Exhibit 1.1
______________ Shares
DOVER SADDLERY, INC.
Common Stock
UNDERWRITING AGREEMENT
________, 0000
X.X. Xxxxxxxxx + Co., LLC
as Representative of the several
Underwriters named in Schedule I hereto
x/x X.X. Xxxxxxxxx + Co., LLC
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Dover Saddlery, Inc., a Delaware corporation (the "Company"), and
the persons listed on Schedule II hereto (the "Selling Stockholders"), propose,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as Representative (the "Representative"), an aggregate
of ________ shares (the "Firm Shares") of the Company's common stock, $0.0001
par value per share (the "Common Stock"). Of the _____ Firm Shares, _____ are to
be issued and sold by the Company and _____ are to be sold by the Selling
Stockholders. The respective amounts of the Firm Shares to be purchased by each
of the several Underwriters are set forth opposite their names on Schedule I
hereto. In addition, the Selling Stockholders propose to grant to the
Underwriters an option to purchase up to an additional ______________ shares of
Common Stock (the "Option Shares") for the purpose of covering over-allotments
in connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are collectively called the "Shares."
The Company has prepared and filed in conformity with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the published rules and regulations thereunder (the "Rules") adopted by the
Securities and Exchange Commission (the "Commission"), a Registration Statement
(as hereinafter defined) on Form S-1 (No. 333-127888), including a preliminary
prospectus relating to the Shares, and such amendments thereof as may have been
required to the date of this Agreement. Copies of such Registration Statement
(including all amendments thereof) and of the related Preliminary Prospectus (as
hereinafter defined) have heretofore been delivered by the Company to you. The
term "Preliminary Prospectus" means any preliminary prospectus included at any
time as a part of the Registration
Statement or filed with the Commission by the Company pursuant to Rule 424(a) of
the Rules. The term "Registration Statement" as used in this Agreement means the
initial registration statement (including all exhibits and financial schedules),
as amended at the time and on the date it becomes effective (the "Effective
Date"), including the information (if any) contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules. If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules (the "462(b)
Registration Statement"), then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration Statement.
The term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement at the time of effectiveness or, if Rule
430A of the Rules is relied on, the term Prospectus shall also include the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representative deems advisable. The Company and the
Selling Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each Preliminary Prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
1. Sale, Purchase, Delivery and Payment for the Shares. On the basis
of the representations, warranties and agreements contained in, and subject to
the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $_____ per
share (the "Initial Price"), the number of Firm Shares set forth opposite
the name of such Underwriter under the column "Number of Firm Shares to be
Purchased from the Company" on Schedule I to this Agreement, subject to
adjustment in accordance with Section 9 hereof. The Selling Stockholders
agree to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Selling
Stockholders, at the Initial Price, the number of Firm Shares set forth
opposite the name of such Underwriter under the column "Number of Firm
Shares to be Purchased from the Selling Stockholders" on Schedule I to
this Agreement, subject to adjustment in accordance with Section 9 hereof.
(b) The Selling Stockholders hereby grant to the several
Underwriters an option to purchase, severally and not jointly, all or any
part of the Option Shares at the Initial Price. The number of Option
Shares to be purchased by each Underwriter shall be the same percentage
(adjusted by the Representative to eliminate fractions) of the total
number of Option Shares to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm Shares. Such option may be exercised
only to cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to
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time thereafter within 30 days after the date of this Agreement, in each
case upon written, facsimile or electronic notice, by the Representative
to the Selling Stockholders no later than 12:00 noon, New York City time,
on the business day before the Firm Shares Closing Date or at least two
business days before the Option Shares Closing Date (as defined below), as
the case may be, setting forth the number of Option Shares to be purchased
and the time and date (if other than the Firm Shares Closing Date) of such
purchase.
(c) Payment of the purchase price for, and delivery of certificates
for, the Firm Shares shall be made at the offices of X.X. Xxxxxxxxx + Co.,
LLC, 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, XX, 00000 at 7:00 a.m.,
San Francisco time, on the third business day following the date of this
Agreement or at such time on such other date, not later than ten (10)
business days after the date of this Agreement, as shall be agreed upon by
the Company and the Representative (such time and date of delivery and
payment are called the "Firm Shares Closing Date"). In addition, in the
event that any or all of the Option Shares are purchased by the
Underwriters, payment of the purchase price and delivery of the
certificates for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the
Representative and the Selling Stockholders, on each date of delivery as
specified in the notice from the Representative to the Selling
Stockholders (such time and date of delivery and payment are called the
"Option Shares Closing Date"). The Firm Shares Closing Date and any Option
Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
(d) Payment for the Shares shall be made to the Company and the
Selling Stockholders by wire transfer of immediately available funds or by
one or more certified or official bank check or checks in same day funds
drawn to the order of the Company and to the Selling Stockholders for the
shares purchased from the Company and the Selling Stockholders, against
delivery of the respective certificates to the Representative for the
respective accounts of the Underwriters of certificates for the Shares to
be purchased by them.
(e) Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representative shall
request at least two full business days before the Firm Shares Closing
Date or, in the case of Option Shares, on the day or days of notice of
exercise of the option as described in Section 1(b) and shall be delivered
by or on behalf of the Company and the Selling Stockholders to the
Representative through the facilities of the Depository Trust Company
("DTC") for the account of the applicable Underwriter(s). Unless delivered
through the facilities of the DTC, the Company will cause the certificates
representing the Shares to be made available for checking and packaging,
at such place as is designated by the Representative, on the full business
day before the Firm Shares Closing Date (or the applicable Option Shares
Closing Date in the case of the Option Shares).
2. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Firm Shares Closing Date and as of each Option Shares Closing Date (if any), as
follows:
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(a) On the Effective Date, the Registration Statement complied, and
on the date of the Prospectus, the date any post-effective amendment to
the Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with
the requirements of the Securities Act and the Rules and the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of
the Commission thereunder. The Registration Statement did not, as of the
Effective Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and on the Effective
Date and the other dates referred to above neither the Registration
Statement nor the Prospectus, nor any amendment thereof or supplement
thereto, will contain any untrue statement of a material fact or will omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. Upon the filing of
the preliminary prospectus with the Registration Statement filed with the
Commission on November 2, 2005 (the "Distributed Prospectus"), or when any
amendment thereof or supplement thereto was first filed with the
Commission, such Distributed Prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. If applicable, each Preliminary Prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T. If Rule 434 is used, the Company will comply with the requirements of
Rule 434 and the Prospectus shall not be "materially different," as such
term is used in Rule 434, from the Prospectus included in the Registration
Statement at the time it became effective. Notwithstanding the foregoing,
none of the representations and warranties in this Section 2(a) shall
apply to statements in, or omissions from, the Registration Statement or
the Prospectus made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by the Representative on behalf
of the several Underwriters for use in the Registration Statement or the
Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the
Representative on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus is certain information contained,
under the caption "Plan of Distribution" in the Prospectus, specifically,
first paragraph under the subcaption "Commissions and Discounts" and the
information contained under the subcaptions "The OpenIPO Auction Process",
"Requirements for Valid Bids", "The Closing of the Auction and Allocation
of Shares", and "Short Sales, Stabilizing Transactions and Penalty Bids".
(b) The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued by the Commission and no proceedings for that
purpose have been instituted or, to the knowledge of the Company, are
threatened under the Securities Act. Any required filing of the
Prospectus
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and any supplement thereto pursuant to Rule 424(b) of the Rules has been
or will be made in the manner and within the time period required by such
Rule 424(b).
(c) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of and at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; and such financial
statements and related schedules and notes thereto, and the unaudited
financial information filed with the Commission as part of the
Registration Statement, have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the
periods involved. The summary and selected financial data included in the
Prospectus present fairly the information shown therein as at the
respective dates and for the respective periods specified and have been
presented on a basis consistent with the consolidated financial statements
set forth in the Prospectus and other financial information. The pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements and
have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(d) Ernst & Young LLP ("Ernst & Young"), the Company's registered
public accounting firm, whose reports are filed with the Commission as a
part of the Registration Statement, are and, during the periods covered by
their reports, were independent registered public accountants as required
by the Securities Act and the Rules. All auditing and non-audit services,
other than de minimus services, provided to the Company by Ernst & Young
since August 26, 2005, have been preapproved by the Company's board of
directors in accordance with Section 10A of the Exchange Act.
(e) The Company and its subsidiaries: (i) have been duly
incorporated and exist as corporations in good standing under the laws of
the States of their respective incorporation, and have full power and
corporate authority to own or lease their respective properties and to
conduct their business as described in the Registration Statement and the
Prospectus; and (ii) are duly qualified to do business as a foreign
corporation and are in good standing in all jurisdictions in which the
character of the respective properties owned or leased or the nature of
the respective businesses transacted by them makes qualification necessary
except for such jurisdictions where the failure to so qualify individually
or in the aggregate would not have a material adverse effect on the
assets, properties, condition, financial or otherwise, or in the results
of operations, business affairs or business prospects of the Company and
its subsidiaries considered as a whole (a "Material Adverse Effect"). The
Company and its subsidiaries have employees located solely in the
Commonwealth of Massachusetts and the States of Texas, Delaware and New
Hampshire, and in no other jurisdiction in the United States. Except for
the subsidiaries set forth in Schedule 2(e), the Company has no
subsidiaries and does not own any capital stock or other equity securities
in any other entity, except for instruments
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or interests held by the Company solely for investment. To the Company's
knowledge, no proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification. Neither the Company nor any of
its subsidiaries own, lease or license any asset or property outside the
United States of America.
(f) The Company and each of its subsidiaries have all requisite
corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and
from all governmental or regulatory bodies or any other person or entity
(collectively, the "Permits"), to own, lease and license their respective
assets and properties and conduct their respective businesses, all of
which are valid and in full force and effect, except where the lack of
such Permits, individually or in the aggregate, would not have a Material
Adverse Effect. The Company and each of its subsidiaries have fulfilled
and performed in all material respects all of their material obligations
with respect to such Permits and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
Company or its subsidiaries thereunder. Except as may be required under
the Securities Act and state and foreign securities or Blue Sky laws, no
other Permits are required to enter into, deliver and perform this
Agreement and to issue and sell the Shares.
(g) To the knowledge of the Company, the Company and each of its
subsidiaries own or possess legally enforceable rights to use all patents,
patent rights, inventions, trademarks, trademark applications, trade
names, service marks, copyrights, copyright applications, licenses
know-how and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of their respective businesses.
Neither the Company nor any of its subsidiaries has received any notice
of, or is not aware of, any infringement of or conflict with asserted
rights of others with respect to any Intangibles that have not been
resolved.
(h) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property, and good and
marketable title to all other property owned by them, respectively, in
each case free and clear of all liens, encumbrances, claims, security
interests and defects, except such as do not materially affect the value
of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company and its subsidiaries.
All property held under lease by the Company and its subsidiaries is held
by them under valid, existing and enforceable leases, free and clear of
all liens, encumbrances, claims, security interests and defects, except
such as are not material and do not materially interfere with the use made
or proposed to be made of such property by the Company and its
subsidiaries. Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus: (i) there has
not been any Material Adverse Effect; (ii) neither the Company nor any of
its subsidiaries has sustained any loss or interference with their
respective assets, businesses or properties (whether owned or leased) from
fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which would have
a Material Adverse Effect; and (iii) since the date of the latest
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balance sheet included in the Registration Statement and the Prospectus,
except as disclosed in the Registration Statement and the Prospectus,
neither the Company nor its subsidiaries have (A) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed
money, except such liabilities or obligations incurred in the ordinary
course of business, (B) entered into any transaction not in the ordinary
course of business or (C) declared or paid any dividend or made any
distribution on any shares of their respective capital stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase or otherwise
acquire any shares of their respective capital stock.
(i) There is no document, contract, understanding or other agreement
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or Rules. Each
description of a contract, document, understanding or other agreement in
the Registration Statement and the Prospectus accurately reflects in all
respects the terms, conditions and limitations of the underlying contract,
document, understanding or other agreement. Each contract, document,
understanding or other agreement described in the Registration Statement
and Prospectus or listed in the Exhibits to the Registration Statement is
in full force and effect and is valid and enforceable by and against the
Company or one or more of its subsidiaries, as the case may be, in
accordance with its terms, except as would not result in a Material
Adverse Effect. Neither the Company nor any of one or more of its
subsidiaries, if a subsidiary is a party, nor to the Company's knowledge,
any other party is in default in the observance or performance of any term
or obligation to be performed by it or its subsidiaries under any such
agreement, and no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case which default or
event, individually or in the aggregate, would have a Material Adverse
Effect. No default exists, and no event has occurred which with notice or
lapse of time or both would constitute a default, in the due performance
and observance of any term, covenant or condition, by the Company or its
subsidiary, if a subsidiary is a party thereto, of any other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which Company or its properties or business, or a subsidiary or its
properties or business, may be bound or affected which default or event,
individually or in the aggregate, would have a Material Adverse Effect.
(j) The statistical and market related data included in the
Registration Statement are based on or derived from sources that the
Company believes to be reliable and accurate.
(k) Neither the Company nor any of its subsidiaries is in violation
of any term or provision of their respective charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(l) This Agreement has been duly authorized, executed and delivered
by the Company.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby
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(including, without limitation, the issuance and sale of a number of
Shares by the Company) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default
(or an event which with notice or lapse of time or both would constitute a
default) under, or require any consent or waiver under, or result in the
execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or its subsidiaries pursuant to the
terms of any agreement, contract, lease, license indenture, mortgage, deed
trust, note or other arrangement, understanding or instrument to which the
Company or any of its subsidiaries is a party or by which either the
Company or its subsidiaries or any of their properties or businesses is
bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or any of its
subsidiaries or violate any provision of the charter or by-laws of the
Company or any of its subsidiaries, except for such consents or waivers
which have already been obtained and are in full force and effect, or for
which the failure to have in full force and effect, would not result in a
Material Adverse Effect.
(n) The Company has the duly authorized and validly issued
outstanding capitalization [as of _____, 2005] as set forth under the
caption "Capitalization" in the Prospectus and will have the adjusted
capitalization as of [________, 2005] (giving effect to the closing of the
offering contemplated by this Agreement) set forth therein on the Closing
Date, based on the assumptions set forth therein. The certificates
evidencing the Shares are in due and proper legal form and have been duly
authorized for issuance by the Company. All of the issued and outstanding
shares of Common Stock have been duly and validly issued and are fully
paid and nonassessable. All of the issued and outstanding shares of
capital stock of the Company were issued in transactions that were exempt
from the registration requirements of the Securities Act, without
violation of preemptive rights, rights of first refusal or similar rights.
There are no statutory preemptive or other similar rights to subscribe for
or to purchase or acquire any shares of Common Stock of the Company or any
of its subsidiaries or any such rights pursuant to its Certificate of
Incorporation or by-laws or any agreement or instrument to or by which the
Company or any of its subsidiaries is a party or bound. The Shares, when
issued and sold pursuant to this Agreement will be duly and validly
issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in
the Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is
no commitment, plan or arrangement to issue, any share of stock of the
Company or any of its subsidiaries or any security convertible into, or
exercisable or exchangeable for, such stock. The securities of the Company
conform to the descriptions thereof contained in the Registration
Statement and the Prospectus. All outstanding shares of capital stock of
each of the Company's subsidiaries have been duly authorized and validly
issued, and are fully paid and nonassessable and are owned directly by the
Company free and clear of any security interests, liens, encumbrances,
equities or claims, other than those described in the Prospectus.
(o) No holder of any security of the Company has any right, which
has not been waived, to have any security owned by such holder included in
the Registration Statement or to demand registration of any security owned
by such holder for a period of
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180 days after the date of this Agreement. Each director and executive
officer of the Company and each stockholder of the Company listed on
Schedule III has delivered to the Representative his, her or its written
lock-up agreement in the form attached to this Agreement as Exhibit A
hereto ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes and will constitute legal, valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(q) Neither the Company nor any of its subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect.
The Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers or contractors which would
have a Material Adverse Effect. The Company is not aware of any threatened
or pending litigation between the Company or its subsidiaries and any of
its executive officers which, if adversely determined, could have a
Material Adverse Effect and has no reason to believe that such officers
will not remain in the employment of the Company.
(r) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the current or prior directors, officers,
stockholders, customers or suppliers of the Company, on the other hand,
which is required to be described in the Registration Statement and the
Prospectus that is not so described.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of the Common Stock or any security of the Company to facilitate the sale
or resale of any of the Shares.
(t) The Company and each of its subsidiaries has filed all Federal,
state, local and foreign tax returns which are required to be filed
through the date hereof, which returns are true and correct in all
material respects or has received timely extensions thereof, and has paid
all taxes shown on such returns and all assessments received by it to the
extent that the same are material and have become due. There are no tax
audits or investigations pending, which if adversely determined would have
a Material Adverse Effect; nor are there any material proposed additional
tax assessments against the Company or any of its subsidiaries.
(u) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers, Inc. Automated Quotation
System ("Nasdaq"),
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National Market System, and listed and duly admitted to trading on the
Nasdaq National Market. A registration statement has been filed on Form
8-A pursuant to Section 12 of the Exchange Act, which registration
statement complies in all material respects with the Exchange Act.
(v) 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 the quotation of the Common Stock on the Nasdaq National
Market, nor has the Company received any notification that the Commission
or the Nasdaq National Market is contemplating terminating such
registration or quotation.
(w) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of
its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles in the United States and to maintain asset
accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; the chief executive officer and the chief financial officer
of the Company have made all certifications required by the Xxxxxxxx-Xxxxx
Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and any related rules and
regulations promulgated by the Commission which are applicable to the
Company, and the statements contained in any such certification are
complete and correct; the Company maintains "disclosure controls and
procedures" (as defined in Rule 13a-15(e) under the Exchange Act) to
ensure that material information relating to the Company is made known to
the Company's principal executive officer and the Company's principal
financial officer or persons performing similar functions; the Company has
established and maintains internal controls over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act); the Company is
otherwise in compliance in all material respects with all effective
provisions of the Xxxxxxxx-Xxxxx Act applicable to the Company and is
actively taking steps to ensure that it will be in compliance with other
provisions of the Xxxxxxxx-Xxxxx Act upon such provisions becoming
applicable to the Company.
(x) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus, all of which insurance is in full force and effect. The
Company and each of its subsidiaries are in compliance with the terms of
such policies and instruments in all material respects; and neither the
Company nor any subsidiary of the Company has any reason to believe that
it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that is not
materially greater than the current cost. Neither the Company nor any of
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its subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.
(y) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made and
is in full force and effect.
(z) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit, claim, proceeding or investigation
pending or, to the Company's knowledge, threatened against the Company or
any of its subsidiaries before or by any court, regulatory body or
administrative agency or any other governmental agency or body, domestic
or foreign, that: (i) questions the validity of the capital stock of the
Company or this Agreement or any action taken or to be taken by the
Company pursuant to or in connection with this Agreement; (ii) is required
to be disclosed in the Registration Statement and the Prospectus and is
not so disclosed (and such proceedings, if any, as are summarized in the
Registration Statement and the Prospectus are accurately summarized in all
material respects); or (iii) may have a Material Adverse Effect.
(aa) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any
five percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representative.
(bb) (i) The Company and each of its subsidiaries is in compliance
in all material respects with all rules, laws and regulation relating to
the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Law") which are
applicable to their respective businesses; (ii) neither the Company nor
its subsidiaries has received any notice from any governmental authority
or third party of an asserted claim under Environmental Laws; (iii) the
Company and each of its subsidiaries has received all permits, licenses or
other approvals required of them under applicable Environmental Laws to
conduct its business and is in compliance with all terms and conditions of
any such permit, license or approval; (iv) to the Company's knowledge, no
facts currently exist that will require the Company or any of its
subsidiaries to make future material capital expenditures to comply with
Environmental Laws; and (v) no property which is or has been owned, leased
or occupied by the Company or its subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et. seq.) or otherwise designated as a contaminated site under applicable
state or local law. Neither the Company nor any of its subsidiaries has
been named as a "potentially responsible party" under the CERCLA 1980.
11
(cc) In the ordinary course of their respective businesses, the
Company and its subsidiaries periodically review the effect of
Environmental Laws on their respective businesses, operations and
properties, in the course of which the Company and its subsidiaries
identify and evaluate associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis
of such review, the Company and it subsidiaries have reasonably concluded
that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(dd) Neither the Company nor any of its subsidiaries is, and, after
giving effect to the offering and sale of the Shares and the application
of proceeds thereof as described in the Prospectus, will be, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act").
(ee) The Company does not, directly or indirectly, including through
any subsidiary, have any outstanding personal loans or other credit
extended to or for any director or executive officer of the Company or any
of its subsidiaries.
(ff) Neither the Company nor any other person associated with or
acting on behalf of the Company including, without limitation, any
director, officer, agent or employee of the Company or its subsidiaries,
has, directly or indirectly, while acting on behalf of the Company or its
subsidiaries: (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment.
(gg) The operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, 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 it subsidiaries with respect to the Money
Laundering Laws is pending, or to the best knowledge of the Company,
threatened.
(hh) 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 currently subject
to any U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department ("OFAC"); and the Company will not,
directly or indirectly, use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other
12
person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(ii) Except as described in the Prospectus, the Company has not sold
or issued any securities during the six-month period preceding the date of
the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(jj) The Company has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of the U.S. Employee Retirement
Income Security Act of 1974 ("ERISA") and the regulations and published
interpretations thereunder with respect to each "plan" as defined in
Section 3(3) of ERISA and such regulations and published interpretations
in which its employees are eligible to participate and each such plan is
in compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. No
"Reportable Event" (as defined in Section 12 of ERISA) has occurred with
respect to any "Pension Plan" (as defined in ERISA) for which the Company
could have any liability which would have a Material Adverse Effect.
(kk) The Company has not incurred any liability for a fee,
commission or other compensation on account of the employment of an
investment banker, financial advisor, broker, dealer, placement agent or
finder in connection with the transactions contemplated by this Agreement
and the Prospectus other than as contemplated hereby.
(ll) Neither the Company, nor its directors and officers have
distributed nor will they distribute prior to the later of (i) the Firm
Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectus, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Securities Act.
3. Representations and Warranties of the Selling Stockholders. Each
of the Selling Stockholders, severally and not jointly, hereby represent,
warrant and agree with each Underwriter as of the date hereof, as of the Firm
Shares Closing Date and, if the Selling Stockholders sell Option Shares, as of
each Option Shares Closing Date (if any), as follows:
(a) Each Selling Stockholder has caused certificates for the number
of Shares to be sold by such Selling Stockholder hereunder to be delivered
to StockTrans, Inc. (the "Custodian"), endorsed in blank or with blank
stock powers duly executed, with a signature appropriately guaranteed,
such certificates to be held in custody by the Custodian for delivery,
pursuant to the provisions of this Agreement and an agreement dated
____________ among the Custodian and the Selling Stockholders
substantially in the form attached hereto as Exhibit B (the "Custody
Agreement").
(b) Each Selling Stockholder has granted an irrevocable power of
attorney substantially in the form attached hereto as Exhibit C (the
"Power of Attorney") to the person named therein, on behalf of each such
Selling Stockholder, to execute and deliver this Agreement and any other
document necessary or desirable in connection with the
13
transactions contemplated hereby and to deliver the shares to be sold by
each Selling Stockholder pursuant hereto.
(c) This Agreement, the Custody Agreement, the Power of Attorney and
the Lock-Up Agreement have each been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes the valid and legally binding agreement of each Selling
Stockholder, enforceable against each such Selling Stockholder in
accordance with its terms.
(d) The execution and delivery by each Selling Stockholder of this
Agreement and the performance by each Selling Stockholder of its
obligations under this Agreement, including the sale and delivery of the
Shares to be sold by each such Selling Stockholder and the consummation of
the transactions contemplated herein and compliance by each Selling
Stockholder with its obligations hereunder, do not and will not, whether
with or without the giving of notice or the passage of time or both, (i)
violate or contravene any provision of the charter or bylaws or other
organizational instrument of any Selling Stockholder, if applicable, or
any applicable law, statute, regulation or filing or any agreement or
other instrument binding upon any Selling Stockholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over any Selling Stockholder, (ii) conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the shares to be
sold by any Selling Stockholder or any property or assets of any Selling
Stockholder pursuant to the terms of any agreement or instrument to which
any Selling Stockholder is a party or by which any Selling Stockholder may
be bound or to which any of the property or assets of any Selling
Stockholder is subject or (iii) require any consent, approval,
authorization or order of or registration or filing with any court or
governmental agency or body having jurisdiction over it, except such as
may be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares which have been or
will be effected in accordance with this Agreement.
(e) Each Selling Stockholder has, and on the Firm Shares Closing
Date and each Option Share Closing Date, if applicable, will have, valid
and marketable title to the Shares to be sold by such Selling Stockholder
free and clear of any lien, claim, security interest or other encumbrance,
including, without limitation, any restriction on transfer, except as
otherwise described in the Registration Statement and Prospectus.
(f) Each Selling Stockholder has, and on the Firm Shares Closing
Date and each Option Share Closing Date, if applicable, will have, full
legal right, power and authority, and any approval required by law, to
sell, assign, transfer and deliver the Shares to be sold by such Selling
Stockholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by each
Selling Stockholder pursuant to this Agreement, assuming each Underwriter
has no notice of any adverse claim, the several Underwriters will receive
valid and marketable title to such Shares free and clear of any lien,
claim, mortgage, pledge, security interest or other encumbrance.
14
(h) All information relating to each Selling Stockholder furnished
in writing by such Selling Stockholder expressly for use in the
Registration Statement and Prospectus is, and on each Closing Date will
be, true, correct and complete, and does not, and on each Closing Date
will not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make such information not misleading.
(i) Each Selling Stockholder has reviewed the Registration Statement
and Prospectus and, although such Selling Stockholder has not
independently verified the accuracy or completeness of all the information
contained therein, nothing has come to the attention of such Selling
Stockholder that would lead such Selling Stockholder to believe that (i)
on the Effective Date, the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein in order to make the statements made therein
not misleading and (ii) on the Effective Date the Prospectus contained
and, on each Closing Date will contain, no untrue statement of a material
fact or omitted or omits to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, misleading; provided, that, with respect to any Selling
Stockholder, this representation and warranty is limited to information
furnished in writing by or on behalf of such Selling Stockholder expressly
for use in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(j) The sale of Shares by each Selling Stockholder pursuant to this
Agreement is not prompted by such Selling Stockholder's knowledge of any
material information concerning the Company or any of its subsidiaries
which is not set forth in the Prospectus.
(k) No Selling Stockholder has taken, nor will any Selling
Stockholder take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(l) No Selling Stockholder has any actual knowledge that any
representation or warranty of the Company set forth in Section 2 above is
untrue or inaccurate in any material respect.
(m) The representations and warranties of each Selling Stockholder
in the Custody Agreement are, and on each Closing Date will be, true and
correct.
4. Conditions of the Underwriters' Obligations. The obligations of
the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representative and the
Prospectus shall have been timely filed with the Commission in accordance
with Section 5(a) of this Agreement.
(b) No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus shall have been or shall be in effect, no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the satisfaction of the Commission and the Representative. If the Company
has elected to rely upon Rule 430A, Rule 430A information previously
omitted from the effective Registration Statement pursuant to Rule 430A
shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely filing,
or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements
of Rule 430A. If the Company has elected to rely upon Rule 434, a term
sheet shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) within the prescribed time period.
15
(c) The Representative shall be reasonably satisfied that: (i) the
representations and warranties of the Company and the Selling Stockholders
contained in this Agreement and in the certificates delivered pursuant to
Section 4(d) shall be, (x) if qualified as to materiality, true and
correct and (y) in all other cases, true and correct in all material
respects, when made and on and as of each Closing Date as if made on such
date; (ii) since the Effective Date, no event has occurred that should
have been set forth in a supplement or amendment to the Prospectus that
has not been set forth in an effective supplement or amendment; and (iii)
since the respective dates as of which information is given in the
Registration Statement in the form in which it originally became effective
and the Prospectus contained therein, there has not been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, financial condition or results of
operations of the Company and its subsidiaries, and since such dates,
neither the Company nor any of its subsidiaries has entered into any
material transaction not referred to in the Registration Statement in the
form in which it originally became effective and the Prospectus contained
therein. The Company shall have performed all covenants and agreements and
satisfied all the conditions contained in this Agreement required to be
performed or satisfied by it at or before such Closing Date and the
Selling Stockholders shall have, in all material respects, performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by them at or before
such Closing Date.
(d) The Representative shall have received on each Closing Date a
certificate, addressed to the Representative and dated as of such Closing
Date, of the chief executive officer and the chief financial officer of
the Company to the effect that: (i) the representations, warranties and
agreements of the Company in this Agreement were true and correct in all
material respects when made and are true and correct in all material
respects as of such Closing Date; (ii) the Company has performed all
covenants and agreements and satisfied all conditions contained herein;
(iii) they have each carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (B)
since the Effective Date no event has occurred which should have been set
forth in a supplement or otherwise required an amendment to the
Registration Statement or the Prospectus; and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and, to their knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act.
(e) The Representative shall have received on each Closing Date a
certificate addressed to the Representative and dated as of such Closing
Date, of each Selling Stockholder, to the effect that: (i) the
representations, warranties and agreements of each Selling Stockholder in
this Agreement were true and correct in all material respects when made
and are true and correct in all material respects as of such Closing Date;
(ii) each Selling Stockholder has performed all covenants and agreements
and satisfied all conditions contained herein; and (iii) each Selling
Stockholder has carefully examined the Registration Statement and the
Prospectus and, in the opinion of such Selling
16
Stockholder, (A) with respect to the information relating to such Selling
Stockholder, as of the Effective Date, the Registration Statement and
Prospectus did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (B) since the Effective
Date no event has occurred with respect to such Selling Stockholder which
should have been set forth in a supplement or otherwise required an
amendment to the Registration Statement or the Prospectus.
(f) The Representative shall have received a certificate on each
Closing Date signed by the Secretary of the Company to the effect that, as
of the Closing Date, the Secretary certifies as to the accuracy of the
Company's charter and bylaws, the resolutions of the Board of Directors
relating to the offering contemplated hereby, the form of stock
certificate representing the Shares and copies of all communications with
the Commission; as to the execution and delivery of this Agreement; as to
the incumbency and signature of persons signing this Agreement, the
Registration Statement and other related documents; as to the approval of
the Shares for listing on the Nasdaq National Market; as to the Company's
compliance with all agreements and performance or satisfaction of all
conditions required hereunder; as to the consideration received for all
outstanding shares of the Company's Common Stock; and as to such other
matters as Underwriters' counsel may reasonably request.
(g) The Representative shall have been furnished evidence in the
usual written or electronic form from the appropriate authorities of the
several jurisdictions, or other evidence satisfactory to the
Representative, of the good standing and qualifications of the Company.
(h) The Representative shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from Ernst
& Young addressed to the Representative and dated, respectively, the date
of this Agreement and each such Closing Date, in form and substance
reasonably satisfactory to the Representative containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus.
(i) The Representative shall have received a copy of a letter from
Ernst & Young addressed to the Company, stating that their review of the
Company's internal accounting controls, to the extent they deemed
necessary in establishing the scope of their examination of the Company's
financial statements filed with the Registration Statement and the
Prospectus, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(j) The Representative shall have received on each Closing Date from
Xxxxxxx XxXxxxxxx LLP, counsel for the Company, an opinion, addressed to
the Representative and dated as of such Closing Date, substantially in the
form attached hereto as Exhibit D.
17
(k) The Representative shall have received on each Closing Date from
Xxxxx Xxxxxxxx Xxxxxxxx Pachios & Xxxxx LLP, counsel for the Company and
the Selling Stockholders, an opinion, addressed to the Representative and
dated as of such Closing Date, substantially in the form attached hereto
as Exhibit E.
(l) The legality and sufficiency of the sale of the Shares hereunder
and the validity and form of the certificates representing the Shares, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration and of the Prospectus (except as to the
financial statements and financial information contained therein) shall
have been approved at or prior to the Closing Date by Xxxxxxxx & Xxxxxxxx
LLP, counsel for the underwriters. The Representative shall have received
on each Closing Date from Xxxxxxxx & Xxxxxxxx an opinion, addressed to the
Representative and dated as of such Closing Date, with respect to the
issuance and sale of the Shares, the Registration Statement and the
Prospectus and such other related matters as the Underwriters reasonably
may request and such counsel shall have received such documents and other
information as they request to enable them to pass upon such matters.
(m) The Representative shall have received copies of the Lock-up
Agreements executed by each entity or person listed on Schedule III
hereto.
(n) The Shares shall have been approved for quotation on the Nasdaq
National Market, subject only to official notice of issuance.
(o) The Company and each Selling Stockholder shall have furnished or
caused to be furnished to the Representative such further certificates or
documents as the Representative shall have reasonably requested.
5. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will (A) prepare and timely file with the
Commission under Rule 424(b), a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A; and (B) not file with the
Commission any amendment to the Registration Statement or supplement
to the Prospectus of which the Underwriters shall not previously
have been advised and furnished with a copy a reasonable period of
time prior to the proposed filing and as to which the Underwriters
shall not have given their consent or which is not in compliance
with the Securities Act or the Rules.
(ii) The Company shall promptly advise the Representative in
writing (A) when any post-effective amendment to the Registration
Statement shall have become effective or any supplement to the
Prospectus shall have been filed, (B) of any request by the
Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of
18
the Registration Statement or of any order preventing or suspending
the use of any Preliminary Prospectus or the institution or
threatening of any proceeding for that purpose and (D) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or
the Rules, the Company promptly shall prepare and file with the
Commission, subject to paragraph (i) of this Section 5(a), an
amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representative as soon as practicable,
but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earning statement
(which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representative and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all amendments
thereof and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the Securities Act or the Rules, as
many copies of any Preliminary Prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Representative may
reasonably request. If applicable, the copies of the Registration
Statement and Prospectus and each amendment and supplement thereto
furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(vi) The Company shall cooperate with the Representative and
its counsel in endeavoring to qualify the Shares for offer and sale
in connection with the offering under the laws of such jurisdictions
as the Representative may designate and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be
19
required in connection therewith, as a condition thereof, to qualify
as a foreign corporation, or as a dealer in securities, or to
execute a general consent to service of process in any jurisdiction
or subject itself to taxation as doing business in any jurisdiction.
(vii) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act and the Rules or
the Exchange Act, will file all reports and other documents required
to be filed with the Commission pursuant to Sections 13, 14 or 15 of
the Exchange Act within the time periods required by the Exchange
Act and the regulations promulgated thereunder.
(viii) Without the prior written consent of X.X. Xxxxxxxxx +
Co., LLC, for a period of 180 days after the date of this Agreement,
the Company and each of its individual directors and executive
officers shall not issue, sell or register with the Commission
(other than on Form S-8 or on any successor form), or otherwise
dispose of, directly or indirectly, any equity securities of the
Company (or any securities convertible into, exercisable for or
exchangeable for equity securities of the Company), except for the
issuance of the Shares pursuant to the Registration Statement and
the issuance of shares pursuant to the Company's existing stock
option plan or bonus plan as described in the Registration Statement
and the Prospectus. In the event that during this period, (A) any
shares are issued pursuant to the Company's existing stock option
plan or bonus plan that are exercisable during such 180 day period
or (B) any registration is effected on Form S-8 or on any successor
form relating to shares that are exercisable during such 180 day
period, the Company shall obtain the written agreement of such
grantee or purchaser or holder of such registered securities that,
for a period of 180 days after the date of this Agreement, such
person will not, without the prior written consent of X.X. Xxxxxxxxx
+ Co., LLC, offer for sale, sell, distribute, grant any option for
the sale of, or otherwise dispose of, directly or indirectly, or
exercise any registration rights with respect to, any shares of
Common Stock (or any securities convertible into, exercisable for,
or exchangeable for any shares of Common Stock) owned by such
person. Notwithstanding the foregoing, if: (1) during the last 17
days of the 180-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 180-day expiration
period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 180-day
period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material
news or material event.
(ix) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
20
(x) Prior to the Closing Date, the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of any of them, or the offering of the Shares
without the prior written consent of the Representative unless in
the judgment of the Company and its counsel, and after notification
to the Representative, such press release or communication is
required by law.
(xi) The Company will apply the net proceeds from the offering
of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(xii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar (which may be the same entity as the transfer agent) for
its Common Stock.
(xiii) The Company will not take, directly or indirectly, and
will use its best efforts to cause its officers, directors or
affiliates not to take, directly or indirectly, any action designed
to, or that might in the future be expected to cause or result in,
stabilization or manipulation of the price of any securities of the
Company.
(b) The Company agrees to pay, or reimburse if paid by the
Representative, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each Preliminary
Prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus, and the printing, filing and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the various jurisdictions as the Representative shall
designate, including the reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration and qualification
and the preparation, printing, distribution and shipment of preliminary
and supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representative and to the Underwriters of
copies of each Preliminary Prospectus, the Prospectus and all amendments
or supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use in
connection with the offering and sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold; (v) the filing fees of the NASD in
connection with its review of the terms of the public offering and
reasonable fees and disbursements of counsel for the Underwriters in
connection with such review; (vi) inclusion of the Shares for quotation on
the Nasdaq National Market; and (vii) all transfer taxes, if any, with
respect to the sale and delivery of the Shares by the Company to the
Underwriters. Subject to the provisions of Section 8, the Underwriters
agree to pay, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Underwriters
21
under this Agreement not payable by the Company pursuant to the preceding
sentence, including, without limitation, the fees and disbursements of
counsel for the Underwriters.
(c) The Selling Stockholders, jointly and severally, will pay all
expenses incident to the performance of their respective obligations
under, and the consummation of the transactions contemplated by, this
Agreement, including (i) any stamp duties, capital duties and stock
transfer taxes, if any, payable upon the sale of the Shares to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (ii) the fees and disbursements
of their respective counsel and accountants.
6. Indemnification.
(a) Each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall be indemnified as follows:
(i) The Company hereby agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and
all losses, claims, damages, expenses and liabilities, joint or
several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject
under the Securities Act, the Exchange Act or other Federal or
state law or regulation, at common law or otherwise, insofar as
such losses, claims, damages, expenses or liabilities arise out
of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto, or in any Blue Sky
application or other information or other documents executed by
the Company filed in any state or other jurisdiction to qualify
any or all of the Shares under the securities laws thereof (any
such application, document or information being hereinafter
referred to as a "Blue Sky Application") or arise out of or are
based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
such indemnity shall not inure to the benefit of any Underwriter
(or any person controlling such Underwriter) on account of any
losses, claims, damages, expenses or liabilities arising from
the sale of the Shares to any person by such Underwriter if such
untrue statement or omission or alleged untrue statement or
omission was made in such Preliminary Prospectus, the
Registration Statement or the Prospectus, or such amendment or
supplement thereto, or in any Blue Sky Application in reliance
upon and in conformity with information furnished in writing to
the Company by the Representative on behalf of any Underwriter
specifically for use therein and not corrected by such
Underwriter in a timely manner. This indemnity agreement will be
in addition to any liability which the Company may otherwise
have.
(ii) In the event that, at the time any liability arises
under Section 6(a)(i), the Company is insolvent or otherwise
unable or unwilling to promptly perform all of its obligations
under such Section after reasonable efforts by the Underwriters
to cause the Company to so perform, each of Xxxxxxx Xxx,
Xxxxxxxx Grylls and Xxxxxxx Xxxxx (collectively, the "Management
Selling Stockholders"), severally and not jointly, hereby agrees
to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act against any and all losses, claims, damages, expenses and
liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange
Act or other Federal or state law or regulation, at common law
or otherwise, insofar as such losses, claims, damages, expenses
or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment thereof or
supplement thereto, or in any Blue Sky Application or arise out
of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages, expenses
or liabilities arising from the sale of the Shares to any person
by such Underwriter if such untrue statement or omission or
alleged untrue statement or omission was made in such
Preliminary Prospectus, the Registration Statement or the
Prospectus, or such amendment or supplement thereto, or in any
Blue Sky Application in reliance upon and in conformity with
information furnished in writing to the Company by the
Representative on behalf of any Underwriter specifically for use
therein and not corrected by such Underwriter in a timely
manner; and provided further, that a Management Selling
Stockholder shall only be liable under this paragraph for [ ]
if such Management Selling Stockholder was in fact aware of, or
reasonably should have been aware of, [ ]. Notwithstanding
the foregoing, the indemnity provided in this paragraph, except
with respect to fraud, shall cease to be in effect upon the date
that is eighteen months following the date hereof.
(iii) The Selling Stockholders other than the Management
Selling Stockholders, severally and not jointly, hereby agree to
indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act
against any loss, liability, claim, damage or expense if such
loss, liability, claim, damage or expense arises out of any
untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with
information furnished in writing by or on behalf of such Selling
Stockholder expressly for use in the Registration Statement (or
any amendment thereto), or any Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto).
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, the Selling Stockholders and each person, if any, who controls
the Company or the Selling Stockholders within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, each director of
the Company and each officer of the Company who signs the Registration
Statement, against any losses, claims, damages, expenses or liabilities to
which such party may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, expenses 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 any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, 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 any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representative
expressly for use therein; provided, however, that the obligation of each
Underwriter to indemnify the Company or the Selling Stockholders
(including any controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6(a) or 6(b) shall be available to
any party who shall fail to give notice as provided in this Section 6(c)
if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or
otherwise than
22
under this Section. In case any such action, suit or proceeding 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 reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (ii) the indemnified party shall have
been advised by counsel satisfactory to the indemnifying parties that
there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party
(in which case the indemnifying parties shall not have the right to direct
the defense of such action on behalf of the indemnified party) or (iii)
the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties.
(d) An indemnifying party shall not be liable for any settlement of
any action, suit and proceeding or claim effected without its prior
written consent, which consent shall not be unreasonably withheld or
delayed.
(e) Notwithstanding the foregoing, the liability of any Selling
Stockholder under this Section 6 shall not exceed the product of the
number of Shares sold by such Selling Stockholder and the initial public
offering price of the Shares as set forth in the Prospectus (net of
underwriting discounts and commissions).
7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6(a) or 6(b) is due in accordance with its terms but for any reason is
unavailable to or insufficient to hold harmless an indemnified party in respect
to any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate losses,
liabilities, claims, damages and expenses (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claims asserted, but
after deducting any contribution received by any person entitled hereunder to
contribution from any person who may be liable for contribution) incurred by
such indemnified party, as incurred, 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 hand from the
offering of the Shares pursuant to this Agreement or, if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to above but also the relative fault of the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other hand in connection with the statements or
23
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 7, (i) no Underwriter
(except as may be provided in the Agreement Among Underwriters) shall be
required to contribute any amount in excess of the underwriting discount
applicable to the Shares purchased by the Underwriter hereunder; and (ii) no
Selling Stockholders shall be required to contribute any amount in excess of the
aggregate net proceeds of the sale of Shares received by the Selling
Stockholders. 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. For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each director of the Company including any person who,
with his or her consent, is named in the Registration Statement as about to
become a director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
one or more Selling Stockholders within the meaning of the Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company or any or more Selling Stockholders, as the case may
be. Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 7. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
underwriting commitments and not joint. The provisions of this Section 7 shall
not affect any agreement among the Company and the Selling Stockholders with
respect to contribution.
8. Termination.
(a) This Agreement may be terminated with respect to the Shares to
be purchased on a Closing Date by the Representative by notifying the
Company and the Selling Stockholders at any time at or before a Closing
Date in the absolute discretion of the Representative if: (i) there has
occurred any material adverse change in the securities markets or any
event, act or occurrence that has materially disrupted, or in the opinion
of the Representative, will in the future materially disrupt, the
securities markets or there shall be such a material adverse change in
general financial, political or economic
24
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the
Representative, inadvisable or impracticable to market the Shares or
enforce contracts for the sale of the Shares; (ii) there has occurred any
outbreak or material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such
as to make it, in the judgment of the Representative, inadvisable or
impracticable to market the Shares or enforce contracts for the sale of
the Shares; (iii) trading in the Shares or any securities of the Company
has been suspended or materially limited by the Commission or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, LLC or the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum ranges for prices for securities
shall have been fixed, or maximum ranges for prices for securities have
been required, by any of said exchanges or by such system or by order of
the Commission, the NASD or any other governmental or regulatory
authority; (iv) a banking moratorium has been declared by any state or
Federal authority; or (v) in the sole discretion of the Representative,
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the assets, properties, condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as a whole,
whether or not arising in the ordinary course of business.
(b) If this Agreement is terminated pursuant to any of its
provisions, neither the Company nor the Selling Stockholders shall be
under any liability to any Underwriter, and no Underwriter shall be under
any liability to the Company or any Selling Stockholders; provided,
however, that in the event of any such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all expenses incident to
the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in Section 5(b); and,
provided, further, that if this Agreement is terminated by the
Representative or the Underwriters because of any failure, refusal or
inability on the part of the Company or the Selling Stockholders to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company shall reimburse the Underwriters for all out-of-pocket expenses
(including the fees and disbursements of their respective counsel)
incurred by them in connection with the proposed purchase and sale of the
Shares or in contemplation of performing their obligations hereunder.
Notwithstanding anything in this Section 8(b) to the contrary, no
Underwriter who shall have failed or refused to purchase the Shares agreed
to be purchased by it under this Agreement shall be relieved of liability
to the Company or the other Underwriters for damages occasioned by its
refusal.
9. Substitution of Underwriters. If any Underwriter shall default in
its obligation to purchase on any Closing Date the Shares agreed to be purchased
hereunder on such Closing Date, the Representative shall have the right, within
36 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase such Shares on the terms
contained herein. If, however, the Representative shall not have completed such
arrangements within such 36-hour period, then the Company shall be entitled to a
further period of 36 hours within which to procure another party or other
parties satisfactory to the Underwriters to purchase such Shares on such terms.
If, after giving effect to any arrangements
25
for the purchase of the Shares of a defaulting Underwriter or Underwriters by
the Representative and the Company as provided above, the aggregate number of
Shares which remains unpurchased on such Closing Date does not exceed 10% of the
aggregate number of all the Shares that all the Underwriters are obligated to
purchase on such date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such date and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based on
the number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default. In any such case, either the
Representative or the Company and the Selling Stockholders shall have the right
to postpone the applicable Closing Date for a period of not more than seven days
in order to effect any necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus
or any other documents), and the Company agrees to file promptly any amendments
to the Registration Statement or the Prospectus which in the opinion of the
Company and the Underwriters and their counsel may thereby be made necessary.
If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representative and the
Company as provided above, the aggregate number of such Shares which remains
unpurchased exceeds 10% of the aggregate number of all the Shares to be
purchased at such date, then this Agreement, and, with respect to a Closing Date
which occurs after the First Closing Date, the obligations of the Underwriters
to purchase and of the Selling Stockholders to sell the Option Shares to be
purchased and sold on such date, shall terminate, without liability on the part
of any non-defaulting Underwriter to the Company or the Selling Stockholders,
and without liability on the part of the Company or the Selling Stockholders,
except as provided in Sections 5(b), 6, 7 and 8. The provisions of this Section
9 shall not in any way affect the liability of any defaulting Underwriter to the
Company or the nondefaulting Underwriters arising out of such default. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section 9 with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company, the Selling
Stockholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or the Company or the
Selling Stockholders or any of their respective officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. In addition, the provisions of Sections
5(b), 6, 7 and 8 shall survive the termination or cancellation of this
Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, or the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement.
26
The term "successors and assigns" shall not include any purchaser of Shares from
any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representative, x/x X.X. Xxxxxxxxx + Co., LLC, 000
Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000 Attention: Xxxxxxxx Xxxx, Esq., with a
copy to Xxxxxxx X. Xxxxxx, Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000 and (b) if to the Company, to its agent for
service as such agent's address appears on the cover page of the Registration
Statement with a copy to Xxxx X. Xxxxxxxxx III, Xxxxxxx XxXxxxxxx LLP, 000
Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, and (c) if to the Selling Stockholders to
Xxxxxxx X. Xxx, Xxxxxxxx A.R. Grylls and Xxxxx X. Xxxxxx with a copy to Xxxx
X. Xxxxxxxx, Xxxxx Xxxxxxxx Xxxxxxxx Pachios & Xxxxx LLP, 00 Xxxxx Xxxx
Xxxxxx, X.X. Xxx 0000 Xxxxxxx, XX 00000-0000.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
THEREOF. THE COMPANY AND THE UNDERWRITERS AGREE TO WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF EITHER PARTY WITH
RESPECT TO ANY MATTER WHATSOEVER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
THE PURCHASE OF THE SHARES HEREUNDER. THE COMPANY ALSO HEREBY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND
COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND EACH OF THE PARTIES HERETO SUBMITS TO THE JURISDICTION
OF SUCH COURTS IN ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
AND AGREES NOT TO COMMENCE ANY SUIT, ACTION OR PROCEEDING RELATING THERETO
EXCEPT IN SUCH COURTS, AND WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
RIGHT TO MOVE TO DISMISS OR TRANSFER ANY ACTION BROUGHT IN SUCH COURT ON THE
BASIS OF ANY OBJECTION TO PERSONAL JURISDICTION, VENUE OR INCONVENIENT FORUM.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
27
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
DOVER SADDLERY, INC.
By: ________________________________
Name:
Title:
SELLING STOCKHOLDERS
By: ________________________________
Name:
Title:
Confirmed:
X.X. XXXXXXXXX + CO., LLC
On behalf of itself and as Representative
of the several Underwriters named in
Schedule I annexed hereto.
X.X. XXXXXXXXX + CO., LLC
By: _____________________________
Name:
Title:
28
SCHEDULE I
Number of
Firm Shares to
Name be Purchased
X.X. Xxxxxxxxx + Co., LLC
--------------
Total:
SCHEDULE II
Number of
Firm Shares to
Name of Selling Stockholders be Sold
--------------
Total:
SCHEDULE III
LOCK-UP SIGNATORIES
Xxxxxxx X. Day
Xxxxxxxx A.R. Grylls
Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxxxx as Trustee of the Xxxxxx Xxxx Xxxxxx Trust
Xxxxxxx Xxxxxx
Xxxxx Xxxx
Xxxxxx Xxxxxxxxxxxx
Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx
Xxxx Xxxxx
Xxxxx Xxxxx
Citizens Ventures, Inc.
SCHEDULE 2(e)
Subsidiaries
Dover Saddlery, Inc., a Massachusetts corporation
Xxxxx Brothers, Inc., a Texas corporation
Exhibit A
FORM OF LOCK-UP AGREEMENT
_______ __, 2005
X.X. Xxxxxxxxx+Co., LLC
As Representative of the Underwriters
c/o X.X. Xxxxxxxxx+Co., LLC
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned is a securityholder of Dover Saddlery, Inc., a Delaware
corporation (the "Company"), and wishes to facilitate the proposed initial
public offering (the "Offering") of the Company's common stock, par value $.0001
per share (the "Common Stock") pursuant to a Registration Statement on Form S-1
(the "Registration Statement").
In consideration of the foregoing, and in order to induce you to act as
the representative to the underwriters in the Offering, the undersigned hereby
irrevocably agrees not to, directly or indirectly, sell, offer, contract to
sell, assign, transfer the economic risk of ownership in, make any short sale,
pledge or otherwise dispose of any shares of capital stock or other ownership
interests of the Company or any securities convertible into or exchangeable or
exercisable for or any other rights to purchase or acquire the Company's capital
stock or other ownership interests of the Company that the undersigned
beneficially owns (other than shares sold under the Registration Statement),
without the prior written consent of X.X. Xxxxxxxxx+Co., LLC, for a period
commencing on the date hereof and ending 180 days after the effective date of
the Registration Statement.
Notwithstanding the foregoing: (a) if the undersigned is an individual, he
or she may transfer any shares of the Company's capital stock or securities
convertible into or exchangeable or exercisable for the Company's capital stock
or other ownership interests of the Company either during his or her lifetime or
on death (i) by gift, will or intestacy or (ii) to a member or members of his or
her immediate family or to a partnership or trust, the partners or beneficiaries
of which are exclusively the undersigned and/or a member or members of his or
her immediate family; and (b) if the undersigned is a partnership, trust,
corporation or similar entity, it may distribute any such shares or securities
to its partners or stockholders; provided, however, that in each such case,
prior to any such transfer, each transferee shall execute an agreement,
reasonably satisfactory to X.X. Xxxxxxxxx+Co., LLC, pursuant to which each
transferee shall agree to receive and hold such shares of capital stock, or
securities convertible into or exchangeable or exercisable for the capital
stock, subject to the provisions hereof, and there shall be no further transfer
except in accordance with the provisions hereof. For the purposes of this
paragraph, "immediate family" shall mean spouse, domestic partner, lineal
descendant, father, mother, brother or sister of the transferor.
Further notwithstanding the foregoing, if: (1) during the last 17 days of
the 180-day restricted period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or (2) prior to the
expiration of the 180-day expiration period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the 180-day period, the restrictions imposed by this letter shall continue to
apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
If for any reason the Underwriting Agreement relating to the Offering is
not executed on or prior to March 31, 2006, or if such Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the shares of Common Stock,
this agreement shall likewise be terminated.
The undersigned hereby waives any rights of the undersigned under any
agreement, instrument or understanding to sell shares of Common Stock or any
other security issued by the Company (or any predecessor company) pursuant to
the Registration Statement, and acknowledges and agrees that for a period
commencing on the date hereof and ending 180 days after the effective date of
the Registration Statement, the undersigned will not make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock issued by the Company or any security convertible into or exercisable or
exchangeable for Common Stock issued by the Company.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The agreements herein shall remain
enforceable by X.X. Xxxxxxxxx+Co., LLC notwithstanding the replacement,
substitution or addition of any new underwriters to the Offering. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of Common Stock or other
securities of the Company held by the undersigned except in compliance with this
agreement.
Very truly yours,
Dated: ________________________ __________________________
Signature
__________________________
Printed Name and Title
