of the several Underwriters. The Purchase Price payable by the Underwriters shall be reduced by
(i) any transfer taxes paid by, or on behalf of, the Underwriters in connection with the transfer
of the Shares to the Underwriters duly paid and (ii) any withholding required by law.
6. Conditions to the Underwriters’ Obligations. The obligations of the Sellers to sell the
Shares to the Underwriters and the several obligations of the Underwriters to purchase and pay for
the Shares on the Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than [3:00 p.m.], New York City time, on the date hereof.
The several obligations of the Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing
Date:
15
(i) To the extent that the Company or any of its subsidiaries has any
securities that are accorded rating by any “nationally recognized statistical
rating organization,” as such term is defined for purposes of Section 3(a)(62)
under the Exchange Act (the “Rated Securities”), there shall not have occurred
any downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded any of the
Rated Securities; and
(ii) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus as of the date of this Agreement that, in your judgment, is material
and adverse and that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the Time of Sale
Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the effect set forth in Section
6(a)(i) above and to the effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the Company has complied in all
material respects with all of the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion and 10b-5 letter
of Xxxxxx & Xxxxxxx LLP, outside counsel for the Company, dated the Closing Date, substantially in
the form of Annex A and Annex B, respectively.
(d) The Underwriters shall have received on the Closing Date an opinion and 10b-5 letter
of Xxxxxxx Xxxxx, general counsel for the Company, dated the Closing Date, substantially in the
form of Annex C and Annex D, respectively.
(e) The Underwriters shall have received on the Closing Date an opinion and 10b-5 letter
of Xxxxxx & Xxxxxxx LLP, counsel for the Selling
16
Shareholders, dated the Closing Date,
substantially in the form of Annex E and Annex F, respectively.
(f) The Underwriters shall have received on the Closing Date an opinion and 10b-5 letter
of Xxxxx Xxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated the Closing Date, in a form
reasonably satisfactory to the Underwriters.
With respect to their respective 10b-5 letters, Xxxxxx & Xxxxxxx LLP and Xxxxx Xxxx & Xxxxxxxx
LLP may state that their opinions and beliefs are based upon their participation in the preparation
of the Registration Statement, the Time of Sale Prospectus and the Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are without independent
check or verification, except as specified. With respect to its opinion in Annex D, Xxxxxx &
Xxxxxxx LLP may rely upon an opinion or opinions of counsel for any Selling Shareholders and, with
respect to factual matters and to the extent such counsel deems appropriate, upon the
representations of each Selling Shareholder contained herein and in the Custody Agreement and Power
of Attorney of such Selling Shareholder and in other documents and instruments; provided that (A)
each such counsel for the Selling Shareholders is satisfactory to your counsel, (B) a copy of each
opinion so relied upon is delivered to you and is in form and substance satisfactory to your
counsel, (C) copies of such Custody Agreements and Powers of Attorney and of any such other
documents and instruments shall be delivered to you and shall be in form and substance satisfactory
to your counsel and (D) Xxxxxx & Xxxxxxx LLP shall state in their opinion that they are justified
in relying on each such other opinion.
The opinions of Xxxxxx & Xxxxxxx LLP described in Sections 6(c) and 6(e) above (and any
opinions of counsel for any Selling Shareholder referred to in the immediately preceding paragraph)
shall be rendered to the Underwriters at the request of the Company or one or more of the Selling
Shareholders, as the case may be, and shall so state therein.
(g) The Underwriters shall have received, on each of the date hereof and the Closing Date,
a letter dated the date hereof or the Closing Date, as the case may be, in form and substance
reasonably satisfactory to the Underwriters, from each of KPMG LLP and Xxxxxxx & Company LLP,
independent public accountants, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Time of Sale
Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a
“cut-off date” not earlier than the date hereof.
17
(h) The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between
you and certain shareholders, officers and directors of the Company relating to sales and certain
other dispositions of shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares hereunder are
subject to the delivery to you on the applicable Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date and other matters related
to the issuance of such Additional Shares.
7. Covenants of the Company. The Company covenants with each Underwriter as follows:
(a) To furnish to you, without charge, [three] conformed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other Underwriter that so requests
a conformed copy of the Registration Statement (without exhibits thereto) and to furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in Section 7(e) or 7(f)
below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement, the Time of Sale
Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which you reasonably object
within a reasonable time, and to file with the Commission within the applicable period specified in
Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or
on behalf of, used by, or referred to by the
Company and not to use or refer to any proposed free writing prospectus to which you
reasonably object within a reasonable time.
(d) Not to take any action that would result in an Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free
writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would
not have been required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a
time when the Prospectus is not yet available to prospective
18
purchasers and any event shall occur
or condition exist as a result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration Statement then on file, or
if, in the reasonable opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that the statements in
the Time of Sale Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or
supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of the Shares as in
the reasonable opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the
notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the
notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not
misleading, or if, in the reasonable opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Shares may have been sold by you on behalf
of the Underwriters and to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule
173(a) of the Securities Act) is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with applicable law.
(g) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you shall reasonably request; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, or taxation in any jurisdiction where it is not
now so
19
subject or subject itself to taxation in excess of a nominal amount in respect of doing
business in any jurisdiction.
(h) To make generally available to the Company’s security holders and to you as soon as
practicable, but no later than the Availability Date (as defined below), an earning statement
covering a period of at least twelve months beginning with the first fiscal quarter of the Company
occurring after the “effective date” (as defined in Rule 158 of the Securities Act) of the
Registration Statement, which shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder. For the purpose of the preceding
sentence, “Availability Date” means the day after the end of the fourth fiscal quarter following
the fiscal quarter that includes such effective date on which the Company is required to file its
Form 10-Q for such fiscal quarter except that, if such fourth fiscal quarter is the last quarter of
the Company’s fiscal year, “Availability Date” means the day after the end of such fourth fiscal
quarter on which the Company is required to file its Form 10-K.
(i) To comply with all applicable securities and other laws, rules and regulations in each
jurisdiction in which the Directed Shares are offered in connection with the Directed Share
Program.
8. Covenants of the Selling Shareholders. Each Selling Shareholder, severally and not
jointly, covenants with each Underwriter as follows:
(a) Each Selling Shareholder will deliver to each Underwriter (or its agent), prior to or
at the Closing Date, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 or
an IRS Form W-8, as appropriate, together with all required attachments to such form.
(b) Except for the Prospectus, the Preliminary Prospectus and the free writing
prospectuses, if any, identified in Schedule III hereto, and electronic road shows, if any, each
furnished to you before first use, such Selling Shareholder has not prepared, used or referred to,
and will not, without your prior consent, prepare use or refer to, any free writing prospectus.
9. Expenses. Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company agrees to pay or cause to be paid all
expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and expenses of the
Company’s counsel, the Company’s accountants and counsel for the Selling Shareholders in connection
with the registration and delivery of the Shares under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration Statement, any
Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus
prepared by or on behalf of, used by, or referred to by the Company
20
and amendments and supplements
to any of the foregoing, including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section 7(g) hereof, including
filing fees and the reasonable fees and disbursements of one counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or Legal Investment
memorandum, which fees and disbursements shall not exceed $15,000, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by FINRA, (v) all fees and expenses in
connection with the preparation and filing of the registration statement on Form 8-A relating to
the Common Stock and all costs and expenses incident to listing the Shares on the NYSE, (vi) the
cost of printing certificates representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the Company relating to investor
presentations on any “road show” undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the preparation or dissemination of
any electronic road show, expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and, subject to the last sentence of this paragraph, the
cost of any aircraft chartered in connection with the road show, (ix) the document production
charges and expenses associated with printing this Agreement, (x) all fees and disbursements of
counsel incurred by the Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection
with the Directed Share Program and (xi) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section, Section 11 entitled
“Indemnity and Contribution”, Section 12 entitled “Directed Share Program Indemnification” and the
last paragraph of Section 14 below, the Underwriters will (i) pay all of their costs and expenses,
including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any advertising expenses
connected with any offers they may make and (ii) reimburse the Company for half of the reasonable,
at fair market costs of any aircraft chartered in connection with the road show.
21
The provisions of this Section shall not supersede or otherwise affect any agreement that
the Sellers may otherwise have for the allocation of such expenses among themselves.
10. Covenants of the Underwriters. Each Underwriter severally covenants with the Company not
to take any action that would result in the Company being required to file with the Commission
under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that
otherwise would not be required to be filed by the Company thereunder, but for the action of the
Underwriter.
11. Indemnity and Contribution. (a) The Sellers, jointly and severally, agree to indemnify
and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each
affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act from and
against any and all losses, claims, damages and liabilities (including, without limitation, any
legal expenses or other expenses, in each case reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment thereof, any
Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing prospectus as defined
in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act or the Prospectus or any
amendment or supplement thereto, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein. The liability of each Selling Shareholder under the indemnity agreement
contained in this paragraph shall be limited to an amount equal to the proceeds to such Selling
Shareholder from the sale of the Shares sold by such Selling Shareholder under this Agreement after
deducting underwriting discounts and commissions.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, the Selling Shareholders, the directors of the Company, the officers of the Company who
sign the Registration Statement and each person, if any, who controls the Company or any Selling
Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal expenses or other expenses, in each case reasonably incurred in
connection with defending or investigating any such action or claim) caused by any untrue statement
or alleged untrue statement of a material
22
fact contained in the Registration Statement or any
amendment thereof, any Preliminary Prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any Company information that
the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, or
the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Prospectus, any issuer free writing prospectus or the Prospectus or
any amendment or supplement thereto. The Company hereby acknowledges that, for purposes of this
Section and Sections 1(b) and 2(f), the only information furnished to the Company by any
Underwriter expressly for use in the Registration Statement, any Preliminary Prospectus, the Time
of Sale Prospectus, any free writing prospectus or the Prospectus (or any amendment or supplement
thereto) are (i) the text set forth on the cover page of the Preliminary Prospectus and the
Prospectus concerning the delivery of the shares of Common Stock; (ii) the names and corresponding
share amounts set forth in the table of Underwriters under the caption “Underwriters” in the
Prospectus; (iii) the [third] paragraph of text under the caption “Underwriters” in the Preliminary
Prospectus and the Prospectus concerning the terms of the offering by the underwriters and (iv) the
[eleventh] paragraph of text under the caption “Underwriters” in the Preliminary Prospectus and the
Prospectus concerning short sales and other stabilizing transactions by the Underwriters.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 11(a)or 11(b),
such person (the “indemnified party”) shall promptly notify the person against whom such indemnity
may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonably incurred fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified
party unless (A) the indemnifying party and the indemnified
party shall have mutually agreed to the
retention of such counsel or (B) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any
23
proceeding or related proceedings in the
same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who control any
Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act or who are affiliates of any Underwriter within the meaning of Rule 405 under the
Securities Act, (ii) the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either such Section and (iii) the
fees and expenses of more than one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder within the meaning of
either such Section, and that all such reasonably incurred fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the Underwriters and such control
persons and affiliates of any Underwriters, such firm shall be designated in writing by X.X. Xxxxxx
and Xxxxxx Xxxxxxx after reasonable consultation with the Company. In the case of any such
separate firm for the Company, and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such control persons of any Selling Shareholders, such firm shall be
designated in writing by the persons named as attorneys-in-fact for the Selling Shareholders under
the Powers of Attorney. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in Section 11(a) or 11(b) is unavailable to
an indemnified party or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party
24
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion
as is appropriate to reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 11(d)(i) above is not permitted by applicable law, in
such proportion as
is appropriate to reflect not only the relative benefits referred to in clause 11(d)(i) above
but also the relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares (before deducting
expenses) received by each Seller and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of the Sellers on the one
hand and the Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Sellers or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters’ respective obligations to
contribute pursuant to this Section 11 are several in proportion to the respective number of Shares
they have purchased hereunder, and not joint. The liability of each Selling Shareholder under the
contribution agreement contained in this paragraph shall be limited to an amount equal to the
proceeds to such Selling Shareholder from the sale of the Shares sold by such Selling Shareholder
under this Agreement after deducting underwriting discounts and commissions.
(e) The Sellers and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 11 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 that
does not take account of the equitable considerations referred to in Section 11(d). The amount
paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 11(d) shall be deemed to include, subject to the limitations set forth
above, any legal expenses or other expenses, in each case reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 11, 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 that such Underwriter has
otherwise been required to pay by reason of such untrue or
25
alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this Section 11 are not
exclusive and shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 11 and the
representations, warranties and other statements of the Company and the Selling Shareholders
contained in this Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter,
any person controlling any Underwriter or any affiliate of any Underwriter, any Selling Shareholder
or any person controlling any Selling Shareholder, or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of the Shares.
12. Directed Share Program Indemnification. (a) The Company agrees to indemnify and hold
harmless Xxxxxx Xxxxxxx, each person, if any, who controls Xxxxxx Xxxxxxx within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of
Xxxxxx Xxxxxxx within the meaning of Rule 405 of the Securities Act (“Xxxxxx Xxxxxxx Entities”)
from and against any and all losses, claims, damages and liabilities (including, without
limitation, any legal expenses or other expenses, in each case reasonably incurred in connection
with defending or investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection with the Directed Share
Program or caused by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares that the Participant
agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Share
Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that are
finally judicially determined to have resulted from the bad faith or gross negligence of Xxxxxx
Xxxxxxx Entities.
(b) In case any proceeding (including any governmental investigation) shall be instituted
involving any Xxxxxx Xxxxxxx Entity in respect of which indemnity may be sought pursuant to Section
12(a), the Xxxxxx Xxxxxxx Entity seeing indemnity, shall promptly notify the Company in writing and
the Company, upon request of the Xxxxxx Xxxxxxx Entity, shall retain counsel reasonably
satisfactory to the Xxxxxx Xxxxxxx Entity to represent the Xxxxxx Xxxxxxx Entity and any others the
Company may designate in such proceeding and shall pay the reasonable fees and disbursements of
such counsel related to such
26
proceeding. In any such proceeding, any Xxxxxx Xxxxxxx Entity shall
have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any impleaded parties)
include both the Company and the Xxxxxx Xxxxxxx Entity and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them.
The Company shall not, in respect of the legal expenses of the Xxxxxx Xxxxxxx Entities in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Xxxxxx Xxxxxxx Entities. Any such separate firm for the Xxxxxx
Xxxxxxx Entities shall be designated in writing by Xxxxxx Xxxxxxx after reasonable consultation
with the Company. The Company shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Company agrees to indemnify the Xxxxxx Xxxxxxx Entities from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time a Xxxxxx Xxxxxxx Entity shall have requested the Company to reimburse it
for fees and expenses of counsel as contemplated by the second and third sentences of this
paragraph, the Company agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30 days after receipt
by the Company of the aforesaid request and (ii) the Company shall not have reimbursed the Xxxxxx
Xxxxxxx Entity in accordance with such request prior to the date of such settlement. The Company
shall not, without the prior written consent of Xxxxxx Xxxxxxx, effect any settlement of any
pending or threatened proceeding in respect of which any Xxxxxx Xxxxxxx Entity is or could have
been a party and indemnity could have been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless
such settlement includes an unconditional release of the Xxxxxx Xxxxxxx Entities from all liability
on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 12(a) is unavailable to a Xxxxxx
Xxxxxxx Entity or insufficient in respect of any losses, claims, damages or liabilities referred to
therein, then the Company in lieu of indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall
contribute to the amount paid or payable by the Xxxxxx Xxxxxxx Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Xxxxxx Xxxxxxx Entities on the other hand
from the offering of the Directed Shares or (ii) if the allocation provided by clause 12(c)(i)
above is not permitted by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 12(c)(i) above but also the relative fault of the
Company on the one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in connection with any
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative
27
benefits received by the Company on the
one hand and the Xxxxxx Xxxxxxx Entities on the other hand in connection with the offering of the
Directed Shares shall be deemed to be in the same respective proportions as the net proceeds from
the offering of the Directed Shares (before deducting expenses) and the total underwriting
discounts and commissions received by the Xxxxxx Xxxxxxx Entities for the Directed Shares, bear to
the aggregate Public Offering Price of the Directed Shares. If the loss, claim, damage or
liability is caused by an untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact, the relative fault of the Company on the one hand and
the Xxxxxx Xxxxxxx Entities on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement or the
omission or alleged omission relates to information supplied by the Company or by the Xxxxxx
Xxxxxxx Entities and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would not be just or equitable
if contribution pursuant to this Section 12 were determined by pro rata allocation (even if the
Xxxxxx Xxxxxxx Entities were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in Section 12(c).
The amount paid or payable by the Xxxxxx Xxxxxxx Entities as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal expenses or other expenses, in each
case reasonably incurred by the Xxxxxx Xxxxxxx Entities in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this Section 12, no Xxxxxx
Xxxxxxx Entity shall be required to contribute any amount in excess of the amount by which the
total price at which the Directed Shares distributed to the public were offered to the public
exceeds the amount of any damages that such Xxxxxx Xxxxxxx Entity has otherwise been required to
pay. The remedies provided for in this Section 12 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or in equity.
(e) The indemnity and contribution provisions contained in this Section 12 shall remain
operative and in full force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Xxxxxx Xxxxxxx Entity or the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and payment for any of the
Directed Shares.
13. Termination. The Underwriters may terminate this Agreement by written notice given by you
to the Company, if after the execution and delivery of this Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on, or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange or the NASDAQ Global
28
Market, (ii) trading of any securities of the Company shall have been suspended on any exchange or
in any over-the-counter market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any moratorium on commercial
banking activities shall have been declared by Federal or New York State authorities or (v) there
shall have occurred any outbreak or escalation of hostilities, or any change in financial markets
or any calamity or crisis that, in your judgment, is so material and adverse and which, singly or
together with any other event specified in this clause (v), as to make it, in your judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the Shares on the terms
and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.
14. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite their respective
names in Schedule II bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 14 by an
amount in excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date,
and arrangements satisfactory to you, the Company and the Selling Shareholders for the purchase of
such Firm Shares are not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or the Selling
Shareholders. In any such case either you or the relevant Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any
other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such Option Closing Date, the
29
non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not less than the number
of Additional Shares that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of any Seller to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason any Seller shall be unable to perform its
obligations under this Agreement, the Sellers will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket
expenses
(including the reasonable fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated hereunder.
15. Entire Agreement. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Shares, represents the entire agreement between the Company and the
Selling Shareholders, on the one hand, and the Underwriters, on the other, with respect to the
preparation of any Preliminary Prospectus, the Time of Sale Prospectus, the Prospectus, the conduct
of the offering, and the purchase and sale of the Shares.
(b) The Company acknowledges that in connection with the offering of the Shares: (i) the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the
Company or any other person, (ii) the Underwriters owe the Company only those duties and
obligations set forth in this Agreement and prior written agreements (to the extent not superseded
by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of
the Company. The Company waives to the full extent permitted by applicable law any claims it may
have against the Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
16. Counterparts. This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
17. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
30
18. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
19. Notices. All communications hereunder shall be in writing and effective only upon receipt
and if to the Underwriters shall be delivered, mailed or sent to you in care of X.X. Xxxxxx
Securities LLC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Desk and
in care of Xxxxxx Xxxxxxx & Co. LLC, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Equity Syndicate Desk, with a copy to the Legal Department; if to the Company shall be delivered,
mailed or sent in care of ADS Tactical, Inc., 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx,
Xxxxxxxx 00000, Attention: General Counsel and if to the Selling Shareholders shall be delivered,
mailed or sent to [address].
| Very truly yours, ADS TACTICAL, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
31
| The Selling Shareholders named in Schedule I hereto, acting severally |
||||
| By: | ||||
| Attorney-in Fact | ||||
Accepted as of the date hereof
X.X. Xxxxxx Securities LLC
Xxxxxx Xxxxxxx & Co. LLC
Xxxxxx Xxxxxxx & Co. LLC
Acting severally on behalf of themselves and
the several Underwriters named in
Schedule II hereto
the several Underwriters named in
Schedule II hereto
By: X.X. Xxxxxx Securities LLC
| By: | ||||
| Name: | ||||
| Title: | ||||
By: Xxxxxx
Xxxxxxx & Co. LLC
| By: | ||||
| Name: | ||||
| Title: | ||||
32
SCHEDULE I
| Number of Firm Shares | Number of Additional | |||
| Selling Shareholder | To Be Sold | Shares To Be Sold | ||
[ ] |
||||
Total: |
||||
I-1
SCHEDULE II
| Underwriter | Number of Firm Shares To Be Purchased | |
X.X. Xxxxxx Securities LLC |
||
Xxxxxx
Xxxxxxx & Co. LLC |
||
Total:
|
||
II-1
SCHEDULE III
Time of Sale Prospectus
| 1. | Preliminary Prospectus issued [ ] | |
| 2. | [identify all free writing prospectuses filed by the Company under Rule 433(d) of the Securities Act] | |
| 3. | [free writing prospectus containing a description of terms that does not reflect final terms, if the Time of Sale Prospectus does not include a final term sheet] | |
| 4. | [orally communicated pricing information to be included on Schedule II if a final term sheet is not used] |
3-1
SCHEDULE IV
| Company | Jurisdiction | |
| Delaware and Virginia | ||
Atlantic Diving Supply, Inc.
|
Virginia, California, Colorado, Florida, Kansas, Maryland, Michigan, Missouri, Nebraska, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas and Wyoming. |
|
Mar-Vel International, Inc.
|
New Jersey, Delaware and California |
II-2
EXHIBIT A
FORM OF LOCK-UP LETTER
____________, 2011
X.X. Xxxxxx Securities LLC
Xxxxxx Xxxxxxx & Co. LLC
Xxxxxx Xxxxxxx & Co. LLC
c/o X.X. Xxxxxx Securities LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx
Xxxxxxx & Co. LLC
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that X.X. Xxxxxx Securities LLC (“X.X. Xxxxxx”) and Xxxxxx Xxxxxxx
& Co. LLC (“Xxxxxx Xxxxxxx”) as representatives of the several Underwriters propose to
enter into an Underwriting Agreement (the “Underwriting Agreement”) with ADS Tactical, Inc., a
Delaware corporation (the “Company”), providing for the public offering (the “Public Offering”) by
the several Underwriters, including X.X. Xxxxxx and Xxxxxx Xxxxxxx (the “Underwriters”) of
____________ shares (the “Shares”) of the common stock of the Company (the “Common Stock”).
To induce the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees that, without the
prior written consent of X.X. Xxxxxx and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock beneficially owned (as such term is used in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), by the undersigned or any
other securities so owned convertible into or exercisable or exchangeable for Common Stock or (2)
enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock,
whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after the completion of the Public Offering,
provided that no filing under Section 16(a) of the Exchange Act shall be required or shall be
voluntarily made in connection with subsequent sales of Common Stock or other securities acquired
in such open market transactions, (b) transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift, (c) dispositions to any trust or partnership for
the direct or indirect benefit of the undersigned or any member of the immediate family of the
undersigned, (d) transfers of Common Stock to another corporation, partnership, limited liability
company or other business entity so long as the transferee is an affiliate (as defined below) of
the undersigned and such transfer is not for value, or (e) distributions of shares of Common Stock
or any security convertible into Common Stock to limited partners or stockholders of the
undersigned; provided that in the case of any transfer or distribution pursuant to clause (b), (c),
(d) or (e), (i) each donee, distributee or transferee shall sign and deliver a lock-up letter
substantially in the form of this letter and (ii) no filing under Section 16(a) of the Exchange
Act, reporting a reduction in beneficial ownership of shares of Common Stock, shall be required or
shall be voluntarily made during the restricted period referred to in the foregoing sentence, or
(f) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the
transfer of shares of Common Stock, provided that such plan does not provide for the transfer of
Common Stock during the restricted period and no public announcement or filing under the Exchange
Act regarding the establishment of such plan shall be required of or voluntarily made by or on
behalf of the undersigned or the Company. In addition, the undersigned agrees that, without the
prior written consent of X.X. Xxxxxx and Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or exchangeable for Common
Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with
the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of
Common Stock except in compliance with the foregoing restrictions.
2
If:
(1) during the last 17 days of the restricted period the Company issues an earnings release or
material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the restricted period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of the restricted
period;
the restrictions imposed by this agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.
The undersigned shall not engage in any transaction that may be restricted by this agreement
during the 34-day period beginning on the last day of the initial restricted period unless the
undersigned requests and receives prior confirmation from the Company or X.X. Xxxxxx and Xxxxxx
Xxxxxxx that the restrictions imposed by this agreement have expired.
The undersigned understands that the Company and the Underwriters are relying upon this
agreement in proceeding toward consummation of the Public Offering. The undersigned further
understands that this agreement is irrevocable and shall be binding upon the undersigned’s heirs,
legal representatives, successors and assigns.
If (i) the Company notifies X.X. Xxxxxx and Xxxxxx Xxxxxxx on behalf of the Underwriters in
writing that it does not intend to proceed with the Public Offering and the registration statement
on Form S-1 filed with the Securities and Exchange Commission with respect to the Public Offering
is withdrawn, (ii) for any reason the Underwriting Agreement shall terminate or be terminated
(other than the provisions thereof which survive termination) prior to payment for and delivery of
the Stock, or (iii) the Public Offering shall not have been completed by September 30, 2011, then
upon the occurrence of any such event, this agreement shall immediately be terminated and the
undersigned shall be released from its obligations under this agreement.
Whether or not the Public Offering actually occurs depends on a number of factors, including
market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement,
the terms of which are subject to negotiation between the Company and the Underwriters.
3
| Very truly yours, |
||||
| Name: | ||||
| Address: | ||||
4
ANNEX C
5
ANNEX D
6
ANNEX E
7
ANNEX F
8
