AUDIBLE, INC.
5,225,000 Shares (a)/
Common Stock
($0.01 par value)
Underwriting Agreement
New York, New York
November 17, 2004
Citigroup Global Markets Inc.
ThinkEquity Partners LLC
Xxxxx Xxxxxxxx, Inc.
America's Growth Capital
Xxxxxxx Bros., X.X.
Xxxxxxxx Curhan Ford & Co.
As Representatives of the several Underwriters,
c/o Citigroup Global
Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Audible, Inc., a corporation organized under the laws of Delaware (the
"Company"), proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 1,500,000 shares of Common Stock, $0.01 par value ("Common
Stock") of the Company, and the persons named in Schedule II hereto (the
"Selling Stockholders") propose to sell to the several Underwriters 3,725,000
shares of Common Stock (said shares to be issued and sold by the Company and
shares to be sold by the Selling Stockholders collectively being hereinafter
called the "Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to 522,500 additional shares of Common
Stock to cover over-allotments (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, being hereinafter called the
"Securities"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. In addition, to the
extent that there is not more than one Selling Stockholder named in Schedule II
hereto, the term Selling Stockholder shall mean either the singular or plural.
The use of the neuter in this Agreement shall include the feminine
---------------------
(a) Plus an option to purchase from the Company up to 522,500 additional
Securities to cover over-allotments.
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and masculine wherever appropriate. Any reference herein to the Registration
Statement, the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement, or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
I. Representations and Warranties.
(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-119610) on Form S-3, including a related basic prospectus,
for registration under the Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including a
Preliminary Final Prospectus, each of which has previously been furnished
to you. The Company will next file with the Commission one of the
following: (1) after the Effective Date of such registration statement, a
final prospectus supplement relating to the Securities in accordance with
Rules 430A and 424(b), (2) prior to the Effective Date of such registration
statement, an amendment to such registration statement (including the form
of final prospectus supplement) or (3) a final prospectus in accordance
with Rules 415 and 424(b). In the case of clause (1), the Company has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Final Prospectus. As filed, such final prospectus supplement or such
amendment and form of final prospectus supplement shall contain all Rule
430A Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to the
Execution Time,
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will be included or made therein. The Registration Statement, at the
Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on
which Option Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Final Prospectus (and any supplement thereto)
will, comply in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder; on the
Effective Date and at the Execution Time, the Registration Statement did
not or will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and, on the Effective Date,
the Final Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date
and any settlement date, the Final Prospectus (together with any supplement
thereto) will not, 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 under which they were made, not
misleading; provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
(c) The Company has been duly incorporated or formed, as applicable,
and is validly existing as a corporation or other entity in good standing
under the laws of the jurisdiction in which it is organized with full power
and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Final Prospectus,
and is duly qualified to do business and is in good standing under the laws
of each jurisdiction which requires such qualification. The Company has no
subsidiaries.
(d) The Company's authorized equity capitalization is as set forth in
the Final Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been duly
and validly authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities being sold by the Selling
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Stockholders are duly listed, and admitted and authorized for trading, on
the Nasdaq National Market and the Securities being sold hereunder by the
Company are duly listed, and admitted and authorized for trading, subject
to official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities are in valid and sufficient form; the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Final Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company are
outstanding.
(e) There is no franchise. contract or other document of a character
required to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Final Prospectus wider the headings
"Legal Proceedings" and "Business - Intellectual Property and Proprietary
Rights", insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate and fair summaries
of such legal matters, agreements, documents or proceedings.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Final Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the
Final Prospectus.
(i) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to, (i) the charter, by-laws or similar
organizational documents of the Company, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its or their property is subject,
or (iii) any statute, law, rule, regulation, judgment, order or
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decree applicable to the Company of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its properties; except in
the case of clauses (ii) and (iii) above, as could not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company,
taken as a whole, whether or not arising from transactions in the ordinary
course of business (a "Material Adverse Effect").
(j) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(k) The consolidated historical financial statements and schedules of
the Company included in the Final Prospectus and the Registration Statement
present fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Financial Data" in the
Final Prospectus and Registration Statement fairly present in all material
respects, on the basis stated in the Final Prospectus and the Registration
Statement, the information included therein.
(1) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a Material Adverse Effect, except as set
forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(m) The Company owns or leases all such properties as are necessary to
the conduct of its operations as presently conducted.
(n) The Company is not in violation or default of (i) any provision of
its charter, by-laws or similar organizational documents, (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or
any of its properties, as applicable; except in the
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case of clauses (ii) and (iii) above, as could not reasonably be expected
to have a Material Adverse Effect.
(o) KPMG LLP, who have certified certain financial statements of the
Company and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Prospectus, are
independent registered public accountants with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder.
(p) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of the
Securities.
(q) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
Material Adverse Effect, except as set forth in or contemplated in the
Final Prospectus (exclusive of any supplement thereto) and has paid all
taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently
being contested in good faith or as would not have a Material Adverse
Effect, except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(r) No labor problem or dispute with the employees of the Company
exists or is threatened or imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
principal suppliers, contractors or customers, that could have a Material
Adverse Effect, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(s) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which they are engaged; all
policies of insurance insuring the Company or its respective businesses,
assets, employees, officers and directors are in full force and effect; the
Company is in compliance with the terms of such policies and instruments in
all material respects; and there are no claims by the Company under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; the Company
has not been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
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business at a cost that would not have a Material Adverse Effect, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(t) The Company possesses all licenses, certificates, permits and other
authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses,
and the Company has received no notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect, except
as set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(u) The Company maintains a system 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.
(v) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(w) The Company is (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) has received and is in compliance with all permits, licenses
or other approvals required of them under applicable Environmental Laws to
conduct its respective business and (iii) has not received notice of any
actual or potential liability under any environmental law, except where
such non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a Material Adverse Effect, except as set forth in
or contemplated in the Final Prospectus (exclusive of any supplement
thereto). Except as set forth in the ]Final Prospectus (exclusive of any
supplement thereto), the Company has not been named as a "potentially
responsible party" under the
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Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended.
(x) Any costs and liabilities associated with any Environmental Laws
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) would not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(y) The minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder ("ERISA"), has been satisfied by each
"pension plan" (as defined in Section 3(2) of ERISA) which has been
established or maintained by the Company, and the trust forming part of
each such plan which is intended to be qualified under Section 401 of the
Code is so qualified; the Company has fulfilled its obligations, if any,
under Section 515 of ERISA; the Company does not maintain or is required to
contribute to a "welfare plan" (as defined in Section 3(1) of ERISA) which
provides retiree or other post-employment welfare benefits or insurance
coverage (other than "continuation coverage" (as defined in Section 602 of
ERISA)); each pension plan and welfare plan established or maintained by
the Company is in compliance in all material respects with the currently
applicable provisions of ERISA; and the Company has not incurred or could
reasonably be expected to incur any withdrawal liability under Section 4201
of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any
other liability under Title IV of ERISA.
(z) There is and has been no failure on the part of the Company or any
of the Company's directors or officers, in their capacities as such, to
comply with any applicable provision of the Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
"Sarbanes Oxley Act"), including Section 402 related to loans and Sections
302 and 906 related to certifications.
(aa) The Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is aware of or has
taken any action, directly or indirectly, that would result in a violation
by such Persons of the FCPA, including, without limitation, making use of
the mails or any means or instrumentality of interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any "foreign official"
(as such term is defined in the FCPA) or any non-U.S.
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political party or official thereof or any candidate for non-U.S. political
office, in contravention of the FCPA and the Company and, to the knowledge
of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.
(bb) The operations of the Company are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions to
which the Company is subject, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the "Money Laundering
Laws") and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
(cc) The Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department ("OFAC"); and the Company will not directly
or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(dd) The Company owns, possesses, licenses or has other rights to use,
on reasonable terms, all patents, patent applications, trade and service
marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property") necessary
for the conduct of the Company's business as now conducted or as proposed
in the Final Prospectus to be conducted. Except as set forth in the Final
Prospectus under the caption "Business--Intellectual Property and
Proprietary Rights", (a) to the Company's knowledge, there are no rights of
third parties to any such Intellectual Property; (b) to the Company's
knowledge, there is no material infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's rights in or to any such Intellectual Property,
and the Company is unaware of any
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facts which would form a reasonable basis for any such claim; (d) there is
no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (e) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others,
and the Company is unaware of any other fact which would form a reasonable
basis for any such claim; (f) to the Company's knowledge, there is no U.S.
patent or published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described in the Final
Prospectus as being owned by or licensed to the Company or that interferes
with the issued or pending claims of any such Intellectual Property; and
(g) there is no prior art of which the Company is aware that may render any
U.S. patent held by the Company invalid or any U.S. patent application held
by the Company unpatentable which has not been disclosed to the U.S. Patent
and Trademark Office.
(ee) Except as disclosed in the Registration Statement and the Final
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Citigroup Global Markets
Holdings Inc. and (ii) does not intend to use any of the proceeds from the
sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of Citigroup Global Markets Holdings Inc.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder severally and not jointly represents and
warrants to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder is the record and beneficial owner of the
Securities to be sold by it hereunder free and clear of all liens,
encumbrances, equities and claims and has duly endorsed such Securities in
blank, and, assuming that each Underwriter acquires its interest in the
Securities it has purchased from such Selling Stockholder without notice of
any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code ("UCC")), each Underwriter that has purchased such
Securities delivered on the Closing Date to The Depository Trust Company or
other securities intermediary by making payment therefor as provided
herein, and that has had such Securities credited to the securities account
or accounts of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have
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acquired a security entitlement (within the meaning of Section 8-102(a)(17)
of the UCC) to such Securities purchased by such Underwriter, and no action
based on an adverse claim (within the meaning of Section 8-105 of the UCC)
may be asserted against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling Stockholder's
Securities have been placed in custody, for delivery pursuant to the terms
of this Agreement, under a Custody Agreement and Power of Attorney duly
authorized (if applicable) executed and delivered by such Selling
Stockholder, in the form heretofore furnished to you (the "Custody
Agreement") with American Stock Transfer & Trust Company, as Custodian (the
"Custodian"); the Securities represented by the certificates so held in
custody for each Selling Stockholder are subject to the interests hereunder
of the Underwriters; the arrangements for custody and delivery of such
certificates, made by such Selling Stockholder and under the Custody
Agreement, are not subject to termination by any acts of such Selling
Stockholder, or by operation of law, whether by the death or incapacity of
such Selling Stockholder or the occurrence of any other event; and if any
such death, incapacity or any other such event shall occur before the
delivery of such Securities hereunder, certificates for the Securities will
be delivered by the Custodian in accordance with the terms and conditions
of the Custody Agreement as if such death, incapacity or other event had
not occurred, regardless of whether or not the Custodian shall have
received notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except such as
may have been obtained under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters and such other approvals
as have been obtained.
(e) Neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by such Selling Stockholder or the fulfillment of the terms
hereof by such Selling Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any law or, if applicable,
the charter, by-laws, or similar organizational documents, of such Selling
Stockholder or the terms of any
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indenture or other material agreement or material instrument to which such
Selling Stockholder or, if applicable, any of its subsidiaries is a party
or bound, or any judgment, order or decree applicable to such Selling
Stockholder or, if applicable, any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over such Selling Stockholder or, if applicable, any of
its subsidiaries.
(f) The sale of Securities by such Selling Stockholder pursuant hereto
is not prompted by any infonnation concerning the Company which is not set
forth in the Final Prospectus or any supplement thereto.
(g) In respect of any statements in or omissions from the Registration
Statement or the Final Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing to
the Company by such Selling Stockholder specifically for inclusion therein,
such statements do not 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 under which they were made, not
misleading.
Any certificate signed by any Selling Stockholder or, as applicable,
any officer thereof and delivered to the Representatives or counsel for the
Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by such Selling Stockholder, as to matters covered
thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, (i) the
Company agrees to sell to the Underwriters 1,500,000 shares of Underwritten
Securities and (ii) each Selling Stockholder agrees, severally and not jointly,
to sell to the Underwriters the number of shares of Underwritten Securities set
forth opposite its name on Schedule 11 hereto, and each Underwriter agrees,
severally and not jointly, to purchase from the Company and the Selling
Stockholders, at a purchase price of 524.50 per share, the amount of the
Underwritten Securities set forth opposite such Underwriter's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
522,500 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Final Prospectus
upon written or telegraphic notice by the Representatives to the Company setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The maximum
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number of Option Securities to be sold by the Company is 522,500. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on November 23,
2004, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement among the Representatives, the Company and the
Selling Stockholders or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Company and each of the Selling
Stockholders to or upon the order of the Company and the Selling Stockholders by
wire transfer payable in same-day funds to the accounts specified by the Company
and the Selling Stockholders. Delivery of the Underwritten Securities and the
Option Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer taxes,
if any, involved in the transfer to the several Underwriters of the Securities
to be purchased by them from such Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to the account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
14
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective in reliance on Rule
430A, or filing of the Final Prospectus is otherwise required under Rule
424(b), the Company will cause the Final Prospectus, properly completed,
and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company will
promptly advise the Representatives (1) when the Registration Statement, if
not effective at the Execution Time, shall have become effective, (2) when
the Final Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Final Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
15
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (i)(a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3) supply
any supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Final Prospectus and the Final Prospectus
and any supplement thereto as the Representatives may reasonably request.
The Company will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) The Company will not, without the prior written consent of
Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed to,
or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement
or otherwise) by the Company or any
16
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common Stock
or any securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock; or publicly announce an intention to effect any
such transaction, for a period of 90 days after the date of the
Underwriting Agreement; provided, however, that the Company may issue and
sell Common Stock pursuant to any employee stock option plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at
the Execution Time and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at the
Execution Time.
(g) The Company will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, the
Sarbanes Oxley Act, and to use its best efforts to cause the Company's
directors and officers, in their capacities as such, to comply with such
laws, rules and regulations, including, without limitation, the provisions
of the Sarbanes Oxley Act.
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(i) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the Commission of the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus (including
financial statements and exhibits thereto), and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and delivery
(including postage, air freight charges and charges for counting and
packaging) of such copies of the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus and the Final Prospectus, and
all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the registration of the Securities
17
under the Exchange Act and the listing of the Securities on the Nasdaq
National Market; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the National
Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to
such filings); (viii) the transportation and other expenses incurred by or
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants, the fees and expenses of counsel (including local
and special counsel) for the Company and the reasonable fees and expenses
of counsel for the Selling Stockholders; and (x) all other costs and
expenses incident to the performance by the Company of its obligations
hereunder.
(ii) Each Selling Stockholder agrees with the several Underwriters
that:
(a) Such Selling Stockholder will not, without the prior written
consent of Citigroup Global Markets inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by such Selling Stockholder or any affiliate
of such Selling Stockholder or any person in privity with such Selling
Stockholder or any affiliate of such Selling Stockholder) directly or
indirectly, or file (or participate in the filing of) a registration
statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to, any
shares of capital stock of the Company or any securities convertible into
or exercisable or exchangeable for such capital stock, or publicly announce
an intention to effect any such transaction, for a period of 90 days after
the date of this Agreement. The foregoing restrictions shall not apply to
transfers of shares of Common Stock or any security convertible into Common
Stock (I) as a bona fide gift or gifts to a member of such Selling
Stockholder's immediate family, (2) to an entity controlled by such Selling
Stockholder or an immediate family member of such Selling Stockholder or
(3) to a trust the beneficiaries of which are exclusively such Selling
Stockholder or a member of the immediate family of such Selling
Stockholder; provided, however, that in connection with any such transfer
each transferee shall execute and deliver to Citigroup Global Markets Inc a
duplicate form of the letter attached hereto as Exhibit A (dated and
effective as of the date hereof). For purposes hereof, "immediate family"
shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece,
18
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships.
(b) Such Selling Stockholder will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you promptly, and if requested
by you, will confirm such advice in writing, so long as delivery of a
prospectus relating to the Securities by an underwriter or dealer may be
required under the Act, of any change in information in the Registration
Statement or the Final Prospectus relating to such Selling Stockholder.
(d) Such Selling Stockholder will comply with the agreement contained
in Section 5(i)(i).
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(6); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
19
(b) The Company shall have requested and caused Xxxxx Xxxxxxx LLP,
counsel for the Company, to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the Representatives, to
the effect that:
(i) the Company has been duly incorporated or formed, as
applicable, and is validly existing as a corporation or other entity in
good standing under the laws of the jurisdiction in which it is
organized, with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Final Prospectus, and is duly qualified to do
business and is in good standing under the laws of each jurisdiction
set forth opposite its name on Exhibit B hereto.
(ii) the Company's authorized equity capitalization is as set forth
in the Final Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the Final
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the Company have
been duly and validly authorized, and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities being sold by the Selling
Stockholders are duly listed, and admitted and authorized for trading,
on the Nasdaq National Market and the Securities being sold hereunder
by the Company are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on the Nasdaq National
Market; the certificates for the Securities are in valid and sufficient
form; the holders of outstanding shares of capital stock of the Company
are not entitled to statutory preemptive or, to such counsel's
knowledge, other similar contractual rights to subscribe for the
Securities; and, except as set forth in the Final Prospectus, to such
counsel's knowledge no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding;
(iii) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the Final
Prospectus, and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required to be
described in the
20
Registration Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(iv) the Registration Statement has become effective under the Act;
any required filing of the Basic Prospectus, Preliminary Final
Prospectus and the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted
or threatened and the Registration Statement and the Final Prospectus
(other than the financial statements and other financial and
statistical information contained therein, as to which such counsel
need express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the respective rules
thereunder; and based upon such counsel's representation of the
Company, nothing has come to its attention that causes it to believe
that on the Effective Date or the date the Registration Statement was
last deemed amended the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Final Prospectus as of its date and
on the Closing Date included or includes any untrue statement of a
material fact or omitted 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 (in each case, other than the
financial statements and other financial and statistical information
contained therein, as to which such counsel need express no opinion);
(v) this Agreement has been duly authorized, executed and delivered
by the Company;
(vi) the Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Final Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(vii) no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein, except such as have been obtained
under the Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriters in the manner contemplated in this
21
Agreement and in the Final Prospectus and such other approvals
(specified in such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, (i) the charter, by-laws
or similar organization documents of the Company, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company is a party or bound or to which its
property is subject, and which is set forth on Exhibit C hereto or
(iii) any statute, law, rule or regulation or, to such counsel's
knowledge, judgment, order or decree applicable to the Company of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its properties; and
(ix) except as set forth in the Prospectus, to such counsel's
knowledge, no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York, the State of Delaware or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B)
as to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the
Final Prospectus in this paragraph (b) shall also include any supplements
thereto at the Closing Date.
(c) Each Selling Stockholder shall have requested and caused counsel
satisfactory to Citigroup Global Markets Inc. to have furnished to the
Representatives an opinion dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement and the Custody Agreement and Power of Attorney
have been duly authorized, executed and delivered by such Selling
Stockholder, the Custody Agreement is valid and binding on such Selling
Stockholder and such Selling Stockholder has full legal right and
authority to sell, transfer and deliver in the manner provided in this
Agreement and the Custody Agreement the Securities being sold by such
Selling Stockholder hereunder;
22
(ii) assuming that each Underwriter acquires its interest in the
Securities it has purchased from such Selling Stockholder without
notice of any adverse claim (within the meaning of Section 8-105 of the
UCC), each Underwriter that has purchased such Securities delivered on
the Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that
has had such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust Company or
such other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to
such Securities purchased by such Underwriter, and no action based on
an adverse claim (within the meaning of Section 8-105 of the UCC) may
be asserted against such Underwriter with respect to such Securities;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except
such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals (specified in such opinion) as have been obtained;
and
(iv) neither the sale of the Securities being sold by such Selling
Stockholder nor the consummation of any other of the transactions
herein contemplated by such Selling Stockholder or the fulfillment of
the terms hereof by such Selling Stockholder will result in a breach or
violation of, or constitute a default under any law generally
applicable to transactions of the type described in this Agreement or
the charter, by-laws or similar organizational documents, of such
Selling Stockholder, as applicable.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of such Selling
Stockholder or responsible officers of such Selling Stockholder, as
applicable, and public officials.
(d) The Representatives shall have received from Cravath, Swaine &
Xxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the Final
Prospectus
23
(together with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Company and each Selling
Stockholder shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final Prospectus,
any supplements to the Final Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by such Selling Stockholder or, if
applicable, the Chairman of the Board or the President and the principal
financial or accounting officer of such Selling Stockholder (or by officers
of such Selling Stockholder performing similar functions) dated the Closing
Date, to the effect that the representations and warranties of such Selling
Stockholder in this Agreement are true and correct in all material respects
on and as of the Closing Date to the same effect as if made on the Closing
Date.
(g) The Company shall have requested and caused KPMG LLP to have
furnished to the Representatives, at the Execution Time and at the Closing
Date, letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are
24
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the nine-month
period ended September 30, 2003, and 2004, as at September 30, 2003, and
2004, in accordance with Statement on Auditing Standards No. 100, and
stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules and included or incorporated by reference in the
Registration Statement and the Final Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company; their limited review, in
accordance with standards established under Statement on Auditing
Standards No. 100, of the unaudited interim financial information for
the nine-month period ended September 30, 2003, and September 30, 2004,
and as at September 30, 2003, and 2004, incorporated by reference in
the Registration Statement and the Final Prospectus carrying out
certain specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and the Audit and Compensation committees of
the Company; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company as
to transactions and events subsequent to December 31, 2003, nothing
came to their attention which caused them to believe that:
(1) any unaudited financial statements included or incorporated
by reference in the Registration Statement and the Final Prospectus
do not comply as to form in all material respects with applicable
accounting requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to financial
statements included or incorporated by reference in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial
25
statements included or incorporated by reference in the
Registration Statement and the Final Prospectus;
(2) with respect to the period subsequent to September 30,
2004, there were any changes, at a specified date not more than
five days prior to the date of the letter, in the total assets of
the Company, total current liabilities of the Company or capital
stock of the Company or decreases in the stockholders' equity of
the Company as compared with the amounts shown on the September 30,
2004, consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Final Prospectus,
or for the period from October 1, 2004 to such specified date there
were any decreases, as compared with the comparable period in 2003,
in total revenue, net of the Company or increases in loss from
operations or net loss per common share of the Company, except in
all instances for changes, decreases or increases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
and
(3) the information included or incorporated by reference in
the Registration Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data), Item 302
(Supplementary Financial Information) and Item 402 (Executive
Compensation) is not in conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statement and the Final Prospectus and in Exhibit 12 to
the Registration Statement, including the information included or
incorporated by reference in Items 1, 2, 6, 7 and 11 of the Company's
Annual Report on Form 10-K, incorporated by reference in the
Registration Statement and the Final Prospectus, the information
included in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q, incorporated
by reference in the Registration Statement and the Final Prospectus,
and the information appearing in the Company's Current Reports on Form
B-K filed on August 31, 2004, and September 20, 2004,
26
incorporated by reference in the Registration Statement and the Final
Prospectus, agrees with the accounting records of the Company,
excluding any questions of legal interpretation.
References to the Final Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (g) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any supplement thereto)
the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and adverse as
to make it impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus (exclusive of
any supplement thereto).
(i) Prior to the Closing Date, the Company and the Selling Stockholders
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
(j) The Securities shall have been listed and admitted and authorized
for trading on the Nasdaq National Market, and satisfactory evidence of
such actions shall have been provided to the Representatives.
(k) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each officer and director of the Company and the stockholders identified on
Annex A hereto addressed to the Representatives.
(1) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
27
(m) The Company shall have requested and caused Blakely, Sokoloff,
Xxxxxx & Zafman, LLP, intellectual property counsel for the Company, to
have furnished to the Representatives their opinion, dated the Closing Date
and addressed to the Representatives, reasonably satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Stockholder in writing or by telephone or facsimile confirmed in
writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Xxxxx LLP, counsel for the
Underwriters, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Citigroup Global Markets Inc. on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. If the Company is
required to make any payments to the Underwriters under this Section 7 because
of any Selling Stockholder's refusal, inability or failure to satisfy any
condition to the obligations of the Underwriters set forth in Section 6, then
such Selling Stockholder shall reimburse the Company on demand for all amounts
so paid.
8. Indemnification and Contribution. (a) (i) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged
28
untrue statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any amendment
thereof, or in the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(ii) The Company agrees to indemnify and hold harmless each Selling
Stockholder, the directors, officers, employees and agents of each
Selling Stockholder and each person who controls any Selling
Stockholder within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of ;a material
fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in
the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by
or on behalf of any Selling Stockholder specifically for inclusion
therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
29
(b) Each Selling Stockholder severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act and each
other Selling Stockholder, if any, to the same extent as the foregoing indemnity
from the Company to each Underwriter and each Selling Stockholder, but only with
reference to written information furnished to the Company by or on behalf of
such Selling Stockholder specifically for inclusion in the documents referred to
in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Selling Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each Selling Stockholder, to
the same extent as the foregoing indemnity from the Company and the Selling
Stockholders to each Underwriter and each Selling Stockholder, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company and each Selling Stockholder
acknowledge that the statements set forth under the heading "Underwriting", (i)
the list of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii)
the paragraphs related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Final Prospectus and the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Final Prospectus or the
Final Prospectus.
(d) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a), (b) or (c) above unless and to the extent it did
not otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and
30
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel, as incurred, if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Selling Stockholders
severally and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, the Selling Stockholders and one
or more of the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company, by the Selling
Stockholders and by the Underwriters from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company, the Selling Stockholders severally and
the Underwriters severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company, the Selling Stockholders and of the Underwriters in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and the
Selling Stockholders shall be
31
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Final Prospectus. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company, the Selling Stockholders or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (e), no person guilty
of fraudulent misrepresentation (within the meaning of Section 1 1(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 8, each person
who controls an Underwriter or a Selling Stockholder within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter or a Selling Stockholder shall have the same rights to
contribution as such Underwriter or Selling Stockholder, and each person who
controls the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (e).
(f) The liability of each Selling Stockholder under such Selling
Stockholder's representations and warranties contained in Section 1 hereof and
under the indemnity and contribution agreements contained in this Section 8
shall be limited to an amount equal to the total net proceeds received by such
Selling Stockholder in respect of the Securities sold to the Underwriters. The
Company and the Selling Stockholders may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase
32
shall exceed 10% of the aggregate amount of Securities set forth in Schedule I
hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. in the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or on the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on either
such Exchange or the Nasdaq National Market, (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the
33
Company, will be mailed, delivered or telefaxed to (fax no.: (000) 000-0000) and
confirmed to it at 00 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000, attention of
Xxxxxx Xxxxxx; or if sent to any Selling Stockholder, will be mailed, delivered
or telefaxed and confirmed to it at the address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law, This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in paragraph I
(i)(a) above contained in the Registration Statement at the Effective Date
including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City. "Commission"
shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
34
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to the
Securities that was first filed pursuant to Rule 424(b) after the Execution
Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(i)(a) above, including exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the Execution
Time, in the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 415", Rule "424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(i)(a) hereof.
35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
AUDIBLE INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: CEO
The Selling Stockholders set forth in
Schedule II to the foregoin Agreement,
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: Attorney-in-fact
36
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
ThinkEquity Partners LLC
Xxxxx Xxxxxxxx, Inc.
America's Growth Capital
Xxxxxxx Bros., X.X.
Xxxxxxxx Curhan Ford & Co.
By: Citigroup Global Markets Inc.
By: /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Citigroup Global Markets Inc. 2,351,250
ThinkEquity Partners LLC 783,750
Xxxxx Xxxxxxxx, Inc. 522,500
America's Growth Capital 522,500
Xxxxxxx Bros., L.P. 522,500
Xxxxxxxx Curhan Ford & Co. 522,500
---------
Total ....................... 5,225,000
=========
SCHEDULE II
NUMBER OF UNDERWRITTEN
SELLING STOCKHOLDERS: SECURITIES TO BE SOLD
--------------------- ---------------------
Apax Excelsior VI, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 2,392,601
Fax: (000) 000-0000
Apax Excelsior VI-A C.V.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 195,440
Fax: (000) 000-0000
Apax Excelsior V1-B C.V.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 130,200
Fax: (000) 000-0000
Patricof Private Investment Club III, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000 81,760
Fax: (000) 000-0000
Random House, Inc.
Attn: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx,
Xxx Xxxx, XX 00000 125,000
Fax: (000) 000-0000
Random House Ventures LLC
Attn: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx,
Xxx Xxxx, XX 00000 300,000
Fax: (000) 000-0000
Bertelsmann Multimedia, Inc.
Attn: Xxxxxxx Xxxxxxx
0000 Xxxxxxxx,
Xxx Xxxx, XX 00000 225,000
Fax: (000) 000-0000
Xxxxxx X. Xxxx
00 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000
Fax: (000) 000-0000 150,000
Xxxxxx Xxxxxx
00 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx, XX 00000
Fax: (000) 000-0000 125,000
---------
Total ........................................... 3,725,000
=========
EXHIBIT A
ILETTERHEAD OF OFFICER, DIRECTOR OR STOCKHOLDER OF
AUDIBLE, INC.)
Audible, Inc.
Public Offering of Common Stock
,2004
Citigroup Global Markets Inc.
As Representative of the several Underwriters,
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Audible, Inc., a
Delaware corporation (the "Company"), the Selling Stockholders named therein and
you as representative of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 90 days after the date
of the Underwriting Agreement.
The foregoing restrictions shall not apply to transfers of shares of
Common Stock or any security convertible into Common Stock (a) as a bona fide
gift or gifts to a member of the undersigned's immediate family, (b) to an
entity controlled by the undersigned or an immediate family member of the
undersigned or (c) to a trust the beneficiaries of which are exclusively the
undersigned or a member of the immediate family of the undersigned; provided,
however, that in connection with any such transfer each transferee shall execute
and deliver to Citigroup Global Markets Inc a duplicate form of this letter
(dated and effective as of the date hereof). For purposes hereof, "immediate
family" shall mean any child, stepchild, grandchild, parent, stepparent,
2
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated. This agreement shall lapse and
become null and void if the Underwriting Agreement is not executed on or before
December 31, 2004.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR
MAJOR STOCKHOLDER]
[NAME AND ADDRESS OF OFFICER, DIRECTOR
OR MAJOR STOCKHOLDER]
EXHIBIT B
ENTITY JURISDICTION
------ ------------
Audible, Inc. Delaware
New Jersey
ANNEX A
Lock-up Agreements
Apax Excelsior VI, L.P.
Apax Excelsior VI-A C.V.
Apax Excelsior VI-B C.V.
Bertelsmann Multimedia, Inc.
Patricof Private Investment Club III, LP
Random House, Inc.
Random House Ventures LLC
Xxxxxx X. Xxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxx
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxxx Xxxx
