EXHIBIT 1.1
_________________ SHARES
NELNET, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
DATED , 2003
TABLE OF CONTENTS
SECTION 1. REPRESENTATIONS AND WARRANTIES............................. 3
(a) Compliance with Registration Requirements........................ 3
(b) Offering Materials Furnished to Underwriters..................... 3
(c) Distribution of Offering Material By the Company................. 3
(d) The Underwriting Agreement....................................... 4
(e) Authorization of the Common Shares............................... 4
(f) No Applicable Registration or Other Similar Rights............... 4
(g) No Material Adverse Change....................................... 4
(h) Independent Accountants.......................................... 4
(i) Preparation of the Financial Statements.......................... 4
(j) Incorporation and Good Standing of the Company and
its Subsidiaries ................................................ 5
(k) Capitalization and Other Capital Stock Matters................... 5
(l) No Prior Sales of Common Stock................................... 5
(m) Stock Exchange Listing........................................... 5
(n) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required ............................ 5
(o) No Material Actions or Proceedings............................... 6
(p) Intellectual Property Rights..................................... 6
(q) All Necessary Permits, etc....................................... 7
(r) Title to Properties.............................................. 7
(s) Tax Law Compliance............................................... 7
(t) Company Not an "Investment Company".............................. 7
(u) Insurance........................................................ 7
(v) No Price Stabilization or Manipulation........................... 8
(w) Related Party Transactions....................................... 8
(x) No Unlawful Contributions or Other Payments...................... 8
(y) Company's Accounting System...................................... 8
(z) ERISA Compliance................................................. 8
(aa) Brokers..................................................... 9
(bb) No Outstanding Loans or Other Indebtedness.................. 9
(cc) Compliance with Laws........................................ 9
(dd) Statistical and Market Data................................. 9
(ee) Directed Share Program...................................... 9
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES........... 9
The Firm Common Shares............................................... 9
The First Closing Date............................................... 10
The Optional Common Shares; the Second Closing Date.................. 10
Public Offering of the Common Shares................................. 10
Payment for the Common Shares........................................ 11
Delivery of the Common Shares........................................ 11
Delivery of Prospectus to the Underwriters........................... 11
SECTION 3. ADDITIONAL COVENANTS....................................... 11
(a) Representatives' Review of Proposed Amendments and Supplements... 11
(b) Securities Act Compliance........................................ 12
(c) Amendments and Supplements to the Prospectus and
Other Securities Act Matters .................................... 12
(d) Copies of any Amendments and Supplements to the Prospectus....... 12
(e) Blue Sky Compliance.............................................. 12
(f) Use of Proceeds.................................................. 13
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(g) Transfer Agent................................................... 13
(h) Earnings Statement............................................... 13
(i) Periodic Reporting Obligations................................... 13
(j) Company to Provide Interim Financial Statements.................. 13
(k) Directed Share Program........................................... 13
(l) New York Stock Exchange Listing.................................. 13
(m) Company to Provide Copy of the Prospectus in Form
That May be Downloaded from the Internet ........................ 13
(n) Agreement Not to Offer or Sell Additional Securities............. 14
(o) Future Reports to the Representatives............................ 14
(p) Investment Limitation............................................ 14
(q) No Manipulation of Price......................................... 15
SECTION 4. PAYMENT OF EXPENSES........................................ 15
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.......... 15
(a) Accountants' Comfort Letter...................................... 16
(b) Compliance with Registration Requirements; No Stop
Order; No Objection from NASD ................................... 16
(c) No Material Adverse Change or Ratings Agency Change.............. 16
(d) Representations and Warranties................................... 16
(e) Opinions of Counsel for the Company.............................. 17
(f) Opinion of Counsel for the Underwriters.......................... 17
(g) Officers' Certificate............................................ 17
(h) Bring-down Comfort Letter........................................ 17
(i) Lock-Up Agreement from Certain Securityholders of the Company.... 18
(j) No Legal Impediment to Issuance.................................. 18
(k) Good Standing.................................................... 18
(l) New York Stock Exchange Listing.................................. 18
(m) Additional Documents............................................. 18
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.................... 18
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT............................ 19
SECTION 8. INDEMNIFICATION............................................ 19
(a) Indemnification of the Underwriters.............................. 19
(b) Indemnification of the Company, its Directors and Officers....... 20
(c) Notifications and Other Indemnification Procedures............... 20
(d) Settlements...................................................... 21
(e) Indemnification for Directed Shares.............................. 21
SECTION 9. CONTRIBUTION............................................... 21
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS......... 23
SECTION 11. TERMINATION OF THIS AGREEMENT.............................. 23
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY........ 24
SECTION 13. NOTICES.................................................... 24
SECTION 14. SUCCESSORS................................................. 25
SECTION 15. PARTIAL UNENFORCEABILITY................................... 25
SECTION 16. GOVERNING LAW PROVISIONS................................... 25
SECTION 17. GENERAL PROVISIONS......................................... 25
SCHEDULE A. UNDERWRITERS............................................... A-1
EXHIBIT A-1. FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX LLP ............ X-0-0
XXXXXXX X-0. LETTER OF XXXXXX XXXXXX & XXXXXXX LLP ..................... X-0-0
XXXXXXX X-0. FORM OF OPINION OF PERRY, GUTHERY, XXXXX
& XXXXXXXX, P.C., L.L.O ................................... X-0-0
XXXXXXX X-0. LETTER OF PERRY, GUTHERY, XXXXX & XXXXXXXX,
P.C., L.L.O. .............................................. A-4-1
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EXHIBIT B. FORM OF LOCK-UP LETTER..................................... B-1
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UNDERWRITING AGREEMENT
, 0000
XXXX XX XXXXXXX SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX XXXXXXX & CO. INCORPORATED
As Representatives of the several Underwriters
C/O
BANC OF AMERICA SECURITIES LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AND
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. Nelnet, Inc., a Nebraska corporation (the
"Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of ________ shares (the "Firm
Common Shares") of its Class A Common Stock, par value $0.01 per share
(the "Class A Common Stock"). In addition, the Company has granted to the
Underwriters an option to purchase up to an additional _________ shares
(the "Optional Common Shares") of Class A Common Stock, as provided in
Section 2. The Firm Common Shares and, if and to the extent such option is
exercised, the Optional Common Shares are collectively called the "Common
Shares". The Class A Common Stock and the Company's Class B Common Stock,
par value $0.01 per share, are collectively called the "Common Stock".
Banc of America Securities LLC ("BAS") and X.X. Xxxxxx Securities Inc.
("JPMSI") have agreed to act as joint book-running managers in connection
with the offering and sale of the Common Shares and BAS, JPMSI, Credit
Suisse First Boston LLC and Xxxxxx Xxxxxxx & Co. Incorporated have agreed
to act as representatives of the several Underwriters (in such capacity,
the "Representatives") in connection with the offering and sale of the
Common Shares.
The Company and the Underwriters agree that up to ______ of
the Firm Common Shares to be purchased by the Underwriters (the "Directed
Shares") shall be reserved for sale by the Underwriters to certain
eligible directors, officers and employees of the Company and persons
having business relationships with the Company (collectively, the
"Participants"), as part of the distribution of the Common Shares by the
Underwriters (the "Directed Share Program") subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. and all
other applicable laws, rules and regulations. One of the Underwriters (the
"Designated Underwriter") shall be selected to process the sales to the
Participants under the Directed Share Program. To the extent that such
Directed Shares are not orally confirmed for purchase by the Participants
by the end of the first business day after the date of this Agreement,
such Directed Shares may be offered to the public as part of the public
offering contemplated hereby.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form
S-1 (File No. 333-108070), which contains a form of prospectus to be used
in connection with the public offering and sale of the Common Shares. Such
registration statement, as amended, including the financial statements and
exhibits thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430A or Rule 434 under the Securities Act, is called the
"Registration Statement". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule
462(b) Registration Statement", and from and after the date and time of
filing of the Rule 462(b) Registration Statement, the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. Such
prospectus, in the form first used by the Underwriters to confirm sales of
the Common Shares, is called the "Prospectus"; provided, however, if the
Company has, with the consent of the Representatives, elected to rely upon
Rule 434 under the Securities Act, the term "Prospectus" shall mean the
Company's prospectus subject to completion (each, a "preliminary
prospectus") dated [___] (such preliminary prospectus is called the "Rule
434 preliminary prospectus"), together with the applicable term sheet (the
"Term Sheet") prepared and filed by the Company with the Commission under
Rules 434 and 424(b) under the Securities Act and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term
Sheet. All references in this Agreement to the Registration Statement, the
Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of
the foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
The Company hereby confirms its agreements with the
Underwriters as follows:
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SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents, warrants and covenants to each
Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration Statement
and any Rule 462(b) Registration Statement have been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated or threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date and at all subsequent times, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by the Representatives expressly
for use therein. There are no contracts or other documents required to be
described in the Prospectus or to be filed as exhibits to the Registration
Statement which have not been described or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to each Representative one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not
distributed and will not distribute, prior to the later of the Second Closing
Date (as defined below) and the completion of the Underwriters' distribution of
the Common Shares, any offering material in connection with the offering and
sale of the Common Shares other than a preliminary prospectus, the Prospectus or
the Registration Statement.
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(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
and contribution hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(e) Authorization of the Common Shares. The Common Shares to be purchased
by the Underwriters from the Company have been duly authorized for issuance and
sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and nonassessable
and will conform to the description thereof in the Prospectus. The issuance of
the Common Shares is not subject to any preemptive or similar rights.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement except for such rights as have been
duly waived.
(g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business or entered into any material transaction or
agreement not in the ordinary course of business; (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock or repurchase or redemption by the Company of any
class of its capital stock; and (iv) the Company and its subsidiaries have not
sustained any material loss or interference with their respective businesses
from fire, explosion, flood, earthquake, accident or other calamity, whether or
not covered by insurance.
(h) Independent Accountants. KPMG LLP, who have expressed their opinion
with respect to the financial statements (which term as used in this Agreement
includes the related notes thereto) filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are, to the knowledge of
the Company after due inquiry, independent public accountants as required by the
Securities Act.
(i) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectus conform in all material respects to the requirements of the
Securities Act and present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as may be expressly stated therein. No
other financial statements or supporting schedules are required to be included
in the Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Consolidated
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Financial Data", "Selected Consolidated Financial Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement.
(j) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly incorporated and, to the
extent a subsidiary is a corporation, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement. Each of
the Company and each subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued, is fully paid and nonassessable and, except for minority
interests in certain subsidiaries, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Registration Statement.
(k) Capitalization and Other Capital Stock Matters The authorized, issued
and outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization" (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Prospectus). The outstanding
Common Stock conforms in all material respects to the description thereof
contained in the Prospectus. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those described in the Prospectus. The
description of the Company's employee stock purchase plan set forth in the
Prospectus accurately and fairly presents the information required to be shown
with respect to such plan.
(l) No Prior Sales of Common Stock. Except as described in the
Registration Statement, the Company has not sold, issued or distributed any
shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act.
(m) Stock Exchange Listing. The Common Shares have been approved for
listing on the New York Stock Exchange, subject only to official notice of
issuance.
(n) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or is in default (or, with the giving of
notice or lapse of time, would be in default) ("Default") under any indenture,
mortgage, deed of trust, loan or credit agreement, note, contract, franchise,
lease or other instrument to which the
5
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an "Existing Instrument"), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company's execution, delivery and performance of this
Agreement and consummation by the Company of the transactions contemplated
hereby and by the Prospectus (i) have been duly authorized by all necessary
corporate action on the part of the Company and will not result in any violation
of the provisions of the charter or by-laws of the Company or any of its
subsidiaries, (ii) will not conflict with or constitute a breach of, or Default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any of its subsidiaries, except for such violations as would not,
individually or in the aggregate, result in Material Adverse Change. No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any court or other governmental or regulatory authority or agency
is required for the Company's execution, delivery and performance of this
Agreement and consummation by the Company of the transactions contemplated
hereby and by the Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act, applicable
state securities or blue sky laws and from the NASD.
(o) No Material Actions or Proceedings. There are no legal or governmental
actions, investigations, suits or proceedings pending or threatened or, to the
Company's knowledge, contemplated (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any executive officer or
director of, or property owned or leased by, the Company or any of its
subsidiaries or (iii) relating to environmental or discrimination matters, where
in any such case (A) there is a reasonable possibility that such action, suit or
proceeding might be determined adversely to the Company or such subsidiary and
(B) any such action, suit or proceeding, if so determined adversely, would
reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement. No
material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the Company's knowledge, is threatened or imminent.
(p) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") necessary to conduct their
respective businesses as now conducted; and the expected expiration of any of
such Intellectual Property Rights would not result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has received any notice of
infringement or conflict with asserted Intellectual Property Rights of others,
which infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change. The Company is not a party to or bound by
any options, licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set forth in the
Prospectus and are not described in all material respects.
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None of the technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation binding on the
Company or, to the Company's knowledge, any of its officers, directors or
employees or otherwise in violation of the rights of any persons, which
violations would, individually or in the aggregate, result in a Material Adverse
Change.
(q) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current material licenses, certificates, authorizations or
permits issued by, and have made all material declarations and filings with, the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such license, certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.
(r) Title to Properties. The Company and each of its subsidiaries have
good and marketable title to all the properties and assets reflected as owned in
the financial statements referred to in Section 1(i) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property, do not materially
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary and could not reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Change. The real property,
improvements, equipment and personal property held under lease by the Company or
any subsidiary are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use made or
proposed to be made of such real property, improvements, equipment or personal
property by the Company or such subsidiary.
(s) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns and have
paid all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them,
except as may be being contested in good faith and by appropriate proceedings.
The Company has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1 (i) above in respect of all
federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has not been
finally determined.
(t) Company Not an "Investment Company". The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not, and after receipt of payment
for the Common Shares will not be, an "investment company" within the meaning of
Investment Company Act and will conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(u) Insurance. Each of the Company and its subsidiaries is insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses including, but not limited
to, policies covering property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism and
earthquakes. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain
7
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change.
(v) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Common Shares.
(w) Related Party Transactions. There are no relationships or
related-party transactions involving the Company or any of its subsidiaries or
any other person required to be described in the Prospectus which have not been
described as required.
(x) No Unlawful Contributions or Other Payments. Neither the Company nor
any of its subsidiaries has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation
of any law which violation is required to be disclosed in the Prospectus.
(y) Company's Accounting System. The Company and its subsidiaries maintain
systems of accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) ERISA Compliance. The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or any of its subsidiaries, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or such subsidiary is a member. No "reportable
event" (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any "employee benefit plan" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined under ERISA). None of
the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification, which could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Change.
8
(aa) Brokers. There is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder's fee or other fee or
commission as a result of any transactions contemplated by this Agreement.
(bb) No Outstanding Loans or Other Indebtedness. There are no outstanding
loans, advances (except normal advances for business expenses in the ordinary
course of business) or guarantees of indebtedness by the Company to or for the
benefit of any of the executive officers or directors of the Company, except as
disclosed in the Prospectus to the extent required to be so disclosed.
(cc) Compliance with Laws. The Company has not been advised, and has no
reason to believe, that it or any of its subsidiaries is not conducting business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so
in compliance would not result in a Material Adverse Change.
(dd) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and
market-related data included in the Prospectus is not based on or derived from
sources that are reliable and accurate in all material respects.
(ee) Directed Share Program. (i) The Registration Statement, the
Prospectus and any preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or regulations of
foreign jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with the
Directed Share Program, and (ii) no authorization, approval, consent, license,
order, registration or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is necessary
under the securities laws and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States, except where the failure
to be so in compliance would not result in a Material Adverse Change. The
Company has not offered, or caused the Underwriters to offer, any Common Shares
to any person pursuant to the Directed Share Program with the intent to
unlawfully influence (i) a customer or supplier of the Company to alter the
customer's or supplier's level or type of business with the Company or (ii) a
trade journalist or publication to write or publish favorable information about
the Company or its products.
Any certificate signed by an officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters set forth therein.
The Company acknowledges that the Underwriters and, for
purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel
to the Company and counsel to the Underwriters, will rely upon the accuracy and
truthfulness of the foregoing representations and hereby consents to such
reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
The Firm Common Shares. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth. On
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to
9
purchase from the Company the respective number of Firm Common Shares set forth
opposite their names on Schedule A. The purchase price per Firm Common Share to
be paid by the several Underwriters to the Company shall be $[___] per share.
The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefore shall be made
at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m. New York time, on [___], or such other time and
date not later than 1:30 a.m. New York time, on [___] as the Representatives
shall designate by notice to the Company (the time and date of such closing are
called the "First Closing Date"). The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to postpone the
First Closing Date as originally scheduled include, but are in no way limited
to, any determination by the Company or the Representatives to recirculate to
the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10 hereof.
The Optional Common Shares; the Second Closing Date. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and
not jointly, up to an aggregate of _______ Optional Common Shares from the
Company at the purchase price per share to be paid by the Underwriters for the
Firm Common Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its exercise by
giving written notice of such cancellation to the Company.
Public Offering of the Common Shares. The Representatives hereby
advise the Company that the Underwriters intend to offer for sale to the public,
as described in the Prospectus, their respective portions of the Common Shares
as soon after this Agreement has been executed as the Representatives, in their
judgment, have determined is advisable and practicable.
10
Payment for the Common Shares. Payment for the Common Shares shall
be made at the First Closing Date (and, if applicable, at the Second Closing
Date) by wire transfer of immediately available funds to the order of the
Company.
It is understood that the Representatives have been
authorized, for their own account and the accounts of the several Underwriters,
to accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Common Shares and any Optional Common Shares the Underwriters have
agreed to purchase. Either or both of BAS and JPMSI, individually and not as a
Representative of the Underwriters, may (but shall not be obligated to) make
payment for any Common Shares to be purchased by any Underwriter whose funds
shall not have been received by such Representatives by the First Closing Date
or the Second Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of
its obligations under this Agreement.
Delivery of the Common Shares. The Company shall deliver, or cause
to be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefore. The Company shall also
deliver, or cause to be delivered, to the Representatives for the accounts of
the several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefore. The certificates for the Common Shares shall be in definitive form
and registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
Delivery of Prospectus to the Underwriters. Not later than 12:00
noon on the second business day following the date the Common Shares are first
released by the Underwriters for sale to the public, the Company shall deliver,
or cause to be delivered, copies of the Prospectus in such quantities and at
such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS.
The Company further covenants and agrees with each Underwriter as
follows:
(a) Representatives' Review of Proposed Amendments and Supplements. During
such period beginning on the date hereof and ending on the later of the First
Closing Date or such date, as in the opinion of counsel for the Underwriters,
the Prospectus is no longer required by law to be delivered in connection with
sales by an Underwriter or dealer (the "Prospectus Delivery Period"), prior to
amending or supplementing the Registration Statement (including any registration
statement filed under Rule 462(b) under the Securities Act) or the Prospectus,
the Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representatives reasonably object.
11
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective, (iv)
of the occurrence of any event within the Prospectus Delivery Period as a result
of which the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading, and (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any order
preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing
or quotation the Common Stock from any securities exchange upon which it is
listed for trading or included or designated for quotation, or, to the Company's
knowledge, the threatening or initiation of any proceedings for any of such
purposes. The Company will use its best efforts to prevent the issuance of any
such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any preliminary prospectus or the Prospectus
or suspending any such qualification of the Shares and, if any such order is
issued, will use its reasonable best efforts to obtain as soon as possible the
withdrawal thereof. Additionally, the Company agrees that it shall comply with
the provisions of Rules 424(b), 430A and 434, as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under such Rule 424(b) were received in a timely manner by
the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section 3(a)
hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, such amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial Securities laws of
those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to
12
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Common
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Common Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.
(g) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.
(h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders an earnings statement (which need
not be audited) covering the year ending December 31, 2004 that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder.
(i) Periodic Reporting Obligations. During the Prospectus Delivery Period
the Company shall file, on a timely basis, with the Commission and the New York
Stock Exchange all reports and documents required to be filed under the Exchange
Act. Additionally, the Company shall report the use of proceeds from the
issuance of the Common Shares as may be required under Rule 463 under the
Securities Act.
(j) Company to Provide Interim Financial Statements. Prior to the Closing
Date, the Company will furnish the Underwriters, as soon as they have been
prepared by or are available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the Registration
Statement and the Prospectus.
(k) Directed Share Program. In connection with the Directed Share Program,
the Company will ensure that the Directed Shares will be restricted to the
extent required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. The Designated Underwriter will
notify the Company as to which Participants' Directed Shares will need to be so
restricted. The Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time. Should the Company
release, or seek to release, from such restrictions any of the Directed Shares,
the Company agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection with
such release.
(l) New York Stock Exchange Listing. The Company will use its best efforts
to list, subject to notice of issuance, the Common Shares on the New York Stock
Exchange.
(m) Company to Provide Copy of the Prospectus in Form That May be
Downloaded from the Internet. The Company shall cause to be prepared and
delivered, at its expense, within one business day from the date of this
Agreement, to BAS and JPMSI an "electronic Prospectus" to be used by certain of
the Underwriters in connection with the offering and sale of the Common Shares.
As used herein, the term "electronic Prospectus" means a form of
13
Prospectus, and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in an electronic format,
satisfactory to BAS and JPMSI, that may be transmitted electronically by certain
of the Underwriters to offerees and purchasers of the Common Shares for at least
the Prospectus Delivery Period; (ii) it shall disclose the same information as
the paper Prospectus and Prospectus filed pursuant to XXXXX, except to the
extent that graphic and image material cannot be disseminated electronically, in
which case such graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to BAS and
JPMSI, that will allow investors to store and have continuously ready access to
the Prospectus at any future time, without charge to investors (other than any
fee charged for subscription to the Internet as a whole and for on-line time).
Such electronic Prospectus may consist of a Rule 434 preliminary prospectus,
together with the applicable Term Sheet, provided that it otherwise satisfies
the format and conditions described in the immediately preceding sentence.
(n) Agreement Not to Offer or Sell Additional Securities. During the
period commencing on the date hereof and ending on the 180th day following the
date of the Prospectus, the Company will not, without the prior written consent
of BAS and JPMSI (which consent may be withheld at the sole discretion of either
BAS or JPMSI), directly or indirectly, sell, offer, contract or grant any option
to sell, pledge, transfer or establish an open "put equivalent position" within
the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares), except for
(i) the registration of the Common Shares and the sales to the Underwriters
pursuant to this Agreement, (ii) issuances of Common Stock pursuant to any stock
purchase plan, restricted stock plan or arrangement described in the Prospectus
and (iii) issuances of Common Stock in connection with any acquisition of any
entity, whether through merger or otherwise, or the acquisition of any assets of
any entity; provided, however, that, in that case of this clause (iii), the
recipient of such Common Stock shall execute a lock-up agreement substantially
in the form of Exhibit B hereto.
(o) Future Reports to the Representatives. During the period of two years
hereafter, so long as the Common Shares are outstanding, the Company will
furnish to BAS at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention:[ ] and
JPMSI at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: [ ]: (i) as soon
as practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock. Notwithstanding the foregoing, no
such report, statement or other document will be furnished to BAS or JPMSI to
the extent it is available on XXXXX or on the Company's website.
(p) Investment Limitation. The Company shall not invest, or otherwise use
the proceeds received by the Company from its sale of the Common Shares in such
a manner as
14
would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.
(q) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock of the Company.
BAS and JPMSI, jointly on behalf of the several Underwriters, may,
in their discretion, waive in writing the performance by the Company of any one
or more of the foregoing covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the Company's authorization,
issuance, sale and delivery of the Common Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer agent
of the Common Stock, (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Common Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, consents and certificates of experts), each preliminary prospectus and
the Prospectus, and all amendments and supplements thereto, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,
(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares, (viii) the fees and expenses associated with listing the Common
Shares on the New York Stock Exchange, (ix) all expenses incurred by the Company
in connection with any "road show" presentation to potential investors, (x) all
other fees, costs and expenses referred to in Item 13 of Part II of the
Registration Statement and (xi) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Directed Shares which are designated by
the Company for sale to Participants. Except as provided in this Section 4,
Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing Date
as though then made and, with respect to the Optional Common Shares, as of the
Second Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
15
(a) Accountants' Comfort Letter. On the date hereof, the Representatives
shall have received from KPMG LLP, independent public accountants for the
Company, a letter dated the date hereof addressed to the Underwriters, in form
and substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountant's "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Prospectus (and the Representatives shall have received
additional conformed copies of such accountants' letter for each of the several
Underwriters).
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD. For the period from and after effectiveness of this Agreement and
prior to the First Closing Date and, with respect to the Optional Common Shares,
the Second Closing Date:
(i) the Company shall have filed the Prospectus with the Commission
(including the information required by Rule 430A under the Securities Act)
in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment
to the Registration Statement containing the information required by such
Rule 430A, and such post-effective amendment shall have become effective;
or, if the Company elected to rely upon Rule 434 under the Securities Act
and obtained the Representatives' consent thereto, the Company shall have
filed a Term Sheet with the Commission in the manner and within the time
period required by such Rule 424(b);
(ii) all requests by the Commission for additional information shall
have been complied with to the reasonable satisfaction of the
Representatives;
(iii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by
the Commission; and
(iv) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date:
(i) in the judgment of the Representatives there shall not have
occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or
any of its subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(d) Representations and Warranties. The respective representations and
warranties of the Company contained herein shall be true and correct on the date
hereof and on and as of
16
the First Closing Date and, with respect to the Optional Common Shares, the
Second Closing Date; and the statements of the Company and its officers made in
any certificates delivered pursuant to this Agreement shall be true and correct
on and as of the First Closing Date, and with respect to the Optional Common
Shares, the Second Closing Date.
(e) Opinions of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received (i) the
favorable opinion and letter of Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the
Company, dated as of such Closing Date, forms of which are attached hereto as
Exhibit A-1 and A-2 and (ii) the favorable opinion and letter of Perry, Guthery,
Xxxxx & Xxxxxxxx, P.C., L.L.O., Nebraska counsel for the Company, dated as of
such Closing Date, forms of which are attached hereto as Exhibit A-3 and A-4
(and the Representatives shall have received additional conformed copies of each
such legal opinion and letter for each of the several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated
as of such Closing Date, with respect to the matters set forth in paragraphs
(i), (ii), (iii) and (v) (with respect to the caption "Underwriting" under
subparagraph (i) only) in Exhibit A-1, and in Exhibit A-2 (and the
Representatives shall have received additional conformed copies of such
counsel's legal opinion for each of the several Underwriters).
(g) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by one of the Co-Chief Executive Officers of the Company
and by the Chief Financial Officer of the Company, in the capacity as such
officers, dated as of such Closing Date, to the effect set forth in subsections
(b)(iii) and (c)(ii) of this Section 5, and further to the effect that, to the
knowledge of such officers:
(i) for the period from and after the date of this Agreement and up
to and including such Closing Date, there has not occurred any Material
Adverse Change;
(ii) the representations, warranties and covenants of the Company
set forth in Section 1 hereto are true and correct with the same force and
effect as though expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
(h) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received from KPMG LLP,
independent public accountants for the Company, a letter dated such date, in
form and substance satisfactory to the Representatives, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant to
subsection (a) of this Section 5, except that the specified date referred to
therein for the carrying out of procedures shall be no more than five business
days prior to the First Closing Date or Second Closing Date, as the case may be
(and the Representatives shall have received additional conformed copies of such
accountants' letter for each of the several Underwriters).
17
(i) Lock-Up Agreement from Certain Securityholders of the Company. On or
prior to the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit B hereto from each director,
each executive officer and each beneficial owner of Common Stock (as defined and
determined according to Rule 13d-3 under the Exchange Act, except that a one
hundred eighty day period shall be used rather than the sixty day period set
forth therein), and such agreement shall be in full force and effect on each of
the First Closing Date and the Second Closing Date.
(j) No Legal Impediment to Issuance. No action shall have been taken and
no statute, rule, regulation or order shall have been enacted, adopted or issued
by any federal, state or foreign governmental or regulatory authority that
would, as of the First Closing Date and, with respect to the Optional Common
Shares, the Second Closing Date, prevent the issuance or sale of the Common
Shares; and no injunction or order of any federal, state or foreign court shall
have been issued that would, as of the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, prevent the issuance or
sale of the Common Shares.
(k) Good Standing. The Representatives shall have received on and as of
the First Closing Date and, with respect to the Optional Common Shares, the
Second Closing Date, satisfactory evidence of the good standing of the Company
and each of its subsidiaries which is a "significant subsidiary" within the
meaning of Rule 405 under the Securities Act in their respective jurisdictions
of organization and their good standing as foreign entities in such other
jurisdictions as the Representatives may reasonably request, in each case in
writing or any standard form of telecommunication from the appropriate
governmental authorities of such jurisdictions.
(l) New York Stock Exchange Listing. The Common Shares to be delivered on
the First Closing Date and, with respect to the Optional Common Shares, the
Second Closing Date, shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
(m) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 hereof shall at all times be effective and shall survive such
termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representatives pursuant to Section 5 hereof, or if the sale
to the Underwriters of the Common Shares on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the
18
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand,
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Common Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall become
effective upon the execution of this Agreement by the parties hereto.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its officers and employees, and each person,
if any, who controls any Underwriter within the meaning of the Securities Act or
the Exchange Act from and against any loss, claim, damage, liability or expense,
as incurred, to which such Underwriter, officer, employee or controlling person
may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and to reimburse each Underwriter and each such
controlling person for any and all expenses (including, without limitation, the
fees and disbursements of counsel chosen by BAS and JPMSI) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); and provided, further, that with respect to
any preliminary prospectus, the foregoing indemnity agreement shall not inure to
the benefit of any Underwriter from whom the person asserting any loss, claim,
damage, liability or expense purchased Common Shares, or any person controlling
such Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 hereof and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person at or prior to the written confirmation of the sale of the Common
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. The indemnity agreement set
19
forth in this Section 8(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person who controls the Company within the
meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is 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 Prospectus (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the table in the second paragraph and
in the third, sixth, seventh, eighth, twelfth, thirteenth, seventeenth and
eighteenth paragraphs under the caption "Underwriting" in the Prospectus; and
the Underwriters confirm that such statements are correct. The indemnity
agreement set forth in this Section 8(b) shall be in addition to any liabilities
that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any indemnified party for contribution or
otherwise than under the indemnity agreement contained in this Section 8 or to
the extent it is not prejudiced as a proximate result of such failure. In case
any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the
indemnifying party will be entitled to participate in, and, to the extent that
it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
20
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party or parties (JPMSI and BAS in the
case of Section 8(b) and Section 9), representing the indemnified parties who
are parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (x) includes an unconditional
release of such indemnified party, in form and substance reasonably satisfactory
to such indemnified party, from all liability on claims that are the subject
matter of such action, suit or proceeding and (y) does not include any statement
as to or any admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(e) Indemnification for Directed Shares. The Company agrees to indemnify
and hold harmless the Designated Underwriter, its officer and employees, and
each person, if any, who controls the Designated Underwriter within the meaning
of the Securities Act or the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Designated Underwriter or such
controlling person may become subject, which is caused by any untrue statement
or alleged untrue statement of a material fact contained in any material
prepared by or with the consent of the Company for distribution to Participants
in connection with the Directed Share Program or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading. The indemnity
agreement set forth in this paragraph shall be in addition to any liabilities
that the Company may otherwise have.
SECTION 9. CONTRIBUTION. If the indemnification provided for in Section 8
hereof is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages,
21
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the Common
Shares pursuant to this Agreement or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Common Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company, and the total underwriting
discounts received by the Underwriters, in each case as set forth on the front
cover page of the Prospectus (or, if Rule 434 under the Securities Act is used,
the corresponding location on the Term Sheet) bear to the aggregate initial
public offering price of the Common Shares as set forth on such cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8(c) hereof for purposes of
indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
22
who controls the Company with the meaning of the Securities Act or the Exchange
Act shall have the same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 8 and Section 9
hereof shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date, this Agreement may be terminated by the Representatives in their absolute
discretion by notice given to the Company if at any time (i) trading or
quotation in any of the securities issued or guaranteed by the Company shall
have been suspended or limited by the Commission or on any exchange or in any
over-the-counter market or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on such stock exchange; (ii) a general
banking moratorium shall have been declared by any of federal, New York or
Nebraska authorities; or (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Representatives is material and adverse and makes it
impracticable or inadvisable to market the Common Shares in the manner and on
the terms described in the Prospectus or to enforce contracts for the sale of
securities. Any termination pursuant to this Section 11 shall be without
liability on the part of (a) the Company to any Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Representatives
23
and the Underwriters pursuant to Section 4 hereof, (b) any Underwriter to the
Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxxxx/Xxxxxx Xxxxxxxx
with a copy to:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxx X. Xxxx, Esq.
and
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 212-
Attention: Equity Capital Markets
with a copy to:
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxx, Esq.
If to the Company:
Nelnet, Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
00
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxx X. Xxxxxx, Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxx and Xxxxxxx llp
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 212-269-5420
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
and
Perry, Guthery, Xxxxx & Xxxxxxxx, P.C., L.L.O.
000 Xxxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: 402-476-0094
Attention: Xxxxxx X. Xxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9 hereof,
and in each case their respective successors, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in such state.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Table of Contents and the
25
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9 hereof, and is fully informed regarding said provisions. Each of the
parties hereto further acknowledges that the provisions of Sections 8 and 9
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the officers or employees of any Underwriter, any person controlling any
Underwriter, the Company, the officers or employees of the Company, or any
person controlling the Company, (ii) acceptance of the Common Shares and payment
for them hereunder and (iii) termination of this Agreement.
26
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
NELNET, INC.
By:__________________________
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in New York, New York as of the date first above
written.
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
CREDIT SUISSE FIRST BOSTON LLC
XXXXXX XXXXXXX & CO. INCORPORATED
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: BANC OF AMERICA SECURITIES LLC
By:__________________________
By: X.X. XXXXXX SECURITIES INC.
By:__________________________
27
SCHEDULE A
NUMBER OF
FIRM COMMON SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Banc of America Securities LLC............................ [___]
X.X. Xxxxxx Securities Inc................................ [___]
Credit Suisse First Boston LLC ........................... [___]
Xxxxxx Xxxxxxx & Co. Incorporated ........................ [___]
[___] .................................................... [___]
Total............................................ [___]
X-0
XXXXXXX X-0
Opinion of Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Company, to be
delivered pursuant to Section 5(e) of the Underwriting Agreement. References to
the Prospectus in this Exhibit A-1 include any supplements thereto at the First
Closing Date (or the Second Closing Date, as the case may be).
(i) The Underwriting Agreement has been duly executed and delivered
by the Company.
(ii) The Registration Statement and the Rule 462(b) Registration
Statement, if any, has been declared effective by the Commission under the
Securities Act. To the knowledge of such counsel, no stop order suspending
the effectiveness of either of the Registration Statement or the Rule
462(b) Registration Statement, if any, has been issued under the
Securities Act and no proceedings for such purpose have been instituted or
are pending or are contemplated or threatened by the Commission. Any
required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) under the Securities Act has been made in the manner and
within the time period required by such Rule 424(b).
(iii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Prospectus, and each amendment or supplement
to the Registration Statement and the Prospectus, as of their respective
effective or issue dates (other than the financial statements included
therein or in exhibits to or excluded from the Registration Statement, as
to which no opinion need be rendered) comply as to form in all material
respects with the applicable requirements of the Securities Act.
(iv) The statements in the Prospectus under the captions "Shares
Eligible for Future Sale -- Sales of Restricted Shares" and "Certain
United States Income Tax Considerations," insofar as such statements
constitute matters of law, summaries of legal matters, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and
fairly present and summarize, in all material respects, the matters
referred to therein.
(v) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency is required for the Company's execution, delivery and performance
of the Underwriting Agreement and consummation by the Company of the
transactions contemplated thereby and by the Prospectus, except as
required under the Securities Act, applicable state securities or blue sky
laws and from the NASD.
A-1-1
(vi) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of
Investment Company Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the Business
Corporation Law of the State of New York or the federal law of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the First Closing Date or the Second Closing Date,
as the case may be, shall be satisfactory in form and substance to the
Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel reasonably satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
X-0-0
XXXXXXX X-0
Letter of Xxxxxx Xxxxxx & Xxxxxxx llp, counsel for the Company, to be
delivered pursuant to Section 5(e) of the Underwriting Agreement. References to
the Prospectus in this Exhibit A-2 include any supplements thereto at the First
Closing Date (or the Second Closing Date, as the case may be).
Such counsel shall state that they have participated in conferences with
certain officers and other representatives of the Company, with representatives
of the independent auditors for the Company and with representatives of the
Underwriters at which the contents of the Registration Statement and the
Prospectus, and any supplements or amendments thereto, and related matters were
discussed. Although such counsel has made certain inquiries and investigations
in connection with the preparation of the Registration Statement, the
limitations inherent in the role of outside counsel are such that such counsel
cannot and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus, except as provided in clause (iv) of Exhibit A-1. Subject to the
foregoing, such counsel advises you that, in connection with their work on this
matter, no facts have come to their attention which would lead them to believe
that either the Registration Statement or any amendments thereto, at the time
the Registration Statement or such amendments became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, as of its date or at the First Closing Date or the
Second Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or other financial or statistical data
derived therefrom included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
X-0-0
XXXXXXX X-0
Opinion of Perry, Guthery, Xxxxx & Xxxxxxxx, P.C., L.L.O., Nebraska
counsel for the Company, to be delivered pursuant to Section 5(e) of the
Underwriting Agreement. References to the Prospectus in this Exhibit A-3 include
any supplements thereto at the First Closing Date (or the Second Closing Date,
as the case may be).
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Nebraska.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Change.
(iv) Each significant subsidiary of the Company (as defined in Rule
405 under the Securities Act) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and, to the knowledge of such counsel, is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except for such jurisdictions where the failure to so qualify
or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change.
(v) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization." All of the issued and
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable and, to knowledge of such
counsel, have been issued in compliance with the registration and
qualification requirements of federal and state securities laws. The form
of certificate used to evidence the Class A Common Stock is in due and
proper form and complies with all applicable requirements of the charter
A-3-1
and by-laws of the Company and the Business Corporation Act of the State
of Nebraska.
(vi) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to
subscribe for or purchase securities of the Company arising (i) by
operation of the charter or by-laws of the Company or the Business
Corporation Act of the State of Nebraska or, (ii) to the knowledge of such
counsel, otherwise.
(vii) The Company has full right, power and authority to execute and
deliver the Underwriting Agreement and to perform its obligations
thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of the Underwriting Agreement and
the consummation by the Company of the transactions contemplated thereby
have been duly and validly taken.
(viii) The Common Shares to be purchased by the Underwriters from
the Company have been duly authorized for issuance and sale pursuant to
the Underwriting Agreement and, when issued and delivered by the Company
pursuant to the Underwriting Agreement against payment of the
consideration set forth therein, will be validly issued, fully paid and
nonassessable.
(ix) The outstanding Common Stock conforms to the description
thereof contained in the Prospectus. The Common Shares, when issued and
delivered by the Company pursuant to the Underwriting Agreement against
payment of the consideration set forth therein, will conform to the
description thereof in the Prospectus.
(x) The statements (i) in the Prospectus under the captions
"Management -- Employee Share Purchase Plan," "Certain Transactions,"
"Description of Capital Stock" and "Shares Eligible for Future Sale" and
(ii) in Items 14 and 15 of the Registration Statement, insofar as such
statements constitute terms of stock, matters of law, summaries of legal
matters, the charter or by-laws of the Company, documents or legal
proceedings, or legal conclusions, has been reviewed by such counsel and
fairly present and summarize, in all material respects, the matters
referred to therein.
(xi) To the knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company
or any of its subsidiaries is or may be the subject which, individually or
in the aggregate, if determined adversely to the
A-3-2
Company or any of its subsidiaries, could reasonably be expected to result
in a Material Adverse Change; and to the knowledge of such counsel, no
such investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or threatened by
others.
(xii) To the knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein.
(xiii) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency is required for the Company's execution, delivery and performance
of the Underwriting Agreement and consummation by the Company of the
transactions contemplated thereby and by the Prospectus, except as
required under the Securities Act, applicable state securities or blue sky
laws and from the NASD.
(xiv) The execution and delivery of the Underwriting Agreement by
the Company and the performance by the Company of its obligations
thereunder (other than performance by the Company of its obligations under
the indemnification and contribution sections of the Underwriting
Agreement, as to which no opinion need be rendered) (i) have been duly
authorized by all necessary corporate action on the part of the Company;
(ii) will not result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries; (iii) will not
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to any Existing
Instrument, except for such breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a
Material Adverse Change; or (iv) to the knowledge of such counsel, will
not result in any violation of any law, administrative regulation or
administrative or court decree applicable to the Company or any of its
subsidiaries, except for such violations as would not, individually or in
the aggregate, result in a Material Adverse Change.
(xv) Except as disclosed in the Prospectus, to the knowledge of such
counsel, there are no persons with registration or other similar rights to
have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by the
Underwriting Agreement, except for such rights as have been duly waived.
(xvi) To the knowledge of such counsel, neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or any
A-3-3
law, administrative regulation or administrative or court decree
applicable to the Company or any of its subsidiaries or is in Default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each
such case for such violations or Defaults as would not, individually or in
the aggregate, result in a Material Adverse Change.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the Business
Corporation Act of the State of Nebraska or the federal law of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the First Closing Date or the Second Closing Date,
as the case may be, shall be satisfactory in form and substance to the
Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel reasonably satisfactory to counsel for the
Underwriters, and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
X-0-0
XXXXXXX X-0
Letter of Perry, Guthery, Xxxxx & Xxxxxxxx, P.C., L.L.O., Nebraska counsel
for the Company, to be delivered pursuant to Section 5(e) of the Underwriting
Agreement. References to the Prospectus in this Exhibit A-4 include any
supplements thereto at the First Closing Date (or the Second Closing Date, as
the case may be).
Such counsel shall state that they have participated in conferences with
certain officers and other representatives of the Company, with representatives
of the independent auditors for the Company and with representatives of the
Underwriters at which the contents of the Registration Statement and the
Prospectus, and any supplements or amendments thereto, and related matters were
discussed. Although such counsel has made certain inquiries and investigations
in connection with the preparation of the Registration Statement, such counsel
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus,
except as provided in clauses (ix) and (x) of Exhibit A-3. Subject to the
foregoing, such counsel advises you that, in connection with their work on this
matter, no facts have come to their attention which would lead them to believe
that either the Registration Statement or any amendments thereto, at the time
the Registration Statement or such amendments became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, as of its date or at the First Closing Date or the
Second Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or other financial or statistical data
derived therefrom included in the Registration Statement or the Prospectus or
any amendments or supplements thereto).
A-4-1
EXHIBIT B
, 0000
Xxxx xx Xxxxxxx Securities LLC
X.X. Xxxxxx Securities Inc.
Joint Book-Running Managers
RE: Nelnet Loan Services, Inc. (to be renamed Nelnet, Inc) (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock"). The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering. However, the undersigned recognizes
that whether or not the Offering takes place depends on a variety of factors and
that you are under no obligation to enter into such underwriting arrangements.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of Banc of America
Securities LLC and X.X. Xxxxxx Securities Inc. (which consent may be withheld in
their sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended, but only including shares of Common Stock over which the
undersigned has the power to control the disposition) by the undersigned, or
publicly announce an intention to do any of the foregoing, for a period
commencing on the effective date of the registration statement relating to the
Offering and continuing through the close of trading on the date 180 days after
the date of the final prospectus for the Offering. The foregoing sentence shall
not apply to (i) any shares of Common Stock acquired as part of the Offering,
(ii) any shares of Common Stock or other securities acquired in open market
transactions after commencement of the Offering, (iii) bona fide gifts or
distributions (including if the undersigned is a partnership, to its partners)
without consideration to persons who, as a result of such gift or distribution,
will not be required to make a filing under Section 16(a) of the Securities
Exchange Act of 1934, as amended, prior to the expiration of the 180-day period
referenced above, (iv) transfers which occur by operation of law, (v) the
conversion of one class of Common Stock into another class of Common Stock or
(vi) the transfer of any or all of the shares of Common Stock owned by the
undersigned either during his or her lifetime or on death, by gift, will or
intestate succession to the immediate family of the undersigned or to a trust
the beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided, however, that in any such case
described in (iii), (iv) or (vi) it shall be a condition to such transfer that
the transferee executes and delivers to Banc of America Securities LLC and X.X.
Xxxxxx Securities Inc. an agreement stating that the transferee is receiving and
holding the Common Stock subject to the provisions of this letter agreement. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of shares
of Common
B-1
Stock or securities convertible into or exchangeable or exercisable
for Common Stock held by the undersigned except in compliance with the foregoing
restrictions.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of 1933, as amended, of
any Common Stock owned either of record or beneficially by the undersigned,
including any rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives and assigns of the
undersigned. This agreement shall terminate upon the earlier to occur of (i) the
expiration of the 180-day period referenced above and (ii) such time as the
Company or Banc of America Securities LLC and X.X. Xxxxxx Securities Inc.
determine to abandon or terminate the Offering.
Printed Name of Holder
By:
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee or on behalf
of an entity)
B-2
