3,000,000 Shares of Common Stock
HEARTLAND EXPRESS, INC.
UNDERWRITING AGREEMENT
January 18, 2002
BEAR, XXXXXXX & CO. INC.
DEUTSCHE BANC ALEX. XXXXX
BB&T CAPITAL MARKETS
XXXXXX XXXXXX & COMPANY, INC.
XXXXXXXX INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxxxx X. Xxxxxx and the Xxxxxx Charitable Foundation, each stockholders
of Heartland Express, Inc., a corporation organized and existing under the laws
of Nevada (the "Company"), (Xxxxxxx X. Xxxxxx and the Xxxxxx Charitable
Foundation shall collectively be referred to as the "Selling Stockholders," each
may be referred to individually as a "Selling Stockholder," and Xx. Xxxxxx maybe
referred to as "Xx. Xxxxxx") propose, subject to the terms and conditions stated
herein, to issue and sell to the several underwriters named in Schedule I hereto
(the "Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares") of
their common stock, par value $0.01 per share (the "Common Stock"). In addition,
for the sole purpose of covering over-allotments in connection with the sale of
the Firm Shares, at the option of the Underwriters, Xx. Xxxxxx proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
up to an additional 450,000 shares (the "Additional Shares") of Common Stock.
The Firm Shares and any Additional Shares purchased by the Underwriters are
referred to herein as the "Shares." The Shares are more fully described in the
Registration Statement referred to below.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-76508),
and amendments thereto, and related preliminary prospectuses for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the Shares which registration statement, as so amended (including
post-effective amendments), has been declared effective by the Commission
and copies of which have heretofore been delivered to the Underwriters. The
registration statement, as amended at the time it became effective,
including the exhibits and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A
or 434(d) under the Securities Act, is hereinafter referred to as the
"Registration Statement." If the Company has filed or is required pursuant
to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Securities Act registering additional shares of Common
Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall
be deemed to include such Rule 462(b) Registration Statement. Other than a
Rule 462(b) Registration Statement, which became effective upon filing, no
other document with respect to the Registration Statement has heretofore
been filed with the Commission. No stop order suspending the effectiveness
of either the Registration Statement or the Rule 462(b) Registration
Statement, if any, has been issued, neither the Company nor its counsel has
been contacted by the Commission with respect to any stop order, and no
proceeding for that purpose has, to the knowledge of the Company, been
initiated or threatened by the Commission. The Company, if required by the
Exchange Act and rules and regulations of the Commission (together, the
"Rules and Regulations"), proposes to file the Prospectus with the
Commission pursuant to Rule 424(b) of the Rules and Regulations. The
Prospectus, in the form in which it is to be filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations, or, if the Prospectus
is not to be filed with the Commission pursuant to Rule 424(b), the
Prospectus in the form included as part of the Registration Statement at
the time the Registration Statement became effective, is hereinafter
referred to as the "Prospectus," except that if any revised prospectus or
prospectus supplement shall be provided to the Underwriters by the Company
for use in connection with the offering and sale of the Shares (the
"Offering") which differs from the Prospectus (whether or not such revised
prospectus or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus or prospectus
supplement, as the case may be, from and after the time it is first
provided to the Underwriters for such use. Any preliminary prospectus or
prospectus subject to completion included in the Registration Statement or
filed with the Commission pursuant to Rule 424 under the Securities Act is
hereafter called a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") on or
before the effective date of the Registration Statement, the date of such
preliminary prospectus or the date of the Prospectus, as the case may be,
and any reference herein to the terms "amend",
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"amendment" or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after the
effective date of the Registration Statement, the date of such preliminary
prospectus or the date of the Prospectus, as the case may be, which is
incorporated therein by reference and (ii) any such document so filed. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, the Preliminary Prospectus and the Prospectus, or
any amendments or supplements to any of the foregoing, shall be deemed to
include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("XXXXX").
(b) At the time of the effectiveness of the Registration Statement or
the effectiveness of any post-effective amendment to the Registration
Statement, when the Prospectus is first filed with the Commission pursuant
to Rule 424(b) or Rule 434 of the Regulations, when any supplement to or
amendment of the Prospectus is filed with the Commission, when any document
filed under the Exchange Act was or is filed and at the Closing Date and
the Additional Closing Date, if any (as hereinafter respectively defined),
the Registration Statement and the Prospectus and any amendments thereof
and supplements thereto complied or will comply in all material respects
with the applicable provisions of the Securities Act and the Rules and
Regulations and did not and will not contain an untrue statement of a
material fact and did not and will not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein (i) in the case of the Registration Statement, not misleading and
(ii) in the case of the Prospectus or any related Preliminary Prospectus in
light of the circumstances under which they were made, not misleading. When
any related preliminary prospectus was first filed with the Commission
(whether filed as part of the registration statement for the registration
of the Shares or any amendment thereto or pursuant to Rule 424(a) of the
Rules and Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus and any
amendments thereof and supplements thereto complied in all material
respects with the applicable provisions of the Securities Act and the Rules
and Regulations and the Exchange Act and the respective rules and
regulations thereunder and did not contain an untrue statement of a
material fact and did not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein in
light of the circumstances under which they were made not misleading. No
representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related Preliminary Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of any
Underwriter through you specifically for use therein ("Underwriters'
Information"). The parties acknowledge and agree that the Underwriters
Information consists solely of the material included in paragraphs 2, 4, 13
and 14 under the caption "Underwriting" in the Prospectus. If Rule 434 is
used, the Company will comply with the requirements of Rule 434.
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(c) Xxxxxx Xxxxxxxx LLP, who has certified the financial statements
and supporting schedules included or incorporated in the Registration
Statement, are independent public accountants as required by the Securities
Act and the Rules and Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company has not
paid any dividends on its capital stock and there has been no material
adverse change or any development involving a prospective material adverse
change on (i) the business, prospects, properties, operations, condition
(financial or other), stockholders' equity (investment) or results of
operations of the Company and each subsidiary of the Company listed on
Exhibit 21 of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 (the "Subsidiaries"), taken as a whole; (ii) the
long-term debt of the Company; (iii) the capital stock of the Company; (iv)
the Offering, or anything giving rise to any liability or obligation on the
part of the Underwriters; or (v) the consummation of the transactions
contemplated by this Agreement or the Company's performance of its
obligations hereunder (a "Material Adverse Change" or "Material Adverse
Effect"), whether or not arising from transactions in the ordinary course
of business, and since the date of the latest balance sheet presented in
the Registration Statement and the Prospectus, neither the Company nor any
of the Subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, or entered into any transactions which
are material to the Company and the Subsidiaries taken as a whole, except
for liabilities or obligations which are reflected in the Registration
Statement and the Prospectus.
(e) This Agreement and the transactions contemplated herein have been
duly and validly authorized by the Company and this Agreement has been duly
and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
(i) conflict with or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of
time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to any indenture,
mortgage, deed of trust, loan agreement or other agreement, instrument,
franchise, license or permit to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries
or their respective properties or assets may be bound or (ii) violate or
conflict with any provision of the certificate or articles of
incorporation, by-laws or other organizational documents of the Company or
any of the Subsidiaries or any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any
of their respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or
permit
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of or with any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any
of their respective properties or assets is required for the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, by the Registration Statement and by the
Prospectus, including the issuance, sale and delivery of the Shares to be
sold and delivered hereunder, except the registration under the Securities
Act of the Shares and such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(g) The Company has the authorized capitalization set forth in the
Prospectus and all of the issued shares of capital stock of the Company
(including the Shares) have been duly and validly authorized and issued,
are fully paid and non-assessable and were not issued in violation of or
subject to any preemptive or similar rights that entitle or will entitle
any person to acquire any Shares from the Company upon sale in the
Offering, except for such rights as may have been fully satisfied or waived
prior to the effectiveness of the Registration Statement; and all of the
issued shares of capital stock of each of its Subsidiaries has been duly
and validly authorized and issued and are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims; the Common Stock, the Firm Shares
and the Additional Shares conform to the descriptions thereof contained in
the Registration Statement and the Prospectus. Except as disclosed in the
Prospectus, the Company has no outstanding options to purchase, or
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations.
(h) The Subsidiaries are the only subsidiaries (as defined in Rule 405
of the Securities Act) of the Company. Each of the Company and the
Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in
good standing which will not in the aggregate have a Material Adverse
Effect. Each of the Company and the Subsidiaries has all requisite power
and authority, and all necessary consents, approvals, authorizations,
orders, registrations, qualifications, licenses and permits (collectively,
the "Consents") of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its properties and conduct its
business as now being conducted and as described in the Registration
Statement and the Prospectus. No Consent contains a materially burdensome
restriction not adequately disclosed in the Registration Statement and the
Prospectus.
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(i) Except as described in the Prospectus, there is no legal or
governmental proceeding, including routine litigation, to which the Company or
any of the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of the Subsidiaries, is reasonably
likely to have a Material Adverse Effect, and to the best of the Company's
knowledge, no such proceeding is threatened or contemplated by governmental
authorities or threatened or contemplated by others, and the defense of all such
claims against the Company in the aggregate, including routine litigation, will
not have a Material Adverse Effect.
(j) Neither the Company nor any of its affiliates have taken and nor
will any of them take, directly or indirectly, any action designed to cause or
result in, or which constitutes or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.
(k) Except for the Subsidiaries, the Company owns no capital stock or
other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(l) The financial statements, including the notes thereto, and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries and the other entities for which
financial statements are included in the Registration Statement and the
Prospectus as of the dates indicated and condition and results of operations for
the periods specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
other financial and statistical information and data included in the
Registration Statement and the Prospectus present fairly the information
included therein and have been prepared on a basis consistent with that of the
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus and the books and records of the respective
entities presented therein.
(m) Except as disclosed in the Prospectus, no holder of securities of
the Company has any rights to the registration of securities of the Company
because of the filing of the Registration Statement or otherwise in connection
with the sale of the Shares contemplated hereby, and any such rights so
disclosed have either been fully complied with by the Company or effectively
waived by the holders thereof.
(n) The Company is not, and upon consummation of the transactions
contemplated hereby, and at all times up to and including the application of
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net proceeds as described in the Prospectus, will not be, subject to
registration as an "investment company" under the Investment Company Act of
1940.
(o) The Company and the Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Registration Statement and the
Prospectus or such as do not materially affect the value of such property by the
Company and the Subsidiaries; and any real property and buildings held under
lease or sublease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings held by the Company and the Subsidiaries. Neither the
Company nor any of the Subsidiaries has received any notice of any claim adverse
to their ownership of any real or personal property or of any claim against the
continued possession of any real property, whether owned or held under lease or
sublease by the Company or any of the Subsidiaries.
(p) The Company and each of the Subsidiaries have accurately prepared
and timely filed all federal, state and other tax returns that are required to
be filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including without
limitation, all sales and use taxes and all taxes which the Company and each of
the Subsidiaries is obligated to withhold from amounts owning to employees,
creditors and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax return), except
in any case which would not have a Material Adverse Effect. No deficiency
assessment with respect to a proposed adjustment of the Company's or any of the
Subsidiaries' Federal, state, or other taxes is pending or, to the best of the
Company's knowledge, threatened. There is no tax lien, whether imposed by any
federal, state, or other taxing authority, outstanding against the assets,
properties or business of the Company or any of the Subsidiaries.
(q) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and the outstanding shares of Common Stock (including the Shares)
are listed for quotation on the NASDAQ National Market (the "NASDAQ National
Market"), and the Company has taken no action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or de-listing the Common Stock from the NASDAQ National Market, nor has the
Company received any notification that the SEC or the NASDAQ National Market is
contemplating terminating such registration or listing.
(r) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(s) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with
the
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Commission, complied and will comply in all respects with the requirements of
the Exchange Act and the rules and regulations of the Commission under the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments thereto
become effective and at the Closing Date, will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(t) There are no contracts or other documents (including, without
limitation, any voting agreement), which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement or the Prospectus
by the Securities Act or by the Rules and Regulations and which have not been so
described or filed.
(u) The Company and its subsidiaries maintain 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 conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(v) Neither the Company nor any of the Subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default (and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject or (iii) is in violation in
any respect of any statute or any judgment, decree, order, rule or regulation of
any court or governmental or regulatory agency or body having jurisdiction over
the Company or any of the Subsidiaries or any of their properties or assets,
except any violation or default that would not have a Material Adverse Effect.
(w) The Company and each of the Subsidiaries owns or possesses
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus and have no reason to
believe that the conduct of their respective businesses will conflict with, and
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have not received any notice of any claim of conflict with, any such right of
others, which claim, if the subject of an unfavorable decision, ruling or
judgment, could reasonably be expected to result in a Material Adverse Effect.
None of the intellectual property employed by the Company and the Subsidiaries
has been obtained or is used or proposed to be used by the Company or the
Subsidiaries in violation of any contractual obligation binding on the Company
or the Subsidiaries or any of their respective directors or executive officers
or, to the Company's knowledge after due inquiry, any employees of the Company
or the Subsidiaries or otherwise in violation of the rights of any persons,
other than any violation which would not individually or in the aggregate have a
Material Adverse Effect; except as described in the Registration Statement and
the Prospectus, to the Company's knowledge after due inquiry, neither the
Company nor any of the Subsidiaries has violated, infringed or conflicted with,
or, by conducting its business as described in the Registration Statement and
the Prospectus and commercializing the products under development described
therein, would violate, infringe or conflict with any of the intellectual
property of any other person or entity, other than any such violation,
infringement or conflict which would not individually or in the aggregate have a
Material Adverse Effect.
(x) No labor disturbance by the employees of the Company or any of the
Subsidiaries exists or, to the best of the Company's knowledge, is imminent
which might be expected to have a Material Adverse Effect.
(y) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with
respect to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan which could
have a Material Adverse Effect; each employee benefit plan is in compliance in
all material respects with applicable law; including ERISA and the Code; the
Company has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from any "pension
plan;" and each "pension plan" (as defined in ERISA) for which the Company would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which could cause the loss of such
qualification. The Company has not agreed to assume, undertake or provide
indemnification for any liability of any other person under any Environmental
Law, including any obligation for cleanup or remedial action, except under any
lease of property operated by the Company under which the Company is liable for
its own cleanup.
(z) Neither the Company, any of the subsidiaries nor, to the Company's
knowledge, any of its employees or agents has at any time during the last five
9
years (i) made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law or (ii) made any
payment to any federal or state governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or permitted by laws of the United States or any jurisdiction thereof.
(aa) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company (or, to the Company's knowledge, any other entity for whose acts or
omissions the Company is or may be liable) upon any other property now or
previously owned or leased by the Company or any of the Subsidiaries, or upon
any other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any statute
or any ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation
or liability which would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or
other hazardous substances with respect to which the Company or any of the
Subsidiaries has knowledge, except as would not have a Material Adverse Effect.
(bb) The statistical and market-related data included in the
Prospectus are based on or derived from sources which are reliable and accurate.
2. Representations and Warranties of the Selling Stockholders. Each Selling
Stockholder severally represents and warrants to, and agrees with, each of the
Underwriters that:
(a) This Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Selling Stockholders and is a valid and
binding agreement of the Selling Stockholders, enforceable against each
Selling Stockholder in accordance with its terms, except as enforcement
hereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting the rights and remedies of
creditors or by general equitable principles.
(b) Each of the Custody Agreements and Powers of Attorney (each, a
"Custody Agreement and Power of Attorney") signed by (i) each Selling
Stockholder, (ii) UMB Bank, n.a., as custodian (in such capacity, the
"Custodian"), and (iii) Xxxxxx X. Xxxx and Xxxxx Xxxxxxx-Xxxxxx as the
Selling Stockholders' attorneys-in-fact (each in such capacity, the or an
"Attorney-In-Fact"), has been duly and validly authorized, executed and
delivered by each Selling Stockholder and is a valid and binding agreement
of each Selling Stockholder, enforceable against him, her or it
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in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles. Xx. Xxxxxx agrees that the Additional
Shares, if any, to be sold by him on deposit with the Custodian are subject
to the interests of the Underwriters, that the arrangements made for such
custody are to that extent irrevocable, and that the obligations of each
Selling Stockholder hereunder shall not be terminated, except as provided
in this Agreement or in the Custody Agreement and Power of Attorney, by any
act of the Selling Stockholder, by operation of law, by death or incapacity
of such Selling Stockholder or by the occurrence of any other event. If Xx.
Xxxxxx should die or become incapacitated, or if any other event should
occur, before the delivery of the Additional Shares, if any, to be sold by
Xx. Xxxxxx hereunder, the documents evidencing the Additional Shares, if
any, to be sold by Xx. Xxxxxx then on deposit with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions of
this Agreement as if such death, incapacity or other event had not
occurred, regardless of whether or not the Custodian shall have received
notice thereof.
(c) Xx. Xxxxxx is the lawful owner of the Additional Shares, if any,
to be sold by him hereunder and upon sale and delivery of, and payment for,
such Additional Shares, as provided herein, Xx. Xxxxxx will convey to the
Underwriters good and marketable title to such Additional Shares, free and
clear of all liens, encumbrances, equities, claims and security interests
whatsoever.
(d) Xx. Xxxxxx has, and on the Additional Closing Date, if any, will
have, good and valid title to all of the Additional Shares which may be
sold by him pursuant to this Agreement on such date and the legal right and
power, and all authorizations and approvals required by law, to enter into
this Agreement and the applicable Custody Agreement and Power of Attorney,
to sell, transfer and deliver all of the Additional Shares which may be
sold by Xx. Xxxxxx pursuant to this Agreement and to comply with his or her
other obligations hereunder and thereunder.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Selling
Stockholders of the transactions contemplated herein, except such as may
have been obtained under the Securities Act and such as may be required
under the state securities laws or the blue sky laws or any jurisdiction in
connection with the purchase and distribution of the Firm Shares by the
Underwriters and such other approvals as have been obtained. No consent,
approval, authorization or order of any court or
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governmental agency or body is required for the consummation by Xx. Xxxxxx
of the transactions contemplated herein, except such as may have been
obtained under the Securities Act and such as may be required under the
state securities laws or the blue sky laws or any jurisdiction in
connection with the purchase and distribution of the Additional Shares by
the Underwriters and such other approvals as have been obtained.
(f) Neither the sale of the Additional Shares, if any, being sold by
Xx. Xxxxxx nor the consummation of any of the other transactions
contemplated herein by the Selling Stockholders or the fulfillment of the
terms hereof by the Selling Stockholders will conflict with, result in a
breach or violation of, or constitute a default under any law or the terms
of any indenture or other agreement or instrument to which any Selling
Stockholder is party or bound, any judgment, order or decree applicable to
any Selling Stockholder or any court or regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over any
Selling Stockholder.
(g) None of the Selling Stockholders has any registration or other
similar rights to have any equity or debt securities registered for sale by
the Company under the Registration Statement or included in the offering of
the Shares, except for such rights as have been waived or which are
described in the Prospectus.
(h) The Selling Stockholders do not have, or have waived prior to the
date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Additional Shares, if any,
that are to be sold by Xx. Xxxxxx to the Underwriters pursuant to this
Agreement; and the Selling Stockholders do not own any warrants, options or
similar rights to acquire, and do not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities
from the Company, other than those described in the Registration Statement
and the Prospectus.
(i) All information furnished by or on behalf of the Selling
Stockholders in writing for use in the Registration Statement and
Prospectus, or any document incorporated by reference into the Registration
Statement and Prospectus is, and on the Closing Date and the Additional
Closing Date, if any, will be, true, correct, and complete in all material
respects, and does not, and on the Closing Date and the Additional Closing
Date, if any, will not, contain any untrue statement of a material fact or
omit to state any material fact necessary to make such information not
misleading. To the extent such information appears in the Prospectus, each
Selling Stockholder confirms as accurate the number of
12
shares of Common Stock and options set forth opposite such Selling
Stockholder's name and as described in the related footnote in the
Prospectus under the caption "Principal and Selling Stockholders" (both
prior to and after giving effect to the sale of the Additional Shares).
(j) The Selling Stockholders have not taken and will not take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of the Shares.
(k) The Selling Stockholders have not distributed and will not
distribute, prior to the later of the Additional Closing Date, if any, and
the completion of the Underwriters' distribution of the Shares, any
offering material in connection with the offering and sale of the Shares by
the Selling Stockholders other than a Preliminary Prospectus, the
Prospectus or the Registration Statement.
(l) Each Selling Stockholder has reviewed and is familiar with the
Registration Statement and the Prospectus and (i) has no knowledge of any
material adverse information with regard to the Company or the Subsidiaries
which is not disclosed in the Registration Statement and the Prospectus and
(ii) has no knowledge of any misstatement of a material fact or failure to
state a material fact necessary to make the statements in the Prospectus,
in light of the circumstances under which they were made, not misleading.
The Selling Stockholders further represent that, with respect to the Firm
Shares, and Xx. Xxxxxx further represents that, with respect to the
Additional Shares, if any, that they are not prompted to sell the Firm
Shares and/or the Additional Shares, if any, as the case may be, by any
information concerning the Company or any of the Subsidiaries which is not
set forth in the Registration Statement and the Prospectus.
(m) The representations and warranties of the Selling Stockholders in
the respective Custody Agreements and Powers of Attorney are, and on the
Closing Date and Additional Closing Date, if any, will be, true and
correct.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to Underwriters' Counsel shall be deemed to
be a representation and warranty by such Selling Shareholder to each Underwriter
as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth,
13
the Selling Stockholders agree to sell to the Underwriters and the Underwriters,
severally and not jointly, agree to purchase from the Selling Stockholders, at a
purchase price per share of $_______, the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP,
0000 X Xxxxxx, X. X., Xxxxx 000, Xxxxxxxxxx, D. C. 20005, ("Underwriters'
Counsel") or at such other place as shall be agreed upon by Bear, Xxxxxxx & Co.
Inc. and the Company, at 10:00 A.M., New York City time on the third or fourth
business day (as permitted under Rule 15c6-1 under the Exchange Act) (unless
postponed in accordance with the provisions of Section 10 hereof) following the
date of the effectiveness of the Registration Statement (or, if the Company has
elected to rely upon Rule 430A of the Regulations, the third or fourth business
day (as permitted under Rule 15c6-1 under the Exchange Act) after the
determination of the public offering price of the Shares), or such other time
not later than ten business days after such date as shall be agreed upon by
Bear, Xxxxxxx & Co. Inc. and the Company (such time and date of payment and
delivery being herein called the "Closing Date").
(c) Payment for the Firm Shares to be sold by the Selling Stockholders
shall be made to or upon the order of the Selling Stockholders of the purchase
price by wire transfer in Federal (same day) funds to the Selling Stockholders
or the Custodian at the offices of Underwriters' Counsel, or such other location
as may be mutually acceptable, upon delivery of the certificates for the Firm
Shares to Bear, Xxxxxxx & Co. Inc. for the respective accounts of the
Underwriters. Each Selling Stockholder hereby agrees that (i) it will pay all
stock transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Firm Shares to be sold by the Selling Stockholders
to the several Underwriters, or otherwise in connection with the performance of
the Selling Stockholders' obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to the
Selling Stockholders hereunder and to hold such amounts for the account of the
Selling Stockholders with the Custodian under the Custody Agreement and Power of
Attorney.
(d) In addition, Xx. Xxxxxx hereby grants to the Underwriters the
option to purchase up to 450,000 Additional Shares at the same purchase price
per share to be paid by the Underwriters to the Selling Stockholders for the
Firm Shares as set forth in this Section 3, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time and from time to time, in whole or in part, on or
before the thirtieth day following the date of the Prospectus, by written notice
by you to Xx. Xxxxxx. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time, as reasonably determined by you, when the Additional Shares are to be
14
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the eighth full business day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 10 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full business days prior to the
Additional Closing Date. Xx. Xxxxxx will permit you to examine and package such
certificates for delivery at least one full business day prior to the Additional
Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be the
number which bears the same ratio to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 10 hereof) bears to the total number of Firm Shares, subject, however,
to such adjustments to eliminate any fractional shares as Bear, Xxxxxxx & Co.
Inc. in its sole discretion shall make.
Payment for the Additional Shares to be sold by Xx. Xxxxxx shall be made to
or upon the order of Xx. Xxxxxx of the purchase price by wire transfer in
Federal (same day) funds to Xx. Xxxxxx or the Custodian at the offices of
Underwriters' Counsel, or such other location as may be mutually acceptable,
upon delivery of the certificates for the Additional Shares to Bear, Xxxxxxx &
Co. Inc. for the respective accounts of the Underwriters. Xx. Xxxxxx hereby
agrees that (i) he will pay all stock transfer taxes, stamp duties and other
similar taxes, if any, payable upon the sale or delivery of the Additional
Shares to be sold by the Selling Stockholders to the several Underwriters, or
otherwise in connection with the performance of Xx. Xxxxxx'x obligations
hereunder and (ii) the Custodian is authorized to deduct for such payment any
such amounts from the proceeds to Xx. Xxxxxx hereunder and to hold such amounts
for the account of Xx. Xxxxxx with the Custodian under the Custody Agreement and
Power of Attorney.
4. Offering. Upon your authorization of the release of the Firm Shares, the
Underwriters propose to offer the Shares for sale to the public upon the terms
and conditions set forth in the Prospectus.
5. Covenants of the Company; Covenants of the Selling Stockholders.
A. The Company covenants and agrees with each of the Underwriters that:
(a) The Registration Statement and any amendments thereto have become
effective, and if Rule 430A is used or the filing of the
15
Prospectus is otherwise required under Rule 424(b), or Rule 434, the
Company will file the Prospectus (properly completed if Rule 430A has been
used) pursuant to Rule 424(b) within the prescribed time period and will
provide evidence satisfactory to you of such timely filing. If the Company
elects to rely on Rule 434, the Company will prepare and file a Term Sheet
that complies with requirements of Rule 434 and provide the Underwriters
with copies of such filings prior to their use.
The Company will notify you immediately (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the Company's intention to file or
prepare any amendments to the Registration Statement (including pursuant to rule
462(b)), the Term Sheet or any supplement, revision or amendment to the
Registration Statement or the Prospectus, (iv) of the mailing or the delivery to
the Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, it being understood that the Company shall make every
effort to avoid the issuance of any such stop order, (v) of the receipt of any
comments from the Commission, and (vi) 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 that purpose. If the Commission shall propose or enter a stop order at any
time, the Company will make every reasonable effort to prevent the issuance of
any such stop order and, if issued, to obtain the lifting of such order as soon
as possible. The Company will not file any amendment to the Registration
Statement or any amendment of or supplement to the Prospectus (including the
prospectus required to be filed pursuant to Rule 424(b) or Rule 434) that
differs from the prospectus on file at the time of the effectiveness of the
Registration Statement before or after the effective date of the Registration
Statement or, file any document under the Exchange Act if such document would be
deemed to be incorporated by reference into the Prospectus to which you shall
reasonably object in writing after being timely furnished in advance a copy
thereof.
(b) The Company shall comply with the Securities Act and the Exchange
Act to permit completion of the distribution as contemplated in this
Agreement, Registration Statement and Prospectus. If at any time when a
prospectus relating to the Shares is required to be delivered under the
Securities Act or the Exchange Act in connection with the sales of Shares,
any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would, in the reasonable judgment of the
Underwriters or the Company, include an untrue statement of a material fact
or omit to state any material fact required to be stated therein
16
or necessary to make the statements therein, in the light of the
circumstances existing at the time of delivery to the purchaser, not
misleading, or if it shall be necessary at any time to amend or supplement
the Prospectus or Registration Statement to comply with the Securities Act
or the Rules and Regulations, or to file under the Exchange Act so as to
comply therewith any document incorporated by reference in the Registration
Statement or the Prospectus or in any amendment thereof or supplement
thereto, the Company will notify you promptly and prepare and file with the
Commission, subject to the second paragraph of Section 5(A)(a) hereof, an
appropriate amendment or supplement (in form and substance satisfactory to
you) which will correct such statement or omission or which will effect
such compliance and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to each of the Representatives
and Underwriters' Counsel a signed copy of the Registration Statement,
including all consents and exhibits filed therewith and all documents
incorporated by reference therein and all amendments thereto, and the
Company will promptly deliver to each of the Underwriters such number of
copies of any Preliminary Prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any,
all documents incorporated by reference in the Registration Statement and
Prospectus or any amendment thereof or supplement thereto, as you may
reasonably request. Prior to 10:00 A.M., New York time, on the business day
next succeeding the date of this Agreement and from time to time thereafter
the Company will furnish the Underwriters with copies of the Prospectus in
New York City in such quantities as you may reasonably request.
(d) The Company shall promptly deliver to each of the Underwriters and
to Underwriters' Counsel copies of the Preliminary Prospectus, and the
Company consents to the use and delivery of the Preliminary Prospectus by
the Underwriters in accordance with Rule 430 and Section 5(b) of the
Securities Act. The Company shall also furnish to each of the Underwriters
copies of the final Prospectus as requested by any of the Underwriters.
(e) The Company will use its best efforts, in cooperation with you, at
or prior to the time of effectiveness of the Registration Statement, to
qualify the Shares for offering and sale under the securities laws relating
to the offering or sale of the Shares of such jurisdictions as you may
designate and to maintain such qualification in effect for so long as
required for the distribution thereof; except that in no event shall the
17
Company be obligated in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process.
(f) The Company will make generally available to its security holders
and to the Underwriters as soon as practicable, but in any event not later
than eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings statement
of the Company and the Subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the rules and regulations of
the Commission thereunder (including, at the option of the Company, Rule
158).
(g) During the period of 90 days from the date of the Prospectus, the
Company will not, directly or indirectly, without your prior written
consent, issue, sell, offer or agree to sell, grant any option for the sale
of, pledge, make any short sale or maintain any short position, establish
or maintain a "put equivalent position" (within the meaning of Rule
16-a-1(h) under the Exchange Act), enter into any swap, derivative
transaction or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock
(whether any such transaction is to be settled by delivery of Common Stock,
other securities, cash or other consideration) or otherwise dispose of, any
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock) or interest therein of the Company or of any
of the Subsidiaries, and the Company will obtain the undertaking of each of
its officers and directors and such of its shareholders as have been
heretofore designated by you and listed on Schedule II attached hereto not
to engage in any of the aforementioned transactions on their own behalf,
other than the Company's sale of Shares hereunder and the Company's
issuance of Common Stock upon (i) the conversion or exchange of convertible
or exchangeable securities outstanding on the date hereof; (ii) the
exercise of currently outstanding options; (iii) the exercise of currently
outstanding warrants; (iv) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, employee stock option plans in
effect on the date hereof; and (v) the acquisition by the Company of the
assets, capital stock or business of another person or entity whether by
merger, exchange of stock or otherwise.
(h) During the period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of all
reports or other communications (financial or other) furnished to security
holders, and to deliver to you (i) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
18
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and the
Subsidiaries are consolidated in reports furnished to its security holders
generally or to the Commission).
(i) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act or the Exchange Act, will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations thereunder.
B. Each Selling Stockholder covenants and agrees with each Underwriter:
(a) To deliver to the Representatives prior to the Closing Date, a
properly completed and executed United States Treasury Department Form W-8
(if the Selling Stockholder is a non-United States Person) or Form W-9 (if
the Selling Stockholder is a United States Person).
(b) If, at any time prior to the date on which the distribution of the
Shares as contemplated herein and in the Prospectus has been completed, as
determined by the Representatives, such Selling Stockholder has knowledge
of the occurrence of any event as a result of which the Prospectus or the
Registration Statement, in each case as then amended or supplemented, would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, such Selling
Stockholder will promptly notify the Company and the Representatives.
(c) To cooperate to the extent necessary to cause the Registration
Statement or any post-effective amendment thereto to become effective at
the earliest possible time and to do and perform all things to be done and
performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this
Agreement.
(d) To deliver to Bear, Xxxxxxx & Co. Inc. on or prior to the date of
this Agreement each lock-up agreement referenced in Section 7(j) hereof.
19
C. Xx. Xxxxxx covenants and agrees with each Underwriter to pay or cause to
be paid all transfer taxes with respect to the Additional Shares, if any, to be
sold by him.
6. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Selling
Stockholders hereby agree to pay all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders
hereunder, including the following: (i) the fees, disbursements and expenses of
the Company's counsel and accountants in connection with the registration of the
Shares under the Securities Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing any Agreement among Underwriters, this Agreement, the blue
sky memoranda, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(A)(e) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
blue sky survey; (iv) all travel expenses of the Company's officers and
employees and any other expense of the Company incurred in connection with
attending or hosting meetings with prospective purchasers of the Shares; (v) any
stock transfer taxes incurred in connection with this Agreement or the Offering;
(vi) the filing fees incident to, and the reasonable legal fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares, and (vii) fees of the Custodian and other fees
and expenses related to the offering of the Additional Shares by Xx. Xxxxxx, on
behalf of Xx. Xxxxxx in connection with the sale of Additional Shares, if any.
The Selling Stockholders also will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent or
registrar; and (iii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6. It is understood, however, that except as provided in this
Section, and Sections 8 and 12 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the
20
Additional Shares), to the absence from any certificates, opinions, written
statements or letters furnished to you or to Underwriters' Counsel pursuant to
this Section 7 of any misstatement or omission, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Registration Statement shall have become effective and all
necessary approvals from the NASDAQ National Market shall have been
received not later than, if pricing pursuant to Rule 430A: 5:30 P.M., New
York time, on the date of this Agreement or at such later time and date as
shall have been consented to in writing by you; if the Company shall have
elected to rely upon Rule 430A or Rule 434 of the Regulations, the
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 5(A)(a) hereof and a form of the Prospectus
containing information relating to the description of the Shares and the
method of distribution and similar matters shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period; and,
at or prior to the Closing Date no stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereof shall
have been issued and no proceedings therefor shall have been initiated or
threatened by the Commission.
(b) At the Closing Date, you shall have received the favorable written
opinions of Xxxxxxx Law Firm, P.C., L.L.O., counsel for the Company, and
dated the Closing Date addressed to the Underwriters substantially in the
form attached hereto as Annex I.
(c) At the Closing Date, you shall have received the favorable written
opinion of Xxxxxxx Law Firm, P.C., L.L.O., counsel for the Selling
Stockholders, dated the Closing Date addressed to the Underwriters
substantially in the form attached hereto as Annex II.
(d) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as herein contemplated shall be reasonably
satisfactory in form and substance to you and to Underwriters' Counsel, and
the Underwriters shall have received from said Underwriters' Counsel a
favorable opinion, dated as of the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and the
Prospectus and such other related matters as you may require, and the
Company shall have furnished to Underwriters' Counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
(e) At the Closing Date, you shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in
21
subsection (a) of this Section 7 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing
Date all agreements, conditions and obligations of the Company to be
performed or complied with hereunder on or prior thereto have been duly
performed or complied with, (iv) the Company and the Subsidiaries have not
sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, and (v) subsequent to the respective
dates as of which information is given in the Registration Statement and
the Prospectus there has not been any change in the capital stock or
long-term debt of the Company or any of the Subsidiaries or any material
change, or any development involving a prospective material change, in the
business, prospects, properties, operations, condition (financial or
otherwise) or results of operations of the Company, except in each case as
described in or contemplated by the Prospectus.
(f) At the time this Agreement is executed and at the Closing Date,
you shall have received a comfort letter from Xxxxxx Xxxxxxxx LLP,
independent public accountants for the Company, dated, respectively, as of
the date of this Agreement and as of the Closing Date addressed to the
Company and the Underwriters and in form and substance satisfactory to the
Underwriters and Underwriters' Counsel.
(g) You shall also have received from Xxxxxx Xxxxxxxx LLP, a letter
stating that the Company's system of internal accounting controls taken as
a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection
of errors or irregularities in amounts that would be material in relation
to the financial statements of the Company and the Subsidiaries.
(h) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto), there shall not have been any change
in the capital stock or long-term debt of the Company or any of the
Subsidiaries or any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and the
Subsidiaries taken as a whole, including, without limitation, the
occurrence of a fire, flood, explosion or other calamity at any of the
properties owned or leased by the Company or any of its Subsidiaries, the
effect of which, in any such case described above, is, in the judgment of
22
the Underwriters, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares on the terms and in the manner contemplated in the Prospectus
(exclusive of any supplement).
(i) You shall have received a lock-up agreement from each person who
is a director or an executive officer of the Company and each Selling
Stockholder substantially in the form attached hereto as Annex III.
(j) At the Closing Date, you shall have received a certificate of an
authorized representative of the Selling Stockholders, dated the Closing
Date, to the effect that the representations and warranties of the Selling
Stockholders set forth in Section 2 hereof are accurate and that each of
the Selling Stockholders has complied with all agreements and satisfied all
conditions on his or her part to be performed or satisfied hereunder at or
prior to the Closing Date.
(k) On or prior to the Closing Date, you shall have received a
properly completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof) from each Selling Stockholder.
(l) The Company shall have complied with the provisions of Section
5(A)(c) hereof with respect to the furnishing of prospectuses.
(m) The Company and the Selling Stockholders shall have furnished the
Underwriters and Underwriters' Counsel with such other certificates,
opinions or other documents as they may have reasonably requested.
If any of the conditions specified in this Section 7 shall not have been
fulfilled when and as required by this Agreement, or if any of the certificates,
opinions, written statements or letters furnished to you or to Underwriters'
Counsel pursuant to this Section 7 shall not be in all material respects
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, all obligations of the Underwriters hereunder may be cancelled by you
at, or at any time prior to, the Closing Date and the obligations of the
Underwriters to purchase the Additional Shares may be cancelled by you at, or at
any time prior to, the Additional Closing Date. Notice of such cancellation
shall be given to the Company in writing, or by telephone. Any such telephone
notice shall be confirmed promptly thereafter in writing.
8. Indemnification.
(a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within
23
the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses whatsoever as incurred (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement for the registration of the Shares, as
originally filed or any amendment thereof, or any related Preliminary
Prospectus or the Prospectus, or in any supplement thereto or amendment
thereof, 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; provided, however, that the
Company will not be liable in any such case to the extent but only to the
extent that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement
or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have including under this Agreement.
(b) Each Selling Stockholder 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(a) of
the Exchange Act against any and all losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or action in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact relating to
such Selling Stockholder contained in the Registration Statement for the
registration of the Shares, as originally filed or any amendment thereof,
or any related Preliminary Prospectus or the Prospectus, or in any
supplement thereto or amendment thereof, or arise out of or are based upon
the omission or alleged omission to state therein a
24
material fact relating to such Selling Stockholder required to be stated
therein or necessary to make the statements therein not misleading. In no
event, however, shall the liability of the Selling Stockholders for
indemnification under this Section 8(b) exceed the proceeds received by the
Selling Stockholders in the offering. This indemnity agreement will be in
addition to any liability which any Selling Stockholder may otherwise have
including under this Agreement.
(c) Each Underwriter severally, and not jointly, shall indemnify and
hold harmless the Company, the Selling Stockholders, each of the directors
of the Company, each of the officers of the Company who shall have signed
the Registration Statement, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever as incurred (including but not limited to
reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim, and any and all amounts paid in settlement of any
claim or litigation), jointly or severally, to which they or any of them
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Shares, as originally
filed or any amendment thereof, or any related preliminary prospectus or
the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein; provided,
however, that in no case shall any Underwriter be liable or responsible for
any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder. This indemnity will be in addition
to any liability which any Underwriter may otherwise have including under
this Agreement. The Company acknowledges that the statements set forth in
paragraphs 2, 4, 13, and 14 under the caption "Underwriting" in the
Prospectus constitute the only information furnished in writing by or on
behalf of any Underwriter expressly for use in the Registration Statement
relating to the Shares as originally filed or in any amendment thereof, any
25
related preliminary prospectus or the Prospectus or in any amendment
thereof or supplement thereto, as the case may be.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of any claims or the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under such subsection, notify each
party against whom indemnification is to be sought in writing of the claim
or the commencement thereof (but the failure so to notify an indemnifying
party shall not relieve the indemnifying party from any liability which it
may have under this Section 8 to the extent that it is not materially
prejudiced as a result thereof and in any event shall not relieve it from
any liability that such indemnifying party may have otherwise than on
account of the indemnity agreement hereunder). In case any such claim or
action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, an indemnifying party may
participate, at its own expense in the defense of such action, and to the
extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel satisfactory to such indemnified
party; provided however, that counsel to the indemnifying party shall not
(except with the written consent of the indemnified party) also be counsel
to the indemnified party. Notwithstanding the foregoing, the indemnified
party or parties shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to have charge of
the defense of such action within a reasonable time after notice of
commencement of the action, (iii) the indemnifying party does not
diligently defend the action after assumption of the defense, or (iv) such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (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 parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to
the entry of judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification or contribution
26
could have been sought under Section 8 or 9 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
the indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim, (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act, by or on
behalf of the indemnified party and (iii) the indemnifying party reaffirms
its obligations.
9. Contribution. In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and each
Selling Stockholder, any contribution received by the Company and/or the Selling
Stockholder from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company and/or the Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company, each
Selling Stockholder and one or more of the Underwriters may be subject, in such
proportions as are appropriate to reflect the relative benefits received by the
Company and each Selling Stockholder on the one hand and the Underwriters on the
other hand from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 8
hereof, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholder on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Stockholders
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Selling Stockholders bear to (y) the underwriting discount received by
the respective Underwriters, respectively, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of each of the
Company, any Selling Stockholder and of the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact
27
relates to information supplied by the Company or such Selling Stockholder on
the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 9. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 9 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 9,
(i) no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the shares are underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and
(ii) 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 9, 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 person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company and any
Selling Stockholder, as applicable, subject in each case to clauses (i) and (ii)
of this Section 9. 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, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 9 or otherwise. The obligations of the
Underwriters to contribute pursuant to this Section 9 are several in proportion
to the respective number of Shares purchased by each of the Underwriters
hereunder and not joint.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such
28
default relates do not (after giving effect to arrangements, if any, made
by you pursuant to subsection (b) below) exceed in the aggregate 10% of the
number of Firm Shares or Additional Shares, the Firm Shares or Additional
Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions
which the numbers of Firm Shares set forth opposite their respective names
in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including
any non-defaulting Underwriter or Underwriters who so agree) to purchase
such Firm Shares or Additional Shares, as the case may be, to which such
default relates on the terms contained herein. In the event that within
five calendar days after such a default you do not arrange for the purchase
of the Firm Shares or Additional Shares, as the case may be, to which such
default relates as provided in this Section 10, this Agreement or, in the
case of a default with respect to the Additional Shares, the obligations of
the Underwriters to purchase and of the Company and Xx. Xxxxxx to sell the
Additional Shares shall thereupon terminate, without liability on the part
of the Company or Xx. Xxxxxx with respect thereto (except in each case as
provided in Sections 6, 8(a) and 9 hereof with respect to the Company and
Sections 8(b) and 9 hereof with respect to the Selling Stockholders) or the
Underwriters, but nothing in this Agreement shall relieve a defaulting
Underwriter or Underwriters of its or their liability, if any, to the other
Underwriters and the Company and the Selling Stockholders for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to which
the default relates are to be purchased by the non-defaulting Underwriters,
or are to be purchased by another party or parties as aforesaid, you or the
Company shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be for a period, not exceeding five business
days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the
opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include
any party substituted under this Section 10 with like effect as if it had
originally been a party to this Agreement with respect to such Firm Shares
and Additional Shares.
29
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, and the Company and
the Selling Stockholders contained in this Agreement or in certificates of
officers of the Company or any Subsidiary submitted hereto or thereto, including
the agreements contained in Section 6, the indemnity agreements contained in
Section 8 and the contribution agreements contained in Section 9, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof, and shall survive delivery of and payment for the Shares to and
by the Underwriters. The representations contained in Sections 1 and 2 and the
agreements contained in Sections 6, 8, 9, 11 and 12(d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 10 or
12 hereof.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later of when (i)
you and the Company shall have received notification of the effectiveness
of the Registration Statement or (ii) the execution of this Agreement. If
either the public offering price or the purchase price per Share has not
been agreed upon prior to 5:00 P.M., New York City time, on the fifth full
business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company
or the Underwriters except as herein expressly provided. Until this
Agreement becomes effective as aforesaid, it may be terminated by the
Company by notifying you or by you notifying the Company. Notwithstanding
the foregoing, the provisions of this Section 12 and of Sections 1, 2, 6, 8
and 9 hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing
Date, as the case may be, if (A) any domestic or international event or act
or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, the market for the Company's
securities or securities in general; or (B) if trading on the New York
Stock Exchange or on the NASDAQ National Market shall have been suspended,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the New York
Stock Exchange or on the NASDAQ National Market by the New York Stock
Exchange or by the NASDAQ National Market or by order of the Commission or
any other governmental authority having jurisdiction; or (C) if a banking
moratorium has been declared by any state or federal authority or if any
material disruption in commercial banking or securities settlement or
clearance services shall have occurred; or (D) any downgrading shall have
occurred in the Company's corporate credit rating or the rating accorded
the Company's debt securities by any "nationally recognized statistical
rating organization" as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act or
30
if any such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities; or (E) (i) if there shall have
occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national
emergency or war by the United States or (ii) if there shall have been any
other calamity or crisis or any change in political, financial or economic
conditions if the effect of any such event in (i) or (ii) as in your
judgment makes it impracticable or inadvisable to proceed with the
offering, sale and delivery of the Firm Shares or the Additional Shares, as
the case may be, on the terms and in the manner contemplated by the
Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall be in
writing.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof each party shall bear its own costs and expenses except
that the Selling Stockholders shall bear the expenses of the Underwriters
as set forth in Section 6.
13. Notices. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or faxed
and confirmed in writing, to such Underwriter c/o Bear, Xxxxxxx & Co. Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital
Markets, with a copy to Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000 X Xxxxxx, X.
X., Xxxxx 000, Xxxxxxxxxx, D. C. 20005, Attention: Xxxxxxx X. Xxxxxxx, Esq.
(b) if sent to the Company, shall be mailed, delivered, or faxed and
confirmed in writing to Company at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxx
00000, Attention: Xxxx X Xxxxxxx and its counsel at Xxxxxxx Law Firm, P.C.,
L.L.O., 000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Attention:
Xxxx Xxxxxxx.
(c) if sent to the Selling Stockholders, shall be mailed, delivered,
or faxed and confirmed in writing to the Custodian at c/o UMB Bank, n.a.,
Corporate Trust Department, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000-0000.
provided, however, that any notice to an Underwriter pursuant to
Section 8 shall be delivered or sent by mail or facsimile transmission to
such Underwriter at its address set forth in its acceptance facsimile to
you, which address will be supplied to any other party hereto by you upon
request. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof.
14. Parties. This Agreement shall insure solely to the benefit of, and
shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 8 and
9 hereof, and their
31
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto and their respective
successors, and said controlling persons, and officers and directors and their
heirs and legal representatives, and it is not for the benefit of any other
person, firm or corporation. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from any of the Underwriters.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be delivered by facsimile and shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
17. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
18. Time is of the Essence. Time shall be of the essence of this Agreement.
As used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
[signature page follows]
32
If the foregoing correctly sets forth the understanding between you and the
Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
HEARTLAND EXPRESS, INC.
By:
----------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
-----------------------------------------
as custodian for the Selling Stockholders
By:
----------------------------------------------
Name:
Title:
By:
----------------------------------------------
Name:
Title:
as attorney-in-fact for the Selling Stockholders
Accepted as of the date first above written
BEAR, XXXXXXX & CO. INC.
By:
---------------------------------------------
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
HEARTLAND EXPRESS, INC.
By:
--------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Bear, Xxxxxxx & Co. Inc.................................. _______________
Deutsche Banc Alex. Xxxxx................................ _______________
BB&T Capital Markets..................................... _______________
Xxxxxx Xxxxxx & Company, Inc............................. _______________
Xxxxxxxx Inc............................................. _______________
Total:......................................... 3,000,000
=========
I-1
SCHEDULE II
NAMES OF STOCKHOLDERS SUBJECT TO THE LOCK-UP PROVISION
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxx Xxxx
Xxxxxx Charitable Foundation
II-1
ANNEX I
Form of Opinion of Company Counsel
(i) Each of the Company and the Subsidiaries has been duly
organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation
with full power and corporate and all other necessary
authority to own its properties and conduct its business as
described in the Prospectus. Each of the Company and the
Subsidiaries is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes
such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set
forth in the Registration Statement and the Prospectus. All
of the issued shares of Capital Stock of the Company have
been duly and validly authorized and issued, are fully paid
and non-assessable and are not now in violation of or
subject to any preemptive or, to the best of such counsel's
knowledge, similar rights that entitle or will entitle any
person to acquire any Shares from the Company upon issuance
thereof by the Company; and the Common Stock, the Firm
Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the
Prospectus. All of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable
and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(iii) The Company has not granted any registration rights
that remain outstanding with respect to any of its capital
stock, and no such rights will be triggered by the
consummation of the Offering or the transactions
contemplated by the Underwriting Agreement.
(iv) The Common Stock currently outstanding is listed, and
the Shares to be sold under this Agreement to the
Underwriters are duly authorized for listing on the NASDAQ
National Market.
(v) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(vi) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of the Subsidiaries is a party or of which any property of
the Company or any of the Subsidiaries is the subject which,
if determined adversely to the Company or any of the
Subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(vii) The execution, delivery, and performance of this
Agreement, compliance by the Company with all provisions of
this Agreement and the consummation of the transactions
contemplated hereby by the Company do not and will not (A)
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default (or an event which
with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company or any of the Subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or any
other agreement, instrument, franchise, license or permit
known to such counsel to which the Company or any of the
Subsidiaries is a party or by which any of the Company or
any of the Subsidiaries or their respective properties or
assets is subject or may be bound or (B) violate or conflict
with any provision of the certificate of incorporation or
by-laws of the Company or any of the Subsidiaries, or, to
the best knowledge of such counsel, any judgment, decree,
order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having
jurisdiction over the Company or any of the Subsidiaries or
any of their respective properties or assets.
(viii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or any public, governmental, or regulatory
agency or body having jurisdiction over the Company or any
of the Subsidiaries or any of their respective properties or
assets is required for the issuance, sale and delivery of
the Shares, the execution, delivery and performance of this
Agreement or the consummation of the transactions
contemplated hereby, except for (1) such as may be required
under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no
opinion), (2) such as have been made or obtained under the
Securities Act and (3) such as are required by the National
Association of Securities Dealers, Inc.
(ix) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the
financial statements and schedules and other financial data
included or incorporated by reference therein, as to which
no opinion need be rendered) comply as to form in all
material respects with the requirements of the Securities
Act and the Rules and Regulations. There are no known
amendments to the Registration Statement and there are no
documents required by the Rules and Regulations to be filed
in connection with, incorporated by reference, or described
in the Registration Statement that have not been so filed,
incorporated by reference or described. The documents filed
under the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus or any amendment
thereof or supplement thereto (other than the financial
statements and schedules and other financial data included
or incorporated by reference therein, as to which no opinion
need be rendered) when they became effective or were filed
with the Commission, as the case may be, complied as to form
in all material respects with the Securities Act or the
Exchange Act, as applicable, and the Rules and Regulations
of the Commission thereunder; and such counsel has no reason
to believe that any of such documents, when such documents
became effective or were so filed, as they case may be,
contained, in the case of a registration statement which
became effective under the Securities Act, an untrue
statement of a material fact, or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made when such documents were so
filed, not misleading.
(x) The statements under the captions "Prospectus Summary",
"Risk Factors", "Business", "Management", "Transactions with
Related Parties", "Description of Capital Stock" and
"Underwriting" in the Prospectus and Items 14 and 15 of Part
II of the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings.
(xi) The Company is not an "investment company" as such term
is defined in the Investment Company Act of 1940, as
amended.
(xii) The Registration Statement is effective under the
Securities Act, and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment
thereof has been issued and no proceedings therefor have
been initiated or threatened by the Commission and all
filings required by Rule 424(b) and Rule 430A of the Rules
and Regulations have been made.
(xiii) The Company has full right, power and authority to
execute and deliver this Agreement and the Shares and to
perform its obligations hereunder, and all corporate action
required to be taken for the due and proper authorization,
execution and delivery of this Agreement and the Shares and
the consummation of the transactions contemplated by this
Agreement and as described in the Prospectus have been duly
and validly taken.
(xiv) To the best knowledge of the Company, no contract or
agreement is required to be filed as an exhibit to the
Registration Statement that is not so filed.
(xv) Neither the Company nor any of the Subsidiaries is in
violation of its respective charter or by-laws and, to the
best of such counsel's knowledge after due inquiry, neither
the Company nor any of the Subsidiaries is in default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a
whole, to which the Company or any of the Subsidiaries is a
party or by which the Company or any of the Subsidiaries or
their respective properties may be bound.
(xvi) Each of the Company and the Subsidiaries has such
authorizations of, and has made all filings with and notices
to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any
applicable environmental laws, as are necessary to own,
lease, license and operate its respective properties and to
conduct its business, except where the failure to have any
such authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material
Adverse Effect; each such authorization is valid and in full
force and effect and each of the Company and the
Subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including,
without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice
or lapse of time or both, would allow, revocation,
suspension or termination of any such authorization or
results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder
of any such authorization; and such authorizations contain
no restrictions that are burdensome to the Company or any of
the Subsidiaries; except where such failure to be valid and
in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a
Material Adverse Effect.
In addition, such opinion shall also contain a statement that such counsel has
participated in conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company and the
Underwriters at which the contents and the Prospectus and related matters were
discussed and, no facts have come to the attention of such counsel which would
lead such counsel to believe that either the Registration Statement, at the time
it became effective (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b) or
Rule 434, if applicable), or any amendment thereof made prior to the Closing
Date, as of the date of such amendment, contained or incorporated by reference
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus (including the documents incorporated by
reference therein), as of its date (or any amendment thereof or supplement
thereto made prior to the Closing Date as of the date of such amendment or
supplement) and as of the Closing Date, contained or contains an untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (it being
understood that
such counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial data included or incorporated by
reference therein).
ANNEX II
Form of Opinions of Selling Stockholders' Counsel
(i) Each Selling Stockholder has full legal right, power
and authority, and any approval required by law (other than
any approval imposed by the applicable state securities and
Blue Sky laws), to sell, assign, transfer and deliver the
Firm Shares and Additional Share to be sold by such Selling
Stockholder in the manner provided in this Agreement.
(ii) To the best of such counsel's knowledge, after due
inquiry, each Selling Stockholder has good and clear title
to the certificates for the Firm Shares and Additional
Shares to be sold by such Selling Stockholder, and upon
delivery thereof pursuant hereto and payment therefor, and
assuming the Underwriters are bona fide purchasers, good and
clear title will pass to the Underwriters, severally, free
of all restrictions and transfer, liens, encumbrances,
security interests and claims whatsoever.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by each Selling Stockholder.
(iv) The Custody Agreements and Powers of Attorney
appointing _________________ as the Custodian and
_______________ as such Selling Stockholder's
Attorney-In-Fact, to the extent set forth therein with
regard to the transactions contemplated hereby and by the
Registration Statement, have been duly authorized, executed
and delivered by or on behalf of each Selling Stockholder
enforceable in accordance with its terms, and pursuant to
such power of attorney, each Selling Stockholder has
authorized such Attorney-In-Fact, to execute and deliver on
such Selling Stockholder's behalf this Agreement and any
other document necessary or desirable in connection with the
transactions contemplated hereby and to deliver the Firm
Shares and Additional Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(v) The execution, delivery and performance of this
Agreement by each Selling Stockholder, compliance by each
Selling Stockholder with all the provisions hereof and the
consummation of the transactions contemplated hereby will
not require any consent, approval, authorization or other
order of any court, regulatory body, administrative
agency or other governmental body (except as such may be
required under the Securities Act, state securities laws or
Blue Sky laws or except as such may have been obtained) and
will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, any material
agreement, indenture or other instrument actually known to
such counsel (after due inquiry) to which such Selling
Stockholder is a party or by which such Selling Stockholder
or property of the Selling Stockholder is bound, or, to the
knowledge of such counsel, violate or conflict with any
laws, administrative regulation or ruling or court decree
applicable to such Selling Stockholder or property of such
Selling Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws other than the laws of the United States and jurisdictions
in which they are admitted, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' Counsel) of other
counsel reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent they deem proper, on
certificates of the Selling Stockholders provided that copies of any such
statements or certificates shall be delivered to Underwriters' Counsel. The
opinion of such counsel shall state the opinion of any such other counsel is in
form satisfactory to such counsel and, in their opinion, you and they are
justified in relying thereon.
ANNEX III
Heartland Express, Inc.
January ____, 2002
Bear, Xxxxxxx & Co. Inc.
Deutsche Banc Alex.Xxxxx
BB&T Capital Markets
Xxxxxx Xxxxxx & Company, Inc.
Xxxxxxxx Inc.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Heartland Express, Inc. Lock-Up Agreement
Ladies and Gentlemen:
We refer to the proposed Underwriting Agreement (the "Underwriting
Agreement"), between Heartland Express, Inc., a Nevada corporation (the
"Company"), and you as representative of the Underwriters named therein (the
"Underwriters") relating to an underwritten public offering (the "Offering") of
common stock, $.01 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned hereby agrees that, without the prior
written consent of Bear, Xxxxxxx & Co. Inc., the undersigned will not, directly
or indirectly, during the period from the date hereof until ninety (90) days
from the date of the final prospectus for the Offering (the "Lock-Up Period"),
(i) offer, sell, agree to offer or sell, solicit offers to purchase, grant any
call option or purchase any put option with respect to, pledge, borrow or
otherwise dispose of any Relevant Security, (ii) establish or increase a "put
equivalent position" or liquidate or decrease a "call equivalent position" with
respect to any Relevant Security (in each case within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), or otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of any Relevant
Security, whether or not such transaction is to be settled by delivery of
Relevant Securities, other securities, cash or other consideration. As used
herein "Relevant Security" means the Common Stock, any other equity security of
the Company or any of its subsidiaries and any security convertible into, or
exercisable or exchangeable for, any Common Stock or other such equity security.
The undersigned hereby further agrees that, except as set forth in the
Underwriting Agreement, during the Lock-up Period, the undersigned (x) will not
file or participate in the filing with the Securities and Exchange Commission of
any registration statement, or circulate or participate in the circulation of
any preliminary or final prospectus or other disclosure document with respect to
any proposed offering or sale of a Relevant Security and (y) will not exercise
any rights the undersigned may have to require registration with the Securities
and Exchange Commission of any proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. Delivery of a signed copy of this letter
by telecopier or facsimile transmission shall be effective as delivery of the
original hereof.
Very truly yours,
By:
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