Shares EVERLAST WORLDWIDE INC. Common Stock PURCHASE AGREEMENT
Exhibit 1.1
Shares
Common Stock
_____________________, 2007
XXXXX XXXXXXX & CO.
As Representative of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
As Representative of the several
Underwriters named in Schedule II hereto
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Everlast Worldwide Inc., a Delaware corporation (the “Company”), and the stockholders of the
Company listed in Schedule I hereto (the “Selling Stockholders”) severally propose to sell to the
several Underwriters named in Schedule II hereto (the “Underwriters”) an aggregate of shares (the “Firm Shares”) of Common Stock, $0.002 par value per share (the “Common Stock”),
of the Company. The Firm Shares consist of authorized but unissued shares of
Common Stock to be issued and sold by the Company and outstanding shares of Common
Stock to be sold by the Selling Stockholders. The Company has also granted to the several
Underwriters an option to purchase up to additional shares of Common Stock,
respectively, on the terms and for the purposes set forth in Section 3 hereof (the “Option
Shares”). The Firm Shares and any Option Shares purchased pursuant to this Purchase Agreement are
herein collectively called the “Securities.”
The Company and the Selling Stockholders hereby confirm their agreement with respect to the
sale of the Securities to the several Underwriters, for whom you are acting as representative (the
“Representative”).
1. Registration Statement and Prospectus. A registration statement on Form S-1 (File No.
333-___) with respect to the Securities, including a preliminary form of prospectus, has
been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Securities Act”), and the rules and regulations (“Rules and Regulations”) of the
Securities and Exchange Commission (the “Commission”) thereunder and has been filed with, and
declared effective by, the Commission; one or more amendments to such registration statement have
also been so prepared and have been, or will be, so filed; and, if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the offering registered under
the Securities Act, the Company will prepare and file with the Commission a registration statement
with respect to such increase pursuant to Rule 462(b) (the “462(b) Registration Statement”).
Copies of such registration statement(s) and amendments and each related preliminary prospectus
have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and Regulations, the
Company has prepared and will promptly file an amendment to the registration statement and an
amended prospectus. If the Company has elected to rely upon Rule 430A of the Rules and
Regulations, it will prepare and file a prospectus pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A. Each part of such
registration statement as amended at the time it is or was declared effective by the Commission,
including the exhibits and schedules thereto and the documents incorporated by reference therein
pursuant to Item 12 of Form S-1 under the Securities Act, and, in the event of any amendment
thereto after the effective date, each part of such registration statement as so amended (but only
from and after the effectiveness of such amendment), including a Rule 462(b) Registration
Statement, and information (if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rules 430A(b) of the Rules and Regulations, is hereinafter called the
“Registration Statement.” The prospectus included in the Registration Statement at the time it is
or was declared effective by the
Commission is hereinafter called the “Prospectus,” except that if any prospectus filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and Regulations or any other such
prospectus provided to the Underwriters by the Company for use in connection with the offering of
the Securities (whether or not required to be filed by the Company with the Commission pursuant to
Rule 424(b) of the Rules and Regulations, but not including a “free writing prospectus” as defined
in Rule 405 of the Rules and Regulations) differs from the prospectus on file at the time the
Registration Statement is or was declared effective by the Commission, the term “Prospectus” shall
refer to such differing prospectus from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule 424(b) or from and
after the time of its first use within the meaning of the Rules and Regulations. The term
“Preliminary Prospectus” as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under the Securities Act
and any prospectus subject to completion as described in Rule 430A of the Rules and Regulations.
All references in this Agreement to the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement to any of the foregoing, shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering, analysis and Retrieval
System (“XXXXX”). All references in this Agreement to financial statements and schedules and other
information which is “described,” “contained,” “included” or “stated” in the Registration
Statement, the 462(b) Registration Statement, any Preliminary Prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in or otherwise deemed by
the Rules and Regulations to be a part of or included in the Registration Statement, the 462(b)
Registration Statement, any Preliminary Prospectus or the Prospectus, as the case may be.
2. Representations and Warranties of the Company and the Selling Stockholders.
(a) The Company represents and warrants to, and agrees with, the several Underwriters as
follows:
(i) No order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission and each Preliminary Prospectus, at the time of filing or the time
of first use within the meaning of the Rules and Regulations, complied in all material
respects with the requirements of the Securities Act and the Rules and Regulations and did
not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any Preliminary Prospectus in reliance upon,
and in conformity with, written information furnished to the Company by you, or by any
Underwriter through you, specifically for use in the preparation thereof.
(ii) The Registration Statement and any Rule 462(b) Registration Statement were
initially declared effective by the Commission under the Securities Act on ___,
2007. The Company has complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in
effect and no proceedings for such purpose have been instituted or are pending or, to the
best knowledge of the Company, are contemplated or threatened by the Commission.
(iii) Each part of the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto, at the time such part became effective, at all
other subsequent times until the expiration of the Prospectus Delivery Period (as defined
below), and at the First Closing Date and Second Closing Date (as hereinafter defined), and
the Prospectus (or any amendment or supplement to the Prospectus), at the time of filing or
the time of first use within the meaning of the Rules and Regulations, at all subsequent
times until expiration of the Prospectus Delivery Period, and at the First Closing Date and
Second Closing Date complied and will comply in all material respects with the applicable
requirements and provisions of the Securities Act, the Rules and Regulations and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date, or the time of first use within the
meaning of the Rules and Regulations, at all subsequent times until the expiration of the
Prospectus Delivery Period, and at the First Closing Date and Second Closing Date, did not
and will not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
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under which they were made, not misleading. The representations and warranties set
forth in the two immediately preceding sentences do not apply to statements in or omissions
from the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or supplements
thereto, made in reliance upon and in conformity with written information relating to an
Underwriter furnished to the Company by you or by any Underwriter through you, specifically
for use in the preparation thereof.
(iv) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and set forth on Schedule III, the information set forth on Schedule IV,
and the Statutory Prospectus, all considered together (collectively, the “Time of Sale
Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing Prospectus,
when considered together with the Time of Sale Disclosure Package, includes or included as
of the Time of Sale any untrue statement of a material fact or omits or omitted as of the
Time of Sale to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from any Statutory Prospectus or any
Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by you or by any Underwriter through you specifically for use
therein. As used in this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” means ___:00 **[a/p]m (Eastern time) on the date of this
Agreement
(2) “Statutory Prospectus” as of any time means the Preliminary Prospectus that
is included in the Registration Statement immediately prior to that time. For
purposes of this definition, information contained in a form of prospectus that is
deemed retroactively to be a part of the Registration Statement pursuant to Rule
430A of the Rules and Regulations shall be considered to be included in the
Statutory Prospectus as of the actual time that form of prospectus is filed with the
Commission pursuant to Rule 424(b) under the Securities Act.
(3) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act
because it contains a description of the Securities or of the offering that does not
reflect the final terms, or is a “bona fide electronic road show,” as defined in
Rule 433 of the Rules and Regulations, in each case in the form filed or required to
be filed with the Commission or, if not required to be filed, in the form retained
in the Company’s records pursuant to Rule 433(g) under the Securities Act.
(4) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule III to this Agreement.
(5) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
(v) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times through the Prospectus Delivery Period or until any earlier date that the Company
notified or notifies the Representative as described in Section 4(a)(iii)(B), did not, does
not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, any Statutory Prospectus or the
Prospectus. The foregoing sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by you or by any Underwriter through you specifically for use
therein.
(B) (1) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the Securities Act) of the Securities and (2) at the date hereof, the
Company was
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not and
is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act, including the Company
or any subsidiary in the preceding three years not having been convicted of a felony or
misdemeanor or having been made the subject of a judicial or administrative decree or order
as described in Rule 405 (without taking account of any determination by the Commission
pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible
issuer), nor an “excluded issuer” as defined in Rule 164 under the Securities Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions to use thereof
as set forth in Rules 164 and 433 under the Securities Act.
(vi) The financial statements of the Company, together with the related notes, set
forth or incorporated by reference in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus comply in all material respects with the requirements
of the Securities Act and the Exchange Act and fairly present the financial condition of the
Company as of the dates indicated and the results of operations and changes in cash flows
for the periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information required to
be stated therein. No other financial statements or schedules are required to be included
in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus. To
the Company’s knowledge, Berenson LLP, which has expressed its opinion with respect to the
financial statements and schedules filed as a part of the Registration Statement and
included in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus and with regard to the Company’s internal control over financing reporting and
management’s assessment thereof, is a registered public accounting firm within the meaning
of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”), and in the performance of its
work for the Company has not been in violation of the auditor independence requirements of
the Xxxxxxxx-Xxxxx Act.
(vii) Each of the Company and its subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has full corporate power and
authority to own its properties and conduct its business as currently being carried on and
as described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, and is duly qualified to do business as a foreign corporation in good standing
in each jurisdiction in which it owns or leases real property or in which the conduct of its
business makes such qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, prospects, management, properties,
operations, condition (financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole (“Material Adverse Effect”).
(viii) Except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants, convertible securities
or other rights to purchase the capital stock, of the Company or any of its subsidiaries, or
any material adverse change in the general affairs, condition (financial or otherwise),
business, prospects, management, properties, operations or results of operations of the
Company and its subsidiaries, taken as a whole (“Material Adverse Change”) or any
development involving a prospective Material Adverse Change.
(ix) Except as set forth in the Time of Sale Disclosure Package and in the Prospectus,
there is not pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company is the subject before or by any court or
governmental agency, authority or body, or any arbitrator, which, individually or in the
aggregate, might result in any Material Adverse Change.
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(x) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus or be filed as exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations that have not been so described or filed.
(xi) This Agreement has been duly authorized, executed and delivered by the Company,
and constitutes a valid, legal and binding obligation of the Company, enforceable in
accordance with its terms, except as rights to indemnity hereunder may be limited by federal
or state securities laws and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company is a party or by which it is
bound or to which any of its property is subject, the Company’s charter or by-laws, or any
order, rule, regulation or decree of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Securities Act; and the Company has full
power and authority to enter into this Agreement and to authorize, issue and sell the
Securities as contemplated by this Agreement.
(xii) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities that have not been waived in writing (a
copy of which has been delivered to counsel to the Representative), and the holders thereof
are not subject to personal liability by reason of being such holders; the Securities which
may be sold hereunder by the Company have been duly authorized and, when issued, delivered
and paid for in accordance with the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will not be subject to
personal liability by reason of being such holders; and the capital stock of the Company,
including the Common Stock, conforms to the description thereof in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus. Except as
otherwise stated in the Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus, there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company’s charter, by-laws or any agreement or other instrument to which the
Company is a party or by which the Company is bound. Neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any shares of Common Stock or
other securities of the Company. All of the issued and outstanding shares of capital stock
of each of the Company’s subsidiaries have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus and except for any
directors’ qualifying shares, the Company owns of record and beneficially, free and clear of
any security interests, claims, liens, proxies, equities or other encumbrances, all of the
issued and outstanding shares of such stock. Except as described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence to purchase or acquire
from the Company or any subsidiary of the Company any shares of the capital stock of the
Company or any subsidiary of the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus.
(xiii) The Company and each of its subsidiaries holds, and is operating in compliance
in all material respects with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders of any governmental or self-regulatory body
required for the conduct of its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and orders are valid and in full
force and effect; and neither the Company nor any of its subsidiaries has received notice of
any revocation or modification of any such franchise, grant, authorization, license, permit,
easement, consent, certification or order or has reason to believe
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that any such franchise,
grant, authorization, license, permit, easement, consent, certification or order will not be renewed in the ordinary course;
and the Company and each of its subsidiaries is in compliance in all material respects with
all applicable federal, state, local and foreign laws, regulations, orders and decrees.
(xiv) The Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus as being owned by them, in each case free and clear
of all liens, claims, security interests, other encumbrances or defects except such as are
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus. The property held under lease by the Company and its subsidiaries is held by
them under valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the conduct of the
business of the Company or its subsidiaries.
(xv) The Company and each of its subsidiaries owns, possesses, or can acquire on
reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and
it subsidiaries’ business as now conducted or as described in the Registration Statement,
the Time of Sale, Disclosure Package and the Prospectus to be conducted, except as such
failure to own, possess, or acquire such rights would not result in a Material Adverse
Effect. Furthermore, (A) to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any such Intellectual Property, except as
such infringement, misappropriation or violation would not result in a Material Adverse
Effect; (B) there is no pending or, to the knowledge of the Company, threatened, action,
suit, proceeding or claim by others challenging the Company’s or any of its subsidiaries’
rights in or to any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (C) the Intellectual Property owned
by the Company and its subsidiaries, and to the knowledge of the Company, the Intellectual
Property licensed to the Company and its subsidiaries, has not been adjudged invalid or
unenforceable, in whole or in part, and there is no pending or threatened action, suite
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; (D) there is no pending or threatened action, suit, proceeding or claim by
others that the Company or any of its subsidiaries infringes, misappropriates or otherwise
violates any Intellectual Property or other proprietary rights of others, neither the
Company or any of its subsidiaries has received any written notice of such claim and the
Company is unaware of any other fact which would form a reasonable basis for any such claim;
and (E) to the Company’s knowledge, no employee of the Company or any of its subsidiaries is
in or has ever been in violation of any term of any employment contract, patent disclosure
agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee’s employment with the Company nor
any of its subsidiaries or actions undertaken by the employee while employed with the
Company or any of its subsidiaries, except as such violation would not result in a Material
Adverse Effect. “Intellectual Property” shall mean all patents, patent applications, trade
and service marks, trade and service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, domain names, technology, know-how and other intellectual
property.
(xvi) Neither the Company nor any of its subsidiaries is in violation of its respective
charter or by-laws or in breach of or otherwise in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default in the performance of
any material obligation, agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or other instrument to which
it is subject or by which any of them may be bound, or to which any of the material property
or assets of the Company or any of its subsidiaries is subject.
(xvii) The Company and its subsidiaries have timely filed all federal, state, local and
foreign income and franchise tax returns required to be filed and are not in default in the
payment of any taxes which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its subsidiaries is contesting
in good faith. There is no pending dispute with any taxing authority relating to any of
such returns, and the Company has no knowledge of any proposed liability for any tax to be
imposed upon the properties or assets of the Company for which there is not an adequate
reserve reflected in the Company’s financial statements included in the Registration
Statement.
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(xviii) The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities other than any
Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or other
materials permitted by the Securities Act to be distributed by the Company; provided,
however, that, except as set forth on Schedule III, the Company has not made and will not
make any offer relating to the Securities that would constitute a “free writing prospectus”
as defined in Rule 405 under the Securities Act, except in accordance with the provisions of
Section 4(a)(xvii) of this Agreement.
(xix) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
is included or approved for inclusion on The Nasdaq Global Market and the Company has taken
no action designed to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from the Nasdaq Global
Market nor has the Company received any notification that the Commission or NASDAQ is
contemplating terminating such registration or listing. The Company has complied in all
material respects with the applicable requirements of The Nasdaq Global Market for
maintenance of inclusion of the Common Stock thereon. The Company has filed an application
to include the Securities on the Nasdaq Global Market.
(xx) Other than the subsidiaries of the Company listed in Exhibit 21 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2006, the Company,
directly or indirectly, owns no capital stock or other equity or ownership or proprietary
interest in any corporation, partnership, association, trust or other entity.
(xxi) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to assets is
permitted only in accordance with management’s general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, since the most recent audit of the effectiveness of the Company’s internal
control over financial reporting, there has been (i) no material weakness in the Company’s
internal control over financial reporting (whether or not remediated) and (ii) no change in
the Company’s internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial
reporting.
(xxii) Other than as contemplated by this Agreement, the Company has not incurred any
liability for any finder’s or broker’s fee or agent’s commission in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xxiii) The Company carries, or is covered by, insurance in such amounts and covering
such risks as is adequate for the conduct of its business and the value of its properties
and as is customary for companies engaged in similar businesses in similar industries; all
policies of insurance and any fidelity or surety bonds insuring the Company or any of its
subsidiaries or its business, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; there are no claims by the Company or any
of its subsidiaries under any such policy or instrument as to which any insurance company is
denying liability or defending under a reservation of rights clause; neither the Company nor
any of its subsidiaries has been refused any insurance coverage sought or applied for; and
neither the Company nor any of its subsidiaries has reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect. Without limitation to the foregoing,
the Company and its subsidiaries carry comprehensive general liability insurance and such
other insurance as is customarily carried by lessees of properties similar to those leased
by the Company and its subsidiaries (in the markets in which the Company’s and its
subsidiaries’ leased properties are located).
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(xxiv) The Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxv) The documents incorporated by reference in the Time of Sale Disclosure Package
and in the Prospectus, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and were filed on a timely basis with the Commission and
none of such documents contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; any further documents so filed and incorporated
by reference in the Time of Sale Disclosure Package or in the Prospectus, when such
documents are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(xxvi) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission thereunder.
(xxvii) The Company has established and maintains disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the Company,
including its subsidiaries, is made known to the principal executive officer and the
principal financial officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus.
(xxviii) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action directly or indirectly, that would result
in a violation by such persons of the FCPA (as defined below), 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 foreign political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA and the Company and its subsidiaries 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 the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
(xxix) The operations of the Company and its subsidiaries have complied in all material
respects 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, 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
or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(xxx) Neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer or employee of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Department of the Treasury.
(xxxi) To the Company’s knowledge, except as disclosed to counsel to the Underwriter,
no transaction has occurred between or among the Company and its subsidiaries, on the one
hand, and any of the Company’s officers, directors or 5% stockholders or any affiliate or
affiliates of any such officer, director or 5% stockholders that is required to be described that is not so described
in the Registration
-8-
Statement, the Time of Sale Disclosure Package and the Prospectus. The
Company has not, directly or indirectly, extended or maintained credit, or arranged for the
extension of credit, or renewed an extension of credit, in the form of a personal loan to or
for any of its directors or executive officers in violation of applicable laws, including
Section 402 of the Xxxxxxxx-Xxxxx Act.
(xxxii) The Company and each of its subsidiaries (A) is in compliance with any and all
applicable federal, state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (B)
has received and is in compliance with all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct its business; and (C) has not received
notice of any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to receive required
permits, licenses or approvals, or liability as would not, individually or in the
aggregate,, result in a Material Adverse Effect.
(xxxiii) The Company and each of its subsidiaries (A) is in compliance, in all material
respects, with any and all applicable foreign, federal, state and local laws, rules,
regulations, treaties, statutes and codes promulgated by any and all governmental
authorities (including pursuant to the Occupational Health and Safety Act) relating to the
protection of human health and safety in the workplace (“Occupational Laws”); (B) has
received all material permits, licenses or other approvals required of it under applicable
Occupational Laws to conduct its business as currently conducted; and (C) is in compliance,
in all material respects, with all terms and conditions of such permit, license or approval.
No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to
the Company’s knowledge, threatened against the Company or any of its subsidiaries relating
to Occupational Laws, and the Company does not have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could reasonably
be expected to form the basis for or give rise to such actions, suites, investigations or
proceedings.
(xxxiv) Each employee benefit plan, within the meaning of Section 3(3) of the Employee
retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or
former employees of the Company and its affiliates has been maintained in compliance with
its terms and the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to, ERISA and the Internal Revenue Code of 1986, as amended (the
“CODE”). No prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan, excluding transactions
effected pursuant to a statutory or administrative exemption; and for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no
“Accumulated funding deficiency,” as defined in Section 412 of the Code, has been incurred,
whether or not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeds the present value of all
benefits accrued under such plan determined using reasonable actuarial assumptions.
(b) Each Selling Stockholder, severally and not jointly, represents and warrants to, and
agrees with, the several Underwriters as follows:
(i) Such Selling Stockholder is the record and beneficial owner of, and has, and on the
First Closing Date, will have, valid and marketable title to the Securities to be sold by
such Selling Stockholder, free and clear of all security interests, claims, liens,
restrictions on transferability, legends, proxies, equities or other encumbrances; and upon
delivery of and payment for such Securities hereunder, the several Underwriters will acquire
valid and marketable title thereto, free and clear of any security interests, claims, liens,
restrictions on transferability, legends, proxies, equities or other encumbrances. Such
Selling Stockholder is selling the Securities to be sold by such Selling Stockholder for
such Selling Stockholder’s own account and is not selling such Securities, directly or
indirectly, for the benefit of the Company, and no part of the
proceeds of such sale received by such Selling Stockholder will
inure, either directly or indirectly, to the benefit
of the Company other than as described in the Registration Statement and Prospectus.
-9-
(ii) Such Selling Stockholder has duly authorized, executed and delivered a Letter of
Transmittal and Custody Agreement (“Custody Agreement”), which Custody Agreement is a valid
and binding obligation of such Selling Stockholder, to Continental Stock Transfer & Trust
Company, as Custodian (the “Custodian”); pursuant to the Custody Agreement the Selling
Stockholder has placed in custody with the Custodian, for delivery under this Agreement, the
certificates representing the Securities to be sold by such Selling Stockholder; such
certificates represent validly issued, outstanding, fully paid and nonassessable shares of
Common Stock; and such certificates were duly and properly endorsed in blank for transfer,
or were accompanied by all documents duly and properly executed that are necessary to
validate the transfer of title thereto, to the Underwriters, free of any legend, restriction
on transferability, proxy, lien or claim, whatsoever.
(iii) Such Selling Stockholder has the power and authority to enter into this Agreement
and to sell, transfer and deliver the Securities to be sold by such Selling Stockholder; and
such Selling Stockholder has duly authorized, executed and delivered to Xxxx Xxxxxxxx and
Xxxx X. Xxxxxx, as attorneys-in-fact (the “Attorneys-in-Fact”), an irrevocable power of
attorney (a “Power of Attorney”) authorizing and directing the Attorneys-in-Fact, or either
of them, to effect the sale and delivery of the Securities being sold by such Selling
Stockholder, to enter into this Agreement and to take all such other action as may be
necessary hereunder.
(iv) This Agreement, the Custody Agreement and the Power of Attorney have each been
duly authorized, executed and delivered by or on behalf of such Selling Stockholder and each
constitutes a valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnity hereunder or thereunder may be
limited by federal or state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or laws affecting the rights of creditors
generally and subject to general principles of equity. The execution and delivery of this
Agreement, the Custody Agreement and the Power of Attorney and the performance of the terms
hereof and thereof and the consummation of the transactions herein and therein contemplated
will not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any agreement or instrument to which such Selling Stockholder is
a party or by which such Selling Stockholder is bound, or any law, regulation, order or
decree applicable to such Selling Stockholder; no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Custody Agreement and the Power of Attorney
or for the consummation of the transactions contemplated hereby and thereby, including the
sale of the Securities being sold by such Selling Stockholder, except such as may be
required under the Securities Act.
(v) Such Selling Stockholder does not have any registration or other similar rights to
have any equity or debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement, except as described or
incorporated by reference in the Registration Statement.
(vi) Such Selling Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale of the
Securities other than any Preliminary Prospectus, the Time of Sale Disclosure Package or the
Prospectus or other materials permitted by the Securities Act to be distributed by such
Selling Stockholder; provided, however, that no Selling Stockholder has made nor will make
any offer relating to the Securities that would constitute a “free writing prospectus” as
defined in Rule 405 under the Securities Act except a Permitted Free Writing Prospectus
authorized by the Company and the Underwriters for distribution in accordance with the
provisions of Section 4(a)(xvii) hereof.
(vii) Such Selling Stockholder has reviewed the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus and neither the Registration Statement, the Time
of Sale Disclosure Package nor the Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or necessary to make
the statements therein not misleading regarding such Selling Stockholder.
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(c) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriters shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby; any certificate signed by or on behalf of any
Selling Stockholder as such and delivered to you or to counsel for the Underwriters shall be deemed
a representation and warranty by such Selling Stockholder to each Underwriter as to the matters
covered thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm
Shares, and each Selling Stockholder agrees, severally and not jointly, to sell the number of Firm
Shares set forth opposite the name of such Selling Stockholder in Schedule I hereto, to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to purchase from the Company
and the Selling Stockholders the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto. The purchase price for each Firm Share shall be $
per share. The obligation of each Underwriter to each of the Company and the
Selling Stockholders shall be to purchase from each of the Company and the Selling Stockholders
that number of Firm Shares (to be adjusted by the Representative to avoid fractional shares) which
represents the same proportion of the number of Firm Shares to be sold by each of the Company and
the Selling Stockholders pursuant to this Agreement as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule II hereto represents to the total number of Firm Shares to
be purchased by all Underwriters pursuant to this Agreement. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in paragraph (c) of this
Section 3 and in Section 8 hereof, the agreement of each Underwriter is to purchase only the
respective number of Firm Shares specified in Schedule II.
The Firm Shares will be delivered by the Company and the Custodian to you for the accounts of
the several Underwriters against payment of the purchase price therefor by wire transfer of same
day funds payable to the order of the Company and the Custodian, as appropriate, at the offices of
Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other
location as may be mutually acceptable, at 9:00 a.m. Central time on the third (or if the
Securities are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m.
Eastern time, the fourth) full business day following the date hereof, or at such other time and
date as you and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time
and date of delivery being herein referred to as the “First Closing Date.” If the Representative
so elects, delivery of the Firm Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representative. Certificates
representing the Firm Shares, in definitive form and in such denominations and registered in such
names as you may request upon at least two business days’ prior notice to the Company and the
Custodian, will be made available for checking and packaging not later than 10:30 a.m., Central
time, on the business day next preceding the First Closing Date at the offices of Xxxxx Xxxxxxx &
Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may
be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company, with respect to the Option
Shares, hereby grants to the several Underwriters an option to purchase all or any portion of the
Option Shares at the same purchase price as the Firm Shares, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised in whole or in part at any time (but not more than once)
within 30 days after the effective date of this Agreement upon notice (confirmed in writing) by the
Representative to the Company setting forth the aggregate number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in which the
certificates for the Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being herein referred to as the
“Second Closing” and “Second Closing Date”, respectively; provided, however, that the Second
Closing Date shall not be earlier than the First Closing Date nor earlier than the second business
day after the date on which the option shall have been exercised. The number of Option Shares to
be purchased by each Underwriter shall be the same percentage of the total number of Option Shares
to be purchased by the several Underwriters as the number of Firm Shares to be purchased by such
Underwriter is of the total number of Firm Shares to be purchased by the several Underwriters, as
adjusted by the Representative in such manner as the Representative deems advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm Shares previously
have been, or simultaneously are, sold and delivered.
-11-
The Option Shares will be delivered by the Custodian and the Company, as appropriate, to you
for the accounts of the several Underwriters against payment of the purchase price therefor by wire
transfer of same day funds payable to the order of the Custodian or the Company, as appropriate, at
the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota,
or such other location as may be mutually acceptable at 9:00 a.m., Central time, on the Second
Closing Date. If the Representative so elects, delivery of the Option Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company designated by the
Representative. Certificates representing the Option Shares in definitive form and in such
denominations and registered in such names as you have set forth in your notice of option exercise,
will be made available for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Second Closing Date at the office of Xxxxx Xxxxxxx & Co., U.S.
Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be
mutually acceptable.
(c) It is understood that you, individually and not as Representative of the several
Underwriters, may (but shall not be obligated to) make payment to the Company or the Selling
Stockholders, on behalf of any Underwriter for the Securities to be purchased by such Underwriter.
Any such payment by you shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an unincorporated association or
partner with the Company or any Selling Stockholder.
4. Covenants.
(a) The Company covenants and agrees with the several Underwriters as follows:
(i) During the period beginning on the date hereof and ending on the later of the
Second Closing Date or such date, as in the opinion of counsel for the Underwriters, the
Prospectus is no longer required by law to be delivered assuming the absence of Rule 172
under the Securities Act, in connection with sales by an underwriter or dealer (the
“Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement
(including any Rule 462(b) Registration Statement), the Time of Sale Disclosure Package or
the Prospectus, the Company shall furnish to the Representative for review a copy of each
such proposed amendment or supplement, and the Company shall not file any such proposed
amendment or supplement to which the Representative or counsel to the Underwriters
reasonably object. Subject to this Section 4(a)(i), immediately following execution of this
Agreement, the Company will prepare the Prospectus containing the information omitted
pursuant to Rule 430A and other selling terms of the Securities, the plan of distribution
thereof and such other information as may be required by the Securities Act or the Rules and
Regulations or as the Representative and the Company may deem appropriate, and if requested
by the Representative, an Issuer Free Writing Prospectus containing the selling terms of the
Securities and such other information as the Company and the Representative may deem
appropriate, and will file or transmit for filing with the Commission, in accordance with
Rule 424(b) or Rule 433, as the case may be, copies of the Prospectus and each Issuer Free
Writing Prospectus.
(ii) After the date of this Agreement, the Company shall promptly advise the
Representative in writing (A) of the receipt of any comments of, or requests for additional
or supplemental information from, the Commission, (B) of the time and date of any filing of
any post-effective amendment to the Registration Statement or any amendment or supplement to
any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus, (C) of
the time and date that any post-effective amendment to the Registration Statement becomes
effective, (D) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment thereto or of
any order preventing or suspending its use or the use of any Preliminary Prospectus, the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, or
(E) of any proceedings to remove, suspend or terminate from listing or quotation the Common
Stock from any securities exchange upon which it is listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the earliest possible
moment. Additionally, the Company agrees that it shall comply with the provisions of Rules
424(b) and 430A, as applicable, under the Securities Act and will use its reasonable efforts
to confirm that any filings made by the Company under Rule 424(b), Rule 433 or Rule 462 were
received in a timely manner by the Commission (without reliance on Rule 424(b)(8) or Rule
164(b)).
-12-
(iii) (A) During the Prospectus Delivery Period, the Company will comply as far as it
is able with all requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force, and by the
Exchange Act so far as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof, the Time of Sale Disclosure Package and
the Prospectus. If during such period any event occurs as a result of which the Prospectus
(or if the Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary or appropriate in
the opinion of the Company or its counsel or the Representative or counsel to the
Underwriters to amend the Registration Statement or supplement the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) to comply with the Securities Act, the Company will promptly notify you and will
amend the Registration Statement or supplement the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Time of Sale Disclosure Package) at the expense
of the Company so as to correct such statement or omission or effect such compliance.
(B) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company has promptly notified or promptly will notify
the Representative and has promptly amended or will promptly amend or supplement, at its own
expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission.
(iv) The Company shall take or cause to be taken all necessary action to qualify the
Securities for sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent to service of
process in any state.
(v) The Company will furnish to the Underwriters and counsel for the Underwriters
copies of the Registration Statement (which will include three complete manually signed
copies of the Registration Statement and all consents and exhibits filed therewith), each
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus, and all amendments and supplements to such documents, in each case as
soon as available and in such quantities as you may from time to time reasonably request.
(vi) The Company will make generally available to its security holders as soon as
practicable an earnings statement (which need not be audited) covering a 12-month period
that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations.
(vii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants and counsel
but, except as otherwise provided below, not including fees of the Underwriters’ counsel) in
connection with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and any
amendment thereof or supplement thereto, and the printing, delivery, and shipping of this
Agreement and other underwriting documents, including Blue Sky Memoranda (covering the
states and other applicable jurisdictions), (C) all filing fees and fees and disbursements
of the Underwriters’ counsel incurred in connection with the qualification of the Securities
for offering and sale by the Underwriters or by dealers under the securities or blue sky
laws of the states and other jurisdictions which you shall designate, (D) the fees and
expenses of the Custodian and any transfer agent or registrar, (E) the filing fees and fees
and
-13-
disbursements of Underwriters’ counsel incident to any required review and approval by
the National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities, (F) listing fees, if any, (G) the cost and expenses of the Company relating to
investor presentations or any “road show” undertaken in connection with marketing of the
Securities, and (H) all other costs and expenses incident to the performance of its
obligations hereunder that are not otherwise specifically provided for herein. If this
Agreement is terminated by the Representative pursuant to Section 9 hereof or if the sale of
the Securities provided for herein is not consummated by reason of any failure, refusal or
inability on the part of the Company or the Selling Stockholders to perform any agreement on
its or their part to be performed, or because any other condition of the Underwriters’
obligations hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company will reimburse the several Underwriters for all out-of-pocket
disbursements (including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges) incurred by the
Underwriters in connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder.
(viii) The Company will apply the net proceeds from the sale of the Securities to be
sold by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and
in the Prospectus.
(ix) The Company will not, without the prior written consent of Xxxxx Xxxxxxx & Co.,
from the date of execution of this Agreement and continuing to and including the date 90
days after the date of the Prospectus (the “Lock-Up Period”) offer for sale; sell, contract
to sell, pledge, grant any option for the sale of, 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 affiliate, or otherwise issue or dispose of, directly or indirectly (or
publicly disclose the intention to make any such offer, sale, pledge, grant, issuance or
other disposition), any Common Stock or any securities convertible into or exchangeable for,
or any options or rights to purchase or acquire, Common Stock, except to the Underwriters
pursuant to this Agreement and to the holders of options or warrants described in the
Registration Statement pursuant to the exercise thereof on their respective terms as
currently in effect. The Company agrees not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the Lock-Up Period.
If (1) during the period that begins on the date that is 18 calendar days before the last
day of the Lock-Up Period and ends on the last day of the Lock-Up Period, (a) the Company
issues an earnings release, (b) the Company publicly announces material news or (c) a
material event relating to the Company occurs; or (2) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, then the restrictions in this Agreement,
unless otherwise waived by Xxxxx Xxxxxxx & Co. in writing, shall continue to apply until the
expiration of the date that is 18 calendar days after the date on which (a) the Company
issues the earnings release, (b) the Company publicly announces material news or (c) a
material event relating to the Company occurs. The Company will provide the Representative,
any co-managers and each shareholder subject to the Lock-Up Agreement (as defined below)
with prior notice of any such announcement that gives rise to the extension of the Lock-Up
Period.
(x) The Company has caused to be delivered to you prior to the date of this Agreement a
letter from each of the Company’s directors and officers **[and — identify other executing
shareholders who are not selling shareholders] stating that such person agrees that he or
she will not, without your prior written consent, offer for sale, sell, contract to sell or
otherwise dispose of, as set forth in such letter, any shares of Common Stock or rights to
purchase Common Stock, except to the Underwriters pursuant to this Agreement, for a period
of 90 days after commencement of the public offering of the Securities by the Underwriters
(the “Lock-Up Agreement”). The Company will enforce the terms of each Lock-Up Agreement and
issue stop-transfer instructions to the transfer agent for the Common Stock with respect to
any transaction or contemplated transaction that would constitute a breach of or default
under the applicable Lock-Up Agreement.
(xi) The Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
-14-
(xii) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xiii) The Company will file on a timely basis with the Commission such periodic and
special reports as required by the Rules and Regulations.
(xiv) The Company and its subsidiaries will maintain such controls and other
procedures, including without limitation those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including without limitation,
controls and procedures designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure, to ensure that material information
relating to Company, including its subsidiaries, is made known to them by others within
those entities.
(xv) The Company and its subsidiaries will comply with all applicable provisions of the
Xxxxxxxx-Xxxxx Act.
(xvi) The Company represents and agrees that, unless it obtains the prior written
consent of Xxxxx Xxxxxxx & Co., and each Underwriter severally represents and agrees that,
unless it obtains the prior written consent of the Company and Xxxxx Xxxxxxx & Co., it has
not made and will not make any offer relating to the Securities that would constitute an
“issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the
Securities Act, required to be filed with the Commission; provided that the prior written
consent of the parties hereto shall be deemed to have been given in respect of the free
writing prospectuses included in Schedule III. Any such free writing prospectus consented
to by the Company and Xxxxx Xxxxxxx & Co. is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely Commission filing
where required, legending and record keeping.
(b) Each Selling Stockholder covenants and agrees with the several Underwriters as follows:
(i) Such Selling Stockholder will pay all taxes, if any, on the transfer and sale,
respectively, of the Securities being sold by such Selling Stockholder, the fees of such
Selling Stockholder’s counsel, accountant or other adviser and such Selling Stockholder’s
proportionate share (based upon the number of Securities being offered by such Selling
Stockholder pursuant to the Registration Statement) of all costs and expenses (except for
legal and accounting expenses and fees of the custodian and any registrar and transfer
agent) incurred by the Company pursuant to the provisions of Section 4(a)(vii) of this
Agreement; provided, however, that each Selling Stockholder severally agrees to reimburse
the Company for any reimbursement made by the Company to the Underwriters pursuant to
Section 4(a)(vii) hereof to the extent such reimbursement resulted from the failure or
refusal on the part of such Selling Stockholder to comply under the terms or fulfill any of
the conditions of this Agreement.
(ii) If this Agreement shall be terminated by the Underwriters because of any failure,
refusal or inability on the part of such Selling Stockholder to perform any agreement on
such Selling Stockholder’s part to be performed, or because any other condition of the
Underwriters’ obligations hereunder required to be fulfilled by such Selling Stockholder is
not fulfilled, such Selling Stockholder agrees to reimburse the several Underwriters for all
out-of-pocket disbursements (including fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Securities or in contemplation of performing their obligations
hereunder.
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(iii) The Securities to be sold by such Selling Stockholder, represented by the
certificates on deposit with the Custodian pursuant to the Custody Agreement of such Selling
Stockholder, are subject to the interest of the several Underwriters and the other Selling
Stockholders; the arrangements made for such custody are, except as specifically provided in
the Custody Agreement, irrevocable; and the obligations of such Selling Stockholder
hereunder shall not be terminated, except as provided in this Agreement or in the Custody
Agreement, by any act of such Selling Stockholder, by operation of law, whether by the
liquidation, dissolution or merger of such Selling Stockholder, by the death of such Selling
Stockholder, or by the occurrence of any other event. If any Selling Stockholder should
liquidate, dissolve or be a party to a merger or if any other such event should occur before
the delivery of the Securities hereunder, certificates for the Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such liquidation, dissolution, merger or other event had not occurred,
whether or not the Custodian shall have received notice thereof.
(iv) Such Selling Stockholder will not, without the prior written consent of Xxxxx
Xxxxxxx & Co., during the Lock-Up Period, offer for sale, sell, contract to sell, pledge,
grant any option for the sale of, enter into any transaction which is designed to, or might
reasonably be expected to, result in disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) or otherwise dispose of, directly
or indirectly (or publicly disclose the intention to make any such offer, sale, pledge,
grant, or other disposition), any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock, except to
the Underwriters pursuant to this Agreement. In addition, each Selling Stockholder agrees
that, without the prior written consent of Xxxxx Xxxxxxx & Co., it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the registration
of any shares of Common Stock or any security convertible into or exercisable or
exchangeable for shares of Common Stock. If (1) during the period that begins on the date
that is 18 calendar days before the last day of the Lock-Up Period and ends on the last day
of the Lock-Up Period, (a) the Company issues an earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs; or (2) prior
to the expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-Up Period, then the
restrictions in this Agreement, unless otherwise waived by Xxxxx Xxxxxxx & Co. in writing,
shall continue to apply until the expiration of the date that is 18 calendar days after the
date on which (a) the Company issues the earnings release, (b) the Company publicly
announces material news or (c) a material event relating to the Company occurs.
Any shares of Common stock received upon exercise of options granted to a Selling
Stockholder will also be subject to this clause (iv). The restrictions on transfers of this
clause (iv), however, will not apply to any shares of Common Stock acquired by the Selling
Stockholder in the open market. A transfer of shares of Common Stock in connection with a
bona fide gift or to a family member or trust may be made, provided the transferee agrees to
be bound in writing by the terms of this Agreement. In addition, notwithstanding the
foregoing, if a Selling Stockholder is a corporation, business trust, association, limited
liability company, partnership, limited liability partnership, limited liability limited
partnership or other entity (collectively, the “Entities” or, individually, the “Entity”),
such Selling Stockholder may transfer shares of Common Stock or securities convertible into
or exchangeable or exercisable for any shares of Common Stock to any Entity which is
directly or indirectly controlled by, or is under common control with such Selling
Stockholder and, if such Selling Stockholder is a partnership or limited liability company,
such Selling Stockholder may transfer the Common Stock or securities convertible into or
exchangeable or exercisable for any shares of Common Stock to its partners, former partners
or an affiliated partnership (or members, former members or an affiliated limited liability
company) managed by the same manager or managing partner (or managing member, as the case
may be) or management company, or managed by an entity controlling, controlled by, or under
common control with, such manager or managing partner (or managing member) or management
company in accordance with partnership (or membership) interests; provided, however, that in
any such case, it shall be a condition to the transfer that the transferee execute an
agreement stating that the transferee is receiving and holding such shares of Common Stock
or securities convertible into or exchangeable or exercisable for any shares of Common Stock
subject to the provisions of this Agreement and there shall be no further transfer of such
Common Stock or securities convertible into or exchangeable or exercisable for any shares of
Common Stock except in accordance with this Agreement, and provided
further that any such transfer shall not
involve a disposition for value.
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(v) Such Selling Stockholder has not taken and will not take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(vi) Such Selling Stockholder shall immediately notify you if any event occurs, or of
any change in information relating to such Selling Stockholder, which results in the Time of
Sale Disclosure Package or in the Prospectus (as amended or supplemented) or any Issuer
General Free Writing Prospectus including an untrue statement of a material fact or omitting
to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(vii) Such Selling Stockholder shall deliver to the Custodian or the Representative, as
appropriate, prior to the First Closing Date, a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company and the Selling Stockholders contained
herein, to the performance by the Company and the Selling Stockholders of their respective
obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no
stop order suspending the effectiveness of the Registration Statement or any part thereof, any Rule
462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use of
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall
have been issued; no proceedings for the issuance of such an order shall have been initiated or
threatened; any request of the Commission for additional information (to be included in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to your satisfaction; and the NASD
shall have raised no objection to the fairness and reasonableness of the underwriting terms and
arrangements.
(b) No Underwriter shall have advised the Company that the Registration Statement, the Time of
Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any
Issuer Free Writing Prospectus, contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, neither the Company nor any of its subsidiaries shall have incurred any material
liabilities or obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other rights to purchase
the capital stock of the Company or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising in the ordinary
course of business), or any loss by strike, fire, flood, earthquake, accident or other calamity,
whether or not covered by insurance, incurred by the Company or any subsidiary, the effect of
which, in any such case described above, in your judgment, makes it impractical or inadvisable to
offer or deliver the Securities on the terms and in the manner contemplated in the Time of Sale
Disclosure Package and in the Prospectus.
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(d) On or after the Time of Sale (i) no downgrading shall have occurred in the rating accorded
any of the Company’s securities by any “nationally recognized statistical organization,” as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii)
no such organization shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company’s securities or;
(e) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, the opinion of Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, counsel for
the Company, dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Company and its subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and its subsidiaries has full corporate power and
authority to own its properties and conduct its business as currently being carried on and
as described in the Registration Statement, in the Time of Sale Disclosure Package and in
the Prospectus, and is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction listed in a schedule to such counsel’s opinion.
(ii) The capital stock of the Company conforms as to legal matters to the description
thereof contained in the Time of Sale Disclosure Package and in the Prospectus under the
caption “Description of Capital Stock.”
(iii) All of the issued and outstanding shares of the capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable, and the
holders thereof are not subject to personal liability by reason of being such holders.
(iv) The Securities to be issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of being such holders.
Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument known
to such counsel to which the Company is a party or by which the Company is bound. To such
counsel’s knowledge, neither the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives rise to any rights for or
relating to the registration of any shares of Common Stock or other securities of the
Company.
(v) All of the issued and outstanding shares of capital stock of each of the Company’s
subsidiaries have been duly and validly authorized and issued and are fully paid and
nonassessable, and, to such counsel’s knowledge, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens, proxies, equities or
other encumbrances, all of the issued and outstanding shares of such stock. To such
counsel’s knowledge, except as described in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus, there are no options, warrants, agreements,
contracts or other rights in existence to purchase or acquire from the Company or any
subsidiary any shares of the capital stock of the Company or any subsidiary of the Company.
(vi) The Registration Statement has become effective under the Securities Act and, to
such counsel’s knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted or, to the
knowledge of such counsel, threatened by the Commission.
(vii) The descriptions in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus of statutes, regulations, legal and governmental proceedings,
contracts and other documents are accurate and fairly present the information required to be
shown; and such counsel does not know of any statutes, regulations, legal or governmental
proceedings or contracts or other documents required to be described in the Time of Sale
Disclosure Package or in the Prospectus (or required to be filed under the Exchange Act if
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upon such filing they would be incorporated in whole or in part, by
reference therein) or included as exhibits to the Registration Statement that are not
described or included as required.
(viii) The Company has full corporate power and authority to enter into this Agreement,
and this Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid, legal and binding obligation of the Company enforceable in accordance
with its terms (except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and subject to
general principles of equity).
(ix) The execution, delivery and performance of this Agreement and the consummation of
the transactions herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, rule or regulation, any
agreement or instrument known to such counsel to which the Company is a party or by which it
is bound or to which any of its property is subject, the Company’s charter or by-laws, or
any order or decree known to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its respective properties.
(x) No consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as may be required under the
Securities Act or state securities laws.
(xi) The Registration Statement, the Statutory Prospectus included in the Time of Sale
Disclosure Package and the Prospectus, and any amendment thereof or supplement thereto,
comply, and as of their respective effective or issue dates complied, as to form in all
material respects with the requirements of the Securities Act and the Rules and Regulations.
(xii) Each document filed pursuant to the Exchange Act (other than the financial
statements and supporting schedules included therein, as to which no opinion need to be
rendered) and incorporated by reference in the Time of Sale Disclosure Package or in the
Prospectus complied when so filed as to form in all material respects with the Exchange Act.
In rendering such opinion such counsel may rely (i) as to matters of law other than New York
law, the Delaware General Corporation Law and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion and that such
counsel shall state that such opinion or opinions of local counsel are satisfactory to them and
that they believe they and you are justified in relying thereon and (ii) as to matters of fact, to
the extent such counsel deems reasonable upon certificates of officers of the Company and its
subsidiaries provided that the extent of such reliance is specified in such opinion.
In addition, such counsel shall include a statement to the effect that on the basis of
conferences with officers and other representatives of the Company, representatives of the
Underwriters and representatives of the independent accountants for the Company, examination of
documents referred to in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus and such other procedures as such counsel deemed appropriate, but without independent
review or verification and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, nothing has come to the attention of such counsel that causes such
counsel to believe that (a) any part of the Registration Statement or any amendment thereof
(including any information omitted from the Registration Statement at the time it became effective
pursuant to Rule 430A of the Rules and Regulations but that is deemed to be part of and included in
the Registration Statement pursuant to Rule 430A) when such part became effective and as of such
Closing Date (including any 462(b) Registration Statement), contained or contains any untrue
statement of a material fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (b) that the documents
specified in a schedule to such counsel’s letter, consisting of those included in the Time of Sale
Disclosure Package as of the Time of Sale and as of such Closing Date, included or includes any
untrue statement of material fact or omitted or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading;
or (c) that the Prospectus (as of its issue date and as of such Closing Date) included or includes
any untrue statement of material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the circumstances under which they were
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made,
not misleading; it being understood that such counsel need express no belief as to the financial
statements or other financial data included in any of the documents mentioned in this paragraph.
(d) On the First Closing Date, there shall have been furnished to you, as Representative of
the several Underwriters, the opinion of ___, counsel for the Selling
Stockholders, dated such Closing Date and addressed to you, to the effect that:
(i) Each of the Selling Stockholders is the sole record and beneficial owner of the
Securities to be sold by such Selling Stockholder and delivery of the certificates for the
Securities to be sold by each Selling Stockholder pursuant to this Agreement, upon payment
therefor by the Underwriters, will pass marketable title to such Securities to the
Underwriters and the Underwriters will acquire all the rights of such Selling Stockholder in
the Securities (assuming the Underwriters have no knowledge of an adverse claim), free and
clear of any security interests, claims, liens or other encumbrances.
(ii) Each of the Selling Stockholders has the power and authority to enter into the
Custody Agreement, the Power of Attorney and this Agreement and to perform and discharge
such Selling Stockholder’s obligations thereunder and hereunder; and this Agreement, the
Custody Agreements and the Powers of Attorney have been duly and validly authorized,
executed and delivered by (or by the Attorneys-in-Fact, or either of them, on behalf of) the
Selling Stockholders and are valid and binding agreements of the Selling Stockholders,
enforceable in accordance with their respective terms (except as rights to indemnity
hereunder or thereunder may be limited by federal or state securities laws and except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally and subject to general principles of equity).
(iii) The execution and delivery of this Agreement, the Custody Agreement and the Power
of Attorney and the performance of the terms hereof and thereof and the consummation of the
transactions herein and therein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute, rule or
regulation, or any agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which any of its
property is subject, any such Selling Stockholder’s charter or by-laws, or any order or
decree known to such counsel of any court or government agency or body having jurisdiction
over such Selling Stockholder or any of its respective properties.
(iv) No consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and performance of this
Agreement, the Custody Agreement and the Power of Attorney or for the consummation of the
transactions contemplated hereby and thereby, including the sale of the Securities being
sold by such Selling Stockholder, except such as may be required under the Securities Act.
In rendering such opinion such counsel may rely (i) as to matters of law other than New York
law **[, — add other appropriate jurisdictions] and federal law, upon the opinion or opinions of
local counsel provided that the extent of such reliance is specified in such opinion and that such
counsel shall state that such opinion or opinions of local counsel are satisfactory to them and
that they believe they and you are justified in relying thereon and (ii) as to matters of fact, to
the extent such counsel deems reasonable upon certificates of officers of the Selling Stockholders
provided that the extent of such reliance is specified in such opinion.
(e) On each Closing Date, there shall have been furnished to you, as Representative of the
several Underwriters, such opinion or opinions from Faegre & Xxxxxx LLP, counsel for the several
Underwriters, dated such Closing Date and addressed to you, with respect to the formation of the
Company, the validity of the Securities, the Registration Statement, the Time of Sale Disclosure
Package, the Prospectus and other related matters as you reasonably may request, and such counsel
shall have received such papers and information as they request to enable them to pass upon such
matters.
(f) On each Closing Date you, as Representative of the several Underwriters, shall have
received a letter of Berenson LLP, dated such Closing Date and addressed to you, confirming that
they are independent public accountants within the meaning of the Securities Act and are
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in compliance with the
applicable requirements relating to the qualifications of accountants under Rule 2-01 of Regulation
S-X of the Commission, and stating, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the Time of Sale Disclosure Package, as of a date not prior to the date
hereof or more than five days prior to the date of such letter), the conclusions and findings of
said firm with respect to the financial information and other matters covered by its letter
delivered to you concurrently with the execution of this Agreement, and the effect of the letter so
to be delivered on such Closing Date shall be to confirm the conclusions and findings set forth in
such prior letter.
(g) On each Closing Date, there shall have been furnished to you, as Representative of the
Underwriters, a certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, in all material respects, as if made at and as of such 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 such Closing Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale, nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and
(A) each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto contain, and contained, when such part of
the Registration Statement (or such amendment) became effective, all statements and
information required to be included therein, each part of the Registration
Statement, or any amendment thereof, does not contain, and did not contain, when
such part of the Registration Statement (or such amendment) became effective, any
untrue statement of a material fact or omit to state, and did not omit to state when
such part of the Registration Statement (or such amendment) became effective, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented, does not
include and did not include as of its date, or the time of first use within the
meaning of the Rules and Regulations, any untrue statement of a material fact or
omit to state and did not omit to state as of its date, or the time of first use
within the meaning of the Rules and Regulations, a material fact necessary to make
the statements therein, in light of the circumstances under which they were made,
(B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, include, nor included as of the Time of Sale any untrue
statement of a material fact or omits, or omitted as of the Time of Sale, to state
any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(C) since the Time of Sale, there has occurred no event required to be set
forth in an amended or supplemented prospectus which has not been so set forth,
(D) subsequent to the respective dates as of which information is given in the
Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business, or declared
or paid any dividends or made any distribution of any kind with respect to its
capital stock, and except as disclosed in the Time of Sale Disclosure Package and in the Prospectus, there has not been any change in
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the capital stock
(other than a change in the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock, of
the Company, or any of its subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising
in the ordinary course of business), or any loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, incurred by the
Company or any subsidiary, and
(E) except as stated in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of its
subsidiaries is a party before or by any court or governmental agency, authority or
body, or any arbitrator, which might result in any Material Adverse Change.
(h) On the First Closing Date, there shall have been furnished to you, as Representative of
the several Underwriters, a certificate or certificates, dated such Closing Date and addressed to
you, signed by each of the Selling Stockholders or either of such Selling Stockholder’s
Attorneys-in-Fact to the effect that the representations and warranties of such Selling Stockholder
contained in this Agreement are true and correct as if made at and as of such Closing Date, and
that such Selling Stockholder has complied with all the agreements and satisfied all the conditions
on such Selling Stockholder’s part to be performed or satisfied at or prior to such Closing Date.
(i) The NASD shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
(k) The Securities shall be approved for listing on The Nasdaq Global Market.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company and each Selling Stockholder, jointly and severally, agree to indemnify and
hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities Act or otherwise
(including in settlement of any litigation if such settlement is effected with the written consent
of the Company and/or such Selling Stockholders, as the case may be), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i)
an untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, including the information deemed to be a part of the Registration Statement at the time
of effectiveness and at any subsequent time pursuant to Rules 430A and 430C of the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action (except that with
respect to this clause (i), each Selling Stockholder shall only be liable, severally and not
jointly, to the extent, and only to the extent, that such untrue statement or alleged untrue
statements or omissions were included in reliance upon and in conformity with written information
relating to the Selling Stockholder furnished or confirmed to the Company by the Selling
Stockholder specifically for use in the preparation thereof); or (ii) in whole or in part upon any
inaccuracy in the representations and warranties of the Company or the Selling Stockholders
contained herein (except that with respect to this clause (ii), each Selling Stockholder shall only
be liable, severally and not
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jointly, for its representations and warranties set forth in Section 2(b)
hereof); or (iii) in whole or in part upon any failure of the Company or the Selling Stockholders
to perform their respective obligations hereunder or under law (except that with respect to this
clause (iii), each Selling Stockholder shall only be liable severally and not jointly for its
respective obligations hereunder and under law); provided, however, that neither the Company nor
any Selling Stockholder shall be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any such amendment or
supplement or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you, specifically for
use in the preparation thereof; and further provided, however, that in no event shall any Selling
Stockholder be liable under the provisions of this Section 6 for any amount in excess of the
aggregate amount of proceeds such Selling Stockholder received from the sale of the Securities
pursuant to this Agreement.
In addition to their other obligations under this Section 6(a), the Company and each Selling
Stockholder, jointly and severally, agree that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this Section 6(a), they
will reimburse each Underwriter on a monthly basis for all reasonable legal fees or other expenses
incurred in connection with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the Company’s and/or the Selling Stockholder’s obligation to
reimburse the Underwriters for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriter that received such
payment shall promptly return it to the party or parties that made such payment, together with
interest, compounded daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time by U.S. Bank, N.A.
(the “Prime Rate”). Any such interim reimbursement payments which are not made to an Underwriter
within 30 days of a request for reimbursement shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement shall be in addition to any liabilities which the
Company or the Selling Stockholders may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company and each Selling Stockholder
against any losses, claims, damages or liabilities to which the Company and the Selling
Stockholders may become subject, under the Securities Act or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of such Underwriter),
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus,
the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto, or any
Issuer Free Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company by you, or by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company and the Selling Stockholders for any legal or
other expenses reasonably incurred by the Company or any such Selling Stockholder in connection
with investigating or defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve the indemnifying party from any liability that it may have to any indemnified party except
to the extent such indemnifying party has been materially prejudiced by such failure. In case any
such action shall be brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of investigation; provided,
however,
-23-
that if, in the sole judgment of the Representative, it is advisable for the Underwriters
to be represented as a group by separate counsel, the Representative shall have the right to employ
a single counsel to represent the Representative and all Underwriters who may be subject to
liability arising from any claim in respect of which indemnity may be sought by the Underwriters
under subsection (a) of this Section 6, in which event the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties and reimbursed to the
Underwriters as incurred (in accordance with the provisions of the second paragraph in subsection
(a) above).
The indemnifying party under this Section 6 shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of counsel as
contemplated by this Section 6, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding and (b) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders on the one hand and
the Underwriters on the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and Selling Stockholders bear
to the total underwriting discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company, the Selling Stockholders or the Underwriters and the parties’ relevant intent,
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 contributions pursuant to this subsection (d) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable considerations referred to
in the first sentence of this subsection (d). The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several
in proportion to their respective underwriting obligations and not joint.
-24-
(e) The obligations of the Company and the Selling Stockholders under this Section 6 shall be
in addition to any liability which the Company and the Selling Stockholders may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Securities Act; and the obligations of the Underwriters under
this Section 6 shall be in addition to any liability that the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his consent, is named in the Registration Statement as about to
become a director of the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company or any Selling Stockholder within
the meaning of the Securities Act.
(f) The Underwriters severally confirm and the Company and each Selling Stockholder
acknowledges that the statements with respect to the public offering of the Securities by the
Underwriters set forth in the *[list specific paragraph numbers] paragraphs under the heading
“Underwriting” in the Time of Sale Disclosure Package and in the Prospectus are correct and
constitute the only information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company and the Selling Stockholders herein or in certificates delivered pursuant
hereto, including but not limited to the agreements of the several Underwriters, the Company and
the Selling Stockholders contained in Section 6 hereof, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof, or the Company or any of its officers, directors, or controlling
persons, or any Selling Stockholders or any controlling person thereof, and shall survive delivery
of, and payment for, the Securities to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased does
not aggregate more than 10% of the total amount of Firm Shares set forth in Schedule II hereto, the
remaining Underwriters shall be obligated to take up and pay for (in proportion to their respective
underwriting obligations hereunder as set forth in Schedule II hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in Schedule II hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event of any such termination
neither the Company nor any Selling Stockholder shall be under any liability to any Underwriter
(except to the extent provided in Section 4(a)(vii), Section 4(b)(ii) and Section 6 hereof) nor
shall any Underwriter (other than an Underwriter who shall have failed, otherwise than for some
reason permitted under this Agreement, to purchase the amount of Firm Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company or the Selling
Stockholders (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, the Representative or the Company shall have the
right to postpone the First Closing Date for not more than seven business days in order that the
necessary changes in the Registration Statement, in the Time of Sale Disclosure Package, in the
Prospectus or in any other documents, as well as any other arrangements, may be effected. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 8.
9. Termination of this Agreement.
(a) You, as Representative of the several Underwriters, shall have the right to terminate this
Agreement by giving notice to the Company and the Selling Stockholders as hereinafter specified at
any time at or prior to the First Closing Date, and the option referred to in Section 3(b), if
exercised, may be cancelled at any time prior to the Second Closing Date, if (i) the Company or the Selling Stockholders shall have failed,
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refused
or been unable, at or prior to such Closing Date, to perform any agreement on its or their part to
be performed hereunder, (ii) any condition of the Underwriters’ obligations hereunder is not
fulfilled, (iii)trading in the Company’s Common Stock shall have been suspended by the Commission
or the Nasdaq Global Market or trading in securities generally on the Nasdaq Global Market, New
York Stock Exchange or the American Stock Exchange shall have been suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the Nasdaq Global Market, New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by federal or state authorities, or
(vi) there shall have occurred any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration by the United States of a national emergency
or war, any change in financial markets, any substantial change or development involving a
prospective substantial change in United States or international political, financial or economic
conditions, or any other calamity or crisis that, in your judgment, is material and adverse and
makes it impractical or inadvisable to proceed with the completion of the sale of and payment for
the Securities. Any such termination shall be without liability of any party to any other party
except that the provisions of Section 4(a)(vii), Section 4(b)(i), Section 4(b)(ii) and Section 6
hereof shall at all times be effective and shall survive such termination.
(b) If you elect to terminate this Agreement as provided in this Section, the Company and an
Attorney-in-Fact, on behalf of the Selling Stockholders, shall be notified promptly by you by
telephone, confirmed by letter.
10. Default by One or More of the Selling Stockholders or the Company. If one or more of the
Selling Stockholders shall fail at the First Closing Date to sell and deliver the number of
Securities which such Selling Stockholder or Selling Stockholders are obligated to sell hereunder,
then the Underwriters may at your option, by notice from you to the Company and the non-defaulting
Selling Stockholders, either (a) terminate this Agreement without any liability on the part of any
Underwriter or, except as provided in Sections 4(a)(viii) and 4(b)(ii) hereof, any non-defaulting
party or (b) elect to purchase the Securities which the Company and the non-defaulting Selling
Stockholders have agreed to sell hereunder.
In the event of a default by any Selling Stockholder as referred to in this Section, either
you or the Company or, by joint action only, the non-defaulting Selling Stockholders shall have the
right to postpone the First Closing Date for a period not exceeding seven days in order to effect
any required changes in the Registration Statement, in the Time of Sale Disclosure Package or in
the Prospectus or in any other documents or arrangements.
If the Company shall fail at the First Closing Date to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any Underwriter or, except as provided in Sections 4(a)(viii) and 4(b)(ii)
hereof, any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company or any Selling Stockholders
so defaulting from liability, if any, in respect of such default.
11. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed, delivered or telecopied to the Representative
c/o Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attention: General Counsel (telecopy no. (000) 000-0000) except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to such Underwriter at the address stated in
the Underwriters’ Questionnaire furnished by such Underwriter in connection with this offering; if
to the Company, shall be mailed, delivered or telecopied to it at Everlast Worldwide Inc., 0000
Xxxxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxx (telecopy no. (000)
000-0000); if to any of the Selling Stockholders, at the address of the Attorneys-in-Fact as set
forth in the Powers of Attorney, or in each case to such other address as the person to be notified
may have requested in writing. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or
any provision herein contained. The term “successors and assigns” as herein used shall not include any
purchaser, as such purchaser, of any of the Securities from any of the several Underwriters.
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13. Absence of Fiduciary Relationship. The Company and each of the Selling Stockholders
acknowledges and agrees that: (a) the Representative has been retained solely to act as an
underwriter in connection with the sale of the Securities and that no fiduciary, advisory or agency
relationship between the Company or any Selling Stockholder and the Representative has been created
in respect of any of the transactions contemplated by this Agreement, irrespective of whether the
Representative has advised or are advising the Company or any Selling Stockholder on other matters;
(b) the price and other terms of the Securities set forth in this Agreement were established by the
Company and each of the Selling Stockholders following discussions and arms-length negotiations
with the Representative and the Company and each of the Selling Stockholders is capable of
evaluating and understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the Representative and
its affiliates are engaged in a broad range of transactions which may involve interests that differ
from those of the Company and each of the Selling Stockholders and that the Representative has no
obligation to disclose such interest and transactions to the Company or any Selling Stockholder by
virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the
Representative is acting, in respect of the transactions contemplated by this Agreement, solely for
the benefit of the Representative and the other Underwriters, and not on behalf of the Company or
any Selling Stockholder; (e) it, he or she waives to the fullest extent permitted by law, any
claims it may have against the Representative for breach of fiduciary duty or alleged breach of
fiduciary duty in respect of any of the transactions contemplated by this Agreement and agrees that
the Representative shall have no liability (whether direct or indirect) to the Company or any
Selling Stockholder in respect of such a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company, or any Selling Stockholder.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
15. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company, the Selling Stockholders and the
several Underwriters in accordance with its terms.
| Very truly yours, | ||||||
| Everlast Worldwide Inc. | ||||||
| By | ||||||
| **[Title] | ||||||
| Selling Stockholders | ||||||
| By | ||||||
| Attorney-in-Fact | ||||||
| Confirmed as of the date first above mentioned, on behalf of themselves and the other several Underwriters named in Schedule II hereto. | ||||||
| Xxxxx Xxxxxxx & Co. | ||||||
By |
||||||
| Managing Director | ||||||
SCHEDULE I
Selling Stockholders
| Number of | ||||
| Firm Shares | ||||
| Name | to be Sold | |||
Total |
||||
SCHEDULE II
| Underwriter | Number of Firm Shares (1) | |||
Xxxxx Xxxxxxx & Co. |
||||
Total |
||||
| (1) | The Underwriters may purchase up to an additional ___Option Shares, to the extent the option described in Section 3(b) of the Agreement is exercised, in the proportions and in the manner described in the Agreement. |
SCHEDULE III
Issuer General Free Writing Prospectuses
SCHEDULE IV
Pricing Information
