EXHIBIT 1
DIRECTED ELECTRONICS, INC.
COMMON STOCK, PAR VALUE $0.01
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UNDERWRITING AGREEMENT
December 15, 2005
Xxxxxxx, Xxxxx & Co.
X.X. Xxxxxx Securities Inc.,
As representatives (the "Representatives") of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Directed Electronics, Inc., a Florida corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 5,937,500 shares of Common Stock, par value $0.01 ("Stock") of the Company
and the shareholders of the Company named in Schedule II hereto (each, a
"Selling Stockholder" and collectively the "Selling Stockholders") propose,
subject to the terms and conditions stated herein, to sell to the Underwriters
an aggregate of 3,437,500 shares and, at the election of the Underwriters, up to
1,406,250 additional shares of Stock. The aggregate of 9,375,000 shares to be
sold by the Company and the Selling Stockholders is herein called the "Firm
Shares" and the aggregate of 1,406,250 additional shares to be sold by the
Selling Stockholders is herein called the "Optional Shares". The Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof are herein collectively called the "Shares".
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-127823) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or, to the Company's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the Preliminary
Prospectus relating to the Shares that was included in the Registration
Statement immediately prior to the Applicable Time (as defined in Section
1(a)(iii) hereof) is hereinafter called the "Pricing Prospectus"; the
final prospectus, in the form first filed pursuant to Rule 424(b) under
the Act, is hereinafter called the "Prospectus"; and any "issuer free
writing prospectus" as defined in Rule 433 under the Act relating to the
Shares is hereinafter called an "Issuer Free Writing Prospectus";
(ii) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Free Writing Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein or by a
Selling Stockholder expressly for use in the preparation of the answers
therein to Items 7 and 11(m) of Form S-1;
(iii) For the purposes of this Agreement, the "Applicable Time" is
___:___ __m (Eastern time) on the date of this Agreement; the Pricing
Prospectus as supplemented by the Issuer Free Writing Prospectuses and
other documents listed in Schedule III(a) hereto, taken together
(collectively, the "Pricing Disclosure Package") as of the Applicable
Time, did not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and each Issuer Free Writing Prospectus listed on Schedule
III(a) or Schedule III(b) hereto does not conflict with the information
contained in the Registration Statement, the Pricing Prospectus or the
Prospectus and each such Issuer Free Writing Prospectus, as supplemented
by and taken together with the Pricing Disclosure Package as of the
Applicable Time, did not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to statements or omissions made in an Issuer Free
Writing Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx,
Sachs & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and any
Issuer Free Writing Prospectus and any further amendments or supplements
to the Registration Statement and the Prospectus and any Issuer Free
Writing Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and as of the applicable filing date as to
the Prospectus and any Issuer Free Writing Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
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writing to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co.
expressly for use therein or by a Selling Stockholder expressly for use in
the preparation of the answers therein to Items 7 and 11(m) of Form S-1;
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Pricing Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Pricing Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Pricing
Prospectus, there has not been (i) any change in the capital stock or
long-term debt of the Company or any of its subsidiaries except for
revolving credit borrowings in the ordinary course of business since
November 30, 2005, (ii) any material adverse change, or any development
involving a prospective material adverse change, in the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, or (iii)
any change, or any development involving a prospective change, materially
and adversely affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, taken as a whole (any of (i), (ii) or (iii) above, a
"Material Adverse Effect"), otherwise than as set forth or contemplated in
the Prospectus;
(vi) The Company and its subsidiaries do not own any real property.
The Company and its subsidiaries have good and marketable title to all
personal property owned by them, free and clear of all liens, encumbrances
and defects except such as are described in the Pricing Prospectus or such
as could not reasonably be expected to have a Material Adverse Effect; 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 interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Florida,
with the corporate power and authority to own its properties and conduct
its business as described in the Pricing Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and
each subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(viii) The Company has an authorized capitalization as set forth in
the Pricing Prospectus, all of the issued shares of capital stock of the
Company, including the Shares to be sold by the Selling Stockholders, have
been duly and validly authorized and issued and are fully paid and
non-assessable and conform to the description of the Stock contained in
the Pricing Prospectus and the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except as
set forth in the Pricing Prospectus) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims, except for such liens or encumbrances on such shares of capital
stock to secure indebtedness as described in the Pricing Prospectus;
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(ix) The Company has the corporate power and authority to execute
and deliver this Agreement, and all corporate action required to be taken
for the due and proper authorization, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly taken by the Company;
(x) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement of
the Company;
(xi) Upon the approval by the shareholders of the Company of the
Amended Articles of Incorporation and the filing thereof with the
Secretary of State of the state of Florida, such approval and filing to
occur prior to the First Time of Delivery, then prior to both of the First
Time of Delivery and, if applicable, the Second Time of Delivery, the
unissued Shares to be issued and sold by the Company to the Underwriters
hereunder will have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(xii) The issue and sale of the Shares to be sold by the Company and
the compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions herein contemplated will not (a)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (b) result in
any violation of the provisions of the Articles of Incorporation, the
Amended Articles of Incorporation or By-laws of the Company or (c) result
in any violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties, except for any such
conflicts, violations, breaches and defaults in the cases of clauses (a)
and (c) that could not reasonably be expected to have a Material Adverse
Effect; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(xiii) Neither the Company nor any of its subsidiaries is (a) in
violation of its Articles of Incorporation, the Amended Articles of
Incorporation or By-laws or (b) in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound except, in the case of clause (b),
where such default could not reasonably be expected to have a Material
Adverse Effect;
(xiv) The Company and its subsidiaries have complied in all material
respects with all laws, regulations and orders applicable to it or its
businesses;
(xv) The statements set forth in the Pricing Prospectus under the
caption "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the Stock under the captions,
"Management - 2005 Incentive Compensation Plan," "Management - 2005
Employee Stock Purchase Plan," "Certain Relationships and Related Party
Transactions,"
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"Description of Indebtedness," "Shares Eligible for Future Sale,"
"Underwriting" and "Material U.S. Federal Income Tax Considerations for
Non-U.S. Holders of our Common Stock," insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate
and fair in all material respects;
(xvi) Other than as set forth in the Pricing Prospectus, there are
no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xvii) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof, will not
be an "investment company," as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(xviii) At the time of filing the Initial Registration Statement the
Company was not and is not an "ineligible issuer," as defined under Rule
405 under the Act;
(xix) The Company has not delivered an Issuer Free Writing
Prospectus to any prospective investor unless (a) such Issuer Free Writing
Prospectus was accompanied by the Preliminary Prospectus or (b) the
Company had previously delivered to such prospective investor the
Preliminary Prospectus;
(xx) The historical financial statements of each of the Company and
its subsidiaries and Definitive Technology included in the Pricing
Prospectus and the Registration Statement present fairly, in all material
respects, the financial position of each of the Company and its
subsidiaries and Definitive Technology, at the dates indicated and the
results of each of their respective operations and cash flows for the
periods indicated in conformity with United States generally accepted
accounting principles applied on a consistent basis throughout the periods
involved; the selected historical financial data set forth under the
captions "Prospectus Summary - Summary Financial and Other Data," "Pro
Forma Financial Data" and "Selected Consolidated Financial Data" present
fairly, in all material respects, the information included therein;
management's assumptions provide a reasonable basis for presenting the
significant effects directly attributable to the transactions described
under the caption "Pro Forma Financial Data" and the related pro forma
adjustments set forth in the pro forma financial statements included in
the Pricing Prospectus and the Prospectus give appropriate effect to those
assumptions, and the pro forma columns included under the captions "Pro
Forma Financial Data," "Prospectus Summary - Summary Financial and Other
Data" and "Selected Consolidated Financial Data" reflect the proper
application of those adjustments to the historical financial statement
amounts; and the pro forma financial statements included in the Pricing
Prospectus and the Prospectus comply as to form with the applicable
accounting requirements of Regulation S-X under the Act;
(xxi) The Company has filed, or has caused to be filed, all
non-U.S., U.S. federal, material state and material local tax returns that
are required to be filed or has requested extensions thereof and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith and except as disclosed in the
Pricing Prospectus and the Prospectus;
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(xxii) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
U.S. federal, state or non-U.S. regulatory authorities necessary to
conduct their respective businesses including, without limitation, from
the Federal Communications Commission except where the failure to so
possess could not reasonably be expected to have a Material Adverse
Effect, and none of the Company or any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit;
(xxiii) Each of the Company and its subsidiaries and any "plan" (as
defined in Section 3(3) of United States Employee Retirement Income
Security Act of 1974 ("ERISA")) in which employees of the Company and its
subsidiaries are eligible to participate is in compliance in all material
respects with the presently applicable provisions of ERISA and the
regulations and published interpretations thereunder. Neither the Company
nor any of its subsidiaries has, at any time, maintained, contributed to,
or had any obligation to contribute to, or has any liability (fixed or
contingent) with respect to, any plan subject to Title IV of ERISA or to
the funding requirements of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal
Revenue Code including any plan which constituted a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA or any plan subject to Sections
4063 or 4064 of ERISA ("multiple employer plan");
(xxiv) The Company and its subsidiaries own or have valid, binding
and enforceable licenses or other rights to use any material patents,
trademarks, trade names, service marks, service names, copyrights and
other proprietary intellectual property rights ("Intellectual Property")
necessary to conduct the business of the Company and its subsidiaries in
the manner in which such business is being conducted as described in the
Pricing Prospectus and the Prospectus; to the knowledge of the Company and
its subsidiaries, no valid United States patent is infringed by the
activities of the Company or its subsidiaries; and there are no actions,
suits or judicial proceedings pending relating to patents or proprietary
information to which the Company or its subsidiaries is a party or of
which any property of the Company or its subsidiaries is subject, and, to
the knowledge of the Company and its subsidiaries, no actions, suits or
judicial proceedings are threatened by governmental authorities;
(xxv) There are no contracts, agreements or understandings between
the Company or any of its subsidiaries and any person granting such person
the right to require the Company or any of its subsidiaries to file a
registration statement under the Act with respect to any securities of the
Company or any of its subsidiaries or to include any securities of the
Company or any of its subsidiaries with the Shares registered pursuant to
the Registration Statement, except as otherwise disclosed in the Pricing
Prospectus and the Prospectus;
(xxvi) There are no contracts or other documents which are required
to be described in the Pricing Prospectus and the Prospectus or to be
filed as exhibits to the Registration Statement by the Act which are not
so described or filed;
(xxvii) None of the Company or any of its subsidiaries, nor to the
knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or
is in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any other unlawful payment to any person or entity;
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(xxviii) There are no relationships (including without limitation
any loans or advances), direct or indirect, nor has any transaction been
entered into since January 1, 2004, between or among the Company and its
subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company (other than the Company and its
subsidiaries) on the other hand which are required to be described in the
Pricing Prospectus or the Prospectus by the Act which have not been
described in the Pricing Prospectus or the Prospectus;
(xxix) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries for fiscal years
ended December 31, 2002, 2003 and 2004, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(xxx) The Company has established and maintains internal accounting
controls sufficient to provide reasonable assurance that (A) transactions
are executed in accordance with the management's general or specific
authorizations, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain asset accountability, (C) access to assets is permitted only in
accordance with the management's general or specific authorization, and
(D) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any difference;
(xxxi) Since the date of the latest audited financial statements
included in the Pricing Prospectus, there has been no change in the
Company's internal control over financial reporting that has materially
adversely affected, or is reasonably likely to materially adversely
affect, the Company's internal control over financial reporting; and
(xxxii) Except as disclosed in the Pricing Prospectus, the Company
maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Exchange Act) that comply with the requirements
of the Exchange Act; such disclosure controls and procedures have been
designed to ensure that material information relating to the Company and
its subsidiaries is made known to the Company's principal executive
officer and principal financial officer by others within those entities;
and to the Company's knowledge such disclosure controls and procedures are
effective.
(b) Each of the Selling Stockholders severally represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power of Attorney and the Custody Agreement hereinafter referred
to, and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained; and such Selling Stockholder
has full right, power and authority to enter into this Agreement, the
Power-of-Attorney and the Custody Agreement and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
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which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Articles or Certificate of
Incorporation, Partnership Agreement, By-laws, Memorandum of Association,
Articles of Association, Limited Liability Company Operating Agreement or
similar instruments or agreements of organization of such Selling
Stockholder, as applicable, or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Stockholder or the property of such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) such Selling Stockholder
will have, good and valid title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances, equities
or claims; and, upon delivery of such Shares and payment therefor pursuant
hereto, good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several Underwriters;
(iv) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus (the
initial "Lock-Up Period"), such Selling Stockholder will not offer, sell
contract to sell or otherwise dispose of, except as provided hereunder or
in the separate lock-up agreement between such Selling Stockholder and
you, any securities of the Company that are substantially similar to the
Shares, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities (other than pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement) (it being understood that the foregoing restrictions preclude
each Selling Stockholder from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead to or
result in a sale or disposition of Stock held by such Selling Stockholder
even if such Stock would be disposed of by someone other than such Selling
Stockholder and that such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant
of any right (including without limitation any put or call option) with
respect to Stock held by such Selling Stockholder or with respect to any
security that includes, relates to, or derives any significant part of its
value from such Stock), or to request or demand registration pursuant to
the Act of any Shares or to publicly announce any intent to seek any such
registration, without the prior written consent of Xxxxxxx, Xxxxx & Co.,
provided, however, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or announces
material news or a material event or (2) prior to the expiration of the
initial Lock-Up Period, the Company announces that it will release
earnings results during the 15-day period following the last day of the
initial Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning
on the date of release of the earnings results or the announcement of the
material news or material event, as applicable, unless Xxxxxxx, Sachs &
Co. waives, in writing, such extension;
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the Pricing Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use
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therein, such Preliminary Prospectus and the Registration Statement did,
and the Pricing Prospectus, the Prospectus and any further amendments or
supplements to the Registration Statement, the Pricing Prospectus and the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading with respect to
the written information furnished to the Company by such Selling
Stockholder;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof);
(viii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder have been placed
in custody under a Custody Agreement, in the form heretofore furnished to
you (the "Custody Agreement"), duly executed and delivered by such Selling
Stockholder to American Stock Transfer & Trust Company, as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and delivered
a Power of Attorney, in the form heretofore furnished to you (the "Power
of Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to perform such acts as set forth
therein; and
(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a partnership
or corporation, by the dissolution of such partnership or corporation, or
by the occurrence of any other event; if any individual Selling
Stockholder or any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or if
any such partnership or corporation should be dissolved, or if any other
such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of
the Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as
if such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Stockholders,
at a purchase price per share of $ [____], the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Shares to be sold by the Company and each of the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto
9
and the denominator of which is the aggregate number of Firm Shares to be
purchased by all of the Underwriters from the Company and all of the Selling
Stockholders hereunder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as provided
below, each Selling Stockholder agrees, severally and not jointly, to sell to
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders, at the purchase
price per share set forth in clause (a) of this Section 2, that portion of the
number of Optional Shares as to which such election shall have been exercised
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of which
is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum number of Optional Shares that all
of the Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to [____] Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by each Selling Stockholder as set forth in
Schedule II hereto. Any such election to purchase Optional Shares may be
exercised only by written notice from you to the Attorneys-in-Fact, given within
a period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you but in no event
(a) earlier than the First Time of Delivery (as defined in Section 4 hereof) and
(b) unless you and the Attorneys-in-Fact otherwise agree in writing, earlier
than two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to Xxxxxxx, Sachs & Co.,
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account(s) specified by the Company and each of the Selling Stockholders, as
their interests may appear, to Xxxxxxx, Xxxxx & Co. at least forty-eight hours
in advance. The Company will cause the certificates representing the Shares to
be made available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto at the office of
DTC or its designated custodian (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York time, on [___], 2005 or such other time and date as Xxxxxxx, Sachs &
Co., the Company and the Selling Stockholders may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs
& Co. of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Xxxxxxx, Xxxxx & Co. and the Selling Stockholders may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional
10
documents requested by the Underwriters pursuant to Section 7(l) hereof, will be
delivered at the offices of Xxxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Closing Location"), and the Shares
will be delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 3:00 p.m., New York City time,
on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any amendment or supplement to the
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d) under the Act; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or other prospectus in respect of the Shares, of
the suspension of the qualification of the Shares for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or other prospectus or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with electronic copies of the Prospectus
and use its reasonable best efforts to furnish the Underwriters with
written copies of the Prospectus in New York City in such quantities as
you may reasonably request, and, if the delivery of a prospectus (or in
lieu thereof, the notice referred to in Rule 173(a) under the Act) is
required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of the
Shares and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the Act) is
delivered, not misleading, or, if for any other reason it shall be
necessary
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during such period to amend or supplement the Prospectus in order to
comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in securities
as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
under the Act) in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon your
request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many written and electronic copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3)
of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the Lock-Up Period, not to offer, sell, contract to sell
or otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock
option or employee stock purchase plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement) (it being understood that
the foregoing restrictions preclude the Company from engaging in any
hedging or other transaction which is designed to or which reasonably
could be expected to lead to or result in a sale or disposition of the
Company's Stock even if such Stock would be disposed of by someone other
than the Company and that such prohibited hedging or other transactions
would include without limitation any short sale or any purchase, sale or
grant of any right (including without limitation any put or call option)
with respect to Company Stock or with respect to any security that
includes, relates to, or derives any significant part of its value from
such Stock), without the prior written consent of Xxxxxxx, Xxxxx & Co.;
provided, however, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or announces
material news or a material event or (2) prior to the expiration of the
initial Lock-Up Period, the Company announces that it will release
earnings results during the 15-day period following the last day of the
initial Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning
on the date of release of the earnings results or the announcement of the
material news or material event, as applicable, unless Xxxxxxx, Sachs &
Co. waives, in writing, such extension; the Company will provide the
Representatives and any co-managers and each shareholder subject to the
Lock-Up Period pursuant to the lock-up letters described in Section 8(j)
with prior notice of any such announcement that gives rise to an extension
of the Lock-up Period;
(f) To furnish to its shareholders or file with the Commission by
XXXXX as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its shareholders
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
12
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you or file with the Commission by
XXXXX copies of all reports or other communications (financial or other)
furnished to shareholders, and to deliver to you or file with the
Commission by XXXXX (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission
or any national securities exchange on which any class of securities of
the Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission); provided that this clause (ii) shall not require the Company
to deliver any information that would cause the Company to make a filing
under Regulation FD as promulgated under the Securities Exchange Act of
1934, as amended;
(h) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the Pricing
Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the
Nasdaq Stock Market Inc.'s National Market ("NASDAQ");
(j) Prior to completion of the distribution of the Shares, not to
take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in,
under the Securities and Exchange Act of 1934, as amended, or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(k) To file with the Commission such information on Form 10-Q or
Form 10-K as may be required by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act; and
(m) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however, that
the License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or transferred.
6. (a) The Company represents and agrees that, without the prior written
consent of Xxxxxxx, Sachs & Co., it has not made and will not make any offer
relating to the Shares that would constitute a "free writing prospectus" as
defined in Rule 405 under the Act; each Underwriter represents and agrees that,
without the prior written consent of the Company and Xxxxxxx, Xxxxx & Co., it
has not made and will not make any offer relating to the Shares that would
constitute a free writing prospectus; and any such free writing prospectus the
use of which has been consented to by the Company and Xxxxxxx, Sachs & Co. in
writing is listed on Schedule III(a) or Schedule III(b) hereto;
13
(b) The Company has complied and will comply with the requirements of Rule
433 under the Act applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission or retention where required and legending and
including delivery of any Issuer Free Writing Prospectus only to such
prospective investors who have already received or are contemporaneously
receiving (by hyperlink or otherwise) the Preliminary Prospectus; the Company
represents that it has satisfied and agrees that it will satisfy the conditions
under Rule 433 under the Act, including without limitation making at least one
version of a "bona fide electronic road show" (as such term is defined in Rule
433(h) of the Act) available without restriction by means of graphic
communication to any person, to avoid a requirement to file with the Commission
any road show that is a written communication;
(c) The Company agrees that if at any time following issuance of an Issuer
Free Writing Prospectus any event occurred or occurs as a result of which such
Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to Xxxxxxx, Xxxxx & Co. and, if requested by Xxxxxxx, Sachs &
Co., will prepare and furnish without charge to each Underwriter an Issuer Free
Writing Prospectus or other document which will correct such conflict, statement
or omission; provided, however, that this Section 6(c) shall not apply to any
statements or omissions in an Issuer Free Writing Prospectus made in reliance
upon and in conformity with information furnished in writing to the Company by
an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein.
7. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) the Company will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing, reproduction and filing of the Registration Statement, any Preliminary
Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on NASDAQ; (v) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (vi) the cost of preparing
stock certificates; (vii) the cost and charges of any transfer agent or
registrar; (viii) the fees and expenses of one counsel for the Selling
Stockholders; and (ix) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section; and (b) the Company will pay or cause to be paid all costs and
expenses incident to the performance of each Selling Stockholder's obligations
hereunder which are not otherwise specifically provided for in this Section,
provided, except as otherwise provided for herein, each Selling Stockholder will
pay or cause to be paid (i) any fees and expenses of separate counsel for such
Selling Stockholder, (ii) such Selling Stockholder's pro rata share of the fees
and expenses of the Attorneys-in-Fact and the Custodian, and (iii) all expenses
and taxes incident to the sale and delivery of the Shares to be sold by such
Selling Stockholder to the Underwriters hereunder. In connection with clause
(b)(iii) of the preceding sentence, Xxxxxxx, Sachs & Co. agrees to pay New York
State stock transfer tax applicable to each Selling Stockholder, and such
Selling Stockholder agrees to reimburse Xxxxxxx, Xxxxx & Co. for associated
carrying costs if such tax payment is not rebated on the day of payment and for
any portion of such tax payment not rebated. It is understood, however, that the
14
Company shall bear, and the Selling Stockholders shall not be required to pay or
to reimburse the Company for, the cost of any other matters not directly
relating to the sale and purchase of the Shares pursuant to this Agreement, and
that, except as provided in this Section, and Sections 9 and 12 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act within the applicable time period
prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; all material required to be filed
by the Company pursuant to Rule 433(d) under the Act shall have been filed
with the Commission within the applicable time period prescribed for such
filing by Rule 433 under the Act; if the Company has elected to rely upon
Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; no stop order suspending or preventing the use of the
Prospectus or any Issuer Free Writing Prospectus shall have been initiated
or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to
your reasonable satisfaction;
(b) Xxxxxx & Xxxxxxx LLP, counsel for the Underwriters, shall have
furnished to you such written opinion and negative assurance letter
(drafts of such opinion and negative assurance letter are attached as
Annex II(a) and Annex II(b) hereto), dated such Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Xxxxxxxxx Traurig, LLP, counsel for the Company and counsel for
Trivest Partners, L.P., Trivest Fund II, Ltd., Trivest Equity Partners II,
Ltd., Trivest Principals Fund II, Ltd., Trivest-DEI Co-Investment Fund,
Ltd., Trivest Fund III, L.P., Trivest Principals Fund III, L.P., Trivest
Equity Partners III, L.P., Trivest Fund Cayman III, L.P. (collectively,
"Trivest") and the Issa Family Foundation, shall have furnished to you
their written opinion, dated such Time of Delivery, substantially in the
form attached as Annex II(c) hereto;
(d) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
executed and delivered by such Selling Stockholder and constitute
valid and binding agreements of such Selling Stockholder in
accordance with their terms;
15
(ii) This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder; and the sale of the Shares to
be sold by such Selling Stockholder hereunder and the compliance by
such Selling Stockholder with all of the provisions of this
Agreement, the Power-of-Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any
terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound
or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation
of the provisions of the Certificate or Articles of Incorporation,
Partnership Agreement, By-laws, Memorandum of Association, Articles
of Association, Limited Liability Company Operating Agreement or
similar instruments or agreements of organization of such Selling
Stockholder, as applicable, or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the Shares to be sold by such Selling Stockholder
hereunder, except such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters;
(iv) Immediately prior to such Time of Delivery, such Selling
Stockholder had good and valid title to the Shares to be sold at
such Time of Delivery by such Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or
claims, and full right, power and authority to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder; and
(v) Good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or claims, has been transferred to
each of the several Underwriters who have purchased such Shares in
good faith and without notice of any such lien, encumbrance, equity
or claim or any other adverse claim within the meaning of the
Uniform Commercial Code.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold by
such Selling Stockholder, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such certificate;
(e) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I hereto
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
16
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Pricing Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Pricing Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Pricing Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in your judgment so material and adverse as to make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(g) On or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities;
(h) On or after the Applicable Time there shall not have occurred
any of the following: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange or on NASDAQ; (ii)
a suspension or material limitation in trading in the Company's securities
on NASDAQ; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(i) The Shares to be sold at such Time of Delivery shall have been
duly listed for quotation on NASDAQ;
(j) Each officer and director of the Company, each person who has
agreed to become an officer or director of the Company, each Selling
Stockholder, each shareholder owning more than 5% of the outstanding
Shares of the Company and each employee shareholder of the Company shall
have delivered to the Underwriters executed copies of an agreement
substantially to the effect set forth in Subsection 1(b)(iv) hereof in
form and substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(l) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholders, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively,
herein at and as of
17
such Time of Delivery, as to the performance by the Company and the
Selling Stockholders of all of their respective obligations hereunder to
be performed at or prior to such Time of Delivery, and the Company shall
have furnished or caused to be furnished certificates as to the matters
set forth in subsections (a) and (g) of this Section and as to such other
matters as you may reasonably request.
9. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, any Issuer Free Writing Prospectus or any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any Preliminary Prospectus,
the Pricing Prospectus or the Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use therein.
(b) Each of the Selling Stockholders, severally but not jointly, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Selling Stockholder expressly for use therein; and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that such
Selling Stockholder shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus
or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use therein; provided, further, that the liability of each Selling
Stockholder pursuant to this subsection 9(b) shall not exceed the product of the
number of Shares sold by such Selling Stockholder (including any Optional
Shares) and the initial public offering price of the Shares as set forth in the
Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling
18
Stockholder may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company and
each Selling Stockholder for any legal or other expenses reasonably incurred by
the Company or such Selling Stockholder in connection with investigating or
defending any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on
19
the one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company, each of the
Selling Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section 9 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act and each broker-dealer affiliate of any
Underwriter; and the obligations of the Underwriters under this Section 9 shall
be in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company or each officer, director or partner of any Selling
Stockholder and to each person, if any, who controls the Company or any Selling
Stockholder within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to
20
this Agreement with respect to such Shares. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
for the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 7 hereof and the indemnity and contribution
agreements in Section 9 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 7 and 9 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company and each of
the Selling Stockholders pro rata (based on the number of Shares to be sold by
the Company and such Selling Stockholder hereunder and calculated assuming there
are no Complying Stockholders (as defined below)) will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Stockholders shall then
be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 7 and 9 hereof; provided however in no
event shall any Selling Stockholder have any liability under this Section 12 if
such Selling Stockholder shall have complied with all of its obligations under
this Agreement (each, a "Complying Stockholder"); provided further however that
any shortfall in the amount to be reimbursed to the Underwriters pursuant to
this Section 12 due to the existence of a Complying Stockholder or Complying
Stockholders shall be paid to the Underwriters by the Company.
21
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
Representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives to Xxxxxxx, Sachs & Co. at
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department and to X.X. Xxxxxx Securities Inc. at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Department, 9th Floor; if
to any Selling Stockholder shall be delivered or sent by mail, telex or
facsimile transmission to counsel for such Selling Stockholder at its address
set forth in Schedule II hereto; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 9(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you upon request; provided, however, that notices
under subsection 5(e) shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to you as the
Representatives at Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Control Room, and if to any shareholder that has executed a
lock-up letter described in Section 8(j) hereof, to such shareholder at its
address on record with the Company or the transfer agent of the Company. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
14. Each of the Company and each Selling Stockholder acknowledges and
agrees that (a) the purchase and sale of the Shares pursuant to this Agreement
is an arm's-length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the several Underwriters, on the other, (b)
in connection therewith and with the process leading to such transaction, each
Underwriter is acting solely as a principal and not the agent or fiduciary of
the Company or any Selling Stockholder, (c) no Underwriter has assumed an
advisory or fiduciary responsibility in favor of the Company or any Selling
Stockholder with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company or any Selling Stockholder on other matters) or
any other obligation to the Company or any Selling Stockholder except the
obligations expressly set forth in this Agreement and (d) the Company and each
Selling Stockholder has consulted its own legal and financial advisors to the
extent it deemed appropriate. Each of the Company and each Selling Stockholder
agrees that it will not claim that the Underwriters, or any of them, have
rendered advisory services of any nature or respect, or owe a fiduciary or
similar duty to the Company or such Selling Stockholder, in connection with such
transaction or the process leading thereto.
15. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Selling Stockholders, on
the one hand, and the Underwriters, on the other, with respect to the subject
matter hereof.
16. The Company, each Selling Stockholder and each of the Underwriters
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
17. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 9 and 11 hereof, the
22
officers and directors of the Company and each person who controls the Company,
any Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
18. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
19. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
20. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
21. Notwithstanding anything herein to the contrary, the Company and the
Selling Stockholders (and the employees, representatives, and other agents of
any of the foregoing) are authorized to disclose to any and all persons, the tax
treatment and tax structure of the potential transaction and all materials of
any kind (including tax opinions and other tax analyses) provided to the Company
and the Selling Stockholders relating to that treatment and structure, without
the Underwriters imposing any limitation of any kind. However, any information
relating to the tax treatment and tax structure shall remain confidential (and
the foregoing sentence shall not apply) to the extent necessary to enable any
person to comply with securities laws. For this purpose, "tax treatment" means
U.S. federal and state income tax treatment, and "tax structure" is limited to
any facts that may be relevant to that treatment.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel and the Custodian, if any counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Stockholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
23
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Directed Electronics, Inc.
By:...................................
Name:
Title:
Trivest Partners, L.P.
Trivest Fund II, Ltd.
Trivest Equity Partners II, Ltd.
Trivest Principals Fund II, Ltd.
Trivest-DEI Co-Investment Fund, Ltd.
Trivest Fund III, L.P.
Trivest Principals Fund III, L.P.
Trivest Equity Partners III, L.P.
Trivest Fund Cayman III, X.X.
Xxxx Family Foundation
By:...................................
Name:
Title: Attorney-in-Fact
Massachusetts Corporate Investors
By:...................................
Name:
Title:
Massachusetts Participation Investors
By:...................................
Name:
Title:
Massachusetts Mutual Life Insurance
Company
By:...................................
Name:
Title:
BancBoston Investments, Inc.
By:...................................
Name:
Title:
555 Madison Investors, LLC
By:...................................
Name:
Title:
HVB U.S. Finance, Inc.
By:...................................
Name:
Title:
Accepted as of the date hereof
Xxxxxxx, Sachs & Co.
By:.................................
(Xxxxxxx, Xxxxx & Co.)
X.X. Xxxxxx Securities Inc.
By:.................................
(X.X. Xxxxxx Securities Inc.)
On behalf of each of the
Underwriters
