DIGENE CORPORATION 3,000,000 Shares of Common Stock Underwriting Agreement
Exhibit 1.1
DIGENE CORPORATION
3,000,000 Shares of Common Stock
Underwriting Agreement
November 15, 2005
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx Partners LLC
Xxxxxxx, Sachs & Co.
XX Xxxxx & Co., LLC
Leerink Xxxxx & Co.
c/o X.X. Xxxxxx Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx Partners LLC
Xxxxxxx, Sachs & Co.
XX Xxxxx & Co., LLC
Leerink Xxxxx & Co.
c/o X.X. Xxxxxx Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Digene Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to the
several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom X.X. Xxxxxx
Securities Inc. is acting as representative (the “Representative”), an aggregate of 2,000,000
shares and, at the option of the Underwriters, up to an additional 300,000 shares, of Common Stock,
par value $0.01 per share, of the Company (the “Stock”) and Armonk Partners (the “Selling
Stockholder”) proposes to sell to the Underwriters an aggregate of 1,000,000 shares and, at the
option of the Underwriters, up to additional 150,000 shares of Stock. The aggregate of 3,000,000
shares to be sold by the Company and the Selling Stockholder is herein called the “Underwritten
Shares” and the aggregate of 450,000 additional shares to be sold by the Company and the Selling
Stockholder is herein called the “Option Shares”. The Underwritten Shares and the Option Shares
are herein referred to as the “Shares”.
The Company and the Selling Stockholder hereby confirm their agreement with the several
Underwriters concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement (File No. 333-112901), including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it became effective, is referred to herein as the “Registration
Statement”; and as used herein, the term “Preliminary Prospectus” means each preliminary prospectus
supplement (and any amendments thereto) specifically relating to the Shares as filed with the
Commission pursuant to Rule 424(a) under the Securities Act, and the term “Prospectus” means the
prospectus supplement together with the base prospectus included in the
Registration Statement at the time of its effectiveness in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration statement pursuant to
Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference
herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration
Statement. Any reference in this Agreement 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 under the Securities Act, as of the effective
date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and any reference to “amend”, “amendment” or “supplement” with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange
Act”) that are deemed to be incorporated by reference therein. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Registration Statement and the
Prospectus.
2. Purchase of the Shares by the Underwriters. (a) The Company and the Selling
Stockholder agree, severally and not jointly, to sell the Underwritten Shares to the several
Underwriters as provided in this Agreement, and each Underwriter, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, agrees, severally and not jointly, to purchase from the Company and the Selling Stockholder
at a purchase price per share of $26.32 the “Purchase Price” the number of Underwritten Shares (to
be adjusted by you so as to eliminate fractional shares) determined by multiplying the aggregate
number of Underwritten Shares to be sold by the Company and the Selling Stockholder set forth
opposite the names of the Company and the Selling Stockholder on Schedule II hereto by a fraction,
the numerator of which is the aggregate number of Underwritten Shares to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Underwritten Shares to be purchased by all the
Underwriters from the Company and the Selling Stockholder hereunder.
In addition, the Underwriters shall have the option to purchase at their election up to
450,000 Option Shares at the Purchase Price. The Company and the Selling Stockholder agree,
severally and not jointly, to sell to the several Underwriters the respective numbers of Option
Shares obtained by multiplying the number of Option Shares as to which such election shall have
been exercised by a fraction, the numerator of which is the number of shares set forth opposite the
names of the Company and the Selling Stockholder on Schedule II hereto under the caption “Option
Shares” and the denominator of which is the total number of Option Shares to be adjusted by you as
to eliminate fractional shares, as provided in this Agreement. Each Underwriter, on the basis of
the representations and warranties herein contained, but subject to the conditions hereinafter
stated, shall have the option to purchase, severally and not jointly, from the Company and the
Selling Stockholder at the Purchase Price that portion of the number of Option Shares as to which
such election shall have been exercised (to be adjusted by you so as to eliminate fractional
shares) to be sold by the Company and the Selling Stockholder set forth opposite the names of the
Company and the Selling Stockholder on Schedule II hereto in the same proportion as the number of
Underwritten Shares set forth opposite such Underwriter’s
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name bears to the total number of Underwritten Shares to be adjusted by you so as to eliminate
fractional shares. Such Option Shares may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Underwritten Shares. No Option
Shares shall be sold or delivered unless the Underwritten Shares previously have been, or
simultaneously are, sold and delivered.
The Underwriters may exercise the option to purchase the Option Shares at any time and from
time to time on or before the thirtieth day following the date of the Prospectus, by written notice
from the Representative to the Company and the Selling Stockholder. Such notice shall set forth
the aggregate number of Option Shares as to which the option is being exercised and the date and
time when the Option Shares are to be delivered and paid for, which may be the same date and time
as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor
later than the tenth full business day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the provisions of Section 11 hereof).
Any such notice shall be given at least two business days prior to the date and time of delivery
specified therein.
(b) The Company and the Selling Stockholder understand that the Underwriters intend to make a
public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment
of the Representative is advisable, and initially to offer the Shares on the terms set forth in the
Prospectus. The Company and the Selling Stockholder acknowledge and agree that the Underwriters
may offer and sell Shares to or through any affiliate of an Underwriter and that any such affiliate
may offer and sell Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the accounts specified by the Company to the Representative, with regard to payment to the Company,
and by the Selling Stockholder, with regard to payment to the Selling Stockholder, in each case,
with respect to the Underwritten Shares, at the offices of Xxxxxx Xxxxxx & Xxxxxxx llp, 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M. New York City time on November 21, 2005, or at
such other time or place on the same or such other date, not later than the fifth business day
thereafter, as the Representative, the Company and the Selling Shareholder may agree upon in
writing or, in the case of Option Shares, on the date and at the time and place specified by the
Representative in the written notice of the Underwriters’ election to purchase such Option Shares.
The time and date of such payment for the Underwritten Shares are referred to herein as the
“Closing Date” and the time and date for such payment for the Option Shares, if other than the
Closing Date, are herein referred to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representative for the respective accounts
of the several Underwriters of the Shares to be purchased on such date in definitive form
registered in such names and in such denominations as the Representative shall request in writing
not later than two full business days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the sale of the Shares duly
paid by the Company or the Selling Stockholder, as the case may be. The certificates for the
Shares will be made available for inspection and packaging by the Representative at the office of
X.X. Xxxxxx Securities Inc. set forth above not later than 1:00
P.M., New York City time, on the business day prior to the Closing Date or the Additional
Closing Date, as the case may be.
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(d) Each of the Company and the Selling Stockholder acknowledges and agrees that the
Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the
Company and the Selling Stockholder with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as a financial advisor
or a fiduciary to, or an agent of, the Company, the Selling Stockholder or any other person.
Additionally, neither the Representative nor any other Underwriter is advising the Company, the
Selling Stockholder or any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company and the Selling Stockholder shall consult with their own
advisors concerning such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to the Company or the Selling Stockholder with respect thereto.
Any review by the Underwriters of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit of the Underwriters
and shall not be on behalf of the Company or the Selling Stockholder.
3. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter and the Selling Stockholder that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects with the Securities Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representative expressly for use in any Preliminary Prospectus.
(b) Registration Statement and Prospectus. The Registration Statement has been declared
effective by the Commission. No order suspending the effectiveness of the Registration Statement
has been issued by the Commission and no proceeding for that purpose has been initiated or
threatened by the Commission; as of the applicable effective date of the Registration Statement and
any amendment thereto, the Registration Statement and any such amendment complied and will comply
in all material respects with the Securities Act, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and as of the applicable filing
date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of
the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance
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upon and in conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representative expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement thereto.
(c) Incorporated Documents. The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Exchange Act, and none of such documents contained any
untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and any further documents so filed and incorporated by reference in
the Prospectus, when such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the Exchange Act and will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Financial Statements. The financial statements and the related notes thereto included or
incorporated by reference in the Registration Statement and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly the financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods covered
thereby, and the supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein; and the other financial
information included or incorporated by reference in the Registration Statement and the Prospectus
has been derived from the accounting records of the Company and its subsidiaries and presents
fairly the information shown thereby.
(e) No Material Adverse Change. Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Registration Statement and the Prospectus, (i)
there has not been any change in the capital stock or long-term debt of the Company or any of its
subsidiaries (except for the issuance of shares of Stock on exercise of outstanding stock options
and except for scheduled repayments of indebtedness), or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material adverse change, in or
affecting the business, properties, management, financial position, stockholders’ equity, results
of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has entered into any transaction or agreement that is material
to the Company and its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action, order or decree of
any court or arbitrator or governmental or regulatory authority, except in each case as otherwise
disclosed in the Registration Statement and the Prospectus.
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(f) Organization and Good Standing. The Company and each of its subsidiaries have been duly
incorporated and are validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority would not, individually
or in the aggregate, have a material adverse effect on the business, properties, management,
financial position, stockholders’ equity, results of operations or prospects of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”). The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than the subsidiaries
listed in Exhibit 21 to the Company’s annual report on Form 10-K for the fiscal year ended June 30,
2005.
(g) Capitalization. The Company has an authorized capitalization as set forth in the
Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholder) have been duly and validly
authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive
or similar rights; except as described in or expressly contemplated by the Prospectus, there are no
outstanding rights (including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable securities or any such rights,
warrants or options; the capital stock of the Company conforms in all material respects to the
description thereof contained in the Registration Statement and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company (except, in the case of any foreign subsidiary, for
directors’ qualifying shares and except for Digene do Brasil LTDA which is a majority-owned
subsidiary of the Company), free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.
(h) Due Authorization. The Company has full right, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; and all action required to be taken for
the due and proper authorization, execution and delivery by it of this Agreement and the
consummation by it of the transactions contemplated hereby has been duly and validly taken.
(i) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
(j) The Shares. The Shares to be issued and sold by the Company hereunder have been duly
authorized by the Company and, when issued and delivered and paid for as provided herein, will be
duly and validly issued and will be fully paid and nonassessable and will conform to the
description thereof in the Prospectus; and the issuance of such Shares is not subject to any
preemptive or similar rights.
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(k) Description of the Underwriting Agreement. This Agreement conforms in all material
respects to the description hereof contained in the Registration Statement and the Prospectus.
(l) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or similar organizational documents; (ii) in default, and no
event has occurred that, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii)
above, for any such default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(m) No Conflicts. The execution, delivery and performance by the Company of this Agreement,
the issuance and sale of the Shares to be issued and sold by the Company hereunder and the
consummation by the Company of the transactions contemplated by this Agreement will not (i)
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or (iii) result in the violation
of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority.
(n) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of this Agreement, the issuance
and sale of the Shares to be sold by the Company hereunder and the consummation by the Company of
the transactions contemplated by this Agreement, except for the registration of the Shares under
the Securities Act and such consents, approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(o) Legal Proceedings. Except as described in the Prospectus, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which any property of the Company or
any of its subsidiaries is or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could reasonably be expected to
have a Material Adverse Effect or materially adversely affect the ability of the Company to perform
its obligations under this Agreement; no such investigations, actions, suits or proceedings are
threatened or, to the best knowledge of the Company, contemplated by any
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governmental or regulatory authority or threatened by others; and (i) there are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Prospectus that are not so described and (ii) there are no
contracts or other documents that are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration Statement or the Prospectus that are
not so filed or described.
(p) Independent Accountants. Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, has advised the Company that it is an independent
registered public accounting firm with respect to the Company and its subsidiaries as required by
the Securities Act, and to the best of the Company’s knowledge, it is such an independent firm.
(q) Title to Real and Personal Property. The Company and its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of
real and personal property that are material to the respective businesses of the Company and its
subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except those that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (ii) could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(r) Title to Intellectual Property. The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) (collectively, “Intellectual Property”) necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will not conflict in any
material respect with any such rights of others, and the Company and its subsidiaries have not
received any notice of any claim of infringement or conflict with any such rights of others. The
Company has not received any written, or to the knowledge of the Company, other notice of
infringement of or conflict with, and the Company has no knowledge of any infringement of or
conflict with, asserted rights of others with respect to its intellectual property rights which
could reasonably be expected to result in a Material Adverse Effect; the discoveries, inventions,
products or processes of the Company referred to in the Registration Statement and the Prospectus
do not infringe or conflict with any right or patent of any third party or any discovery,
invention, product or process which is the subject of a patent application filed by any third
party. Further, except as described in the Prospectus, or which would not reasonably be expected
to result in a Material Adverse Effect, the Company is not obligated to pay a royalty, grant a
license or provide other consideration to any third party in connection with its patents, patent
rights, licenses, inventions, trademarks, service marks, trade names, copyrights and know-how; and
no third party, including any academic or governmental organization, possesses rights to the
Company’s intellectual property rights which, if exercised, could enable such third party to
develop products competitive with those of the Company or its subsidiaries or could reasonably be
expected to have a Material Adverse Effect.
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(s) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other,
that is required by the Securities Act to be described in the Registration Statement and the
Prospectus and that is not so described.
(t) Investment Company Act. The Company is not and, after giving effect to the offering and
sale of the Shares to be issued and sold by the Company hereunder and the application of the
proceeds thereof as described in the Prospectus, will not be required to register as an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Investment Company Act”).
(u) Public Utility Holding Company Act. Neither the Company nor any of its subsidiaries is a
“holding company” or a “subsidiary company” of a holding company or an “affiliate” thereof within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
(v) Taxes. The Company and its subsidiaries have filed all tax returns required to be filed
and paid all federal, and all material state, local and foreign taxes shown due on such returns
through the date hereof; and except as otherwise disclosed in the Prospectus, there is no tax
deficiency that has been, or could reasonably be expected to be, asserted against the Company or
any of its subsidiaries or any of their respective properties or assets.
(w) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Registration Statement and the
Prospectus, except where the failure to possess or make the same would not, individually or in the
aggregate, have a Material Adverse Effect; and except as described in the Prospectus, neither the
Company nor any of its subsidiaries has received notice of any revocation or modification of any
such license, certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the ordinary course.
(x) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or
any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or
threatened.
(y) Compliance With Environmental Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws, rules, regulations,
decisions and orders relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective businesses; and
(iii) have not received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in any such case for any such failure to comply, or
failure to receive required permits, licenses or approvals, or liability as would not,
individually or in the aggregate, have a Material Adverse Effect.
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(z) Compliance With ERISA. Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred
with respect to any such plan, excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section
412 of the Code has been incurred, whether or not waived, and the fair market value of the assets
of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the
present value of all benefits accrued under such plan determined using reasonable actuarial
assumptions.
(aa) Disclosure Controls. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the
Exchange Act; such disclosure controls and procedures have been designed to ensure that material
information relating to the Company and its subsidiaries is made known to the Company’s principal
executive officer and principal financial officer by others within those entities. Such disclosure
controls and procedures are effective.
(bb) Accounting Controls. The Company and its subsidiaries maintain systems of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(cc) Insurance. The Company and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including business interruption insurance, which
insurance is in amounts and insures against such losses and risks as are adequate for their
respective businesses and consistent with insurance coverage maintained by similarly situated
companies; and neither the Company nor any of its subsidiaries has (i) received notice from any
insurer or agent of such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to continue its
business.
(dd) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any director, officer, agent, employee or other person
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associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (iii) violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(ee) No Restrictions on Subsidiaries. No subsidiary of the Company is currently prohibited,
directly or indirectly, under any agreement or other instrument to which it is a party or is
subject, from paying any dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s properties or assets to the Company
or any other subsidiary of the Company.
(ff) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement) that would give
rise to a valid claim against the Company or any of its subsidiaries or any Underwriter for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale of the
Shares.
(gg) No Registration Rights. No person has the right to require the Company or any of its
subsidiaries to register any securities for sale under the Securities Act by reason of the filing
of the Registration Statement with the Commission or the issuance and sale of the Shares to be sold
by the Company hereunder or, to the best knowledge of the Company, the sale of the Shares to be
sold by the Selling Stockholder hereunder.
(hh) No Stabilization. The Company has not taken, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(ii) Margin Rules. Neither the issuance, sale and delivery of the Shares to be issued and
sold by the Company hereunder nor the application of the proceeds thereof by the Company as
described in the Prospectus will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
(jj) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration
Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(kk) Statistical and Market Data. Nothing has come to the attention of the Company that has
caused the Company to believe that the statistical and market-related data included in the
Registration Statement and the Prospectus is not based on or derived from sources that are reliable
and accurate in all material respects.
(ll) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of the Company or any
of the Company’s directors or officers, in their capacities as such, to comply with any provision
of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
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4. Representations and Warranties of the Selling Stockholder. The Selling Stockholder
represents and warrants to each Underwriter and the Company that:
(a) Required Consents; Authority. All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of this Agreement and for the
sale and delivery of the Shares to be sold by the Selling Stockholder hereunder have been obtained;
and the Selling Stockholder has full right, power and authority to enter into this Agreement and to
sell, assign, transfer and deliver the Shares to be sold by the Selling Stockholder hereunder; this
Agreement has been duly authorized, executed and delivered by the Selling Stockholder.
(b) No Conflicts. The execution, delivery and performance by the Selling Stockholder of this
Agreement, the sale of the Shares to be sold by the Selling Stockholder hereunder and the
consummation by the Selling Stockholder of the transactions herein contemplated will not (i)
conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Selling Stockholder pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or to which any of the property
or assets of the Selling Stockholder is subject, (ii) result in any violation of the provisions of
the organizational documents of the Selling Stockholder or (iii) result in the violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory agency.
(c) Title to Shares. The Selling Stockholder has good and valid title to the Shares to be
sold at the Closing Date or the Additional Closing Date, as the case may be, by the Selling
Stockholder hereunder free and clear of all liens, encumbrances, equities or adverse claims; the
Selling Stockholder will have, immediately prior to the Closing Date or the Additional Closing
Date, as the case may be, good and valid title to the Shares to be sold at the Closing Date or the
Additional Closing Date, as the case may be, by the Selling Stockholder, free and clear of all
liens, encumbrances, equities or adverse claims; and, upon delivery of the certificates
representing such Shares and payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or adverse claims, will pass to the several
Underwriters.
(d) No Stabilization. The Selling Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(e) Registration Statement and Prospectus. As of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading; and as of the applicable
filing
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date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and
as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Selling Stockholder makes no
representation and warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use in the Registration Statement and the
Prospectus and any amendment or supplement thereto.
(f) Material Information. As of the date hereof, as of the Closing Date and as of the
Additional Closing Date, as the case may be, the sale of the Shares by the Selling Stockholder is
not and will not be prompted by any material information concerning the Company which is not set
forth in the Registration Statement or the Prospectus.
The Selling Stockholder specifically agrees that the obligations of the Selling Stockholder
hereunder shall not be terminated by operation of law, whether by the dissolution of the Selling
Stockholder or by the occurrence of any other event. If the Selling Stockholder should be
dissolved, or if any other such event should occur, before the delivery of the Shares hereunder,
certificates representing such Shares shall be delivered by or on behalf of the Selling Stockholder
in accordance with the terms and conditions of this Agreement.
(g) Investment Company Act. The Selling Stockholder is not required to register as an
“investment company” within the meaning of the Investment Company Act.
5. Further Agreements of the Company. The Company covenants and agrees with each
Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will file the final Prospectus
with the Commission within the time period specified by Rule 424(b) under the Securities Act and to
file promptly all reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; and the Company will furnish copies
of the Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York City time, on
the business day next succeeding the date of this Agreement in such quantities as the
Representative may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i) to the Representative,
two conformed copies of the Registration Statement as originally filed and each amendment thereto,
in each case including all consents filed therewith and documents incorporated by reference
therein; (ii) as promptly as possible after the Closing Date, one signed copy of the Registration
Statement as originally filed and each amendment thereto, in each case including all exhibits and
consents filed therewith and documents incorporated by reference therein and (iii) to each
Underwriter (A) a conformed copy of the Registration Statement as originally filed and each
amendment thereto (without exhibits) and (B) during the Prospectus Delivery Period, as many copies
of the Prospectus (including all amendments and supplements
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thereto and documents incorporated by reference therein) as the Representative may reasonably
request. As used herein, the term “Prospectus Delivery Period” means such period of time after the
first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in connection with sales of
the Shares by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or supplement to the Registration
Statement or the Prospectus, the Company will furnish to the Representative and counsel for the
Underwriters a copy of the proposed amendment or supplement for review and will not file any such
proposed amendment or supplement to which the Representative reasonably objects.
(d) Notice to the Representative. The Company will advise the Representative promptly, and
confirm such advice in writing, (i) when any amendment to the Registration Statement has been filed
or becomes effective; (ii) when any supplement to the Prospectus or any amendment to the Prospectus
has been filed; (iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request by the Commission for any
additional information; (iv) of the issuance by the Commission of any order suspending the
effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose;
(v) of the occurrence of any event within the Prospectus Delivery Period as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances existing when the Prospectus is delivered to a purchaser, not misleading; and
(vi) of the receipt by the Company of any notice with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and the Company will use its best efforts to prevent the
issuance of any such order suspending the effectiveness of the Registration Statement, preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Shares and, if any such order is issued, will obtain as soon as possible the
withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus Delivery Period (i) any
event shall occur or condition shall exist as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii)
it is necessary to amend or supplement the Prospectus to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c)
above, file with the Commission and furnish to the Underwriters and to such dealers as the
Representative may designate, such amendments or supplements to the Prospectus as may be necessary
so that the statements in the Prospectus as so amended or supplemented will not, in the light of
the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus will comply with law.
-14-
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the Shares.
(g) Earning Statement. The Company will make generally available to its security holders and
the Representative as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the “effective date” (as defined in Rule 158) of the Registration Statement.
(h) Clear Market. For a period of 90 days after the date of the Prospectus, the Company will
not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any
securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic consequences of ownership
of the Stock, whether any such transaction described in clause (i) or (ii) above is to be settled
by delivery of Stock or such other securities, in cash or otherwise, without the prior written
consent of the Representative, other than the Shares to be sold hereunder and any shares of Stock
of the Company issued upon the exercise of options granted or the vesting of restricted stock units
awarded or the grant of any equity-based awards under existing stock incentive plans; provided,
that no such grants of any equity-based awards under existing stock incentive plans will be
exercisable or vest during the lock-up period contained in this paragraph. Notwithstanding the
foregoing, if (1) during the last 17 days of the 90-day restricted period, the Company issues an
earnings release or material news or a material event relating to the Company occurs; or (2) prior
to the expiration of the 90-day restricted period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the 90-day period, the
restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of the material news or
material event.
(i) Use of Proceeds. The Company will apply the net proceeds to it from the sale of the
Shares as described in the Prospectus under the heading “Use of proceeds”.
(j) No Stabilization. The Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(k) Exchange Listing. The Company will use its best efforts to list for quotation the Shares
on the National Association of Securities Dealers Automated Quotations National Market (the
“Nasdaq National Market”).
(l) Reports. So long as the Shares are outstanding, the Company will furnish to the
Representative, as soon as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities exchange or
automatic quotation system.
-15-
6. Further Agreements of the Selling Stockholder. The Selling Stockholder covenants
and agrees with each Underwriter that:
(a) Clear Market. For a period of 90 days after the date of the Prospectus, the Selling
Stockholder will not (i) offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any
shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or (ii)
enter into any swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Stock, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise or
(iii) make any demand for or exercise any right with respect to the registration of any shares of
Stock or any security convertible into or exercisable or exchangeable for Stock without the prior
written consent of the Representative, in each case other than the Shares to be sold by the Selling
Stockholder hereunder. Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period, the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (2) prior to the expiration of the 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period beginning on the
last day of the 90-day period, the restrictions imposed by this Agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(b) Tax Form. It will deliver to the Representative prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-9 or W-8 (or other
applicable form or statement specified by the Treasury Department regulations in lieu thereof) in
order to facilitate the Underwriters’ documentation of their compliance with the reporting and
withholding provisions of the Internal Revenue Code of 1986, as amended, with respect to the
transactions herein contemplated.
7. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company and the
Selling Stockholder of their respective covenants and other obligations hereunder and to the
following additional conditions:
(a) Registration Compliance; No Stop Order. Any post-effective amendment to the Registration
Statement required to be filed under the Securities Act shall have become effective, and the
Representative shall have received notice thereof; no order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose shall be pending
before or threatened by the Commission; the Prospectus shall have been timely filed with the
Commission under the Securities Act and in accordance with Section 5(a) hereof; and all requests by
the Commission for additional information shall have been complied with to the reasonable
satisfaction of the Representative.
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(b) Representations and Warranties. The respective representations and warranties of the
Company and the Selling Stockholder contained herein shall be true and correct on the date hereof
and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the
statements of the Company and its officers and of the Selling Stockholder made in any certificates
delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the
Additional Closing Date, as the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded any securities or preferred stock of or
guaranteed by the Company or any of its subsidiaries by any “nationally recognized statistical
rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its rating of any
securities or preferred stock of or guaranteed by the Company or any of its subsidiaries (other
than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement,
no event or condition of a type described in Section 3(e) hereof shall have occurred or shall
exist, which event or condition is not described in the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement and the Prospectus.
(e) Officer’s Certificate. The Representative shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate (i) of the chief financial
officer or chief accounting officer of the Company and one additional senior executive officer of
the Company who is satisfactory to the Representative stating that such officers have carefully
reviewed the Registration Statement and the Prospectus and, to the best knowledge of such officers,
(A) confirming that the representation of the Company set forth in Section 3(b) hereof is true and
correct, (B) confirming that the other representations and warranties of the Company in this
Agreement are true and correct and that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date
and (C) to the effect set forth in paragraphs (a), (c) and (d) above and (ii) of the Selling
Stockholder, in form and substance reasonably satisfactory to the Representative, (A) confirming
that the representation of the Selling Stockholder set forth in Section 4(e) hereof is true and
correct and (B) confirming that the other representations and warranties of the Selling Stockholder
in this Agreement are true and correct and that the Selling Stockholder has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional
Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the Representative, at
the request of the Company, letters, dated the respective dates of delivery thereof and addressed
to the Underwriters, in form and substance reasonably satisfactory to the Representative,
containing statements and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain
-17-
financial information contained or incorporated by reference in the Registration Statement and
the Prospectus; provided, that the letter delivered on the Closing Date or the Additional
Closing Date, as the case may be, shall use a “cut-off” date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, counsel for
the Company, shall have furnished to the Representative, at the request of the Company, their
written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, and
addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative,
to the effect set forth in Annex A hereto.
(h) Opinion of Intellectual Property Counsel for the Company. Xxxxxx Xxxxx LLP, intellectual
property counsel for the Company, shall have furnished to the Representative, at the request of the
Company, their written opinions, dated the Closing Date or the Additional Closing Date, as the case
may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representative.
(i) Opinion of Counsel for the Selling Stockholder. Xxxxxx Xxxxxxx LLP, counsel for the
Selling Stockholder, shall have furnished to the Representative, at the request of the Selling
Stockholder, their written opinion, dated the Closing Date or the Additional Closing Date, as the
case may be, and addressed to the Underwriters, substantially in the form set forth in Annex B
hereto.
(j) Opinion of Counsel for the Underwriters. The Representative shall have received on and as
of the Closing Date or the Additional Closing Date, as the case may be, an opinion of Xxxxxx Xxxxxx
& Xxxxxxx llp, counsel for the Underwriters, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such matters.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Shares to be issued and sold by the
Company hereunder or prevent the sale of the Shares to be sold by the Selling Stockholder
hereunder; and no injunction or order of any federal, state or foreign court shall have been issued
that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the
issuance or sale of the Shares.
(l) Good Standing. The Representative shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the
Company and its subsidiaries in their respective jurisdictions of organization and their good
standing as foreign entities in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication from the appropriate
governmental authority, agency, instrumentality, regulatory body, court or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (each a “Governmental Authority”) of such jurisdictions.
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(m) Exchange Listing. The Shares to be issued and sold by the Company hereunder shall have
been listed on the NASDAQ National Market.
(n) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between you and the Selling Stockholder, certain officers and the directors of the Company
relating to sales and certain other dispositions of shares of Stock or certain other securities,
delivered to you on or before the date hereof, shall be full force and effect on the Closing Date
or the Additional Closing Date, as the case may be.
(o) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company and the Selling Stockholder shall have furnished to the Representative
such further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and liabilities (including,
without limitation, legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (or any amendment or supplement
thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representative expressly for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of the information
described as such in subsection (c) below.
(b) Indemnification of the Underwriters by the Selling Stockholder. The Selling Stockholder
hereunder agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and
officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other expenses incurred
in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses
are incurred), joint or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
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Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information relating to any
Underwriter furnished to the Company in writing by such Underwriter through the Representative
expressly for use therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection (c) below.
(c) Indemnification of the Company and the Selling Stockholder by the Underwriters. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its
directors, its officers who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Selling Stockholder to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that arise out of, or
are based upon, any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Underwriter furnished to the
Company in writing by such Underwriter through the Representative expressly for use in the
Registration Statement and the Prospectus (or any amendment or supplement thereto) or any
Preliminary Prospectus, it being understood and agreed upon that the only such information
furnished by any Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the concession and reallowance figures contained under the subcaption
“Commissions and discounts” and the information contained under the subcaption “Price
stabilization, short positions” under the caption “Underwriting”.
(d) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section
8, such person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 8 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 8. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 8 that the Indemnifying Person may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain
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counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall
have reasonably concluded that there may be legal defenses available to it that are different from
or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid
or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates,
directors and officers and any control persons of such Underwriter shall be designated in writing
by the Representative, any such separate firm for the Company, its directors, its officers who
signed the Registration Statement and any control persons of the Company shall be designated in
writing by the Company and any such separate firm for the Selling Stockholder shall be designated
in writing by the Selling Stockholder. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or
could have been a party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in
form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(e) Contribution. If the indemnification provided for in paragraphs (a), (b) and (c) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Selling Stockholder on the one hand and the Underwriters on the other from the offering of the
Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company and the Selling Stockholder on the one hand and the
Underwriters on the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company and the Selling Stockholder from the
sale of the Shares and the total underwriting discounts and commissions received by the
Underwriters in connection therewith, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company
and the Selling Stockholder on the one hand and the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement
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of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Stockholder or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(f) Limitation on Liability. The Company, the Selling Stockholder and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section 8 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (e) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in paragraph (e)
above shall be deemed to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 8, in no event shall an Underwriter be required to
contribute any amount in excess of the amount by which the total underwriting discounts and
commissions received by such Underwriter with respect to the offering of the Shares exceeds the
amount of any damages that such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations to contribute pursuant to this Section 8 are several in proportion to
their respective purchase obligations hereunder and not joint.
(g) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
9. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
10. Termination. This Agreement may be terminated in the absolute discretion of the
Representative, by notice to the Company and the Selling Stockholder, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares,
prior to the Additional Closing Date (i) trading generally shall have been suspended or materially
limited on or by any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis, either within or outside the United
States, that, in the judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the
Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement and the Prospectus.
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11. Defaulting Underwriter. (a) If, on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it
has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their
discretion arrange for the purchase of such Shares by other persons satisfactory to the Company and
the Selling Stockholder on the terms contained in this Agreement. If, within 36 hours after any
such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholder shall be entitled to a further period of
36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Shares on such terms. If other persons become obligated or agree to purchase the
Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company and the
Selling Stockholder may postpone the Closing Date or the Additional Closing Date, as the case may
be, for up to five full business days in order to effect any changes that in the opinion of counsel
for the Company, counsel for the Selling Stockholder or counsel for the Underwriters may be
necessary in the Registration Statement and the Prospectus or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the Registration
Statement and the Prospectus that effects any such changes. As used in this Agreement, the term
“Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires,
any person not listed in Schedule I hereto that, pursuant to this Section 11, purchases Shares that
a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholder as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company and
the Selling Stockholder shall have the right to require each non-defaulting Underwriter to purchase
the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to
purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters, the Company and the Selling
Stockholder as provided in paragraph (a) above, the aggregate number of Shares that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company and
the Selling Stockholder shall not exercise the right described in paragraph (b) above, then this
Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to
purchase Shares on the Additional Closing Date, as the case may be, shall terminate without
liability on the part of the non-defaulting Underwriters. Any termination of this Agreement
pursuant to this Section 11 shall be without liability on the part of the Company and the Selling
Stockholder, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 12 hereof and except that the provisions of Section 8 hereof shall not terminate
and shall remain in effect.
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(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company, the Selling Stockholder or any non-defaulting Underwriter for damages caused
by its default.
12. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery
of the Shares to be issued and sold by it hereunder and any taxes payable in that connection; (ii)
the costs incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Preliminary Prospectus and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of
the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in
connection with the registration or qualification and determination of eligibility for investment
of the Shares under the laws of such jurisdictions as the Representative may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriters); (v) the cost of preparing stock certificates; (vi) the
costs and charges of any transfer agent and any registrar; (vii) all expenses and application fees
incurred in connection with any filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc.; (viii) all expenses incurred by the Company in connection
with any “road show” presentation to potential investors; and (ix) all expenses and application
fees related to the listing of the Shares on the NASDAQ National Market.
(b) If (i) this Agreement is terminated pursuant to Section 10, (ii) the Company or the
Selling Stockholder for any reason fails to tender the Shares for delivery to the Underwriters or
(iii) the Underwriters decline to purchase the Shares for any reason permitted under this
Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket costs and
expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters
in connection with this Agreement and the offering contemplated hereby.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 8 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
14. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company, the Selling Stockholder and the Underwriters contained in
this Agreement or made by or on behalf of the Company, the Selling Stockholder or the Underwriters
pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery
of and payment for the Shares and shall remain in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of the Company, the Selling
Stockholder or the Underwriters.
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15. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act.
16. Miscellaneous.
(a) Authority of the Representative. Any action by the Underwriters hereunder may be taken by
the Representative on behalf of the Underwriters, and any such action taken by the Representative
shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the Representative, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention: Syndicate Desk. Notices to
the Company shall be given to it at Digene Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx
00000 (Fax: (000) 000-0000); Attention: General Counsel. Notices to the Selling Stockholder
shall be given to it at 0000 Xxxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 (Fax: (000) 000-0000);
Attention: Xxxxxxx X. Xxxxxxxxxx.
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, and no
any consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
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If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, DIGENE CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Senior Vice President, General Counsel and Secretary | |||
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| XXXXXX XXXXXXXX |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Managing Partner | |||
Accepted: November 15, 2005
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Underwriters listed
in Schedule 1 hereto.
several Underwriters listed
in Schedule 1 hereto.
By:
|
/s/ Xxxx Xxxxxxxxx | |||
| Authorized Signatory |
Schedule I
| Underwriter | Number of Shares | |||
X.X. Xxxxxx Securities Inc. |
1,032,500 | |||
Xxxxxx Xxxxxx Partners LLC |
1,032,500 | |||
Xxxxxxx, Sachs & Co. |
590,000 | |||
XX Xxxxx & Co., LLC |
295,000 | |||
Leerink Xxxxx & Co. |
50,000 | |||
Total |
3,000,000 | |||
Schedule II
| Underwritten Shares | Option Shares | |||||||
Digene Corporation |
2,000,000 | 300,000 | ||||||
Armonk Partners |
1,000,000 | 150,000 | ||||||
| 3,000,000 | 450,000 | |||||||
Exhibit A
FORM OF LOCK-UP AGREEMENT
November [ ], 2005
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxx Partners LLC
Xxxxxxx, Sachs & Co.
XX Xxxxx & Co., LLC
Xxxxxx Xxxxxx Partners LLC
Xxxxxxx, Sachs & Co.
XX Xxxxx & Co., LLC
c/o X.X. Xxxxxx Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the
several Underwriters listed
in Schedule 1 hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Digene Corporation — Public Offering
Ladies and Gentlemen:
The undersigned understands that X.X. Xxxxxx Securities Inc., as Representative (the
“Representative”) of the several Underwriters, proposes to enter into an Underwriting Agreement
(the “Underwriting Agreement”) with Digene Corporation, a Delaware corporation (the “Company”), and
Armonk Partners, providing for the public offering (the “Public Offering”) by the several
Underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters”) of Common
Stock, $0.01 per share par value, of the Company (the “Common Stock”). Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters’ agreement to purchase, and make the Public Offering of
Common Stock, and for other good and valuable consideration receipt of, which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of the
Representative on behalf of the Underwriters, the undersigned will not, during the period ending 90
days after the date of the final prospectus supplement relating to the Public Offering (the
“Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock
(including without limitation, Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and Exchange Commission
and Common Stock which may be issued upon exercise of a stock option or warrant) or (2) enter into
any swap or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written consent of the
Representative on behalf of the Underwriters, the undersigned will not, during the period ending 90
days after the date of the Prospectus make any demand for, or exercise any right with respect to,
the registration of any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
Notwithstanding the foregoing, if (1) during the last 17 days of the 90-day restricted period,
the Company issues an earnings release or material news or a material event relating to the Company
occurs; or (2) prior to the expiration of the 90-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on the last day of the 90-day
period, the restrictions imposed by this Letter Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.
A transfer of Common Stock to a family member or trust, or a transfer of Common Stock in the
form of a charitable gift, may be made, provided the transferee agrees prior to such transfer to be
bound in writing by the terms of this Letter Agreement and such transfer shall not involve a
disposition for value. In addition, anything in this Letter Agreement to the contrary
notwithstanding, it is expressly understood and agreed that, upon written notice to the
Representative and the Company by the undersigned, Common Stock will not be subject to this Letter
Agreement if either of the following shall occur at any time, except for the period between the
execution of the Underwriting Agreement and the Closing Date (as defined in the Underwriting
Agreement): (1) the Company enters into an agreement for a corporate transaction in the nature of
a merger, consolidation, share exchange or sale of assets with another company such that Common
Stock would become exchangeable for consideration in accordance with the terms of such transaction;
or (2) a fully-financed tender offer for Common Stock is made; provided, that, Common Stock will
only be exempt from the operation of this Letter Agreement for the specific purpose of (x)
exchanging Common Stock in a corporate transaction described in (1) above, or (y) tendering Common
Stock into a tender offer as described in (2) above, provided further, that, in each case, the
relevant corporate transaction or tender offer successfully closes. If such corporate transaction
or tender offer does not close, Common Stock will continue to be subject to this Letter Agreement.
It is also understood that the restrictions imposed hereby shall not apply to any sale or
other disposition of Common Stock by the undersigned (unless the undersigned is Armonk Partners, in
which case the restrictions imposed hereby shall be applicable) pursuant to a Rule 10b5-1 selling
program in effect on the date of the Prospectus.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
-2-
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be con
ferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective, or
if the Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of Common Stock to be sold thereunder,
the undersigned shall be released form all obligations under this Letter Agreement.
The undersigned understands that the Underwriters are entering into the Underwriting Agreement
and proceeding with the Public Offering in reliance upon this Letter Agreement.
This lock-up agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, [NAME OF STOCKHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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