EXHIBIT 1.1
X.X. XXXXXX SECURITIES INC.
BLACKBAUD, INC.
_____Shares of Common Stock
Underwriting Agreement
____________, 2004
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
As Representatives of the
several Underwriters listed
in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose to sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of _______ shares and, at the option of the
Underwriters, up to an additional ________ shares of common stock, par value
$0.001 per share (the "Stock"), of Blackbaud, Inc., a Delaware corporation (the
"Company"). The aggregate of _______ shares to be sold by the Selling
Stockholders is herein called the "Underwritten Shares" and the aggregate of
___________ additional shares to be sold by the Selling Stockholders is herein
called the "Option Shares". The Underwritten Shares and the Option Shares are
herein referred to as the "Shares".
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-112978) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A under the Securities Act to be
part of the registration
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statement at the time of its effectiveness ("Rule 430 Information"), is referred
to herein as the "Registration Statement"; and as used herein, the term
"Preliminary Prospectus" means each prospectus included in such registration
statement (and any amendments thereto) before it becomes effective, any
prospectus filed with the Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included in the Registration Statement at the
time of its effectiveness that omits Rule 430A Information, and the term
"Prospectus" means the prospectus in the form first used to confirm sales of the
Shares. If the Company has filed an abbreviated registration statement pursuant
to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"),
then any reference herein to the term "Registration Statement" shall be deemed
to include such Rule 462 Registration Statement. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Registration
Statement and the Prospectus.
2. Purchase of the Shares by the Underwriters. (a) Each of the Selling
Stockholders agrees, severally and not jointly, to sell the Shares to the
several Underwriters as provided in this Agreement, and each Underwriter, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from each of the Selling Stockholders at a purchase price per share
of $__________ (the "Purchase Price") the number of Underwritten Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Underwritten Shares to be sold by each of the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Underwritten
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Underwritten Shares to be purchased by all the Underwriters
from all the Selling Stockholders hereunder.
In addition, each of the Selling Stockholders, as and to the extent
indicated in Schedule II hereto agrees, severally and not jointly, to sell the
Option Shares to the several Underwriters and the Underwriters shall have the
option to purchase at their election up to [ ] Option Shares at the Purchase
Price. The Underwriters, on the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, shall have
the option to purchase, severally and not jointly, from each of the Selling
Stockholders at the Purchase Price that portion of the number of Option Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of Option
Shares by a fraction the numerator of which is the maximum number of Option
Shares that such Underwriter is entitled to purchase and the denominator of
which is the maximum number of Option Shares that all of the Underwriters are
entitled to purchase hereunder. Any such election to purchase Option Shares
shall be made in proportion to the maximum number of Option Shares to be sold by
each Selling Stockholder as set forth in Schedule II hereto.
The Underwriters may exercise the option to purchase the Option Shares at
any time (but not more than twice) on or before the thirtieth day following the
date of this Agreement, by written notice from the Representatives to the
Company and the Attorney-in-Fact (as defined below). Such notice shall set forth
the aggregate number of Option Shares as to which the option
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is being exercised and the date and time when the Option Shares are to be
delivered and paid for which may be the same date and time as the Closing Date
(as hereinafter defined) but shall not be earlier than the Closing Date nor
later than the tenth full business day (as hereinafter defined) after the date
of such notice (unless such time and date are postponed in accordance with the
provisions of Section 11 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
The Company, the Selling Stockholders and the Underwriters hereby agree
that up to [ ] of the Underwritten Shares to be purchased by Wachovia Capital
Markets, LLC (the "Designated Underwriter") under this Agreement (the "Directed
Shares") shall be reserved for sale by such Designated Underwriter for the
Company's employees (the "Directed Shares Purchasers") as part of the
distribution of the Underwritten Shares (the "Directed Share Program"). The
Underwritten Shares to be reserved and sold by the Designated Underwriter
pursuant to the Directed Share Program shall be sold by such Designated
Underwriter at the public offering price and shall be subject to the terms of
this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. (the "NASD") and all other
applicable laws, rules and regulations. The Directed Shares purchased pursuant
to the Directed Share Program by the Company employees shall not be subject to
the clear market provision contained in Section 6(a) hereto. To the extent that
such Directed Shares are not orally confirmed for purchase by such persons by
the end of the first day after this Agreement, such Directed Shares will be
offered to the public as part of the offering contemplated hereby. Except as
expressly provided in Section 8(c) hereto, under no circumstances will the
Designated Underwriter or any other Underwriter be liable to the Company or to
any of the Directed Shares Purchasers for any action taken or omitted to be
taken other than any such action or inaction resulting primarily from the bad
faith or willful misconduct of the Designated Underwriter in connection with the
Directed Share Program.
(b) The Company and the Selling Stockholders understand that the
Underwriters intend to make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the Representatives is
advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Company and the Selling Stockholders acknowledge and agree that
the Underwriters may offer and sell Shares to or through any affiliate of an
Underwriter and that any such affiliate may offer and sell Shares purchased by
it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Attorney-in-Fact (as defined
below), with regard to payment to the Selling Stockholders in the case of the
Underwritten Shares, at the offices of Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M. New York City time on _____,
2004, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representatives and the
Attorney-in-Fact may agree upon in writing or, in the case of the Option Shares,
on the date and at the time and place specified by the Representatives in the
written notice of the Underwriters' election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares are referred to herein
as the "Closing Date" and the time and date for such payment for the
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Option Shares, if other than the Closing Date, are herein referred to as the
"Additional Closing Date".
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company or the Selling
Stockholders, as the case may be. The certificates for the Shares will be made
available for inspection and packaging by the Representatives at the office of
X.X. Xxxxxx Securities Inc. set forth above not later than 1:00 P.M., New York
City time, on the business day prior to the Closing Date or the Additional
Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter and the Selling Stockholders that:
(a) Preliminary Prospectus. No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in any Preliminary Prospectus, such
information consisting solely of the information set forth as such in Section
8(c).
(b) Registration Statement and Prospectus. No order suspending the
effectiveness of the Registration Statement has been issued by the Commission
and, to the Company's knowledge and belief, no proceeding for that purpose has
been initiated or threatened by the Commission; as of the applicable effective
date of the Registration Statement and any amendment thereto, the Registration
Statement 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 in
order to make the statements therein not misleading; and as of the applicable
filing date of the Prospectus and any amendment or supplement thereto and as of
the Closing Date and as of the Additional Closing Date, as the case may be, the
Prospectus or any wrapper or supplement prepared in connection with the
distribution of the Directed Shares will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating
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to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration Statement and
the Prospectus and any amendment or supplement thereto, such information
consisting solely of the information set forth as such in Section 8(c).
(c) Financial Statements. The financial statements and the related notes
thereto included in the Registration Statement and the Prospectus or any wrapper
or supplement prepared in connection with the distribution of the Directed
Shares comply in all material respects with the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Exchange
Act"), as applicable, and present fairly the financial position of the Company
and its subsidiaries as of the dates indicated and the results of their
operations and the changes in their 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
covered thereby, and the supporting schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein; and the other financial information included in the Registration
Statement and the Prospectus or any wrapper or supplement prepared in connection
with the distribution of the Directed Shares has been derived from the
accounting records of the Company and its subsidiaries and presents fairly the
information shown thereby.
(d) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included in the Registration Statement and
the Prospectus or any wrapper or supplement prepared in connection with the
distribution of the Directed Shares, (i) there has not been any change in the
capital stock or increase in long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared, set aside
for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, stockholders' equity, results of operations or prospects of the
Company and its subsidiaries taken as a whole; (ii) neither the Company nor any
of its subsidiaries has entered into any transaction or agreement that is
material to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the Company nor any of
its subsidiaries has sustained any loss or interference that is material to the
Company and its subsidiaries taken as a whole with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, except in each of (i), (ii)
and (iii) above as otherwise disclosed in the Registration Statement and the
Prospectus.
(e) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
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authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, stockholders' equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). The Company does not own or control, directly or indirectly,
any corporation, association or other entity other than the subsidiaries listed
in Exhibit 21 to the Registration Statement.
(f) Capitalization. The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Capitalization"; all the outstanding
shares of capital stock of the Company (including the Shares to be sold by the
Selling Stockholders) have been duly and validly authorized and issued and are
fully paid and non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the Prospectus,
there are no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; the capital
stock of the Company conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable, are owned directly or indirectly by the Company and, except
as described in or expressly contemplated by Registration Statement and the
Prospectus, are free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of any third
party.
(g) Due Authorization. The Company has full right, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken for the due and proper authorization, execution
and delivery by it of this Agreement and the consummation by it of the
transactions contemplated hereby has been duly and validly taken.
(h) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(i) The Shares. The Shares of the Company to be sold by the Selling
Stockholders hereunder (including Shares to be issued upon exercise of the
Options (as hereinafter defined)) have been duly authorized by the Company and,
when issued, if applicable, and delivered and paid for as provided herein, will
be duly and validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Prospectus; and the initial issuance
and delivery of the Shares by the Company to the Selling Stockholders was not,
the issuance of Shares to be issued upon exercise of the Options will not be,
and the delivery of the Shares contemplated by this Agreement will not be,
subject to any preemptive or similar rights.
(j) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no
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event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject; or (iii) in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(k) No Conflicts. The execution, delivery and performance by the Company
of this Agreement, the initial issuance and delivery of the Shares by the
Company to the Selling Stockholders, the sale of the Shares to be sold by the
Selling Stockholders hereunder, the issuance by the Company of the Shares to be
issued upon exercise of the Options and the consummation by the Company of the
transactions contemplated by this Agreement did not or will not, as applicable,
(i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a 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 indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the
Company or any of its subsidiaries or (iii) result in the violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(l) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority was or is required, as applicable, for the execution,
delivery and performance by the Company of this Agreement, the initial issuance
and delivery of the Shares by the Company to the Selling Stockholders, the sale
of the Shares to be sold by the Selling Stockholders hereunder, the issuance by
the Company of the Shares to be issued upon the exercise of the Options and the
consummation by the Company of the transactions contemplated by this Agreement,
except for (i) the registration of the Shares under the Securities Act and such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required under applicable state securities laws, the rules and
regulations of the National Association of Securities Dealers or the NASDAQ
National Market, in connection with the purchase and distribution of the Shares
by the Underwriters and (ii) any other consent, approval, authorization, order,
registration or qualification that the failure of which to obtain would not,
individually or in the aggregate, have a Material Adverse Effect, or would not
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement.
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(m) Legal Proceedings. 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 that, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect or materially and adversely affect the ability of the
Company to perform its obligations under this Agreement; no such investigations,
actions, suits or proceedings have been threatened in writing to the Company or,
to the knowledge of the Company, contemplated by any governmental or regulatory
authority or threatened by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Prospectus that are not
so described and (ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration Statement or the
Prospectus that are not so filed or described.
(n) Independent Accountants. PriceWaterhouseCoopers LLP, who have audited
financial statements as of December 31, 2003 and 2002 and for each of the three
years ended December 31, 2003 of the Company and its subsidiaries, are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of the
American Institute of Certified Public Accountants and its interpretations and
rulings thereunder ("Independent Accountants"), and Xxxxxx Xxxxxxxx LLP and
Ernst & Young LLP, at the time that they were the Company's accountants, were
Independent Accountants.
(o) Title to Real and Personal Property. The Company and its subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease
or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free
and clear of all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (ii)
are disclosed in the Prospectus or (iii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(p) Title to Intellectual Property. The Company and its subsidiaries own
or possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses;
and the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others except those claims or conflicts that could not be
expected, individually or in the aggregate, to have a Material Adverse Effect.
(q) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one hand,
and the directors, officers,
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stockholders, customers or suppliers of the Company or any of its subsidiaries,
on the other, that is required by the Securities Act to be described in the
Registration Statement and the Prospectus and that is not so described.
(r) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, "Investment Company Act").
(s) Taxes. The Company and its subsidiaries have paid all material
federal, state, local and foreign taxes and filed all tax returns required to be
paid or filed through the date hereof; and except as otherwise disclosed in the
Prospectus, there is no material tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its
subsidiaries or any of their respective properties or assets.
(t) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement and the
Prospectus, except where the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect; and except as
described in the Prospectus or as it could not, individually or in the
aggregate, have a Material Adverse Effect, neither the Company nor any of its
subsidiaries has received notice of any revocation or modification of any such
license, certificate, permit or authorization or has any reason to believe that
any such license, certificate, permit or authorization will not be renewed in
the ordinary course.
(u) No Labor Disputes. No material labor disturbance by or material
dispute with employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is contemplated or threatened.
(v) Compliance With Environmental Laws. The Company and its subsidiaries
(i) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive
required permits, licenses or approvals, or liability as would not, individually
or in the aggregate, have a Material Adverse Effect.
(w) Compliance With ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"),
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that is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its affiliates
has been maintained in material compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code");
no prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
(x) Accounting Controls. The Company and its subsidiaries maintain systems
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) Insurance. (i) The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are (A) reasonable and customary for
their respective businesses and (B) adequate, in the Company's reasonable
belief, to protect the Company and its subsidiaries and their respective
businesses; and (ii) neither the Company nor any of its subsidiaries has (A)
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (B) any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
(z) No Unlawful Payments. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or any of its
subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(aa) No Restrictions on Subsidiaries. Except as disclosed in the
Prospectus, no subsidiary of the Company is currently prohibited, directly or
indirectly, under any agreement or
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other instrument to which it is a party or is subject, from paying any dividends
to the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(bb) No Broker's Fees. Neither the Company nor any of its subsidiaries is
a party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the Company or any
of its subsidiaries or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the offering and sale of the Shares.
(cc) No Registration Rights. Except as expressly disclosed in the
Registration Statement and the Prospectus, no person has the right to require
the Company or any of its subsidiaries to register any securities for sale under
the Securities Act by reason of the filing of the Registration Statement with
the Commission or the issuance of the Shares to be issued in connection with the
exercise of the Options or, to the knowledge of the Company, the issuance and
sale of the Shares to be sold by the Selling Stockholders hereunder.
(dd) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(ee) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained in the Registration Statement and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(ff) 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 Registration Statement and the Prospectus is
not based on or derived from sources that are reliable and accurate in all
material respects.
(gg) The Options. The unissued Shares issuable upon the exercise of
options (the "Options") to be exercised by certain of the Selling Stockholders
(the "Optionholders") have been duly authorized by the Company and validly and
reserved for issuance, and at the time of delivery to the Underwriters with
respect to such Shares, such Shares will be issued and delivered in accordance
with the provisions of the Stock Option Agreements between the Company and such
Selling Stockholders pursuant to which such Options were granted (the "Option
Agreements") and will be validly issued, fully paid and non-assessable and will
conform to the description thereof in the Prospectus.
(hh) The Option Agreements. The Options were duly authorized and issued
pursuant to the Option Agreements and constitute valid and binding obligations
of the Company and the Optionholders are entitled to the benefits provided by
the Option Agreements; the Option Agreements were duly authorized, executed and
delivered and constitute valid and legally binding agreements enforceable
against the Company in accordance with their terms except as
12
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or by equitable principles relating
to enforceability; and the Options and the Option Agreements conform to the
descriptions thereof in the Prospectus.
(ii) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of
the Company or, to the knowledge of the Company, any of the Company's directors
or officers, in their capacities as such, to comply with any applicable
provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Xxxxxxxx-Xxxxx Act"), including
Section 402 related to loans.
(jj) Directed Share Program. The Company has not offered, or caused the
Underwriters to offer, any Shares to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
4. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders severally and not jointly represents and warrants to each
Underwriter that:
(a) Required Consents; Authority. All consents, approvals, authorizations
and orders necessary for the execution and delivery by such Selling Stockholder
of this Agreement and the Power of Attorney (the "Power of Attorney") and the
Custody Agreement (the "Custody Agreement") hereinafter referred to, and for the
sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder hereunder; this Agreement, the Power of
Attorney and the Custody Agreement have each been duly authorized, executed and
delivered by such Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by such Selling
Stockholder of this Agreement, the Power of Attorney and the Custody Agreement,
the sale of the Shares to be sold by such Selling Stockholder and the
consummation by such Selling Stockholder of the transactions herein and therein
contemplated will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of such Selling Stockholder pursuant to, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject, (ii)
result in any violation of the provisions of the charter or by-laws or similar
organizational documents of such Selling Stockholder, if applicable, or (iii)
result in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory agency
applicable to such Selling Stockholder or applicable to any of the property or
assets of such Selling Stockholder, including the Shares to be sold by such
Selling Stockholder.
13
(c) Title to Shares. Such Selling Stockholder has good and valid title to
the Shares to be sold at the Closing Date or the Additional Closing Date, as the
case may be, by such Selling Stockholder hereunder (other than the Shares to be
issued upon exercise of Options), free and clear of all liens, encumbrances,
equities or adverse claims; such Selling Stockholder will have, immediately
prior to the Closing Date or the Additional Closing Date, as the case may be,
assuming due issuance of any Shares to be issued upon exercise of Options, good
and valid title to such Shares to be sold at the Closing Date or the Additional
Closing Date, as the case may be, by such Selling Stockholder, free and clear of
all liens, encumbrances, equities or adverse claims; and, upon delivery of the
certificates representing such Shares and payment therefor pursuant hereto, good
and valid title to such Shares, free and clear of all liens, encumbrances,
equities or adverse claims (other than any such lien, encumbrance, equity or
adverse claim created by or resulting from an action taken by an Underwriter),
will pass to the several Underwriters.
(d) No Stabilization. Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Shares.
(e) Registration Statement and Prospectus. As of the applicable effective
date of the Registration Statement and any amendment thereto, the information in
the Registration Statement and any amendment or supplement thereto which relates
to such Selling Stockholder and which has been furnished in writing by or on
behalf of such Selling Stockholder expressly for use in such Registration
Statement, amendment or supplement 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 in order to make the statements therein not
misleading; and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the information in the Prospectus
and any amendment or supplement thereto or in any wrapper or supplement prepared
in connection with the distribution of the Directed Shares which relates to such
Selling Stockholder and which has been furnished in writing by or on behalf of
such Selling Stockholder expressly for use in such Prospectus, amendment,
supplement or wrapper will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that such Selling Stockholder
makes no representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto, such information consisting
solely of the information set forth in Section 8(c).
(f) Representations and Warranties of the Company. No fact has come to
such Selling Stockholder's attention which would cause such Selling Stockholder
to believe that the representations and warranties of the Company contained in
Section 3 are not true and correct, although such Selling Stockholder has not
performed an independent investigation with respect to any such facts, and such
Selling Stockholder is familiar with the Registration Statement and
14
Prospectus and has no knowledge of any material fact, condition or information
not disclosed in the Prospectus that has had, or may have, a Material Adverse
Effect, although such Selling Stockholder has not performed an independent
investigation with respect to any such facts, conditions or information other
than any such facts, conditions or information relating solely to itself. Such
Selling Stockholder is not prompted by any material information concerning the
Company which is not set forth in the Prospectus to sell its Shares pursuant to
this Agreement.
(g) No Registration Rights. Except as expressly disclosed in the
Registration Statement and the Prospectus, there are no contracts, agreements or
understandings between such Selling Stockholder and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement.
Each of the Selling Stockholders severally and not jointly represents and
warrants that certificates in negotiable form representing all of the Shares to
be sold by such Selling Stockholders hereunder other than any such Shares to be
issued upon the exercise of Options, have been, and each of the Selling
Stockholders who is selling Shares upon the exercise of Options represents and
warrants that duly completed and executed irrevocable Option exercise notices,
in the forms specified by the relevant Option Agreement, with respect to all of
the Shares to be sold by such Selling Stockholders hereunder have been, placed
in custody under a Custody Agreement relating to such Shares, in the form
heretofore furnished to you, duly executed and delivered by such Selling
Stockholder to Wachovia Equity Services, as custodian (the "Custodian"), and
that such Selling Stockholder has duly executed and delivered Powers of
Attorney, in form satisfactory to the Representatives, appointing the person
indicated in Schedule II hereto, as such Selling Stockholder's Attorney-in-fact
(the "Attorney-in Fact") with authority to execute and deliver this Agreement on
behalf of such Selling Stockholder, to determine the purchase price to be paid
by the Underwriters to the Selling Stockholders as provided herein, to authorize
the delivery of the Shares to be sold by such Selling Stockholder hereunder, to
authorize (if applicable) the exercise of the Options to be exercised with
respect to the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection with the
transactions contemplated by this Agreement and the Custody Agreement.
Each of the Selling Stockholders specifically agrees that the Shares
represented by the certificates or the irrevocable Option exercise notice, in
either case held in custody for such Selling Stockholder under the Custody
Agreement, are subject to the interests of the Underwriters hereunder, and that
the arrangements made by such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorney-in-Fact by the Power of
Attorney, are to that extent irrevocable. Each of the Selling Stockholders
specifically agrees that the obligations of such Selling Stockholder hereunder
shall not be terminated by operation of law, whether by the death or incapacity
of any individual Selling Stockholder, or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership, corporation or similar
organization, by the dissolution of such partnership, corporation or
organization, or by the occurrence of any other
15
event. If any individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust should be
terminated, or if any such partnership, corporation or similar organization
should be dissolved, or if any other such event should occur, before the
delivery of the Shares hereunder, certificates representing such Shares shall be
delivered by or on behalf of such Selling Stockholder in accordance with the
terms and conditions of this Agreement and the Custody Agreement, and actions
taken by the Attorney-in-Fact pursuant to the Powers of Attorney shall be as
valid as if such death, incapacity, termination, dissolution or other event had
not occurred, regardless of whether or not the Custodian, the Attorney-in-Fact,
or any of them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
5. Further Agreements of the Company. The Company covenants and agrees
with each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will use its
reasonable best efforts to cause the Registration Statement to become effective
at the earliest possible time and, if required, will file the final Prospectus
with the Commission within the time periods specified by Rule 424(b) and Rule
430A under the Securities Act and the Company will furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York
City time, on the business day next succeeding the date of this Agreement in
such quantities as the Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to
the Representatives, three signed copies of the Registration Statement as
originally filed and each amendment thereto, in each case including all exhibits
and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy
of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period, as many copies
of the Prospectus (including all amendments and supplements thereto) as the
Representatives may reasonably request. As used herein, the term "Prospectus
Delivery Period" means such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales of the Shares by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or supplement
to the Registration Statement or the Prospectus, the Company will furnish to the
Representatives and counsel for the Underwriters a copy of the proposed
amendment or supplement for review and will not file any such proposed amendment
or supplement to which the Representatives reasonably object in a timely manner.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly, and confirm such advice in writing, (i) when the
Registration Statement has become effective; (ii) when any amendment to the
Registration Statement has been filed or becomes effective; (iii) when any
supplement to the Prospectus or any amendment to the Prospectus has been filed;
(iv) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any
comments from the Commission relating to the Registration Statement or any other
request by the
16
Commission for any additional information; (v) of the issuance by the Commission
of any order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or the initiation or threatening of any proceeding for that purpose; (vi) 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 (vii) of the
receipt by the Company of any notice with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and 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 obtain as
soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus
Delivery Period (i) any event shall occur or condition shall exist as a result
of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or 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 or (ii) it is necessary to amend or supplement the
Prospectus to comply with law, the Company will promptly notify the Underwriters
thereof and forthwith prepare and, subject to paragraph (c) above, file with the
Commission and furnish to the Underwriters and to such dealers as the
Representatives may designate, such amendments or supplements to the Prospectus
as may be necessary 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
will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives shall reasonably request and will continue such qualifications
in effect so long as required for distribution of the Shares, provided that no
such qualification shall require the Company to file a general consent to
service, to qualify as a foreign corporation or subject it to taxation as a
foreign corporation.
(g) Earning Statement. The Company will make generally available to its
security holders and the Representatives as soon as practicable an earning
statement that satisfies the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the "effective date" (as defined in Rule 158) of the
Registration Statement.
(h) Clear Market. (i) For a period of 180 days after the date of the
initial public offering of the Shares, the Company will not (x) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to
17
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Stock or any securities
convertible into or exercisable or exchangeable for Stock or (y) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction described
in clause (x) or (y) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, without the prior written consent of X.X.
Xxxxxx Securities Inc., other than the Shares to be sold hereunder and any grant
of stock options or issuance of any shares of Stock of the Company issued upon
the exercise of options granted, in each case, under existing employee stock
option plans described in the Registration Statement and the Prospectus, so long
as the Company shall cause the recipients of such shares or options to execute
and deliver to you a "lock-up" agreement substantially in the form set forth as
Exhibit A hereto and (ii) to the extent that any stockholders of the Company are
subject to separate lock-up agreements with the Company (the "Company
Lock-Ups"), the Company will not release any such stockholders from the Company
Lock-Ups without the prior written consent of X.X. Xxxxxx Securities Inc.
(i) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(j) Exchange Listing. The Company will use its best efforts to list for
quotation the Shares on the National Association of Securities Dealers Automated
Quotations National Market (the "NASDAQ National Market").
(k) Reports. For a period of two years from the date of the initial public
offering, the Company will furnish to the Representatives, as soon as they are
available, copies of all reports or other communications (financial or other)
furnished to holders of the Shares, and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange or automatic quotation system.
(l) Filings. The Company will file with the Commission such reports as may
be required by Rule 463 under the Securities Act.
(m) Restriction of Directed Shares. 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. The Designated Underwriter will notify the
Company as to which potential Directed Share Purchasers, if any, will need to be
so restricted.
6. Further Agreements of the Selling Stockholders. Each of the Selling
Stockholders covenants and agrees with each Underwriter that:
(a) Clear Market. For a period of 180 days after the date of the initial
public offering of the Shares, such Selling Stockholder will not (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Stock or any securities convertible into
or exercisable or exchangeable for Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of
18
the economic consequences of ownership of the Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Stock or such other securities, in cash or otherwise or (iii) make any demand
for or exercise any right with respect to the registration of any shares of
Stock or any security convertible into or exercisable or exchangeable for Stock
without the prior written consent of X.X. Xxxxxx Securities Inc., in each case
other than the Shares to be sold by such Selling Stockholder hereunder.
(b) Tax Form. It will deliver to the Representatives prior to or at the
Closing Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the Underwriters'
documentation of their compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated.
7. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company and each of the Selling
Stockholders of their respective covenants and other obligations hereunder and
to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement (or
if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective, and
the Representatives shall have received notice thereof, not later than 5:00
P.M., New York City time, on the date hereof; no order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose shall be pending before or, to the Company's
knowledge and belief, threatened by the Commission; the Prospectus shall have
been timely filed with the Commission under the Securities Act and in accordance
with Section 5(a) hereof; and all requests by the Commission for additional
information shall have been complied with to the reasonable satisfaction of the
Representatives.
(b) Representations and Warranties. The respective representations and
warranties of the Company and the Selling Stockholders contained herein shall be
true and correct on the date hereof and on and as of the Closing Date or the
Additional Closing Date, as the case may be; and the statements of the Company
and its officers and of each of the Selling Stockholders made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded any
securities or preferred stock of or guaranteed by the Company or any of its
subsidiaries by any "nationally recognized statistical rating organization", as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, or has changed its outlook with respect to,
its rating of any securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries (other than an announcement with positive
implications of a possible upgrading).
19
(d) No Material Adverse Change. Subsequent to the execution and delivery
of this Agreement, no event or condition of a type described in Section 3(d)
hereof shall have occurred or shall exist, which event or condition is not
described in the Prospectus (excluding any amendment or supplement thereto) and
the effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, on the terms and in the manner contemplated by this Agreement and the
Prospectus.
(e) Officers' Certificate. The Representatives shall have received on and
as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate (i) of the chief financial officer or chief accounting officer of
the Company and one additional senior executive officer of the Company who is
satisfactory to the Representatives (A) confirming that such officers have
carefully reviewed the Registration Statement and the Prospectus and, to the
knowledge of such officers, the representation of the Company set forth in
Section 3(b) hereof is true and correct, (B) confirming that the other
representations and warranties of the Company in this Agreement are true and
correct and that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date and (C) to the effect set forth in paragraphs (a), (c) and (d)
above and (ii) of the Selling Stockholders, in form and substance reasonably
satisfactory to the Representatives, (A) confirming that the representation of
such Selling Stockholders set forth in Section 4(e) hereof is true and correct
and (B) confirming that the other representations and warranties of such Selling
Stockholders in this agreement are true and correct and that the such Selling
Stockholders have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to such Closing
Date.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, PricewaterhouseCoopers LLP
shall have furnished to the Representatives, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided, that the letter delivered
on the Closing Date or the Additional Closing Date, as the case may be, shall
use a "cut-off" date no more than three business days prior to such Closing Date
or such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP,
counsel for the Company, shall have furnished to the Representatives, at the
request of the Company, their written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives, to the
effect set forth in Annex A hereto.
(h) Opinions for Selling Stockholders. (i) Wachtell, Lipton, Xxxxx & Xxxx,
counsel for Xxxxxxx & Xxxxxxxx Capital Partners III, L.P., H&F Orchard Partners
III, L.P., and H&F International Partners III, L.P. (collectively, "Xxxxxxx &
Xxxxxxxx), shall have furnished to the
20
Representatives, at the request of Xxxxxxx & Xxxxxxxx, their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be, and
addressed to the Underwriters, in form and substance reasonably satisfactory to
the Representatives, to the effect set forth in Annex B hereto, but only with
respect to Xxxxxxx & Xxxxxxxx and (ii) Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP,
counsel for all of the Selling Stockholders other than Xxxxxxx & Xxxxxxxx, shall
have furnished to the Representatives, their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives to the effect set forth in Annex B hereto, but only with respect
to Selling Stockholders other than Xxxxxxx & Xxxxxxxx.
(i) Opinion of Counsel for the Underwriters. The Representatives shall
have received on and as of the Closing Date or the Additional Closing Date, as
the case may be, an opinion of Cravath, Swaine & Xxxxx LLP, counsel for the
Underwriters, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.
(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 Closing Date or the Additional Closing Date, as the case may
be, prevent the issuance or sale of the Shares; and no injunction or order of
any federal, state or foreign court shall have been issued that would, as of the
Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(k) Good Standing. The Representatives shall have received on and as of
the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its subsidiaries
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) Exchange Listing. The Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall have been approved for
listing on the NASDAQ National Market, subject to official notice of issuance.
(m) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date or the
Additional Closing Date, as the case may be.
(n) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company and the Selling
Stockholders shall have furnished to the Representatives such further
certificates and documents as the Representatives may reasonably request.
21
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) Indemnification of the Underwriters by the Company. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are reasonably incurred), joint or several,
that arise out of, or are based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (ii) any untrue statement or alleged untrue statement of
a material fact included in the supplement or prospectus wrapper material
distributed in connection with the reservation and sale of the Directed Shares
to the Company's employees, or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, when considered in
conjunction with the Prospectus or Preliminary Prospectus, not misleading,
except insofar as such losses, claims, damages or liabilities arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (c) below; provided, that with
respect to any such untrue statement in or omission from any Preliminary
Prospectus, the indemnity agreement contained in this Section 8(a) shall not
inure to the benefit of any Underwriter, its affiliates, directors, officers,
employees, representatives, agents or any person who controls an Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, if any, to the extent that in the final nonappealable judgment of
a court of competent jurisdiction: (i) the sale to the person asserting any such
loss, claim, damage or liability was an initial resale by such Underwriter, (ii)
any such loss, claim, damage or liability of or with respect to such Underwriter
results from the fact that to the extent required by applicable law, a copy of
the Prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Shares to such person and (iii) the Company has
sustained the burden of proof that the untrue statement in or omission from such
Preliminary Prospectus was corrected in the Prospectus unless, in the case of
clause (ii), such failure to deliver the Prospectus was a result of
non-compliance by the Company with the provisions of Section 5 hereof.
(b) Indemnification of the Company and the Underwriters by the Selling
Stockholders. Each of the Selling Stockholders severally and not jointly in
proportion to the number of Shares to be sold by such Selling Stockholder
hereunder agrees to indemnify and hold
22
harmless the Company, its directors, its officers who sign the Registration
Statement, each Underwriter and each person, if any, who controls the Company or
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses reasonably incurred in connection with any suit, action or proceeding
or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or any
Preliminary Prospectus, 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, in the light of the circumstances under which they were
made, not misleading or (ii) any untrue statement or alleged untrue statement of
a material fact included in the supplement or prospectus wrapper material
distributed in connection with the reservation and sale of the Directed Shares
to the Company's employees, or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, when considered in
conjunction with the Prospectus or Preliminary Prospectus, not misleading, but,
in each case of (i) or (ii), only with reference to information relating to such
Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder expressly for use in the Registration Statement or the Prospectus
(or any amendment or supplement thereto or any supplement or prospectus wrapper
material distributed in connection with the reservation and sale of the Directed
Shares) or any Preliminary Prospectus, and, except insofar as such losses,
claims, damages or liabilities arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly
for use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (c) below; provided, that with respect to any such untrue statement
in or omission from any Preliminary Prospectus, the indemnity agreement
contained in this Section 8(b) shall not inure to the benefit of any Underwriter
or any person who controls an Underwriter within the meaning of Section 15 of
the Securities Act of Section 20 of the Exchange Act, if any, to the extent that
in the final nonappealable judgment of a court of competent jurisdiction: (i)
the sale to the person asserting any such loss, claim, damage or liability was
an initial resale by such Underwriter, (ii) any such loss, claim, damage or
liability of or with respect to such Underwriter results from the fact that to
the extent required by applicable law, a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the sale of such
Shares to such person and (iii) the Selling Stockholder from whom such
Underwriter seeks an indemnity pursuant to this Section 8(b) has sustained the
burden of proof that the untrue statement in or omission from such Preliminary
Prospectus was corrected in the Prospectus unless, in the case of clause (ii),
such failure to deliver the Prospectus was a result of non-compliance by the
Company with the provisions of Section 5 hereof. In no event shall the aggregate
liability of any Selling Stockholder under Section 8(b) together with any
liability of such Selling Stockholder under Section 8(f) exceed the proceeds,
net of underwriting discounts and commissions, received by such Selling
Stockholder in connection with such Selling Stockholder's sale of Shares
hereunder.
23
(c) Indemnification of the Company and the Selling Stockholders by the
Underwriters. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and each of the Selling Stockholders to the same extent as the indemnity set
forth in paragraph (a) above, but only with respect to any losses, claims,
damages or liabilities (including, without limitation, the reasonable legal fees
and other reasonable expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred) that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, it being understood and agreed upon that
the only such information furnished by any Underwriter consists of the following
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the fourth paragraph under the
caption "Underwriting" and the information contained in the ninth and tenth
paragraphs under the caption "Underwriting" insofar as such paragraphs describe
passive market making.
(d) Directed Shares. In connection with the offer and sale of Directed
Shares, the Company agrees, promptly upon written notice, to indemnify and hold
harmless the Designated Underwriter from and against any and all losses,
liabilities, claims, damages and expenses incurred by such Designated
Underwriter (i) as a result of the failure of any Directed Shares Purchaser, who
makes an oral agreement, properly confirmed by the Underwriters, to purchase
Directed Shares within twenty-four hours of establishing the public offer price,
to pay for and accept delivery of the Directed Shares, and (ii) related to,
arising out of, or in connection with the Directed Share Program, other than
losses, claims, damages or liabilities (or expenses relating thereto) that, in
the final nonappealable judgment of a court of competent jurisdiction, have
resulted primarily from the bad faith or willful misconduct of the Designated
Underwriter in connection with the Directed Share Program.
(e) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to the preceding paragraphs of this Section 8, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 8 except to the extent that it has
been materially prejudiced by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 8. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 8 that the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and
24
expenses of such counsel related to such proceeding, as incurred. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded, based upon advice of outside counsel, that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel (based upon, in the case of the Indemnified Person, a reasonable
determination after receipt of advice from outside counsel) would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and any control persons of
such Underwriter shall be designated in writing by X.X. Xxxxxx Securities Inc.,
any such separate firm for the Company, its directors, its officers who signed
the Registration Statement and any control persons of the Company shall be
designated in writing by the Company and any such separate firm for the Selling
Stockholders shall be designated in writing by the Attorney-in-Fact. The
Indemnifying Person 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 Person agrees to
indemnify each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested that an Indemnifying
Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the Indemnifying
Person of such request and (ii) the Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such 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 Person.
(f) Contribution. If the indemnification provided for in paragraphs (a),
(b), (c) and (d) above is unavailable to an Indemnified Person or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities
25
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand, and the
Underwriters on the other, from the offering of the Shares or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Company and the Selling
Stockholders on the one hand, and the Underwriters on the other, in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand, and the Underwriters on the other, shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company and the Selling Stockholders from the sale of the Shares and the
total underwriting discounts and commissions received by the Underwriters in
connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative
fault of the Company and the Selling Stockholders on the one hand, and the
Underwriters on the other, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Selling Stockholders or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(g) Limitation on Liability. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Selling Stockholders or the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (f) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (f) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 8, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total underwriting discounts and commissions received by
such Underwriter with respect to the offering of the Shares exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 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 8 are several
in proportion to their respective purchase obligations hereunder and not joint.
The Selling Stockholders' obligations to contribute pursuant to this Section 8
are several in proportion to their respective receipt of net proceeds (before
expenses) hereunder and not joint. The Selling Stockholders' limitation on
liability under this Section 8, including without limitation for contribution,
is as set forth in Section 8(b).
(h) Non-Exclusive Remedies. The remedies provided for in this Section 8
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity.
26
9. Effectiveness of Agreement. This Agreement shall become effective upon
the later of (i) the execution and delivery hereof by the parties hereto and
(ii) receipt by the Company and the Representatives of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
10. Termination. This Agreement may be terminated in the absolute
discretion of the Representatives, by notice to the Company and the Selling
Stockholders, if after the execution and delivery of this Agreement and prior to
the Closing Date or, in the case of the Option Shares, prior to the Additional
Closing Date: (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock Exchange
or the National Association of Securities Dealers, Inc.; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms
and in the manner contemplated by this Agreement and the Prospectus.
11. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company and the Selling
Stockholders on the terms contained in this Agreement. If, within 36 hours after
any such default by any Underwriter, the non-defaulting Underwriters do not
arrange for the purchase of such Shares, then the Company and the Selling
Stockholders shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or agree
to purchase the Shares of a defaulting Underwriter, either the non-defaulting
Underwriters or the Company and the Selling Stockholders may postpone the
Closing Date or the Additional Closing Date, as the case may be, for up to five
full business days in order to effect any changes that in the opinion of counsel
for the Company, counsel for the Selling Stockholders or counsel for the
Underwriters may be necessary in the Registration Statement and the Prospectus
or in any other document or arrangement, and the Company agrees to promptly
prepare any amendment or supplement to the Registration Statement and the
Prospectus that effects any such changes. As used in this Agreement, the term
"Underwriter" includes, for all purposes of this Agreement unless the context
otherwise requires, any person not listed in Schedule I hereto that, pursuant to
this Section 11, purchases Shares that a defaulting Underwriter agreed but
failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be,
27
does not exceed one-eleventh of the aggregate number of Shares to be purchased
on such date, then the Company and the Selling Stockholders shall have the right
to require each non-defaulting Underwriter to purchase the number of Shares that
such Underwriter agreed to purchase hereunder on such date plus such
Underwriter's pro rata share (based on the number of Shares that such
Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters, the Company and the Selling Stockholders as provided in paragraph
(a) above, the aggregate number of Shares that remain unpurchased on the Closing
Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of
the aggregate amount of Shares to be purchased on such date, or if the Company
and the Selling Stockholders shall not exercise the right described in paragraph
(b) above, then this Agreement or, with respect to any Additional Closing Date,
the obligation of the Underwriters to purchase Shares on the Additional Closing
Date, as the case may be, shall terminate without liability on the part of the
non-defaulting Underwriters. Any termination of this Agreement pursuant to this
Section 11 shall be without liability on the part of the Company and the Selling
Stockholders, except that the Company will continue to be liable for the payment
of expenses as set forth in Section 12 hereof and except that the provisions of
Section 8 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company, the Selling Stockholders or any
non-defaulting Underwriter for damages caused by its default.
12. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the performance
of its obligations hereunder, including without limitation: (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection, other than transfer taxes which
shall be paid by the respective Selling Stockholders; (ii) the costs incident to
the preparation, printing and filing under the Securities Act of the
Registration Statement, the Preliminary Prospectus and the Prospectus (including
all exhibits, amendments and supplements thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing this Agreement; (iv) the fees
and expenses of the Company's counsel and independent accountants, and of the
Company's counsel for acting as counsel to all of the Selling Stockholders other
than Xxxxxxx & Xxxxxxxx; (v) the fees and expenses incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Shares under the laws of such jurisdictions as the
Representatives may designate and the preparation, printing and distribution of
a Blue Sky Memorandum (including the related fees and expenses of counsel for
the Underwriters); (vi) the cost of preparing stock certificates; (vii) the
costs and charges of any transfer agent and any registrar; (viii) all expenses
and application fees incurred in connection with any filing with, and clearance
of the offering by, the National Association of Securities Dealers, Inc.; (ix)
all expenses incurred by the Company in connection with any "road show"
presentation to potential investors; and (x) all expenses and application fees
related to the listing of the Shares on the
28
NASDAQ National Market and (xi) the legal fees and expenses incurred in
connection with the Directed Share Program.
(a) If (i) this Agreement is terminated pursuant to Section 10, (ii) the
Company or the Selling Stockholders for any reason fail to tender the Shares for
delivery to the Underwriters or (iii) the Underwriters decline to purchase the
Shares for any reason permitted under this Agreement, the Company agrees to
reimburse the Underwriters for all out-of-pocket costs and expenses (including
the fees and expenses of their counsel) reasonably incurred by the Underwriters
in connection with this Agreement and the offering contemplated hereby.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to in Section 8 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
14. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf of the Company, the Selling Stockholders or the Underwriters pursuant to
this Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Shares and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company, the Selling Stockholders or the
Underwriters.
15. Certain Defined Terms. For purposes of this Agreement: (a) except
where otherwise expressly provided, the term "affiliate" has the meaning set
forth in Rule 405 under the Securities Act; (b) the term "business day" means
any day other than a day on which banks are permitted or required to be closed
in New York City; and (c) the term "subsidiary" has the meaning set forth in
Rule 405 under the Securities Act.
16. Miscellaneous. (a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by X.X. Xxxxxx Securities Inc. and Banc of
America Securities LLC, acting together, on behalf of the Underwriters, and any
such action taken by X.X. Xxxxxx Securities Inc. and Banc of America Securities
LLC, acting together, shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o X.X. Xxxxxx Securities Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention: Syndicate
Desk. Notices to the Company shall be given to it at Blackbaud, Inc., 0000
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (Fax: (000) 000-0000);
Attention: Xxxxxx X. Xxxxxx, Esq. Notices to the Selling Stockholders shall be
given to the
29
Attorney-in-Fact at Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx,
00000, (Fax: ________); Attention: Xxxxxxx Xxx.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
30
If the foregoing is in accordance with your understanding, please indicate
your acceptance of this Agreement by signing in the space provided below.
Very truly yours,
BLACKBAUD, INC.,
By: ______________________________________
Name:
Title:
SELLING STOCKHOLDERS,
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named
in Schedule II to this Agreement.
Accepted: __________, 2004
X.X. XXXXXX SECURITIES INC.
By___________________________________
Authorized Signatory
BANC OF AMERICA SECURITIES LLC
By___________________________________
Authorized Signatory
For themselves and on behalf of the
several Underwriters listed in
Schedule I hereto.
Schedule I
Underwriter Number of Shares
----------- ----------------
X.X. Xxxxxx Securities Inc.
Banc of America Securities LLC
Xxxxxx Xxxxxx Partners LLC
Wachovia Capital Markets, LLC
Total
----------------
Schedule II
Number of Number of
Selling Stockholders(1): Underwritten Shares: Options Shares
----------------------- ------------------- --------------
--------------------
(1) Xx. Xxxxxxx Xxx, Attorney-in-Fact, acting on behalf of each of the Selling
Stockholders.
Annex A
[Form of Opinion of Counsel for the Company]
(-) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion; the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) under the
Securities Act specified in such opinion on the date specified therein; and no
order suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose is pending or, to the best knowledge of such
counsel, threatened by the Commission.
(-) The Registration Statement and the Prospectus (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Securities Act.
(-) The Company and each of its subsidiaries have been duly organized and
are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(-) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company (including the Shares to be sold by the Selling
Stockholders) have been duly and validly authorized and issued and are fully
paid and non-assessable; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus; and all the outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable.
(-) 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.
(-) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally or by equitable principles
relating to enforceability.
(-) The Shares of the Company to be sold by the Selling Stockholders
pursuant to the Underwriting Agreement (including Shares to be issued upon
exercise of the Options) have been duly authorized by the Company, and when
issued, if applicable, and delivered to and paid for by
2
the Underwriters in accordance with the terms of the Underwriting Agreement,
will be validly issued, fully paid and non-assessable and the initial issuance
and delivery of the Shares by the Company to the Selling Stockholders was not,
the issuance of Shares to be issued upon exercise of the Options will not be,
and the delivery of the Shares contemplated by the Underwriting Agreement will
not be, to such counsel's knowledge, subject to any preemptive or similar
rights.
(-) Neither the Company nor any of its subsidiaries is (i) in violation of
its charter or by-laws or similar organizational documents; (ii) in default, and
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which, to such counsel's
knowledge, it is a party or by which it is bound or to which any of its property
or assets is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except in the case of clauses (ii) and (iii) for any
such default or violation that would not, individually or in the aggregate, have
a Material Adverse Effect.
(-) The execution, delivery and performance by the Company of the
Underwriting Agreement, the initial issuance and delivery of the Shares by the
Company to the Selling Stockholders, the sale of the Shares to be sold by the
Selling Stockholders and delivered on the Closing Date or the Additional Closing
Date, as the case may be, the issuance by the Company of the Shares to be issued
upon the exercise of the Options, and compliance by the Company with the terms
of, and the consummation of the transactions contemplated by, the Underwriting
Agreement did not or will not, as applicable, (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
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 indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which, to such counsel's knowledge, the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational documents of
the Company or any of its subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order or regulation of any court or arbitrator
or governmental or regulatory authority except, in the case of clauses (i) and
(iii) above, for such conflict, breach or violation that would not, individually
or in the aggregate, have a Material Adverse Effect.
(-) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority was or is required, as applicable, for the execution, delivery and
performance by the Company of the Underwriting Agreement, the initial issuance
and delivery of the Shares by the Company to the Selling Stockholders, the sale
of the Shares to be sold by the Selling Stockholders and delivered on the
Closing Date or the Additional Closing Date, as the case may be, the issuance by
the Company of the Shares to be issued upon the exercise of the Options, and
compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Underwriting Agreement, except for (i) the
registration of the Shares under the Securities Act and such consents,
approvals,
3
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws, the rules and regulations of the
National Association of Securities Dealers or the NASDAQ National Market, in
connection with the purchase and distribution of the Shares by the Underwriters
and (ii) any other consent, approval, authorization, order, registration or
qualification that the failure of which to obtain would not, individually or in
the aggregate, have a Material Adverse Effect, or would not materially and
adversely affect the ability of the Company to perform its obligations under the
Underwriting Agreement.
(-) To the best 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 Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the best
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.
(-) The descriptions in the Prospectus of statutes, legal, governmental
and regulatory proceedings and contracts and other documents are accurate in all
material respects; the statements in the Prospectus under the headings "U.S.
federal tax considerations for non-U.S. holders of common stock", "Description
of capital stock" and "Underwriting", and in the Registration Statement in items
14 and 15, to the extent that they constitute summaries of the terms of stock,
matters of law or regulation or legal conclusions, fairly summarize the matters
described therein in all material respects; and, to the best knowledge of such
counsel, (A) there are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the Securities Act to be
described in the Prospectus and that are not so described and (B) there are no
statutes, regulations or contracts and other documents that are required under
the Securities Act to be filed as exhibits to the Registration Statement or
described in the Prospectus and that have not been so filed or described.
(-) The Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act.
(-) To such counsel's knowledge, each of the Company and its subsidiaries
owns, possesses or has obtained all licenses, permits, certificates, consents,
orders, approvals and other authorizations from, and has made all declarations
and filings with, all Governmental Authorities (including foreign regulatory
agencies), all self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as conducted as of the date
hereof, except where the failure to own, possess or obtain any license, permit,
certificate, consent, order, approval or to make any declaration or filing that
would not, individually or in the aggregate, have a Material Adverse Effect;
neither the Company nor any such subsidiary has received any actual notice of
any proceeding relating to revocation or modification of any such license,
permit, certificate,
4
consent, order, approval or other authorization, except as described in the
Registration Statement and the Prospectus or as would not, individually or in
the aggregate, have a Material Adverse Effect; and each of the Company and its
subsidiaries is materially in compliance with all laws and regulations relating
to the conduct of its business as conducted as of the date of the Prospectus.
(-) To such counsel's knowledge, each of the Company and its subsidiaries
owns, possesses or has the right to use the Intellectual Property employed by it
in connection with the business conducted by it as of the date hereof.
(-) To such counsel's knowledge, the Company and its subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as described or
referred to in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, existing and enforceable leases with such exceptions as are not
material and to not interfere with the use made or proposed to be made of such
property and buildings by the Company or its subsidiaries.
(-) To such counsel's knowledge, each of the Company and its subsidiaries
is in compliance with all Environmental Laws, except, in each case, where
noncompliance, individually or in the aggregate, would not have a material
adverse effect on the Company and its subsidiaries taken as a whole; there are
no legal or governmental proceedings pending, or to the knowledge of such
counsel, threatened against or affecting the Company or any of its subsidiaries
under any Environmental Law which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole.
Such counsel shall also state that they have participated in conferences
with representatives of the Company and with representatives of its independent
accountants and counsel at which conferences the contents of the Registration
Statement and the Prospectus and any amendment and supplement thereto and
related matters were discussed and, although such counsel assume no
responsibility for the accuracy, completeness or fairness of the Registration
Statement, the Prospectus and any amendment or supplement thereto (except as
expressly provided above), nothing has come to the attention of such counsel to
cause such counsel to believe that the Registration Statement, at the time of
its effective date (including the information, if any, deemed pursuant to Rule
430A to be part of the Registration Statement at the time of effectiveness),
contained any 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 or any amendment or supplement thereto as
of its date and the Closing Date contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(other than the financial statements and other financial information contained
therein, as to which such counsel need express no belief).
5
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP described above shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
Annex B
[Form of Opinion of Counsel For
The Selling Stockholders]
( ) The Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Stockholders.
( ) A Power of Attorney and a Custody Agreement have been duly authorized,
executed and delivered by each Selling Stockholder and constitute valid and
binding agreements of each Selling Stockholder, enforceable against each Selling
Stockholder in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or by equitable principles relating to
enforceability.
( ) Each Selling Stockholder is the record, beneficial and lawful owner of
all of the Shares to be sold by such Selling Stockholder and has valid and
marketable title to such Shares, and upon delivery of and payment for the
Shares, the Underwriters will acquire valid and marketable title to the shares,
free and clear of any mortgage, pledge, security interest, lien, claim or other
encumbrance or restriction on transferability or any adverse claim, other than
any such mortgage, pledge, security interest, lien, claim or other encumbrance
or restriction on transferability or any adverse claim created by or resulting
from an action taken by an Underwriter.
( ) The sale of the Shares and the execution and delivery by the Selling
Shareholder of, and the performance by the Selling Shareholder of its
obligations under, the Underwriting Agreement, and the consummation of the
transactions contemplated therein, (i) have been duly authorized on the part of
each of the Selling Stockholders, and (ii) to such counsel's knowledge will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which any Selling
Stockholder is a party or by which any Selling Stockholder is bound or to which
any of the property or assets of any Selling Stockholder is subject, nor will
any such action result in any violation of the provisions of the charter or
by-laws or similar organizational documents of any Selling Stockholder, if
applicable, or any applicable law or statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over such Selling
Stockholder or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the sale of the Shares or the consummation by the
Selling Stockholders of the transactions contemplated by the Underwriting
Agreement, except such consents, approvals, authorizations, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Selling Stockholders and shall so state
therein.
The opinion of counsel shall be subject to customary qualifications.
Exhibit A
[Open Issue]
FORM OF LOCK-UP AGREEMENT
, 2004
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
As Representatives of
the several Underwriters listed in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Blackbaud, Inc.-- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with Blackbaud, Inc., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by us/the several
Underwriters named in Schedule I to the Underwriting Agreement (the
"Underwriters"), of common stock of the Company (the "Securities"). Capitalized
terms used herein and not otherwise defined shall have the meanings set forth in
the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without the prior written consent of X.X. Xxxxxx Securities Inc. on behalf of
the Underwriters, the undersigned will not, during the period ending 180 days
after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of common stock,
$0.001 per share par value, of the Company (the "Common Stock") or any
securities convertible into or exercisable or exchangeable for Common Stock
(including without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant) or (2) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2)
2
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise; provided, however, that Directed Shares purchased by Company
employees pursuant to the Directed Share Program operated by Wachovia Capital
Markets, LLC shall not be subject to this Agreement. In addition, the
undersigned agrees that, without the prior written consent of X.X. Xxxxxx
Securities Inc. on behalf of the Underwriters, it will not, during the period
ending [180] days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Letter Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Letter Agreement.
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This lock-up agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[NAME OF STOCKHOLDER],
By: _________________________________
Name:
Title:
